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Wed Aug 29 2018 10:19:54

Amazon Seeks Brand New Products from Sellers

By: Ina Steiner

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Not only does Amazon want to be the source for repeat purchases such as household staples, it also wants to showcase new products to entice shoppers. This month it kicked off a promotion to encourage sellers to launch brand new products with the goal of expanding selection on its site.

Amazon is offering sellers who use its Fulfillment by Amazon (FBA) program a chance to save on long-term storage fees, called LTSF or LTS fees. 

Amazon is offering participating FBA sellers reimbursement for up to six months of long-term storage fees for new-to-Amazon ASINs in qualifying categories created between August 21, 2018, and November 30, 2018. The inventory must be received at a fulfillment center by December 5, 2018 in order to qualify for the promotion.

Amazon is excluding items in the Media category. Categories that do qualify include Apparel, Collectibles, Crafts & Sewing, Jewelry, Home & Garden, and Toys & Games, to name a few.

LTS fees are significant costs, and Amazon uses them in an effort to maximize storage space at its network of fulfillment centers. It doesn't want slow-moving inventory taking up space, especially during the busy holiday season when space is at a premium.

In March, Amazon announced a number of FBA fee changes. Among them: beginning September 15, 2018, long-term storage fees will be adjusted and the assessment dates will be changed from a semi-annual basis to a monthly basis. The changes are outlined in this EcommerceBytes Newsflash article.

The new seller promotion shows another way Amazon can exploit its FBA program to build its product catalog and increase selection for shoppers, making its Prime program even more valuable to paying members.

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Perminate Link for Amazon Seeks Brand New Products from Sellers   Amazon Seeks Brand New Products from Sellers

by: mcposty This user has validated their user name.

Sun Sep 2 04:00:49 2018

Amazom is a bubble that will pop. They are always on disasters edge.

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by: Troy Stiffler This user has validated their user name.

Sun Sep 2 09:25:49 2018

"They seem unable to grow/restrict their way out of the dilemma of diminishing storage space with all the willing fba'ers out there. Let's see how high they can jack the fees till the flood subsides."

They just took care of this with the IPI (Inventory Performance Index). It started on July 1. If you're not moving your inventory quick enough (est. 6 weeks), you're not qualifying. If you don't qualify, you get locked out quarterly. And if you don't qualify, your storage goes from $.75/mo/cu/ft to $11/mo/cu/ft. That will collapse your business overnight if you don't pull out your inventory.

From now on, there is really no way to stock inventory at FBA unless you're moving it in and out. Nobody quite understands the algorithm yet. But you pretty-much need to circulate your products every six weeks. And there's not much tolerance for products that stay there longer. For example, if you only move half your inventory every six weeks, your "sell-through" rate may be high enough to alleviate the other half. But you're really walking the tight rope with that. One slip-up and you are in a lot of trouble.

My products tend to have very high markups. So I always ignored lost/damaged items that went unpaid for (no compensation from Amazon). And I absorbed the Long Term Storage Fees, knowing that I was leveraging their labor, ultra-low shipping, and monthly storage costs. But I guess they weren't making enough money off people like me.

I still think they left a vacuum in the third party logistics business. And someone is going to step in and service companies like mine. But as of right now, there aren't any 3PL fulfillment services out there who want to handle my products. Those companies are only looking for people with a low number of SKU's and high turnover. For example, I was talking to FedEx's 3PL service (who declined me), and they said they have a client who has 20 SKU's and they ship approximately 3000 packages a day for them. That's pretty-much the business model for all of the existing 3PL companies. They don't want to assimilate companies like mine, who have 2000 SKU's and ship 20-or-so packages per day.

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by: Chicago48 This user has validated their user name.

Sun Sep 2 17:13:33 2018

Toys and Games is restricted. Are they going to allow toys & games for non-FBA?

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by: Whatever This user has validated their user name.

Mon Sep 3 10:20:18 2018

long-term storage fees??

Oh yeah - I remember now why I don't sell on Amazon

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