I separated this from the overall 2024 Fee Increase discussion because I want to talk about the Low Inventory Fee ONLY.
I am a bookseller. Most of the items I send to FBA are single units of fast selling ASINs. I’ve never sent in more than 20 copies of a book ASIN at any one time.
Am I correct in assuming that every item I sell will be subject to the Low Inventory Fee once it’s implemented?
(I don’t and won’t post on NSFE, but if others do, Mod confirmation of my question would be very nice.)
Totally relate to the name of this thread. This is the most complecated and confusing FBA fee.
I’d like to make sure I understood correctly, If my “Historic Supply of Days” number (on my FBA inventory list) is above “28”, then I won’t get charged of this “Low Inventory Level” fee, right?
So in the example below, eventhough this item is showing as “Low stock” (highlighted in yellow), the “Historic days of supply” is “87.7”. That’s means no Low Inventory Level fee, right?
Most of my Historic Days of Supply have “–” instead of numbers.
On my FBA inventory list, the item with “-” are the ones that haven’t had any sales in last 90 days, I assume that means I don’t have to worry about this new fee on those items, right?
I read your screenshot as you having 4 on hand with the minimum level Amazon wants at 5, so your 4 would be subject to the LIF?
@Muse! Big fan from OSFE, glad you’re here!
Sadly, I have no answer for you except that I do read the changes the same way that you do: one-off inventory not wanted at FBA.
It also means almost all of Handmade.
Basically FBA has determined that handling your inventory costs them more money (after all, having your single unit bounce around in FC-transfer for a month has to cost SOMETHING, right?), so they’re going to pass the cost on to you in the form of an arbitrary formula.
I would just boil it down to this. If you do get hit with the fee, and selling the item still makes sense, then don’t worry about it and just let Amazon do what they will with the fees, if the fee is the difference between making money or not, the margins are too thin for that item to be worth selling on Amazon after considering all the headaches associated with an Amazon sale.
I’m not sure that’s really true ( the reason I asked the question), here is why:
According to Amazon FAQ: " We will only charge the low-inventory-level fee when both the long-term historical days of supply (that is, the last 90 days) and short-term historical days of supply (that is, the last 30 days) are below 28 days .
My HDS is above 28, both for 30 days and 90 days.
I’m beginning to understand Amazon’s reasoning behind this particular fee.
Most of my items can handle the fee. About 25% will net more if sold through non-FBA means, once all of the new fees are implemented.
I am trying to get a clear picture of what will happen to all the low margin FBA book and media sellers.
In my view, the 2024 Fee Schedule is going to unalive more FBA book and media sellers than the 2017 “Feepocalypse” did.
Low margin 3P Amazon seller businesses tend to all go bust sooner or later. Having low margins when someone else controls your costs is a recipe for disaster.
I think they will have a threshold for this kind of thing. I believe this is aimed more at higher volume units.
For example we have an item that sells about 800 units a month, so we keep a minimum 30 days on hand at all times with rolling inbound shipments. I can see how it would be expensive for Amazon if we only had 10-15 days as they would have to ship items a longer distance to customers if they could not maximize low cost distribution methods, like slow FTL transfers.
If inventory sells out faster than Amazon can transfer it using internal means, they have to pay a external carrier or internally expedite at a greater cost per unit to the customer. I don’t think this will affect smaller volume sellers, but only those with limited high demand inventory.
Think of how expensive it would be to ship the last few boxes of holiday lights right now, to you as a prime customer if there was only inventory left in (pick a part of CONUS furthest from your location) compared to 10 boxes across the network at all locations. Those of us living on either coast know how much more expensive things get, when the other side of the continent expects it in two days.
Does Amazon show those few boxes to buyers on the other side of the country, if the buyer searches for holiday lights?
Yup, sometimes with delayed delivery dates, but Amazon does not change the price.
I tend to agree with you 100%. No history means no fines. All a seller in this situation would have to worry about is LTSF’s if it doesn’t sell in 180 days.
Amazon can’t be that cruel to assess fines on 1 off collectible listings. Maybe they can be, who knows, but I stand by no history = no fine for low inventory.
Time will tell. I don’t think anyone knows the real answer to this question, up to and including Amazon sadly.
What is the threshold for days of inventory for it to become low?
When both the long-term historical days of supply (the last 90 days) and short-term historical days of supply (the last 30 days) are below 28 days, the fee applies.
But HOW the low-stock number or the minimum level of inventory is calculated, is not clear: it factors demand forecast and replenishment settings.
This sounds and smells like a fee Amazon will charge whenever, and it will be calculated by the same metrics as how the buy box works, AKA MAGIC!
Ugh, this is going to be a fun one
Good post on NSFE:
Link:
https://sellercentral.amazon.com/seller-forums/discussions/t/04665c84-8ab5-4bb9-9212-ae0b68055d22
I mentioned this exactly this but not in this detail.
It astounds!
