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What are Amazon Storage Fees? Seller’s Guide

July 16, 2019 | Posted By marketing team
What are Amazon Storage Fees? Seller’s Guide

Sellers using Amazon FBA (Fulfillment by Amazon) get perks such as eligibility for Amazon Prime, plus they don’t have to worry about storing inventory, handling picking, packing, and shipping, or even dealing with customer returns. Instead, Amazon stores their inventory in its fulfillment centers and handles all the shipping and returns tasks on the behalf of sellers. While the (mostly) hands-off nature of Amazon FBA is appealing to many Amazon sellers, it does come at a price.

One of the biggest fees Amazon FBA sellers have to account for is storage fees. Here’s what you need to know about Amazon storage fees and how they’re calculated.

Calculating Inventory Volume

Amazon inventory storage fees are charged by the cubic foot, based on the daily average volume a seller’s inventory occupies in Amazon’s fulfillment centers. The measurement is based on unit size when items are packaged in line with Amazon FBA policies and requirements and ready to ship. Learn more about listing, preparing, and shipping your FBA inventory to Amazon’s fulfillment centers here and specific packaging and preparation requirements here.

If you know your packaged units’ dimensions in inches, it’s easy to convert to cubic feet to estimate your storage fees:

  • Multiply the item’s length x width x height
  • Divide the total volume by 12 to convert to cubic feet

Using an Amazon FBA calculator can help you calculate your total Amazon FBA fees, including storage fees.

Monthly Inventory Storage Fees

The monthly inventory storage fee is the basic fee sellers pay to Amazon in exchange for storing their inventory at Amazon’s fulfillment centers. These fees are based on two product size tiers – standard-size and oversize – and are charged between the 7th and 15th of the following month. So, for example, you’d be charged for inventory storage for the month of March sometime between April 7th and April 15th.

The monthly inventory storage fee, charged by the cubic foot, varies based on the product size tier and the time of the year. Generally, storage fees are higher between October and December, during the busy holiday shopping season when fulfillment centers everywhere are at max capacity.

Screenshot via Amazon

For standard-size products, monthly storage fees are:

  • $0.69 per cubic foot between January and September
  • $2.40 per cubic foot between October and December

For oversize products, monthly storage fees are:

  • $0.48 per cubic foot between January and September
  • $1.20 per cubic foot between October and December

If you’re wondering why the fees are lower for oversize products, Amazon has a good explanation: they require more complex bins, drawers, and shelving units that are more costly. However, given that oversize products are, as the name suggests, larger than standard-size products, and fees are charged by the cubic foot, monthly storage fees tend to be lower overall for standard-size products.

Monthly Storage Fees for Dangerous Goods

If you’re using FBA for inventory Amazon deems “dangerous goods,” you’ll pay a bit more in monthly storage fees. Basically, dangerous goods are items that require special handling and hazmat (hazardous materials) storage. To sell such items, sellers need to be in the FBA Dangerous Goods program.

Screenshot via Amazon

Monthly storage fees for standard-size dangerous goods are:

  • $0.99 per cubic foot between January and September
  • $3.63 per cubic foot between October and December

For oversize dangerous goods, monthly storage fees are:

  • $0.78 per cubic foot between January and September
  • $2.43 per cubic foot between October and December

Long-Term Inventory Storage Fees

In addition to monthly inventory storage fees, FBA sellers may also have to pay long-term inventory storage fees for items stored in Amazon’s fulfillment centers for more than 365 days. Amazon conducts an inventory cleanup on the 15th of every month, at which time inventory that’s been in fulfillment centers for more than 365 days is charged a long-term storage fee of $6.90 per cubic foot or $0.15 per-unit – whichever is greater.

Previously, long-term storage fees were also charged for inventory that had been stored in fulfillment centers between 181 to 365 days, but that fee was eliminated in early 2019, giving FBA sellers with slower-moving inventory a bit of a break. The minimum per-unit fee has also decreased: Until February 15, 2019, sellers had to pay a minimum per-unit rate of $0.50 for any items that were in storage for more than 365 days. Beginning February 15, 2019, the minimum per-unit charge is just $0.15 per unit, which is good news for sellers who struggle with profit margins with the Amazon FBA fee structure. Keep in mind, though, that the per-cubic-foot long-term storage rate still applies if it’s greater than the per-unit minimum.

Note that products in the FBA Small and Light program are subject to different fees, including the long-term storage fee, which is $0.25 per unit for items stored in U.S. fulfillment centers for 181 to 365 days. Items in fulfillment centers for more than 365 days are subject to a minimum per-unit fee of $0.50 per unit.

Avoiding Long-Term Inventory Storage Fees

Sellers can avoid long-term inventory storage fees by keeping tabs on the length of time your inventory has been stored in fulfillment centers. Inventory Age and Inventory Health reports provide insights on the ASINs that have been in storage for:

  • 0 to 90 days
  • 91 to 180 days
  • 181 to 270 days
  • 271 to 365 days
  • 365+ days

Using this data, it’s easy to estimate which ASINs will be subject to long-term storage fees by the 15th of the following month, when Amazon conducts its inventory cleanups. The Recommended Removals report calculates the number of items you’d need to remove, by ASIN, to avoid long-term storage fees if no additional items are sold.

If you’re at risk of being charged long-term storage fees, you can do one of two things:

  • Submit a removal order by 11:59 p.m. (PT) on the 14th of the month to avoid having those items incur fees, even if they’re not physically removed by the next inventory cleanup. Removal order fees are charged only when the inventory is disposed of or returned to you.
  • Set up automated removals, which allows you to automatically designate items for removal based on your automated long-term storage fee removal settings. You can either elect to have all items removed that will incur long-term storage fees or only items within a specified price range. You can opt to have items below a certain price removed while keeping higher-priced inventory as well, meaning you’d only pay the fees for the inventory you’re not removing. The removed inventory will either be disposed of or returned to you.

Note that removing inventory can impact the amount of new inventory that you can send to Amazon under the FBA program. The number of new units you’re eligible to send is based on the number of sales in the preceding 90 days, projected sales for the next eight weeks, in-stock units, inventory utilization, and other factors.

Like any fulfillment center, Amazon incurs overhead costs for inventory stored in its facilities. Amazon FBA sellers are charged fees based on the volume of inventory stored in Amazon’s fulfillment centers, with additional fees for items stored for more than one year. For many FBA sellers, these fees are a worthwhile tradeoff compared to the costs (and hassles) associated with maintaining their own warehouses and fulfillment centers.