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Sat Sept 17 2011 23:32:36

Amazon Sellers Struggle with New FBA Storage-Fee Policy

By: Ina Steiner

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Online merchants who use Amazon FBA to fulfill orders on their behalf began reporting what they believed were errors in how Amazon was charging them for its new storage fees.

Readers may remember the initial hubbub back in May when Amazon announced it would begin charging a new annual Long-Term Storage Fee of $45 per cubic foot for any units that had been stored in an Amazon fulfillment center for one year or longer.

According to Amazon's website, there are two Inventory Cleanup dates: August 15 and February 15. "Units in our fulfillment centers for 365 days or longer are charged the Long-Term Storage Fee once per year on either August 15 or February 15," according to the FBA FAQs.

But an FBA merchant told EcommerceBytes he believed Amazon was assessing fees on the 1-year anniversary of each individual ASIN, not twice a year (Feb. 15 and Aug. 15), as Amazon had stated would happen. And on the Amazon boards (here and here), a seller wrote:

"I was on the phone with fulfillment support this morning and they said they will charge on the anniversary date of each product and NOT on the two dates specified on the website of February 15 and August 15. I've been charged $435 two days ago and $217 yesterday. I imagine I will continue to get charged as my inventories hit the one year mark. Obviously, i'm pretty frustrated by this."

Other sellers disagreed that it was a policy change and said they believed the charges were made in error.

The seller later posted an update - it appears Amazon evaluated his inventory on August 15, but the system did not charge his account for the fees until the 15th and 16th of September. The customer service rep told him, "If these units are returned before October 31 we will be able to credit you back for the fees that were charged."

Some sellers are also perplexed in how Amazon.com is sending back their items. Amazon gave sellers an opportunity to remove slow-moving inventory from their warehouses to avoid paying Long Term Storage fees, reducing its removal and disposal fees. One seller said he pulled thousands of items from Amazon warehouses and is now receiving back his inventory from Amazon in shipments with 4 - 6 items per box.

The seller received at least 50 boxes already, and said, "I might well have 1,000 boxes coming to my house over the next week or three." Another seller said Amazon sent one toy via USPS Priority Mail that weighed 4 oz. and commented, "It seems like the only folks benefiting from the long term storage fees is UPS and USPS."

Another Amazon FBA seller warned her colleagues to count returns carefully - "I have already found both damaged items and missing items. And I only have a couple hundred to deal with," she wrote.

Using a fulfillment service is supposed to streamline merchants' operations, and with the holiday shopping season fast approaching, the fallout from Amazon's new Long Term Storage fees is one headache sellers don't need!




Comments (15) | Permalink

Readers Comments

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: marilyn

Sat Sep 17 23:54:15 2011

The assessment of the long term storage fee at $45/cu ft was ill thought out by Amazon, and execution was worse. We didn't see the final Removal Reports tool until less than 3 weeks before the drop dead date. I know I personally took 3 different screen shots of ZERO FOUND after completing my removals, on 3 different dates, in case Amazon came back and tried to hit me with fees, as seems to have happened to some unfortunate sellers (to the tune of $1000-$2000 and up).

Worse, in at least a dozen cases, items I had to pull and have shipped back had the remaining single unit sell out long before the balance of the inventory was returned to us. Then we had to turn around and ship it back to Amazon, where it continues to sell at its usual slow-but-steady pace. Just absolutely stupid, and the only winner was USPS and UPS for hauling it all back and forth.

Amazon should have grandfathered existing inventory.  99.99% of sellers pulled their inventory  just to turn around and ship it back in. Absolutely a pointless exercise.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

This user has validated their user name. by: Ming the Merciless

Sun Sep 18 02:29:17 2011

Fulfillemt centers have ben created in order to increase their owners' revenues, NOT YOURS, and IMO they were always intended to be profit centers through cleverly disgui8sed bait and switch marketing to sellers.

I trust NO third party to host my inventory because the second thing you can count on when you use a fulfillment center is shrink through employee theft and breakage.

While Amazon may appear to be slightly more ethical than ebay, their objective is the same: to relieve you of as much of your profit as they can.

Missing or broken inventory? Take them to small claims court.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: Gary Overton
Web Site

Sun Sep 18 07:27:14 2011

I was one of Amazon's 1st 3rd party sellers. I love Amazon BUT there is no way I would trust them(or anyone else) to fill my orders. Unless you are selling a lot of product at high margins it just doesn't make sense. The more variables you add to any process only increases the more ways something can go wrong.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: John Lindberg
Web Site

Sun Sep 18 10:00:04 2011

I have been in the order fulfillment business for over ten years and my company is a member of the Mailing & Fulfillment Service Association, which is the the trade group for the outsourced fulfillment industry.  I have great respect for Amazon.com as the leading online retailer, but the pricing, terms and administration of their fulfillment services division just does not make any sense for themselves or for FBA clients. The fact is that Amazon.com is a COMPETITOR to independent online retailers and not a service provider.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: anyone out there

Sun Sep 18 18:31:50 2011

Could someone tell me why you would let AMAZON even have your items.

I would think if you were a business owner you would want to know and SEE exactly what you have and not let some third party idiots take care of it for you.

Doesn't sound like good business practices to me and seems like you are leaving yourself wide open for unhappy customers. All Amazon is, is a drop ship company for those that are to lazy to operate a real entity.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

This user has validated their user name. by: Ming the Merciless

Sun Sep 18 19:17:53 2011

If I'm mistaken, I hope an Amazon seller who uses FBA will correct me.

As I recall, Amazon dangled tempting carrots in front of sellers to persuade them to use FBA.

Now, in a pond scum bait and switch ebafia-like policy change, Amazon is monetizing their FBA program to coerce sellers into lowering prices to move merchandise faster or face high storage fees.

When it comes to money, these corproations are essentially all alike.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: High Volume FBA Seller

Tue Sep 20 09:54:47 2011

I am so glad to see so many "sellers" not understand the advantages of FBA. The fewer people who use it in my category, the less competition for me, and the more sales and money I make. Should break $200,000 NET profit this year. Just three employees in this office. Amazon handles the rest. Oh - and we maintain a 99% feedback rating on Amazon. So please keep shipping your items yourself...

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: TomH

Tue Sep 20 10:10:49 2011

@ High Volume FBA Seller

I'm with you and let us not educate them here......

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: buck efay

Tue Sep 20 22:05:43 2011

The advantage to FBA? Letting them charge you more so you can get the buy box? I control my shipping, my stock & pack as sold instead of paying more, packing more & possibly getting storage fees on top. Now if I was in a low dollar high competition item, I'd need the buy box, but since I control the buy box as the only seller of the one item I could use FBA on, there's no advantage to me I can see.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: angryjim

Wed Sep 21 11:00:41 2011

''Inside Amazon's warehouse
Lehigh Valley workers tell of brutal heat, dizzying pace at online retailer.

Allentown, Pa.—
Elmer Goris spent a year working in Amazon.com's Lehigh Valley warehouse, where books, CDs and various other products are packed and shipped to customers who order from the world's largest online retailer.

The 34-year-old Allentown resident, who has worked in warehouses for more than 10 years, said he quit in July because he was frustrated with the heat and demands that he work mandatory overtime. Working conditions at the warehouse got worse earlier this year, especially during summer heat waves when heat in the warehouse soared above 100 degrees, he said.

He got light-headed, he said, and his legs cramped, symptoms he never experienced in previous warehouse jobs. One hot day, Goris said, he saw a co-worker pass out at the water fountain. On other hot days, he saw paramedics bring people out of the warehouse in wheelchairs and on stretchers.''

http://www.mcall.com/news/local/mc-allentown-amazo...

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: anyone out there

Wed Sep 21 11:51:27 2011

@angryjim

There is no law about having to have air conditioning in any building.

Try working at a Auto Assembly plant when the temperature outside is 105.

Most people would wimp out at the first sight of sweat.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: New High Volume FBA Seller

Wed Sep 21 12:07:03 2011

@High Volume FBA Seller

Thanks for the tip. I just signed up for FBA.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: GeoffreyYu7
Web Site

Wed Sep 21 13:11:02 2011

Using FBA when you're selling through Amazon can make sense because of the discounts. However, if you're comparing the service with other fulfillment providers, it comes up short.

Unlike Amazon, top fulfillment companies like Webgistix only charge for storage space used per month, and don't charge higher rates during the holidays.

Amazon needs to improve its offerings if it wants to remain competitive in an increasingly crowded field.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: Reality Check

Wed Sep 21 22:01:16 2011

What a joke.  Those of you still pushing this FBA garbage have to be manufacturers or publishers.  If your a seller/retailer it will be a matter of time before they have your products in their warehouses directly from the manufacturer.  Once you are cut out like so many others say bye bye to your business.  Even the used product business is being infiltrated by this ever-hungry company.  They now buy used books and have single handedly put all the believers out of business.  Good luck with your $200,000 net profit a year...it will soon dissapate and they will have sucked you dry of all your intelligence, contacts, and products.  This is the most insidious company on earth and it has no loyalty or respect for its merchants...More than 80% of the original marketplace sellers are now defunct.

Amazon Sellers Struggle with New FBA Storage-Fee Policy   Amazon Sellers Struggle with New FBA Storage-Fee Policy

by: TomH

Thu Sep 22 13:34:26 2011

@ Reality Check
''More than 80% of the original marketplace sellers are now defunct.''

Just curious, but you know this how?




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