I wish it was $1600.
Remember - Amazon gets a cut of your account on top of the base fee. Maxes out at $5K for SAS. Unfortunately we are nowhere near that but it ain’t $1600.
All of a sudden I’m 13 months old (No not a year and some change old)
Googoo da fuqaaagaaaagaaaa !!!
I didn’t realize they take % of revenue too.
Grape.
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Yup. .3%. And what it used to be is the $ amount on the Vig was frozen on month 1. Now it’s variable so if you grow, so does Amazon…
As much as I hate Amazon and almost everything about it, I still find a lot of value with the program so there is that.
Our SAS manager works hard for us and does get things done and always gets us answers.
Literally the only thing she hasn’t been able to handle is this competitor BS.
It’s an amazing feeling to know you have someone at your disposal, that has a brain, and is in this country that you can reach out to whenever and have them get back to you within hours with a path forward.
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And isn’t it just like Amazon to announce a major fee change to the masses BEFORE THEY TRAIN THEIR OWN SUPPORT AGENTS ON IT.
FFS.
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This is intentional. They don’t want to provide support on it, they want to wait till most sellers figure it out and have no further questions before training their support on it that way they don’t have to waste as many man hours helping people.
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Here’s the SAS response to my questions minutes after we all got notified.
They found out the day before, had a brief training the next day but have more in depth training next week.
Amazon is a leaky ship. They would never let anyone know about something like this or any change well in advance of the announcement.
The reality is the Low Inventory Fee is still 4+ months away so there is time to figure it out, which we will try to. I will update this thread when and if I get anything actionable or answers to the very simple questions upthread as soon as I have that info.
Hi Steve,
Yes will add to the agenda. I’m attending a training on this tomorrow morning (first heard of these updates yesterday). I’ll come with as much information as I can for our call and will plan to take any follow ups as a priority back to the FBA team.
Thanks,
MK
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OH So there is still time for Amazon to make the right call & trash the idea.
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We all know that’s not going to happen but they better damn well not penalize sellers because their FBA team can’t deliver / check in / receive / transfer inventory in a reasonable amount of time.
I made a really strong statement about this on our call today. My voice hurts. It’s not fair and I don’t even think it’s legal.
If Amazon has the inventory in any shape or form, they cannot penalize the seller. Those guardrails have to be set up. Call it 4 weeks or 5 weeks from shipment pickup - I’ll give them space to work but after what we just went through in Oct, there’s no way this can work.
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The struggle is real …
Because my cat, like many cats is exceptionally arrogant and is willing to speak on behalf of all cats in general.
It says that any inventory Amazon has accounted for in their system counts for “days in stock.” This includes inventory in FC-transfer.
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If the shipment is only delivered, it does not count in inventory. It can be delivered but still sit in the Amazon warehouse’s parking lot for weeks or longer.
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Correct, it has to be accounted for which means it has to at least get past the received stage.
Other than the specific period before the holiday season, I almost never have inventory sit at the dock for longer than a day or two.
Experienced sellers will be able to guesstimate how much of a delay they can expect with the inbound process and plan accordingly. I been using FBA for many years and there generally aren’t any huge surprises and even when there are, it’s usually someone getting shafted by no LTL slots available anytime soon, which is resolvable by using SPD instead. The lead time to inventory being received, and then being finished with FC-transfer, is relatively predictable. Slow downs are usually around big sales events and are also somewhat predictable.
The new policies don’t change a ton except it makes products that were borderline suitable for FBA possibly no longer suitable for FBA.
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I shipped a pallet for my other account that was picked up last Thursday. Checked in today.
So much for Amazon’s BS - get your stuff in by Oct 26th because we aren’t focusing on inventory in Q4. RIGHT… I knew that was going to happen. Really, really, really dumb.
But I’m the dumb one because I continue to trust what I read from them. Like a battered spouse. Things will be different next time or it won’t happen again.
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Hey, Amazon wisely walked back the proposed SFP fee because the FTC might have called that non-competitive double-dipping…kinda like hijacking or “losing” your FBA inventory and then charging you a fee for insufficient inventory but also a fee for too much storage when you do have sufficient inventory… 
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I’ll be pleasantly surprised if they do.
Like I and others have said, this thing has so many variables that are out of the seller’s control and sometimes even Amazon’s control that I don’t even know how it would even work.
You would think that Amazon has already built all of this out and tested it but something tells me they haven’t even started…
I said this to SAS today - “What are we supposed to use to forecast Amazon sales”? Your planning tool sucks. It’s off by 50% on the high side universally. Planning for growth that didn’t happen. I haven’t even looked at that tool in almost a year after it got our hopes up.
To be honest, it might have been correct. That tool doesn’t take into account 20 sellers coming in with fake crap to grab your share or the wild fluctuations that seem to happen to everyone.
There’s no way to really effectively plan. There’s a penalty for overstocking and now one for understocking.
I really wonder what’s next…???
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It’s actually not as bad as it sounds.
90% of being successful in retail is inventory management (assuming that you have customers). If you’re constantly out of stock or you got a warehouse full of trash you can’t sell, that’s how you end up on the fast track to bankruptcy.
After fully reviewing the way the low inventory fee works, I think if you properly manage your inventory you should never get hit by it. Since they take the calculation on TWO time periods, it means if you either recently restocked a large quantity, or you restocked a 3 month supply 3 months ago, you should not get hit by the fee.
If you restocked 90 days of inventory 90 days ago and sell through it without replenishing, on day 90 and the last unit, your “90 day average inventory level” would sit at 45 days, thus no penalty. If you recently replenished (a large quantity), your 28 day average level should get over the threshold pretty quickly.
If you send in a 90 day supply each time you replenish, and restock when it declines to a 30 day supply, you should never even come close to getting hit by the fee.
Only sellers who are intentionally understocking (likely some kind of RA or whatever who can’t get enough inventory), or who are selling low volume/inconsistent sales items (who are less and less welcome at FBA every year) will get hit by this. There may be some glitches here and there that get people hit with the fee but that’ll probably be rare.
Remember there used to be a ton of incentives to increase FBA selection, like 1 unit not counting for storage/LTSF, annual free removal periods and cheap removals all around, and FBA offering 2-day prime to all customers regardless of where the item was located. Those are all gone now because now that their catalog’s big enough they don’t need to subsidize that anymore.
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In this perfect world scenario, where you have total control over supply, constantly have just the right number of units in FBA to neither harm your sell-through index, nor trigger long-term storage fees, meaning, you have enough for 90 days, but sell most before the 45 days sweet spot to keep your sell-through index above 2.0, the low inventory fee will not apply. I have to assume that the bulk of what’s being sold in FBA falls into that category, and these merchants have already done the right thing anyway and do not need a new fine dangling over their inventory. If you have a fairly low profit margin, to be all of a sudden hit by that fine long AFTER the sale, because of a hick-up outside your control, unpredictable sales dip (Corona anyone?), or selling TOO FAST (God forbid), you can all of a sudden suffer thousands in fines without any way to timely correct this. Even with perfect logistics in place, FBA is sometimes responding to changes as late as two months after you change what you source, how much, etc, or even longer. It has always been the key to be able to foresee what will happen in FBA either by looking at the data Amazon provides on units with existing sales, or by trying it slowly yourself and see how it goes, improve the listing etc.
The only way to handle the new fee in these categories is to simply assume that it WILL incur, like always adding $1 to the COGS per unit or whatever, and then be happy when the fee DOESN’t occur. Like a Christmas bonus. In this non-perfect scenario of irregular or untested supply, you simply can’t predict it anymore in a reliable manner. I think this is the main disrupting aspect of this new fee,
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Whether the situation is outside of your control or not, the low stock situation still costs Amazon more money to fulfill your orders. While they did make the system convoluted/complex, it is a more fair way to allocate fulfillment fees than to increase costs across the board (remember that base fees are actually DECREASING this year despite yearly inflation/other carriers increasing fees).
There’s a lot of things that are outside of your control when running a business that you can end up being liable for. For example, if you sell a defective product and the manufacturer goes bankrupt because of it, you can be fully liable for all damages that they can’t pay.
If you on average run your supply chain well, you should come out ahead with this new fee model.
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The above covers almost every seller of used books and media.
We are not intentionally understocking any of our items. When I find a used book that has high customer demand, I would love to send in 20 copies. But I only have 1 copy. That’s the nature of sourcing and selling used items that are not consistently available.
So, if we want to continue selling books via FBA, we will soon pay an extra fee to do that.
Here are a few other things about Used books that most Amazon sellers don’t understand - they are excluded from a lot of Amazon programs and benefits. Can’t run PPC on books. Can’t Create a Coupon for books. They are excluded from Small and Light, excluded from Vine, excluded (technically) from the current iteration of Inventory Placement and Premium Placement Services. No Brand Registry for Books. Used Buy Box Wins are not provided by Amazon like New Buy Box Wins, are, so we sellers have less analytics to work with.
And I don’t believe that “Amazon doesn’t want used books on the venue”. I know that less than 10% of Amazon sellers carry books and/or media in their inventory, and only a fraction of those sellers use FBA to sell them. But even so, mega used booksellers (Thriftbooks, Better World Books, Discover Books) are often still in the top 10 of Amazon 3p sellers in terms of revenue and units sold year after year. Used books are very popular with Amazon customers. Used FBA Books even more so.
After April, there will be far less used books available for Prime shipping, and that is not a win for Amazon customers.
But apparently it is a win for cutting fulfillment costs.
My argument here is not a “fees are so unfair” argument. Fees go up every year. New fees will continue to be implemented. I plan for that and factor it into my operation well in advance. I tailor my FBA inventory so as not to be suddenly worthless if Amazon thrown more fees at it or makes a major change in program structure or policy.
My argument is that of unintended consequences of throwing a “Low Inventory Fee” at in-demand merchandise, that by it’s very nature has been and always will be a “one off item”.
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