SKUdrop’s Post

INVENTORY PLACEMENT FEES 🩸Blood is on the streets, or is there? It’s the talk of the town. There is no doubt the March 1st, Inventory Placement Fees (IPF) have had a significant impact on all 3P Amazon sellers around the world. Amazon have made the decision to lure as much business as they can into their AWD program. Sellers I talk to aren’t willing to hand over the keys to their business to Amazon with AWD, not to mention no service being displayed currently. While the IPF changes rolled out, there was a timely back room chess move also being made. This was whether or not AGL’s, “AMP” (Amazon Managed Placement) program was going to have the IPF applied to their shipments. AGL kept tight lipped. But, in an expected move, all AGL shipments into the US from China remain IPF free. Their LCL and FCL with mixed SKU’s and product size tiers, to one Amazon FC with the kicker….no IPF, is now an offer that can’t be ignored. Another timely move, the old MWS Amazon API is scheduled to be deprecated from March 31st. I believe 3rd party tools that are creating workarounds are relying on that connection. That will all be done and dusted when that ends. Any software that didn’t upgrade to the new SP API may be in for a surprise soon. (*SKUdrop customers rest easy - we shifted to the SP a long time ago) So what does all this mean? I see storing in China, drip feeding into Amazon and avoiding all the IPF is going to be the new normal. Ask yourself, how many Chinese sellers are using AWD or US 3PL’s? Not many, if at all. At SKUdrop, we are helping sellers stay in the game with our China facility. SKUdrop customers are able ship with whoever they wish. Utilising AGL is welcomed. We are onboarding big sellers at speed. Some savings being reported between $6-$10k per container just in IPF. Now you may not be able to send your entire shipments in one hit. Well that’s where we come in. We inbound for free, store, pick, label and load out as you need. Smaller LCL shipments with AGL may not be comparable to our current freight rates, even after paying the IPF. There will be a tipping point with AGL. We help with instant FBA shipping quotes and shipping plans all built in our system with real time visibility of your warehouse stock. With Seller Central integration and many more features, we do make life easier. We currently have warehouse space available, how long for…I am not sure. If it makes sense to jump on a call with me to discuss the model and apply for space, please message me direct. I want to wish everyone all the best out there. #amazonfba #logisticssolutions #amazonseller #supplychainmanagement #shipping #aggregator #amazonagency #chinabusiness

The new Amazon Placement Fee requires sellers to either pay for a new Amazon warehousing service or begin shipping goods to at least four different warehouses on their dime to avoid the fee. Additionally, sellers will be penalized if their inventory in Amazon warehouses consistently runs too low unless they sign up for the same new Amazon warehousing service. It's important to note that the new fees apply to the majority of the hundreds of thousands of small and midsize businesses that sell goods on Amazon in the U.S. and that already pay Amazon to store and ship goods on their behalf through a program known as FBA, or Fulfillment by Amazon. Amazon sellers accounted for over 60% of items sold on the company’s shopping sites during the holiday quarter. Unsurprisingly, the tech giant generated $140 billion in revenue from seller fees alone in 2023. Looking to stay informed and adjust your inventory management strategy accordingly to avoid these new fees? Schedule an intro call today: https://lnkd.in/guGWPqxt #AmazonSellers #InventoryManagement #FulfillmentByAmazon

Heads Up, Amazon Sellers! Important Updates on the FBA Low-Inventory Fee There's important news from Amazon regarding the recently launched FBA low-inventory-level fee. Here's a breakdown to help you stay on top of things: Good News! More Time to Adjust ● Amazon has extended the grace period for the new fee. Originally starting April 1st, 2024, you now have time to adjust until May 14th. ● Even better, any fees you incur during this extended period (April 1st to May 14th) will be credited back by May 31st. This gives you a chance to optimize your inventory levels without worrying about immediate charges. Exemptions and Adjustments ● Starting May 15th, some products get a free pass! Those that sold less than 20 units in the past week won't be subject to the low-inventory-level fee. This is great for seasonal items, products nearing the end of their lifecycle, or those with naturally lower sales volume. ● Amazon acknowledges that delays on their end can impact processing times. Don't worry, any fees resulting from excessive inbound processing caused by Amazon will be credited back. For instance, May's fees will be reversed by June 15th, ensuring you're not penalized for issues outside your control. ● Prime Day is coming! To support sellers, Amazon is offering a fee exemption for products included in Prime-exclusive Lightning Deals and Best Deals for four weeks following Prime Day. Tools to Help You Manage ●Keep an eye on your inventory health using the FBA Inventory tool ●Estimate potential low-inventory-level fees with the FBA Revenue Calculator ●For in-depth insights, check the SKU Economics report to track past charges. Stay Informed and Share Your Strategies for navigating these changes in comments 👇 Post credit: Julia Malachowski who highlighted these important changes #amazonfba #inventoryfeeupdate #sellercentral #amazonfee

The new Amazon Placement Fee requires sellers to either pay for a new Amazon warehousing service or begin shipping goods to at least four different warehouses on their dime to avoid the fee. Additionally, sellers will be penalized if their inventory in Amazon warehouses consistently runs too low unless they sign up for the same new Amazon warehousing service. It's important to note that the new fees apply to the majority of the hundreds of thousands of small and midsize businesses that sell goods on Amazon in the U.S. and that already pay Amazon to store and ship goods on their behalf through a program known as FBA, or Fulfillment by Amazon. Amazon sellers accounted for over 60% of items sold on the company’s shopping sites during the holiday quarter. Unsurprisingly, the tech giant generated $140 billion in revenue from seller fees alone in 2023. Are you looking to stay informed and adjust your inventory management strategy to avoid these new fees? Schedule an intro call today: https://lnkd.in/gy7vM_Mi #AmazonSellers #InventoryManagement #FulfillmentByAmazon

Amazon’s FBA sellers, brace yourselves for a game-changing update that’s set to revolutionize the way you manage inventory costs! 🚀 Introducing “Auto-Cancellation” - Amazon’s latest feature designed to safeguard your wallet from the woes of overpaying for storage space. With the recent buzz about Amazon’s inventory storage price hike, this new feature couldn’t have come at a better time. Here’s the scoop: Starting April 2024, Amazon FBA fees will see a slight increase, averaging $0.27 for standard-sized items and $1.58 for large bulky-sized products1. But don’t fret! The “Auto-Cancellation” feature is your new financial guardian angel. 🛡️ How does it work? Simply put, if you accidentally request more storage than needed, Amazon’s got your back. The system will automatically trim down your excess request, ensuring you only pay for what you use. It’s like having a smart financial advisor embedded in your Amazon account! Why is this a big deal? With the new fee structure, efficient inventory management is more crucial than ever. “Auto-Cancellation” ensures you’re not stuck with surplus storage capacity, which aligns perfectly with Amazon’s goal to optimize costs and enhance seller experience. The bottom line: Amazon’s “Auto-Cancellation” is a win-win. You get to dodge unnecessary fees, and Amazon streamlines operations for a smoother seller journey. So, gear up to embrace this nifty feature and watch your savings soar! 🚀💸 Remember, smart inventory placement is key to boosting sales and cutting costs. With “Auto-Cancellation,” you’re all set to navigate the waves of Amazon’s 2024 fee changes like a pro! 🌟 Follow me to get all new Updates Amzinsighters.com #Amazonupdate #AmazonFBA #Amazonnewfeature #Amazonautocancellation

I’m not one for regulation and want to let the free market economy just choose the best path but I have to echo these sellers concerns. Amazon, remember, cares about things in this order 1) their #1 market share in the U.S. and other developed markets 2) their customers (though outwardly stated by the company as #1) and 3) their own financial performance. What was once known as the Walmart effect clearly is today the “Amazon Effect” of squeezing suppliers to make their numbers. Occupying the dominant position is certainly an enviable position but I’m curious what these moves will do to push merchants to other platforms like Walmart as well as other niche marketplaces where curation and brand are becoming increasingly more valuable for product discovery. It feels like from the sellers we talk to that they’ve cried mercy; we shall see how Amazon responds, or be forced to respond by regulators.

Since 2020 (when COVID hit) - Amazon has tried a new method of restricting Sellers' ability to send in FBA inventory for the 4th Quarter. This year they introduced Capacity Limits. An auction based system with "monthly" capacity limits in which you could bid for more space. For those of us on the front lines of inventory management - we have to try to figure out, plan and adapt to a new system each year (often with changing targets and not a lot of clarity). All-in-all I think the Capacity Limit system worked better than the restrictions of previous years for many Sellers... BUT... it was awful that Amazon significantly shrunk November numbers and further shrunk their Oct 12 capacity estimate for November (in this example by 30%). If someone had planned their inventory (as in this example) and had Q4 inbound shipments that they deemed safe - they would suddenly find themselves over capacity and hit with large fines and no auction-based recourse (because the auction closed before they knew they were over the limit). Also in this case, the inventory "space" being counted against them (as fines) were shipments that Amazon's own shipping missed appointments to even pick up. The capacity should not count inbound inventory - which can be a long process in Q4. So, while this system worked better than in previous years... there are still kinks that need to be worked out: >> A longer confirmed period - perhaps 1 month >> No closed auctions until a few weeks after the limit is confirmed >> Downward space changes from estimate to confirmed of 5% or less >> The ability to ask for space increases >> Only count inventory at FBA warehouses >> Allow sellers to swap space limits they don't need (Hazmat, Oversized, etc.) for space they do. As a whole this system worked better that other restrictions - yes but it still failed some Sellers and is unfairly hitting them with fines they don't deserve (due to last minute changes in limits from Amazon). Curious to hear about others' experiences with this new system. #amazonsellers #amazonfba

Amazon Liquidation How To Get Rio Of Unsold Inventory 1. Evaluate Your Inventory: Begin by identifying which products are slow-moving or have been sitting in your Amazon inventory for an extended period. Look at sales data and consider seasonal trends. 2. Understand Amazon's Liquidation Programs: - Amazon Warehouse Deals: This program allows Amazon to sell your excess inventory at discounted prices under the "Amazon Warehouse" section. - Amazon Liquidation Auctions: You can sell your overstock, customer returns, and refurbished inventory to buyers in bulk through this program. 3. Use Amazon's FBA (Fulfillment by Amazon) Services - Enroll your slow-moving inventory in the FBA program. Amazon can automatically discount these items to move them faster. - You can use the "Automate Pricing" tool to gradually reduce prices based on certain rules. 4. Consider Amazon's Excess Inventory Fees: Amazon charges long-term storage fees for inventory that stays in their warehouses for too long. Liquidating inventory can help you avoid or minimize these fees. 5. Create Promotions: Run promotions or lightning deals on your slow-moving inventory to boost visibility and encourage sales. 6. Sell on Other Platforms: If liquidation within Amazon doesn't meet your needs, consider selling the inventory on other platforms like eBay, Craigslist, or even through your own website. 7. Donate or Liquidate Locally: Explore local liquidation companies or charities that might be interested in purchasing your excess inventory. 8. Monitor Performance: Continuously monitor the performance of your inventory liquidation strategies. Be prepared to adjust pricing or tactics based on results. 9. Plan for Future Inventory: Use the insights gained from this experience to inform your future inventory management practices. Adjust your purchasing and stocking strategies accordingly. #BusinessGrowth #sidehustle #ecommerce #MONEY

The FTC is taking a closer look at the new FBA fees being rolled out by Amazon. These fees are intended to motivate operators to run a tight ship, which is a positive development. Amazon FBA was designed to be a fulfillment operation, not a warehouse. However, finding the right balance between incentive and unsustainable cost structures is a challenge for all. Overstocking, even by a few units, can quickly result in tens of thousands of dollars in costs. It's a difficult line to walk for sellers: too much inventory equals fees, while too little inventory equals more fees. It will be fascinating to see how this story unfolds. Read more about it here: https://lnkd.in/eUVycfig

What's the real reason behind Amazon's new Inventory Placement Fee that's causing widespread frustration across the selling community? Years ago, I had the unique opportunity to lead Amazon's annual fee change review process. Working across Marketplace, Business, and Operations teams, it was quickly evident that the intent of FBA was not to be a profit center. FBA growth fuels economies of scale across Amazon's fulfillment network, and Amazon leadership truly advocates to keep FBA costs as break-even as possible to make it an attractive option for sellers. So why implement the Inventory Placement Fee which adds to the cost structure for most sellers and brands? On 01/30/24, Amazon Stores CEO, Doug Herrington, published an article highlighting ambitions to make Prime shipping faster in 2024. He touted a 2023 milestone in reaching 7 billion units arriving the same or next day🚀 Citing the following success drivers: 1️⃣ shortening the distance deliveries travel to reach customers 2️⃣ improving inventory placement 3️⃣building out same-day delivery service Looking ahead to 2024, Doug shared how he plans to make it the fastest year ever: "𝙒𝙚'𝙡𝙡 𝙘𝙤𝙣𝙩𝙞𝙣𝙪𝙚 𝙩𝙤 𝙤𝙥𝙩𝙞𝙢𝙞𝙯𝙚 𝙤𝙪𝙧 𝙤𝙥𝙚𝙧𝙖𝙩𝙞𝙤𝙣𝙨 𝙣𝙚𝙩𝙬𝙤𝙧𝙠 𝙬𝙞𝙩𝙝 𝙩𝙝𝙚 𝙜𝙤𝙖𝙡 𝙤𝙛 𝙨𝙝𝙞𝙥𝙥𝙞𝙣𝙜 𝙢𝙤𝙧𝙚 𝙥𝙧𝙤𝙙𝙪𝙘𝙩𝙨 𝙛𝙧𝙤𝙢 𝙡𝙤𝙘𝙖𝙩𝙞𝙤𝙣𝙨 𝙘𝙡𝙤𝙨𝙚𝙧 𝙩𝙤 𝙘𝙪𝙨𝙩𝙤𝙢𝙚𝙧𝙨, 𝙝𝙚𝙡𝙥𝙞𝙣𝙜 𝙩𝙤 𝙣𝙤𝙩 𝙤𝙣𝙡𝙮 𝙨𝙥𝙚𝙚𝙙 𝙪𝙥 𝙙𝙚𝙡𝙞𝙫𝙚𝙧𝙞𝙚𝙨, 𝙗𝙪𝙩 𝙖𝙡𝙨𝙤 𝙧𝙚𝙙𝙪𝙘𝙚 𝙩𝙝𝙚 𝙩𝙧𝙖𝙫𝙚𝙡 𝙙𝙞𝙨𝙩𝙖𝙣𝙘𝙚 𝙖𝙣𝙙 𝙨𝙩𝙤𝙥𝙨 𝙥𝙚𝙧 𝙥𝙖𝙘𝙠𝙖𝙜𝙚." 👆 This is EXACTLY what the new 5-destination splits and Inventory Placement Fee accomplish So, if you think Amazon is rolling out this new fee to squeeze sellers, you're missing the point. Amazon is investing in accelerating consumer demand through faster delivery. And they're requiring sellers to co-invest with them since the improvements will benefit both Amazon and sellers. So what went wrong? Amazon missed the opportunity to single out the Inventory Placement rollout as an innovation to increase demand for sellers' products. Instead, the announcement got buried within their annual fee announcement... ...which has led to the current reception of the new fee as a tax on sellers.