Amazon FBA Storage Costs: Understanding and Calculating
If you want to get started with Amazon FBA, you need to keep a constant eye on your storage costs. Find out which parameters the storage fees depend on and how you can optimise your expenses.
Unlike traditional e-commerce, where the seller handles logistics, Amazon FBA shifts these tasks to the American conglomerate. This does not mean that storage, shipping preparation, and final delivery costs disappear. While shipping costs can be optimized by choosing the right packaging, storage costs are more complex. Understanding Amazon FBA’s storage fee system is crucial for minimizing per-ASIN storage costs and maximizing long-term profits.
Amazon FBA Storage Costs - Product Size and Season as Parameters
How exactly are Amazon FBA storage fees calculated? Amazon uses a simple system that considers both the occupied storage space and the duration of storage. Storage fees are calculated per month and per cubic meter. You can imagine a cubic meter as a cube with one-meter sides. The volume your inventory occupies in Amazon’s logistics center depends on your product’s dimensions.
A unique aspect of Amazon’s storage costs per cubic meter is that they can vary depending on the season. October, November, and December, due to the pre-Christmas rush, are particularly strong sales months, increasing the demand for limited storage space. Consequently, storage costs are higher during these months to discourage FBA sellers from stocking more products than necessary.
Amazon’s storage fees vary yearly and can be viewed in the seller section of Amazon’s website. In 2021, the monthly costs per cubic meter for Germany are as follows:
January - September
- Standard-size products (max. 45 x 34 x 26 cm, 12 kg): 26 Euros
- Standard-size products, clothing and shoes category: 15.60 Euros
- Oversized products: 18 Euros
October - December
- Standard-size products (max. 45 x 34 x 26 cm, 12 kg): 36 Euros
- Standard-size products, clothing and shoes category: 21.60 Euros
- Oversized products: 25 Euros
These rates do not apply to hazardous goods. A guide on hazardous goods can be found here. Storage fees for a month are deducted between the 7th and 15th of the following month. For instance, January’s storage fees will appear in February’s billing report under transactions between February 7th and 15th.
Calculating Inventory Properly - Tips for FBA Sellers
Optimizing storage costs can help you as an Amazon FBA seller to better maximize profits. The easiest way to minimize these expenses is through professional and realistic inventory planning. It is advisable to maintain inventory levels that match your sales volume for two months. This prevents long-term storage, which incurs unnecessary storage fees.
Additionally, long-term storage fees apply to items stored in Amazon’s logistics center for over 365 days. These fees are significantly higher and should be avoided. Long-term storage fees are 170 Euros per cubic meter or 0.10 Euros per item, whichever amount is higher.
While optimizing, ensure not to fall below the two-month benchmark, as a thin inventory that might go out of stock negatively impacts the product’s sales performance. Communication with the manufacturer is also crucial, as the goods need to be produced at the right pace to avoid unnecessary storage costs. A comprehensive Amazon FBA guide can be found here.
Frequently Asked Questions
Find quick answers to common questions related to this article.
What factors influence the amount of FBA storage costs?
Amazon calculates the monthly storage fees depending on the required number of cubic metres that the products take up in its own warehouse. In addition to the product size, the time of year is also decisive for the amount of the storage costs, as Amazon generally charges higher fees during the high sales months of October, November and December due to the high demand for storage facilities.
Which items fall under the storage costs of an Amazon product?
Amazon's storage fees cover numerous cost aspects, from the cost of storage space to the payment of logistics staff. In addition, there are shipping, return and disposal costs associated with the storage of FBA sellers' products.
How can warehousing costs be optimised and minimised?
The best way to minimise storage costs is to regulate stock levels in line with demand. While too little stock jeopardises sales, too much stock in the storage centre causes unnecessary storage costs. Experience has shown that there should always be enough goods in the warehouse to last for the next two months. It is also best to pay attention to last year's data and the data of competitor products.
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