Money Saving Post-Long-Term Storage Fee Strategy

As you’re probably aware, twice a year (February 15th and August 15th) Amazon charges a long term storage fee (LTSF) for all items that have been stored in a FBA warehouse for 6 months or longer. This fee can be very high as it’s currently $11.25 per cubic foot for the 6-month fee and $22.50 per cubic foot for the 12-month fee.

With Amazon charging this big fee twice a year for any item in their warehouse over six months, it’s a good strategy to possibly wait until after long-term storage fees are calculated on February 15 to send in items you think might take longer than six months to sell (or sell out if you have multiples). Here’s my thinking on why:

When Amazon calculates long-term storage fees on February 15 and August 15, they look at all of your inventory and charge you a fee for anything that’s been in an Amazon warehouse over six months. But here’s what many people forget: If you send your inventory to Amazon right after February 15, then when Amazon calculates long-term storage fees on August 15, they will only charge you the fee for any items that were stored in Amazon since before February 15 (the long-term storage fee calculation date). Here’s an example:

Scenario 1 – Sending inventory to Amazon right before February 15:

Send an item to Amazon FBA on February 10. When August 15 comes around, if you have not sold that item, then you’ll be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for over six months (6 months and 5 days to be exact).

 Scenario 2 – Sending inventory to Amazon right after February 15:

Send an item to Amazon FBA on February 17. When August 15 comes around, if you have not sold that item, then you won’t be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for under six months (5 months and 29 days to be exact). You won’t be charged a six-month long-term storage fee until February 15 of the following year.

In summary, the few weeks after Amazon calculates long-term storage fees are the absolute best days to send your potentially slow moving inventory (long-tail items) to Amazon, since you’ll be buying more time to sell your items without incurring long-term storage fees.

Keep this strategy in mind as you source for inventory throughout the year. During the summer, if you come across some items  you think might take longer than six months to sell, or if you find multiple items you think might not sell out in six months, then consider holding on to them and don’t send them to Amazon until after August 15. That way, you’ll be buying even more time before the long-term storage fees are calculated. You could even merchant fulfill these items you are storing at home before you send them in after the long-term storage fees are accessed.

Of course, this strategy is not for everyone. Hopefully, your sourcing skills have gotten so good that most of your inventory sells within the first few months of hitting the FBA warehouses. If you’re looking to learn more about how to know exactly how long it might take for an item to sell on Amazon, be sure to watch my free tutorials on how to understand Keepa, and how to understand CamelCamelCamel or check out my book/video course, The Reseller’s Guide to How to Keepa Camel: Using Amazon Sales History to Make Smart Sourcing Decisions.

Now, I’d love to hear from you. Do you have any strategies that help you gain more time to sell your inventory without long-term storage fees? Do you have some helpful tips on quickly selling your inventory so that long-term storage fees aren’t even an issue?

15 responses to “Money Saving Post-Long-Term Storage Fee Strategy

  1. Stephen,

    I’ve been planning on using this exact strategy, but I’m curious…..do you know what day they start counting inventory? Is it safe to create a shipment and mail it before February 15 so it doesn’t arrive at the warehouse until just after the 15th or is inventory counted from the day the shipment is created or the day I actually scan it into inventory as inactive. Any idea? Thank you so much!

  2. great advice. thank you.

  3. I would also like to know if there is clarification for the above question concerning WHEN Amazon starts calculating the storage fee – do they go by the creation date of the item in inventory or received at warehouse date? I personally believe it would be by the “received” date as how else could they really honestly charge for storing an item that you might have created a listing for many days or even a couple of weeks if you are slowly working on a shipment, before you even shipped it in?

    I might also add that any inventory being returned to you to avoid these fees can NOT be shipped back to Amazon for FBA until July 1st..and again this train of thought works for those items if you are re-submitting them to FBA.

    Thanks.

  4. yep…i figured that out also..send in after the 15th and no long term fees plus the product will be there for Xmas..i’ve also raised the prices of all the books i’ve left in the FBA warehouses..my thinking since everyone else is destroying, why not charge more since there will be less..i know i’ll be monitoring more this year..what a pain to destroy as many books as i did in a short amount of time..never again..

  5. Been doing this all along…is the only way to go

  6. This is brilliant and right on time! I’ve only been selling for a few weeks now, but this is essential for me come the August inventory assessment. Thanks big time!

  7. This is especially important if you are sending in college books, otherwise you miss the Sept rush unless you pay LTS.

    As far as when the clock starts ticking for 180 days, I’m almost certain it’s when received in the warehouse. When you create the listing shouldn’t make any difference. It’s the storage aspect that they care about. More info from Amazon about LTSF here.

    I personally don’t know why Amazon hasn’t closed this loophole yet. I would expect items in the future with 180 days of storage to be assessed LTSF automatically and the 2/15 and 8/15 dates will become moot. Amazon is well aware of the tactic and probably gets swamped with items after 2/15 and 8/15

  8. I meant that after an item has been in a warehouse for 180 days Amazon could, in the future, modify their software to assess LTSF automatically after 180 days irregardless of the standard 2/15 and 8/15 dates. Yes currently only on 2/15 and 8/15 it’s automatic just not as a 180 “rolling period” for any date.

    • Oh yeah. Totally makes sense. They already charge sellers many fees so let’s hope they will “forgive” this one to us. I doubt though because we know that their warehouses are not endless and with new sellers entering FBA marketplace they will have to maintain the order of business.

  9. I can not find the Keepa for Chrome anywhere
    has it been removed from the Chrome web store for the chrome browser ? Any help would be great as can not find it for Chrome ?

    • For some reason, Google Chrome removes the Keepa app from time to time. Keepa says it’s because Google’s algorithm thinks it might be a spammy app or something like that… so it’s automatically removed. Then Keepa has to resubmit the app and a few days later it’s back. The Keepa app is not a spammy app at all and is essential for smart sourcing. Just wait a few days and it should be back soon.

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