The new low inventory-level fees are adding another challenge for Amazon FBA sellers. Now, you need to keep a closer eye on your stock levels to avoid extra costs. This means balancing just the right amount of inventory – not too little to incur fees and not too much to avoid overstock. It’s a bit tough and tricky as well. If you want to save on this fee, you need careful planning and smart management.
A quick overview of this article:
- The recent updates on the low inventory level fee
- The challenges sellers will face for this update
- The key findings of this update
Recent Update on the Low Inventory Level Fee
The way Amazon is injecting the low inventory level fee into FBA, the reaction is chaotic. They still didn’t clear up much of the confusion. Sellers are facing many new challenges regularly.
There are several updates regarding this fee. Initially, sellers weren’t required to pay this fee from April 1 to April 30. After that Amazon announced an extension of this period for two more weeks. However, the fee is now in effect and started being charged on May 15. Meanwhile, you’ll be credited back for any low inventory-level fees incurred between April 1 and May 14. You might already be aware of this update.
But there is a key piece of information we would like to mention. That is, the fee will not apply to those who sold less than 20 units in the past seven days. That means if you sell less than 20 units per week, you don’t have to pay this fee.
The confusion among the sellers
All those new changes in the fee structure have already caused huge confusion among the sellers. Many sellers are complaining and expressing frustration on social media. Some of them are just scared. Some are raising serious concerns, like this guy: “This person thinks it is an abusive monopoly by Amazon, and sellers should take it to the FTC and the United States Attorney General.”
We have also found that having a lot of SKUs and keeping low stock for some of them is an absolute trap for the sellers. So, it’s natural to get this type of reaction from the sellers in such a situation.
Challenges for sellers in this update include
We’ve seen sellers complaining that Amazon is abusing monopoly power. Even though they’re abusing the sellers to win across the markets. But sellers are struggling to adapt to this fee. Here are some of the key challenges sellers might face:
- Sellers have to pay additional fees for maintaining low inventory levels, impacting their profitability.
- Maintaining higher inventory levels means spending more money upfront on products.
- Sellers might need to pay an additional fee to FBA for storage.
- Managing larger inventories adds complexity to operations, including tracking, handling, and shipping products, which can require more time and resources.
Key findings of this update
We found that Amazon declared a new exemption for the new seller. If you are a new seller, then you don’t need to panic about this fee for the first 365 days. The new sellers don’t have to pay this fee for the first 365 days. Amazon is still interested in having more new sellers. They want new sellers to come and start a business.
On the other hand, the existing seller requires a smarter strategy to reduce their extra costs. With careful planning and smart strategies, existing sellers can overcome this challenge and reduce costs. Sellers should carefully look after their inventory level.
Conclusion
To sum up, the new low inventory level fee is a challenge. Remember that you need to pay a storage fee for your product inventory. At the same time, if your inventory becomes lower, you have to pay a low inventory level fee. For the new sellers, they had one year to understand their statistics. Amazon will not charge this fee to the new sellers for 365 days. At that time, the seller might understand their standard inventory level.
If you need any help with Amazon, feel free to let us know in the comment box or email us at the following email address: info@ecomclips.com
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