Sellers are crying! A whopping 630,000 yuan storage overage fee! Amazon has a policy that makes sellers work for nothing for a year

Sellers are crying! A whopping 630,000 yuan storage overage fee! Amazon has a policy that makes sellers work for nothing for a year

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Amazon implemented new warehouse shipping restrictions from August 16. Sellers with an Inventory Performance Score (IPI) below 500 points will be subject to FBA inventory capacity restrictions. At that time, the cross-border e-commerce circle was wailing, and many sellers went to the backend to create shipping plans to replenish stocks. Many sellers were even forced to create and replenish stocks.


Amazon sellers face $630,000 in storage fees




Recently, a screenshot like this has been circulated among Amazon sellers: the current storage limit is 2,822 cubic feet, but 11,904.31 cubic feet have been used, which is more than 9,000 cubic feet. Based on the price of $10 per cubic foot, the estimated storage overage fee is more than $92,000, which is nearly 630,000 yuan in RMB! For most sellers, this is a considerable fee.

Amazon backend screenshot

High storage excess fees are killing Amazon sellers




According to feedback from Amazon sellers, they have been charged nearly US$40,000 (approximately RMB 270,000) in excess fees since the beginning of the month. They originally stocked up so much inventory just for Prime Day, but now they can only remove it as soon as possible. They are almost losing confidence to continue.

According to Maizi, the calculation method of storage excess fee is mainly (excess quantity x excess days/total days in this month) x 10 US dollars, and the explanation given by the Amazon platform is: the amount of the excess fee depends on the number of days exceeding the storage limit. Even if the seller's inventory drops below the storage limit allocated for that month, the seller still needs to pay this fee. Maizi thinks that those who can afford the storage excess fee should be cross-border tycoon sellers.


Screenshot of Amazon seller chat

If the amount exceeds the limit, a charge of US$10 per cubic foot will be imposed. In other words, the more days the amount exceeds the limit, the more money will be deducted. The only way for sellers to stop losses is to clear out the warehouse as soon as possible, clean up the inventory, and reduce daily fees.

These sellers have something to say about storage overage fees




Amazon sellers are really suffering from the storage overage fee! Maizi consulted several sellers, and none of them did not complain. After all, no seller's money comes from the wind, except for the platform!

Amazon Seller A


I was also deducted several thousand dollars, and my heart was bleeding. I was a little reluctant to clear out the inventory. The products were actually still profitable, and the listings were well maintained. It was a very embarrassing situation.

Amazon Seller B


Last month, one of our company's accounts was charged an overage fee, and the return was only 400 US dollars. The boss didn't believe it when he saw the report, and checked the account several times himself. Then he frantically cleared out the goods at low prices outside the site, and cleared out 6,000 US dollars of goods before returning to the prescribed storage limit. However, he was charged for every extra day, and the return was still less. Alas!

Amazon Seller C


The overage fee exceeded my expectation because I had built a shipment before and my IPI score was low. I was shocked when I sent it. The two accounts had to pay an overage fee of about 3,000 pounds in September!

According to Maizi, most sellers were charged 4,000 or even 8,000 USD for overage storage fees. Some sellers charged storage fees that were higher than the value of the goods, which was not enough to cover their profits. Sellers are advised to be cautious when shipping goods, as the huge overage fees may not be worth the cost. In this regard, some sellers have given some practical suggestions:


Expand the warehouse monitor at the bottom of the inventory performance page to view the current storage usage and storage limits for the next period of time. Then download the table in the inventory status to view the volume of each product. You can roughly calculate how much storage space is left, which products need to be cleared as soon as possible, and how to allocate each product more cost-effectively.

In addition, you must pay attention to the following points:


01
Reasonable allocation of inventory



If your inventory performance score is lower than 500, you can expand the storage monitor at the bottom of the inventory performance page to view the current usage and storage limits for the next period of time. Then, you can download a table from the inventory status to view the volume of each product. You can calculate how much storage space is available, which products need to be cleared as soon as possible, and how to allocate each product cost-effectively.

02
Timely clearance reduces fees



A seller with an IPI score below 500 said that he also chose to move his inventory to overseas warehouses because he had long-term cooperation with overseas warehouses. He is currently waiting for notification from Amazon and is a little nervous about whether he can succeed.

It is worth noting that if the goods are received but not put on the shelves, they cannot be removed during this period and will still be charged.

03
Improve your inventory performance score



Some sellers complained that Amazon's IPI score assessment is like using a bunch of professional accountants in the United States to "calculate" third-party sellers. "In the past, you could pass with a score of 350-400, but now you can only pass with a score of 500. Then the warehouse won't ship your products. If you ship your products, the Amazon warehouse will be full, and you will be out of stock, so your IPI score will naturally become lower."

The best way to improve your IPI score and minimize Amazon logistics storage fees is to reduce redundant or slow-moving inventory. Sellers should find ways to increase product traffic, sales, and FBA inventory availability to avoid out-of-stock products.

Sellers whose inventory performance scores are below 500 should quickly find ways to improve their scores. Go to Inventory - Manage Amazon Shipments - Storage Volume (lower left corner) to check whether they have excess inventory, and clear out what needs to be cleared or move what needs to be moved.


(Source: Maiwen)


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