I have questions! Low Inventory Fee on Items I'm Phasing Out/ Won't Be Carrying Anymore :/
Need a moderator to tell me how am I being charged if I am phasing out a product. I have products that I am thinking about phasing out once this last batch is sold. Will I be reimbursed my money once the product is deleted? How long am I charged fees if item is listed but no stock? How is this really even fair. This is such a gross over reach and a sinister move by amazon.
I have questions! Low Inventory Fee on Items I'm Phasing Out/ Won't Be Carrying Anymore :/
Need a moderator to tell me how am I being charged if I am phasing out a product. I have products that I am thinking about phasing out once this last batch is sold. Will I be reimbursed my money once the product is deleted? How long am I charged fees if item is listed but no stock? How is this really even fair. This is such a gross over reach and a sinister move by amazon.
0 replies
Seller_nRFmxiQg4EGrw
I finally got an answer to this and related questions after asking multiple times.
Basically, it doesn't matter if your item is seasonal, discontinued, phased out, replaced by a new product, or whatever. You'll pay the Low Inventory Fees on every unit you sell once you are below the threshold.
Amazon feels that they know how to run your business better than you do.
Seller_nlFz11d3mMLUM
IMO sellers should contact the FTC over this. This fee is a monopolistic overreach. We're charged inventory fees if items stay in inventory for too long and we're now going to be charged when inventory is "too low" by their calculation. Not to mention the fact that they are already taking 33% to 50% of the FBA product price. I guess we just keep bumping up prices until the customer is forced to begin searching elsewhere for their items.
Seller_hLH0bAcCwYcos
THIS is EXACTLY my problem with this particular FEE, per post on another forum. ALL PRODUCTS get phased out, discontinued eventually. And when they do, you will get hit with the fee on EVERY SiNGLE UNIT of your last shipment of a product if it's not enough to match last month's sales.
EVEN IF YOUR FINAL SHIPMENT OF A PRODUCT DOES match last month's sales, you will get hit with this fee on EVERY SINGLE UNIT once the threshold gets below last month's sales. It's almost like a "TAX" on successful sales.
ALSO, you will get hit with the LOW INVENTORY FEE if there is a delay in getting a shipment credited to your account, per LOGISTICS backup at the loading docks. One seller posted that their shipment was delayed by 2 weeks (WHICH WE TOLD HIM WAS COMPLETELY NORMAL AND REALLY UNAVOIDABLE). What's NOT NORMAL, is that seller will get hit with the LOW INVENTORY FEE EVERY DAY until that shipment gets unloaded IF it results in their inventory going below the threshold, EVEN IF THEY SHIPPED IT IN PLENTY OF TIME. We are getting hit with an "INEFFICIENCY FEE" EVEN IF THE INEFFICIENCY HAS TO DO WITH AMAZON LOGISTICS, AND HAS NOTHING TO DO WITH US. FAR TOO MANY WAYS THIS FEE IS GOING TO BITE US IN THE TAIL.
The ONLY WAY to AVOID THAT FEE, GUARANTEED, ON YOUR FINAL SHIPMENT OF A PRODUCT, WOULD BE TO HOLD IT, LITERALLY FOR 90 DAYS, UNTIL YOUR 90 DAY SALES AVG REACHES ZERO, AND THEN SHIP IT ALL. THEN THERE WOULD BE NOTHING IN PRIOR 90 DAYS OF SALES TO COMPARE IT TO. BUT THAT WOULD ALSO CONTRADICT THE ENTIRE PURPOSE OF THE FEE, WHICH IS TO KEEP PRODUCT STOCKED! THEN YOU ARE HURTING YOUR SALES, AND AMAZON'S SALES! NOBODY WANTS THAT! DOES ANYBODY ELSE SEE HOW BACKWARDS, AND MESSED UP THIS FEE IS?
*** UPDATE: CORRECTION, EVEN IF YOU DID THIS, YOU WOULD STILL GET CHARGED THE FEE AS YOU ARE GOING DOWN TO ZERO UNITS BEFORE YOUR RESTOCK. SEE MY POST BELOW ***
Seller_RmrFi3dwWiP3u
I wonder if the only way to avoid this confusing and seemingly unfair fee is to convert all of my FBA inventory to FBM and submit a removal order and just ship from my warehouse rather than send anything into Amazon fulfillment centers. At least it would free up inventory for other channels. Does this make sense to anyone?
TaylorR_Amazon
Hi @Seller_mA0Z5w7U7SxRU, Amazon will only charge a low-inventory-level fee when both the long-term historical days of supply (last 90 days) and short-term historical days of supply (last 30 days) are below 28 days (4 weeks). If an item goes out of stock, the fee will not apply.
Seller_OHUMEP5eiRhB6
Basically the answer is...
Once below the Low Inventory threshold (when selling out), you want to
Either,
Sell Out as quickly as possible (to minimize the fee impact), or
Raise the selling price [if you can] to offset the cost of the fee
That is until ..........
Seller_ULw5xOlDpZZF2
This is unfair not just for inventory phase out but for seasonal sellers. We have huge spikes of different product during the peak seasons and ideally, during the peak of all peaks, that's when we WANT to sell out. And we don't want to restock. What a joke. We've already run the numbers and if we have a season longer than 90 days, this will impact seasonal sellers the most, particularly Halloween and Christmas seasons that are months long. Sorry, but a fee reimbursement for April is not going to help seasonal sellers. We sell Halloween and Christmas villages, figurines, and ornaments. This is outrageous and is forcing us to look at Amazon's competitors for fulfillment.
Another thing to consider is that small-medium sellers absolutely don't have the tools and resources to thread such a fine inventory needle to keep inventory EXACTLY perfectly as Amazon can.
Amazon, it's time to eliminate this fee completely.
Seller_hLH0bAcCwYcos
The ENTIRE PREMISE of THE LOW INVENTORY FEE is flawed. It's supposed to promote the efficiency right? How is it efficient to require 30 days on hand of additional untouched inventory? That's 30 days of unused inventory thats just sitting there at all times. That's what we call "stockpiling!"... Have you been to a restaurant where they leave a 30-day supply of food in the back at all times? Of course not! They use it up each week! Why is it inefficient to use the actual inventory on hand? Why do we have to have 30 days of untouched Supply or get charged with a low inventory fee? Makes NO SENSE to me. We use gas in our car every week, but we don't stockpile a 30 gallon drum on hand! WE simply use up what we have each week. How is that inefficient?
This fee completely contradicts the * inventory utilization Fee *, which says if we have over 22 weeks worth of inventory, we get charged with THAT fee. So we have to keep our inventory at 12 weeks worth to avoid LI Fee (30 Days worth untouched on hand to avoid the fee, + 30 days worth to cover inbound shipping delays on OUR NEXT SHIPMENT, + 30 days worth to cover OUR ACTUAL SALES ABOVE THE 30 DAY SUPPLY MIN.). That's WAY too narrow a margin. With this new fee, you will GUARANTEED get hit with one of the 2 above fees. The channel between the 2 is way too narrow to navigate without getting blasted with fees.
Seller_oDXVaydIpi3Hi
I believe this fee has 4 purposes:
1) make Amazon more money for less work, of course
2) push only top sellers which will make people not ship in anything that doesnt sell fast and at volume.
3) make sellers spend massively more on AMS to get sales rank and volume
4) they are having issues with staffing at a number of FCs and have too many FCs in many markets, so this will reduce workload and increase efficiency at the FC level by reducing on hand SKU counts.
Its a lose for the seller, the consumer, and only a win win win for Amazon
Seller_nRFmxiQg4EGrw
It all comes down to the numbers. As the numbers have changed, I find fewer and fewer of the books I have are suited to FBA; but there are still plenty of cases where I will make more, even after fees, by using FBA.
The important thing is to check the numbers for yourself. There is no "one size fits all" answer, despite the fact that Amazon makes their rules along those lines.