Amazon announced changes to the new Low Inventory fee that it is instituting this month for sellers who use its FBA fulfillment service. A reader told us, “The biggest (and best) thing here is not charging the fee on items selling less than 20 pieces in the previous week. This will allow me to continue selling my slower moving items without the fear of this silly new fee.”
Note that EcommerceBytes published a blog post about the controversial new fee on the same day as Amazon’s update, which follows:
Update to low-inventory-level fee
In December 2023, we announced our plans to launch a low-inventory-level fee to improve inventory health and maintain sufficient inventory levels. Having sufficient inventory that is spread across our fulfillment network ensures that we have enough product close to customers so we can deliver it faster. We’ve seen that when products have sufficient inventory levels they will, on average, generate measurably more sales.
On April 1, 2024, the FBA low-inventory-level fee went into effect, and we announced any low-inventory-level fees charged in April would be credited back. We’re extending this transition period through May 14. By May 31, you’ll be credited back for any low-inventory-level fees incurred between April 1 and May 14. We hope this transition period has helped you get more familiar with the fee and fee management tools. We’ve seen that the additional time has enabled even more sellers to achieve healthy inventory levels and avoid this fee entirely.
We’ve continued to listen to your feedback and are making three additional changes that are designed to better target these low-inventory-level fees to where you have the most control to ensure healthy inventory:
1) Because of the greater unpredictability in managing inventory levels for seasonal, end-of-life, and other low-volume products with varying demand, starting May 15, the low-inventory-level fee will not apply to products that have sold less than 20 units in the past 7 days.
2) Low-inventory-level fees incurred due to excessive inbounding and processing times caused by Amazon or Amazon-managed services will be credited back to you by the 15th day of the following month. For example, May charges with excessive inbound delays will be credited back by June 15.
3) Prime Day is an important sales driver for your business that is coming up soon, and we want to ensure that you are set up for success. For Prime Day 2024, we’ll provide a time-bound exception on low-inventory-level fees for products that are included in Prime-exclusive Lightning Deals and Best Deals. The fee exception will apply for the four weeks following Prime Day when inventory levels may be more unpredictable based on Prime Day sales.
We appreciate your partnership as we continue innovating for you and our shared customers. We’re committed to providing you the right resources and tools so, together, we can get products to customers faster than ever.
You can use FBA Inventory to track your inventory health and identify products at risk of incurring low-inventory-level fees. Additionally, to estimate the low-inventory-level fee for affected products, go to FBA Revenue Calculator. To review historical charges for each product, go to SKU Economics report.
For more information on the FBA low-inventory-level fee and what qualifies, go to Low-inventory-level fee.
For fee updates by type, go to 2024 US referral and FBA fee changes summary.
The full announcement is on Amazon Seller Central.
