Inventory tracking and control is more important than ever, now that Amazon is changing their storage and shipping fees. Amazon recently announced that they are lowering FBA storage fees in October, but doubling them during the peak months of November and December.
Amazon FBA fees for January through October is now $0.54 per cubic foot for standard-size products and $0.43 per cubic foot for oversize products. In November and December, however, the fees will jump from $0.72 to $2.25 per cubic foot for standard-size products. For oversize products, the fees will double from $0.57 to $1.15 per cubic foot.
This “surge pricing” model was largely due to last year’s holiday season when Amazon ran out of space in its US warehouses, increasing the company’s fulfillment costs that led to lower-than-expected profits for that quarter.
The new fee structure will force merchants to make smarter, strategic decisions about their inventory. Retailers will have to make sure to stock only fast-moving items, as slow-moving items will only go stale and absorb the FBA fees. The new fees could result in the Amazon marketplace being less profitable for sellers, unless they have a solid inventory management system.
If FBA is a significant part of your ecommerce business, the price spike could hurt your profit this holiday season. As an online retailer, you need to track specific KPIs to ensure that your products don’t sit still in a fulfillment center.
When it comes to knowing your best and worst performing items, spreadsheets or natural instinct just won’t cut it. Amazon sellers need real-time performance tracking and predictive analytics to determine which products are slow moving or which items need more promoting. It gives you the data you need to analyze sales performance and drill down on which item variations or kits are selling poorly. If you cannot predict how much inventory to stock this holiday season, it will cost you a lot of money in stale inventory.
Similarly, an automated Amazon re-pricing tool can also drive sales by keeping your products competitive on price, without having to manually adjust them.
By having the right ecommerce management tools, you can keep more profit, trim expenses and sell more effectively on all your channels.