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Amazon FBA Storage Fees

Amazon FBA Storage Fees for Sellers

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Amazon FBA storage fees are updated regularly, and they have been changed for 2020, as well. If you’re not sure what these fees are for, here is some information about why Amazon FBA charges fees, when the changes go into effect, and what the fees are in 2020.

What is Amazon FBA Storage Fees?

FBA stands for Fulfillment by Amazon, and it is a method for Amazon sellers to ship products through company warehouses. FBA offers room for businesses to scale up, save money, and have their products be eligible for fast shipping through Amazon Prime.

FBA Storage is where companies keep their products, held and stored by Amazon in one of their warehouses or fulfillment centers. Amazon takes a monthly inventory of the items stored in their locations and uses those counts to assess fees for sellers.

The charges can be monthly or long-term if items in a business’s inventory are stored with the fulfillment center for more than a year. 

What Types of FBA Storage Fees Are There?

Monthly Fees

Monthly charges typically come through between the 7th and 15th days of the month. For instance, a seller would see the fees for February on their statement in March. These costs vary based on the following factors:

  • The time of year
  • The size of the product
  • Occasional updates by Amazon (such as the updates for 2020)

Long Term Fees

Long term Amazon

Amazon FBA storage fees only apply to inventory that has been in an Amazon fulfillment center for longer than a full year. This is also in addition to the normal monthly assessed fees after the one year mark.

Sellers can submit removal orders before reaching the 365-day mark to have the inventory taken out, so they will not be subject to the long term storage fees. 

Dangerous Goods

There is one other type of storage fee, which only applies in specific scenarios. Amazon offers an FBA Dangerous Goods program for products that require specific procedures and handling, as well as anything that needs hazardous material protection. Products in this program are assessed differently than “regular” inventory and are subject to higher fees.

These also change based on the time of year and whether the items are standard-sized or oversized.

Why Do I Have to Pay Amazon FBA Storage Fees?

Amazon is a massive company and consistently in high demand. As such, space in their fulfillment centers is valuable and coveted. It’s all about supply and demand. If you want to secure and keep your position in Amazon facilities, the cost will increase as demand increases.

More sellers mean more people want space, and the storage fees will ensure that your inventory stays in the fulfillment center while Amazon does not lose out on possible profits from giving your space to other merchants.

When Will the New FBA Storage Fee Changes Go Into Effect?

Different price changes will take effect at different points of the year. Some will increase between January and September of 2020, with the change first reflected in payments for March 2020 storage:

  • Label service fees will increase beginning in February. 
  • Different fees will be adjusted based on the size of each product, as well. Larger or bulkier items will have a higher fee than items on the “Small and Light” program from Amazon. 
  • Dangerous goods will not see a change in cost for 2020.

How Do They Calculate FBA Storage Fees?

Because Amazon bases these costs on the amount of space a business takes up in an Amazon facility with their products, they are usually calculated based on the daily average volume of space in cubic feet that the inventory takes up.

The volume measurement happens after the products are packed and ready to ship, according to Amazon’s FBA policies and rules.

Summary of Amazon FBA Fee Changes for 2020

Monthly storing fees, long term storage, label service, and removal and disposal fees will all receive updates for 2020. Here are the updates:

Monthly Inventory

For every cubic foot of storage space, fees will increase by $0.06 for the beginning of the year. End of the year fees will not increase. 

Before March 1, 2020, standard size fees were $0.69 per cubic foot from January to September, and October-December fees were $2.40 per cubic foot.

After March 1, 2020, the prices for standard sizes will be as follows:

  •  January – September: $0.75 per cubic foot
  •  October – December: $2.40 per cubic foot

This change will reflect on invoices starting in April 2020, for items that have been stored since March. Oversized item monthly fees will not change.

Label Service

Another component of using Amazon’s storage space is its label service, which has a separate fee. As of February 18, 2020, standard-sized optional FBA label service charges will increase to $0.30 per item. For items considered “Small and Light,” the price is $0.10.

Removal and Disposal Orders

Before February 2020, removal and disposal fees were the same across multiple weight classes. Now, both of these costs for standard-sized items by weight are:

  • 0 – 0.5 lbs – $0.25 per unit
  • 0.5 – 1.0 lbs – $0.30 per unit
  • 1.0 – 2.0 lbs – $0.35 per unit
  • 2.0 and up – $0.40 per unit plus $0.20 for every pound over 2 lbs

For oversized and “special handling” items, the updated costs will be:

  • 0 – 1.0 lbs – $0.60 per unit
  • 1.0 -2.0 lbs – $0.70 per unit
  • 2.0 – 4.0 lbs – $0.90 per unit
  • 4.0 – 10.0 lbs – $1.45 per uint
  • Over 10.0 lbs – $1.90 plus $0.20 for every pound over 10 lbs

Both removal and disposal follow the same pattern in costs.

If the removal order was placed before February 18, 2020, the old fees would apply rather than the updated 2020 ones. These fees will apply to items in the “Small and Light” program as well.

Dangerous Goods

Fees for dangerous or hazmat items under the FBA Dangerous Goods program will not change in 2020 but are still higher than the standard inventory fees. Those costs, like the monthly inventory costs, are different based on the time of year and size of the items.

For standard-sized items under this program, the prices are:

  • January-September – $0.99 per cubic foot
  • October-December – $3.63 per cubic foot

For products that are oversized that fall in this category, the fees will be:

  • January-September – $0.78 per cubic foot
  • October-December – $2.43 per cubic foot

Know Your Costs and What to Expect

These FBA storage fees are already in effect and will continue through the rest of 2020. Amazon frequently revisits its fees, and space in fulfillment centers is becoming more valuable as the company continues to grow. 

Make sure if you are a current Amazon seller or are interested in becoming one that you consider these costs when using the FBA program. It is highly beneficial to merchants. Keep these updated prices in mind as you consider your inventory with Amazon and their warehouses. 

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