The structure of the fees is sound, and effectively managing inventory is crucial to cut down on storage expenses over the long term and avoid any further FBA costs. There's a myriad of methods that will help you make sure that you can keep your FBA expenses in check.
1. Improve Inventory Levels
- The most efficient method to anticipate demand is to utilize prior data on trends and sales within the marketplace to predict the anticipated demand accurately. It ensures you have enough inventory, thus reducing the possibility of buying more.
- Conduct regular audits of inventory to find inventory that's taking too long to move or is not needed anymore. Discounts and promotions can assist in eliminating such items and opening space for storage.
2. Make use of Amazon's inventory management tools
Amazon seller central has tools to help sellers optimize their inventory and reduce the FBA cost of long-term storage. One of the most effective tools is The Inventory Performance Index (IPI) Dashboard
- IPI Score and its effect on the fees. A lower IPI score may result in storage restrictions in addition to costs for higher and higher scores could help you reduce costs.
- The most important metrics to monitor :
- Overstock items that are not in stock could increase the cost to keep them in storage over a longer period.
- Sell-Through Ratio: Making sure the inventory is moved efficiently, and conserving storage costs.
- Stranded Inventory: Things that don't get sold due to issues with the listing require some sort of action.
- It also offers price adjustments, methods to restock, and methods of removal for sellers to ensure a balanced stock.
Involving yourself in determining the IPI score. If you are proactive in managing the IPI score and determining the score, you'll have the ability to cut storage expenses and boost the effectiveness of inventory.
3. Make use of Liquidation Removal and Removal Options
- Removal Orders: In the event that some of your items aren't generating the sales you'd prefer, try establishing removal orders to allow you to return the item without the requirement to store it for the long time.
- The FBA liquidation program allows the buyer to recover a part of the expenses associated from inventory. You can do this by selling items that aren't offered by Amazon wholesale partner.
4. Improve packaging and product dimensions
- A small amount of packaging, the size of the packaging of your product could reduce the space in which the inventory is taken into consideration and result in storage expenses being reduced.
- Bundling of Products Mix and bundle items to create a distinctive bundle. It could increase the rate of sales and reduce the amount of products that is placed in storage.
5. Consider Alternative Fulfillment Options
- Third Party Logistics (3PL) Your partnership in place with 3PL service providers allows you to supply better storage solutions that are scalable, specifically when it comes to items that are extremely popular.
- Seller Fulfilled Prime (SFP) This program enables immediate fulfillment of orders. It it also shows an emblem for Prime. This could reduce the need for FBA.