Low Inventory Fee and Amazon Out of Stock Guidance

Fulfillment by Amazon Deciphering Amazon’s inventory management
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Happy Easter Everyone!

One of the two days that we take off each year. Except this year Amazon is providing us help by telling us two items are going to be charged for low inventory. At 4:13am Easter morning.

Upgrade Inventory Practices & Avoid Low-Inventory-Level Fee!

Hello,

We’ve launched a new Minimum Inventory Level metric to help FBA sellers plan inventory levels more effectively, improve delivery speeds, and help them to avoid the recently announced low-inventory-level fee.

You’re receiving this message because some of your Fulfillment by Amazon (FBA) products don’t have enough inventory to keep up with customer orders.
The following sample ASINs are at risk of running out of stock, incurring low-inventory-level fee, or resulting in degraded delivery speed to customers:…

… 1. Schedule your shipments regularly and on-time. Leverage the FBA Inventory page to help stay on top of recommended ship dates and avoid stock-outs…

The inventory management page shows the two products they provided as a sample. The first 3 in stock, 54 unit run rate, 2 days avail and they don’t want us to send inventory until April 6th. They want 94 units.

The second has 28 in stock 50 unit run rate, 17 days available and they also don’t want us to send inventory until April 6th. They want 53 units.

Now we know both those restock requests are wrong. We view them, but always have to correct for what amazon thinks we should send. Now the first item, our fault, we were going to send a case last week. However, why do they think we should wait around until April 6th, if I were the type to blame others I would blame them.

But no it is our responsibility to keep up on it and make it happen.

And we can trust them to charge an Accurate low-inventory-level fee?

  1. Adhere to recommended quantities. Match your shipment quantity to the replenishment recommendations our system generates based on sales trends and market demand, which can help avoid both excess stock and potential sales loss due to shortages.

I can’t imagine Back to School season, they are still bugging us to send units that we recalled at the end of September last year! How much excess Low Inventory Fees will we get based on this inaccurate tool?

  1. Ensure your shipments are accurate. Confirm that shipped quantities correspond to what you’ve committed to on Seller Central in order to maintain a healthy inventory level, ensure product availability, and sustain customer satisfaction.

The only time they are inaccurate is when Billy does not know how to count, but that is another problem.

  1. Check the FBA Inventory page on a regular basis. Think of this page as your comprehensive inaccurate tool for managing your inventory efficiently, offering insights into restocking, reducing excess inventory, and resolving stranded inventory issues.

Nearly Useless and inaccurate tool. I edited it for them.

This low inventory fee is going to be one hell of a money generator for Amazon. Especially if they rely on this “comprehensive tool” that has never worked well at all.

Well we could always overstock I guess. Oh wait, IPI score, storage fees, monthly fees, overstock fees, long-term storage fees… :person_facepalming: :man_facepalming: :woman_facepalming:

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I assume the Amazon message you received was an email, right?

So, can I also assume if we didn’t get that email, that means we won’t be charged the Low inventory fee, at least for the very first time period?

How often does Amazon assess whether we’ll be charged this fee, weekly? Then how long will it last?

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A dangerous and meaningless word found in the Amazon non-dictionary dictionary.

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Yes, the information in block quotes is a copy and paste from the email they sent.

I have no idea, about when it will be charged. My concern is the system is flawed. And thus the charges will be fraudulent.

What else is new, look at the new inbound tax for distribution of items.

We are FBA and FBus. We see a 4-5X lift when we use FBA. We do it all wrong if you were to have gone to business school. We have many SKU’s since we have many themes and variations that result in a variety for the customer.

This versus the recommended few SKU’s and selling larger quantities.

We chose this path to compete with the offshore Asian Basin Research and Duplicate program. They replicate our items but can only ship big batches over to FBA. So they typically select one design, or theme. Where we can provide a broad customer selection.

For those that say they are getting treated the same… I argue, no since they are limited (financially) to importing a lot of the same item.

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This is my concern as well, which is why I’ve had to task someone w/ archiving various reports, GUI screenshots, and missives like this email (which we received @ 2:15 AM today, 31Mar`24) for what’s likely to prove a slog in contesting widely-inaccurate charges.

Selling Coach functionalities have never been up to par, but things are getting worse.

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we will calculate the historical days of supply metric at the parent-product level, and we will add the low-inventory-level fee to the FBA fulfillment fee for all shipped units of eligible products.

I assume they will assess if charges are applicable when sales are made? I think it will continue with each sale as long as the inventory is below 28 days of 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).

I hope it is not multiplied by the number of days the inventory level fell below their 28 days of supply metric!, but only once at the time of sale?

Search Low Inventory Fee under Help, I could not copy the link for some reason (@Dogtamer ?)

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The simplified, non-“G”-prefixed URL of the SHC’s “Low-inventory-level fee” page is here (‘broken’ for Discourse display):

https: //sellercentral.amazon.com/help/hub/reference/V43F6S76Y9DHYRH

Prime, may I ask if you’re saying that you had the URL, but couldn’t include it in your post because it displayed a “Server Busy” or “Amazon Sign-in” dialog box when you posted it ‘unbroken?’

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Yes, you may ask! It displayed as ‘server busy’.

Is that because I did not break the link?

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Yepper - it’s an idiosyncrasy that is most-easily addressed simply by ‘breaking’ the link as I did above.

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This and hundreds of other questions are one reason I posted this thread. The analysis of the impact of this ridiculous tax, has been confusing.

Now with practical examples starting to show up, we can find out how it hits the everyday seller.

We have a very large local market chain that uses a similar method with suppliers. (They send in product, get paid for when it sells) I just can not imagine, they charge a fee/tax if they did not deliver the green beans on time. Though they may. When I run into one of the family members I will ask.

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Woke up this morning frantically looking for the Low Inventory fee that will apply to some of my ASINs, but I’m not seeing it under Manage Inventory or FBA inventory. Can anyone find it?

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I have an FBA inventory screen that projects a 35-day supply in stock, but labels that as “Low Stock”, with a button called “Recommended Action” that says “Ship X units in Y Days to FBA”

So “low stock” can’t be “low inventory”, as the supply is above 28 days, even at their own metric.

But what does one do with multiple SKUs of the same ASIN? I ALSO have a “Recommended Action” that says “Ship X units in Y Days to FBA” for a 2nd SKU that we are no longer shipping, and only remains active so that Amazon can “find” and sell the 1000+ units they lost in 2023. At some point, that inventory expires, and anything found must be destroyed, not sold. (Does anyone know how to order Amazon to do this with any “found” items with certain FNSKUs? They don’t seem to have any facility for accomplishing this.)

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They just added this announcement to news:

https://sellercentral.amazon.com/gp/headlines.html?ref=nswg_scgw_GFAM369ZC9K2YM8E_en_US_0_nslp&id=GFAM369ZC9K2YM8E&communicationDeliveryId=15d26278-8585-4732-acbd-11123bc464cd

Looks like they’re offering a transition period. Per the news:

We will still charge the FBA low-inventory-level fees incurred between April 1 and April 30, but after the end of the month, we will credit your account for all low-inventory-level fees charged during this period. Our goal is for you to see the end-to-end experience, and understand how this may affect your business so you can further update your inventory management to maintain sufficient inventory levels, drive greater sales, and avoid the fee in the future.

In typical Amazon fashion, they realized this was a big mess and implemented a “grace period” in the last minute.

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They have this posted at the top of the page now

Note: We’ve heard your feedback about the low-inventory-level fee, and we want to make it easier for you by providing a transition period. Low-inventory-level fees incurred for units shipped between April 1, 2024 and April 30, 2024 will be credited back in May.

I read somewhere earlier that we would not be charged until 45 days after the orders shipped. So, an order shipped April 30 would not be charged until mid June, but credited back in May??

This notice is a little different than the news item posted by @Gandalf since it clarifies that it is units shipped.

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You mixed up Low Inventory fee with FBA placement fee (which is charged 45 days after shipment was received).

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There Restock Recommendations Report NEVER matched up with there INVENTORY Health Report!
They (as far as i can tell), have no proper way to predict for (majority) of FBA Products and/or Sellers proper stock levels! [And now they want to charge based on their dreamed-up numbers].

This is sooo Dumb that even they wouldn’t in a semi-sane moment consider this theft.

Its just that they need/want to push their newest service/offer Wharhousing By Amazon, which will drip feed stock into FBA, and would have the low inventory fee waived. So this is just another one of those illegals pushes of their services onto sellers

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Amazon just announced a CREDIT for the first month on the LOW INVENTORY FEES…

Update: Credit for FBA low-inventory-level fees incurred during April 2024

by News_Amazon

4 hours ago

As announced in December 2023, the FBA low-inventory-level fee will go into effect on April 1, 2024. This fee applies to products with consistently low levels of inventory relative to their unit sales, which is also referred to as your historical days of supply. Maintaining sufficient inventory levels allows Amazon to effectively distribute products across our fulfillment network, which improves shipping speeds for customers and helps drive more sales for you.

We have heard feedback from a number of sellers that they are still uncertain what the exact effect of this fee will be on their business. To help you better see how this affects your business in real time, we will provide a transition period during the month of April.

We will still charge the FBA low-inventory-level fees incurred between April 1 and April 30, but after the end of the month, we will credit your account for all low-inventory-level fees charged during this period. Our goal is for you to see the end-to-end experience, and understand how this may affect your business so you can further update your inventory management to maintain sufficient inventory levels, drive greater sales, and avoid the fee in the future.

How it will work

Starting April 1, the transition period will begin. You will still be charged the fee on eligible products shipped with historical days of supply below 28 days. Then, we will credit back any charged low-inventory-level fees for units shipped between April 1 and April 30. You can expect to see this credit in May.

Starting May 1, the fee will be charged without a credit back. You can avoid the fee by ensuring that either the long-term historical days of supply (last 90 days) or short-term historical days of supply (last 30 days) are above 28 days (4 weeks). April will give you an opportunity to understand if your current inventory management actions will effectively avoid the fee, or if there are adjustments you can make to avoid this fee so you’re prepared going forward.

For more information on the low-inventory-level fee and what qualifies, go to Low-inventory-level fee.

Thank you for your continued partnership.

News and Announcements

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Yup! That is what I did. Sorry to confuse others.

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I think you nailed it, trying to push us into the new warehousing service. I don’t want it.

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One of the members of the FMT-CMT (“Forum Moderation Team”-Community Management Team"), Jim, posted this in the NSFE’s ‘Update’ discussion earlier today:

https://sellercentral.amazon.com/seller-forums/discussions/t/e4922716-241e-48db-ac74-411e71825614?postId=aaaed48e-e916-4466-bc58-e516443181cc

I’ve just downloaded our report covering the period 28Mar24 through 3Apr24 from the “SKU Economics Report” Dashboard @ https: //sellercentral.amazon.com/sereport, and from what I can tell, this functionality seems to be a work in progress - but if it is eventually fully-fleshed out, it might prove a useful thing.

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