All You Need to Know About LTSF Amazon
Amazon offers a service called Long-Term Storage Fees (LTSF) that allows customers to store their products for an extended period.
This monthly inventory storage fee is charged as a flat rate per cubic foot and can be applied to any item stored in Amazon’s warehouses. By taking advantage of this service, businesses can reduce the costs of keeping larger inventory volumes over lengthy periods.
This article will discuss what LTSF is, how it works, and why it can benefit your business. We will also provide tips on using LTSF to maximize savings while minimizing disruption in your supply chain operations.
What Are Amazon’s Long-Term Storage Fees?
The LTSF charges are based on the volume of the product, with products that take up more space charged at a higher rate.
For example, products over 365 days old and occupying less than or equal to 365 days of warehouse space will be charged $6.90 per cubic foot. However, products that are more than 365 days old and occupy more than 365 days of warehouse space will be charged $0.15 per cubic foot per month.
What is the Standard Amazon Long-Term Storage Fee?
The standard LTSF rate is $6.90 per cubic foot for products over 365 days old and occupying less than or equal to 365 days of warehouse space. However, products that are more than 365 days old and occupy more than 365 days of warehouse space will be charged a higher rate of $0.15 per cubic foot per month.
Tips for Managing Amazon Inventory and LTSF
1. Monitor Product Performance Regularly
It’s essential to keep a close eye on and manage inventory and monitor the performance of your products regularly. This allows you to identify slow- moving products and take action to prevent excess inventory from accumulating. Doing this can reduce the likelihood of paying LTSF charges for old stock that is not selling.
2. Set Up Automated Replenishment
Automated replenishment ensures that your inventory levels are consistently maintained at optimal levels. You can always ensure enough products are in stock without overstocking by setting up automatic replenishment. This helps you avoid LTSF charges and ensure you can fulfill orders promptly via Amazon fulfillment centers and maintain customer satisfaction.
3. Use Amazon’s Inventory Management Tools
Amazon provides several powerful inventory management tools to help you manage your inventory effectively.
One such tool is the FBA Inventory Health inventory age report, which provides insights into your inventory performance and enables you to identify slow- moving products.
Amazon’s inventory management tools can help you make data-driven decisions that optimize your inventory and reduce your LTSF charges.
4. Keep Your Inventory Up-to-date
Maintaining accurate inventory cleanup dates is crucial for effective inventory management. By keeping your list up-to-date, you can avoid overstocking, reduce the likelihood of LTSF charges, and fulfill orders promptly. It’s important to regularly update your inventory levels and the next inventory cleanup date and remove items that are no longer in stock.
5. Consider Removing Slow-moving Products
If you have products that are not selling well, consider removing them from Amazon’s warehouse. This can help you avoid LTSF charges for slow-moving inventory and free up space for more demanding products. You can also consider selling slow-moving products through other channels or offering discounts to encourage sales.
How Do I Keep Inventory Moving?
1. Optimize your product listings
Optimizing your product listings is one of the most effective ways to keep inventory moving. This means ensuring that your product titles, descriptions, and images are accurate, compelling, and informative. Doing this can improve your product’s visibility on Amazon, attract more customers, and increase sales.
2. Offer competitive pricing
Another effective way to keep inventory moving is to offer competitive pricing. This means closely monitoring your competitors’ pricing and adjusting your prices accordingly. Doing this can attract price-sensitive customers and increase your chances of making a sale.
3. Leverage Amazon’s advertising tools
Amazon provides several advertising tools that can help you drive traffic to your product listings and increase sales. One such tool is Sponsored Products, which allows you to promote your products in Amazon search results and product detail pages. Using these tools, you can increase the visibility of your products and keep inventory moving.
4. Provide excellent customer service
Providing excellent customer service is crucial to keeping inventory moving. This means responding promptly to customer inquiries, addressing customer concerns, and ensuring that orders are fulfilled promptly and accurately. Doing this can build a loyal customer base, increase repeat business, and keep inventory moving.
5. Stay on top of industry trends
Staying on top of industry and product trends is critical to keeping inventory moving. This means closely monitoring market demand, consumer preferences, and emerging product trends. By doing this, you can adjust your inventory accordingly, anticipate changes in demand, and keep inventory moving.
What is the Minimum Quantity for Amazon Sellers?
As an Amazon seller central user, it’s essential to understand the minimum quantity requirements set forth by Amazon. The minimum quantity requirement refers to the minimum number of product units a seller can send to Amazon’s fulfillment centers in one shipment.
The minimum quantity requirement varies depending on the product category, and it’s essential to remember that Amazon only accepts shipments that fall below the minimum quantity requirement. For example, the minimum quantity required in the Toys & Games category is six units per shipment, while in the Health & Personal Care category, it’s 30 units per shipment.
It’s important to note that sending shipments that fall below the minimum quantity requirements can result in additional fees, including a $0.15 per- unit fee and a $2.50 small-item fee. These fees can quickly add up and impact your bottom line.
How to calculate Long-Term storage fees on Amazon
1. Determine Which Products Are Subject to LTSF
The first step in calculating LTSF is determining which products in your in- stock inventory are subject to these fees.
Products that have been in an Amazon fulfillment center for six to twelve months are subject to a $6.90 per cubic foot fee, while products that have been in storage for over a year are subject to a $15.00 per cubic foot fee.
2. Measure Your Inventory
To calculate the total cubic feet of inventory subject to LTSF, you need to measure each item’s size and multiply it by the number of units. You can use Amazon’s Inventory Age, and Inventory Health reports to determine which items have been in storage for six months or more.
3. Calculate Your Long-Term Storage Fees
Once you have determined which items are subject to LTSF and measured your inventory’s size, you can calculate your fees by multiplying the cubic feet of inventory by the applicable fee rate.
For example, if you have 100 units of a product, each measuring one cubic foot, in storage for nine months, your LTSF would be $690 ($6.90 per cubic foot x 100 cubic feet).
4. Take Actions to Avoid LTSF Charges
To avoid LTSF charges, keeping track of your inventory levels and adjusting your storage strategies accordingly is crucial. Based on your sales history and anticipated demand, you can use the Amazon Inventory Planning tool to estimate how many units you need to keep in stock.
Additionally, consider using Amazon’s FBA Inventory Age and FBA Long-Term Storage reports to identify slow-moving inventory and take steps to liquidate it before it becomes subject to LTSF charges.
How To Get Rid Of The Long-Term Storage Fee
1. Optimize Your Inventory Levels
Optimizing your inventory levels is one of the most effective ways to prevent LTSF from accruing. By keeping track of your sales velocity and adjusting your inventory levels accordingly, you can reduce the likelihood of excess inventory building up in Amazon’s warehouses.
An excellent way to achieve this is by using Amazon’s Inventory Planning tool to help you estimate the optimal number of units to the stock based on your sales history and anticipated demand. Proper inventory management also enables you to avoid stockouts, which can lead to missed sales opportunities and a drop in your Amazon search ranking.
2. Run Promotions and Sales
Running promotions and sales is an effective way of reducing your long-term storage fees. Repricing your slow-moving inventory and offering discounts or deals to help clear them out is a good way of incentivizing customers to purchase these items.
Liquidating slow-moving stock in this manner helps free up shelf space and avoid long-term storage fees that Amazon attaches to inventory in their fulfillment centers for over six months.
3. Utilize Amazon’s FBA Removals Service
Amazon’s FBA Removals Service allows sellers to quickly and easily remove excess inventory from Amazon’s warehouses. This service charges a small fee but can help reduce your LTSF charges in the long run.
You can use this service to remove slow-moving or overstocked items before they become subject to LTSF charges or to remove excess inventory that has already incurred these fees. Removing these items will reduce the space occupied by your inventory, freeing up capacity for fast-moving products.
4. Sell on Other Marketplaces
Diversifying your sales channels by selling on other marketplaces can help you reduce your LTSF charges on Amazon. By marketing on multiple platforms, you can distribute your inventory more evenly and avoid the build-up of excess inventory that can lead to long-term storage fees.
Selling on other marketplaces will also give you access to a broader range of customers, increasing your sales velocity and reducing the likelihood of stockouts.
Frequently Asked Questions
How much is Amazon 1TB cloud storage?
Amazon 1TB cloud storage costs $59.99 per year.
Does Amazon FBA have storage fees?
Yes, it has monthly storage fees depending on the Amazon size tier in FBA and the volume of your inventory. The charges depend on your items’ cubic feet and vary between regions. They also increase during peak season and may include additional customs clearance costs if applicable.
Does Amazon offer unlimited storage?
No, Amazon does not offer unlimited storage. They have different storage options which vary in cost and size.
Ultimately, with some effort and strategic planning, you should be able to reduce or even eliminate long-term storage fees. This advice gives you more room for profit margins and faster-growing businesses!