If you are an e-commerce entrepreneur who takes advantage of the Fulfillment by Amazon (FBA) program, you probably already know about the higher fees and new limits on inventory storage at the various logistics centers. According to the email sent to FBA merchants, this fee increase and new storage limits are part of an effort to push all sellers towards becoming more efficient in terms of inventory management.
When FBA centers were introduced a few years ago, Amazon executives knew that the need for expansion was right around the corner; to this effect, new facilities are currently opening on a monthly basis not just in the United States but also in select overseas markets. Clearly, even Amazon has its limits and capacity issues. As the situation stands in 2018, the company is expecting a very busy holiday shopping season. It stands to reason that the FBA fee increases and storage limits might be intended to fund opening more centers in the future.
New Amazon FBA Fees
The first FBA fee increase rolled out in February to set a new minimum of $0.50 per item. In April, a $0.05 increase per cubic foot storage was added to products that take up standard and oversize space at the FBA centers. In August, items that have been sitting for more than 365 days will be assessed a monthly $0.50 fee each month for long-term storage.
In the near future, Amazon may roll out additional FBA storage fees based on the Inventory Performance Index of sellers. In essence, sellers whose Inventory Performance Index (IPI) scores are lower than 350 will be affected by the new fees. If you are one of these sellers with low IPI scores, Amazon will notify you, and the fees could be as high as $10 per cubic foot each month.
The Need for More Efficient Inventory Management
When it comes to assigning IPI scores, Amazon looks at three main factors: out-of-stock, excess and stranded inventory. It is not surprising to learn that Amazon is seeking to maximize the efficiency of its massive online marketplace and its logistics operations; moreover, the retail giant wants to push third-party sellers to move their inventories in the best way possible, which means increasing their sales volumes.
There is something else that Amazon sellers should realize with regard to stranded inventory: this is a situation that is caused by inactive product listings, which in turn often happens because of duplicate or suppressed ASINs. In some cases, Amazon deactivates product listings when shoppers start complaining about getting items that did not match the product description, and many times this is caused by a hijacked ASIN.
Tracking Your ASINs With Brandlox
When counterfeiters and scammers take control over an ASIN that is being handled at FBA centers, they may go as far as sending their own inventory of fake products; in some instances, they will even pay for the storage fees so that it looks like they are the sellers who generated the ASIN in the first place.
To avoid suppressed ASINs and stranded inventory, you should keep an eye on your product listings and look out for unauthorized sellers offering your items without permission; this could be a sign that an ASIN hijacking attempt is in progress. With a subscription to Brandlox, you can be notified about unauthorized sellers trying to piggyback on your ASINs the moment it happens.
If you are trying to keep track of 10 or more ASINs that you have generated on the Amazon Marketplace, Brandlox is definitely for you. Learn more about this online loss prevention tool by contacting one of our e-commerce consultants today.
