Amazon US Storage Fee Changes in 2024
Amazon's fee adjustments can have a significant impact on sellers' profitability, making it crucial to stay informed and adapt strategies accordingly. Here's a breakdown of the storage fee changes for 2024 and some ideas to mitigate the fee increases.
1. Monthly Inventory Storage Fee Changes
Amazon charges monthly inventory storage fees based on the space your inventory occupies in fulfillment centers. Starting April 1, 2024, off-peak monthly inventory storage fees for standard-size products will decrease by $0.09 per cubic foot (January-September). This reduction aims to alleviate some of the financial burden on sellers.
Mitigation Strategies:
- Optimize Inventory Levels: Regularly assess your inventory levels and adjust replenishment strategies to align with demand. Avoid overstocking to minimize storage fees.
- Utilize Fulfillment by Amazon (FBA) Programs: Leverage FBA programs like Small and Light or Multi-Channel Fulfillment for products with lower storage requirements to reduce storage costs.
- Strategic Product Bundling: Bundle slow-moving products with faster-selling items to optimize inventory turnover and minimize storage duration.
2. Storage Utilization Surcharge Changes
Starting April 1, 2024, Amazon will introduce more granular fee tiers to the storage utilization surcharge, applying the fee to Professional sellers with a storage utilization ratio above 22 weeks. Additionally, inventory aged between 0 and 30 days will be excluded from the surcharge. These changes aim to incentivize efficient inventory management.
Mitigation Strategies:
- Optimize Inventory Turnover: Implement strategies to increase inventory turnover, such as offering promotions, adjusting pricing dynamically, or expanding product offerings to attract more customers.
- Efficient Replenishment Strategies: Utilize tools like Amazon's Inventory Performance Index (IPI) to optimize inventory replenishment and minimize excess stock accumulation.
- Regular Inventory Audits: Conduct regular audits to identify slow-moving or obsolete inventory and take proactive measures to liquidate or remove such items to avoid storage surcharges.
3. Aged Inventory Surcharge Changes
Starting February 15, 2024, Amazon will increase the aged inventory surcharge for inventory stored between 271 to 365 days. Surcharges for inventory stored between 181 to 270 days and inventory stored 365 days or more will remain unchanged. This adjustment aims to incentivize sellers to manage inventory turnover effectively.
Mitigation Strategies:
- Promotional Campaigns: Run targeted promotional campaigns to liquidate aged inventory, offering discounts or special deals to incentivize purchases.
- Seasonal Inventory Planning: Plan inventory levels strategically, considering seasonal demand fluctuations to avoid excess inventory buildup.
- Utilize Fulfillment Alternatives: Explore alternative fulfillment options such as third-party logistics providers or self-fulfillment for slow-moving inventory to reduce storage costs.
If you want to learn more about how to mitigate Amazon’s storage fee increases, don’t hesitate to check out our Top 10 tricks to decrease your Amazon monthly storage fees and our checklist to avoid Amazon’s long-term storage costs.
By understanding these changes and implementing effective mitigation strategies, you can successfully navigate Amazon's 2024 storage fee adjustments and maintain your store’s profitability. Check out how 3fin can help you implement mitigation strategies to make sure you keep your storage costs under control this year. You can book a demo to see 3fin in action.
