Someone explain the Low Inventory Fee to me like I am 5

YES! I am concerned about that too, I bet they have not considered it. Because last year they offered me a fee credit if I sent in a particular quantity of one of my expirable items. I did send the quantity, same ASIN but the sku changed due to a new date batch. They wouldn’t give me the discount.

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If they didn’t consider the “List / Retail” price of an item for the new coupon policy and pointed there for the current price, even if there was a sale price, they certainly didn’t consider this.

Nobody at Amazon would even think of that because it’s not even a procedure they know about or recommend. It’s done because they have no ability or care to rotate perishable goods and this is the smart seller’s way of working around their ineptitude.

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It seems to be at the ASIN level.
From the FBA Inventory dashboard, I see that the ‘Historical Days of Supply’ are the same for two different SKUs of the same ASIN we currently have in stock.
Needless to say, the available quantity differs between the two SKUs.

Initially, when the guidelines came out, I assumed this would be at the ASIN level rather than the SKU/FNSKU level.
However, they do not explicitly mention that anywhere (if I am not mistaken).
They state that it is calculated at the ‘parent-product level,’ but this does not necessarily exclude the possibility of it being calculated at both the parent-product and SKU levels.

@primetime

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What many people don’t realize is that Parent ASIN level means that items in different sub conditions will be treated as the same item. A seller could have a media item in Acceptable condition and the same ASIN in Very Good condition, and the Low Inventory Level Fee system will read it as 2 of the same item.

I don’t think a lot of book/media sellers find themselves in this situation often, but still.

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I disagree with this. The last 3 shipments I sent in, 2 of them were delivered and checked in within a couple weeks which is usual. The 3rd took a month to even get delivered to the FC, then another 10 days after delivery to get into checked in status. That’s 40 days from pickup to being “in the system”.

Was I out of stock? No, but I would have been fined for low stock. I do agree that this is the exception rather than the rule but let’s just extend that percentage out for future shipments. If I’m fined for 1/3 of my inventory being low stock (as 1/3 of my shipments were delayed) that isn’t a small glitch or rare.

The real issue is the same as most problems with Amazon, the left hand doesn’t understand what the right is doing. A couple years ago, I actually got to speak with one of the execs somewhere in the FC chain about this issue. He assured me that all shipments are checked in exactly the order they are delivered. I showed him another set of shipments similar to my last 3 where most were delivered and checked in in a reasonable time but a third was still out in the weeds somewhere. I explained to him about the dropped containers sitting in their yards. What was happening was the reports he sees just show checked in shipments versus delivered shipments. Great, but those dropped containers aren’t shown as delivered in their system so he doesn’t see them. In his view, the FC’s were running at a very high percentage of checking in. He was shocked to know that isn’t what was happening.

Did anything change? I doubt it, better to hide the issue and the potential loss of a performance bonus for their “outstanding metrics”

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For sure. Like when it tells us that we have low stock (translation: send more in) at the same time they tell us we have excess inventory (translation: you have too much at the warehouse).

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A lot of sellers are still suffering from the trauma of inventory/unit limits only to be told now that 90+ days is more than acceptable. Fool me once shame on me…

Make up your mind Amazon, either you want us to store and pray or you don’t.

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This is Normal in the real world :arrow_heading_up:

4 Turns is the sweet spot, especially on Amazon where having enough inventory spread all over is what gets you the best time to home and thus conversion.

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Thanks for researching. I did not think to look at that dashboard before, I am seeing the same 90 day quantity on different SKUs per ASIN also. Mine is not a parent/child variation situation so it is interesting Amazon is apparently applying the same logic to multiple SKUs. My original listings in this brand (parents in their eyes?) are my seller fulfilled offers.

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I notice the FBA Dashboard Inventory tab default does not show inbound, I added it as a table preference but it’s still not in view. It doesn’t appear to be factored in to the restock recommendations, something to watch out for on restock decisions. Especially in the case of inbound being delayed in a trailer in their yard it certainly should be counted against the low inventory calculation.

I don’t see any indication that my inbound is being counted.

Currently trying to function on an iPad so things might be different than what I’m seeing.

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Even if they did could it be trusted? Having it in the sku identifies exactly which lot each customer order came from. God forbid I ever need that, my superstition is that if I have it then I won’t need it!

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Yeah, I’ve been thinking about this too. Suggestion: the same day that you get the updated in-stock rate, if still above 28 days, start repricing the product for a certain amount less than the lower price to try to sell it out as soon as possible. In-stock rate hasn’t consistently updated every week, which could play in your favor in case the following update is delayed.

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Ths is absolutely erroneous. It is not uncommon for suppliers to experience supply chain constraints from time to time, even long after the worst of the pandemic. It’s happened to us with several products in the last couple of months; those products were doing great and there’s no way we could’ve restocked them in time to avoid the days of supply going below 28. And I’m talking about some of the largest manufacturers of home and office products in the US - no small peanuts. Solution… singificantly raise prices to throttle sales until we were able to restock.

There are several other factors that might cause a drop in your metrics, most importantly lost FBA shipments and inventory stuck in FC Processing (being transshipped, which takes several weeks or even more sometimes). We’ve also been significantly affected by both of those in the last months.

I still think sellers who handle their stock well will do a lot better than those with poor management skills, but the system punishes you even if you do everything that you can control perfectly.

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Amazon is supposed to be on a “first in, first out” system for any items with expiration dates and within the entire grocery category.

It has NEVER worked the way it should.

And you just know they DO have the logistics capabilities to manage this.

So why can’t they get it right?

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(yes, it may be due to the ipad. We can see the inbound quantity in the dashboard)

Apparently, inbound units are not influencing this metric.

However, Amazon points out that if the inventory is generally well managed, it should be able to maintain a healthy 90-day value, hence allowing to avoid the fee (since it is charged when both the 30-day and the 90-day are below the threshold)

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TIME! It’s all about time and efficiency. Product comes in, gets shoved in the next closest avail location. Exp date is not noted anywhere in the FBA system on their side. They have zero capability to handle this shockingly.

So let’s say 100 pieces of inventory get shipped into a FC. It gets parked far away due to avail space.

2 weeks later, 100 more get shipped in and get parked closer. That further away inventory will never get picked if inventory remains closer to where the picker is going. It’s borderline insanity.

Amazon just marked 126 units of ours expired. That never would have even come close to happening if things were picked even remotely close to FIFO.

Just writing it off. Not getting involved with the complications of sku / date management of inventory. It’s not worth our time.

Our first and third SAS managers both came from managing Amazon FC’s / DC’s - interesting transition that makes no business sense to me because neither have any business experience but I digress. Both of them told me how it works and both “stories” were identical.

Not to say I was shocked to learn the dirty little secrets but it is surprising that Amazon hasn’t put systems in place that have been widely used since the 90’s by everyone else to fix this and help themselves and their valued selling “Partners”

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

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.

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You know some “exec” did the math on just how much $ Amazon could collect annually on the low inventory fee. Must be a big attractive number for them.

Just read something that the FTC is looking into the Placement Fees. That’s interesting.

TBH, I don’t have an issue with the placement fees, coupled with the FBA fee reduction. It makes sense all around. The issue I have with it is 3 pallets isn’t enough to avoid placement fees. That’s just nuts. I guarantee that Amazon will not send pallets to FC’s, rather DC’s anyway which means they are getting moved anyway, even if you send 20 pallets to avoid fees.

Created 4 shipments yesterday, with a total of 10 different destinations, all but 2 I’ve never heard of and are FC’s not DC’s.

Didn’t pay any placement fees but sure are nervous about the increased chances of losses, delays, damages, and the increased risk of multiple “Shipment Problems” to deal with.

Let’s see what happens folks.

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It appears that there is a new Fee-tracking tool coming into play:

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