Understanding Amazon FBA Storage Fees and How They Are Calculated
E-Commerce
In cross-border e-commerce, sellers often encounter various storage-related fees when using platforms like Amazon. FBA (Fulfillment by Amazon) storage fees are a common and significant expense, directly impacting sellers' profits. This article explores the concept of FBA storage fees, how they are calculated, strategies to optimize storage costs, and answers to some frequently asked questions.
What are FBA Storage Fees?
FBA (Fulfillment by Amazon) storage fees are the charges sellers need to pay to store their products in Amazon’s warehouses. These fees help cover Amazon's costs for managing, storing, and shipping sellers' items. Storage fees are generally calculated based on the duration and volume of product storage. These fees are divided into standard storage fees and long-term storage fees, which may vary based on seasonal demand.
Where to Check FBA Storage Fees on Amazon?
To view FBA storage fees, sellers can:
-
Access the "Fee Estimate" tool in the Amazon Seller Center.
-
View the "Fee Estimate" report in the "Inventory" section, which provides detailed information on FBA storage fees. Additionally, Amazon also notifies sellers about upcoming fee changes via regular emails, especially during peak seasons.
How are Amazon FBA Storage Fees Calculated?
FBA storage fees typically consist of the following two parts:
-
Standard Storage Fees: This fee is based on the volume of the products (calculated in cubic feet) and the months of storage. For example, sellers storing lighter, smaller products may only pay lower fees, while large items will incur higher storage charges. Standard storage fees are typically charged on a monthly basis.
-
Long-Term Storage Fees: If products remain stored in the warehouse for more than 365 days, Amazon charges long-term storage fees, which are higher than the standard storage fees. This fee encourages sellers to clear out slow-moving inventory. Long-term storage fees are charged annually, typically settled in February and August. FBA storage fee rates are determined by Amazon based on product volume and storage time, and these fees are adjusted yearly.
How to Reduce FBA Storage Fees?
FBA storage fees directly impact a seller's operating costs, especially when dealing with excess or unsold inventory. Here are several strategies to reduce storage fees:
-
Accurate Inventory Management: Ensure precise market demand forecasting and avoid overstocking. Plan monthly shipments based on sales trends, and avoid storing unsold inventory.
-
Regular Inventory Cleanup: Clean up slow-moving products promptly to avoid prolonged storage in Amazon's warehouse and reduce long-term storage fees. Offer discounts, run promotions, or use other methods to clear them out faster.
-
Reduce Product Size and Weight: Optimize product packaging and design to reduce product volume and weight, thus lowering the storage fees based on volume.
-
Optimize Shipment Planning: Ensure that inventory is aligned with seasonal demand and promotions, and stock up on popular products in advance to avoid high peak-season fees due to space shortages.
Seasonal Variations in FBA Storage Fees
FBA storage fees are seasonal, with higher costs during peak seasons (typically from October to December). This is due to increased demand during the holiday shopping period (e.g., Black Friday, Christmas), resulting in limited warehouse space. To mitigate the effects of seasonal price hikes, sellers should prepare in advance by sending popular items to warehouses ahead of time. Conversely, during off-peak periods, sellers should avoid excessive reliance on FBA storage to lower costs.
Impact of FBA Storage Fees on Sellers
FBA storage fees directly affect a seller's profit margin, product pricing, and inventory turnover. Sellers need to balance their inventory levels with actual sales figures. If there is excessive inventory buildup, sellers may not only incur higher storage fees but could also lose sales opportunities. Additionally, higher storage fees may force sellers to adjust pricing strategies and increase costs to maintain profitability.
Frequently Asked Questions about FBA Storage Fees
Can FBA Storage Fees Be Waived? No, FBA storage fees are a necessary cost for sellers using Amazon's storage and logistics services.
How Can I Reduce Long-Term Storage Fees? Regularly clear out slow-moving inventory and ensure products do not exceed 365 days of storage to avoid long-term storage fees.
Under What Circumstances Do FBA Storage Fees Increase? During peak seasons (especially October to December), FBA storage fees tend to increase. Additionally, storing products for more than one year or maintaining unsold items will trigger higher long-term storage fees.
How Are FBA Overseas Storage Fees Paid?
FBA storage fees are typically settled through the seller's Amazon Seller account. The payment process is as follows:
-
Automatic Deduction: Amazon automatically deducts the storage fees from the seller's account balance. Monthly storage fees are deducted at the beginning of the following month, and Amazon provides detailed fee statements for sellers.
-
Prepaid Fees: Certain fees (like long-term storage fees) are collected on a quarterly or annual basis. Sellers can manage payments through credit cards or other payment methods in the account settings.
How to Optimize FBA Storage Fee Payments?
-
Inventory Management: Understand your product’s sales cycle and inventory needs to avoid overstocking and minimize long-term storage fees.
-
Smart Shipment Planning: Choose the right shipping quantities based on Amazon's storage fees and sales projections, preventing extra costs due to inventory buildup.
-
Participate in Amazon’s Inventory Management Programs: Amazon provides certain programs to help sellers optimize their inventory while reducing storage fees, such as promotions that accelerate inventory turnover.
How to Choose the Right Cross-Border Payment Tool?
For cross-border e-commerce sellers, FBA storage fees are usually paid in foreign currencies like USD. Therefore, choosing a reliable cross-border payment tool is crucial. Solutions like PhotonPay provide international payment services, which help sellers manage various payment needs, ensuring fees are settled quickly and securely without unnecessary currency conversion costs or delays.
Founded in 2015, PhotonPay is a digital financial infrastructure provider offering global payment solutions to businesses. Our innovative core products include Global Accounts, Card Issuing, Online Payments, Payouts, FX Management and Embedded Finance. PhotonPay has become a Mastercard issuer in Hong Kong and the fintech card issuer in the Greater China region of Discover® Global Network.
With a strong compliance culture and technological innovation capabilities, PhotonPay is building a digital payment network to take the friction out of global payments and enhance operational efficiency for businesses operating on a global scale.
Headquarters in Hong Kong and providing localized services through nine international offices, PhotonPay partners with a network of top-tier banks and global financial institutions and serves more than 200,000 enterprises globally.
By optimizing inventory management and payment methods, sellers can enjoy the convenience of FBA logistics while lowering storage fees, improving overall profitability.
Latest Announcements
Back to the blog homepage
What are Embedded Finance Examples?
Embedded finance is revolutionizing the way financial services are delivered, integrating financial tools directly into non-financial platforms.
PhotonPay
2025-03-21 11:14:21 ·
6minute(s)
What are multi-currency cards and how do they work
Multi-currency cards, a type of innovative currency cards, have become an essential financial tool for businesses and travelers alike.
PhotonPay
2025-03-21 10:57:06 ·
5minute(s)
The Future of Finances: How Automated Payment Systems Simplify Your Life
In this article, we explore what automated payments are, how they work, when to use them, and examine their advantages and disadvantages.
PhotonPay
2025-03-21 10:42:33 ·
4minute(s)
