Amazon FBA 4th Quarter Changes
If you sell at all on FBA then you know that the 4th quarter is a bonanza. Sure you can still do quite well during the first nine months of the year, but something magical happens in the 4th quarter. People open up their wallets and SHOP, SHOP, SHOP.
Naturally with so many more customers, there is more inventory as well. Apparently this fact caused some issues last year with Amazon’s warehouses getting full and backed up. I remember it taking up to 10 days for a shipment to get fully checked in. It was a mess and apparently Amazon is going to address that by requiring better labeling and raising storage prices.
Starting in October, 2016 they will implement three major changes:
Adjustment to Monthly Inventory Storage Fees: Effective October 1, 2016, the monthly fee for inventory storage will change for Standard-Size and Oversize units. October storage fees will decrease, and the fees for November and December storage will increase. This change will first be reflected in November 2016 charges for storage that occurs in October 2016. See details (or scroll to the Monthly Inventory Storage Fees information below).
Reduction of Weight Handling Fees in November and December: To minimize the impact of the increased storage fees in November and December on your business, effective November 1, 2016, we will reduce our Weight Handling Fees for all items shipped in November and December. See details (or scroll to Fulfillment Fee information below). With the reduction in Weight Handling Fees, sellers who reduce the storage space they use in November and December have the opportunity to pay lower total FBA fees. Sellers who hold unproductive inventory through November and December may see an increase in total fees. See examples of how total fees may be reduced.
Box content information required for shipments to Amazon: To ensure that shipments to Amazon are received quickly and accurately, effective November 1, 2016, you must provide box content information for each box sent to a fulfillment center. Shipments containing more than 55% of FBA units already provide box content information. In September 2016, we will provide additional tools to make it easier to provide box content information on all shipments. If your shipping processes do not support providing this information, we will apply a fee of $0.15 per unit in November and December. The fee will be $0.10 per unit for January through October. If you provide box content information, you will not be charged this fee.
You can find more details about these changes including all of the prices here.
My Thoughts on the Changes
So basically you will pay more to store your stuff at Amazon in the 4th quarter. Normally the big fees don’t kick in until your item has been in their warehouse for six months, but now the normal storage fees are quite significant at 2X-3X their normal prices. Of course this will be slightly offset by lower weight handling charges. The bottom line is they want items to come in and go out quickly.
The other big change is the requirement of box content information. Right now you don’t need to send a full inventory of each box in your shipment, but that will change. They do say a new tool will come online in September to help with this. The only reason I don’t label my boxes now is because their current tool stinks. Hopefully come September it will become much easier.
If these small changes help my products get into stock quicker during the 4th quarter then I am all for it. Yes the inventory storage fees are high, but the small offset with weight fees will help and I honestly don’t plan to send in stuff that will sit. If by chance a product doesn’t sell well, I can always recall it to avoid those huge fees. Either way, a better more efficient system is good for all FBA sellers.