What are Amazon FBA Storage Costs now in the UK?
To faithfully answer this question, we must understand what Amazon IPI scores are as these massively impact storage fees on Amazon. In fact, quotas and limits are set according to your Amazon IPI score – you pay a percentage of your FBA storage fees based on the IPI score. In addition, your performance, both past and present, dictates your overall storage costs, and so, you shouldn’t be using the standard FBA storage calculator alone to work out costs.
All about Amazon IPI Score
According to how Amazon has explained it here, the IPI score is used to measure the efficiency and productivity of your FBA inventory management. It ranges between 0 and 1,000 – higher values are better!
So, what happens is Amazon sets out a minimum threshold score. All sellers need to meet this. If you don’t meet this, Amazon sets storage limits on your account – so you need to improve your inventory health ASAP in order to have the limits removed. As of 2021, Amazon required sellers to meet the minimum threshold of 450, so anything below this means you will have storage limits on your account.
If your Amazon IPI score is above 450, you’ll end up paying fewer storage costs and even get more storage space – yay!
Wait – there’s more: if you manage to score above the 450 threshold for two score check weeks in a row, you’ll get unlimited storage space for every storage type – apparel, aerosol, footwear, standard-size, oversize, etc.
FYI: Amazon computes your IPI score every Monday based on the past three months’ performance data. Before imposing any storage limits, Amazon will inform you if you can increase your IPI score in order to avoid the storage limits and, hence, save up on storage costs.
What are FBA Amazon storage costs in the UK?
The one question that’s on every UK seller’s mind: “What are Amazon storage costs in the UK?”
Inventory storage fees in the UK are charged between the 7th and 15th day of each month right after the month the fee applies. For instance, if you want to know what your storage fee for January is, you need to go to the report for February Payments and view transactions ranging between the 7th and 15th.
Amazon storage costs in the UK for non-dangerous goods (cubic feet per month) is £0.43 from January to February, £0.60 from October to December, and so on.
Monthly Amazon storage costs in the UK for dangerous goods (cubic feet per month) is £0.75 from January to September, and £1.05 from October to December.
You can view the entire table of storage costs here.
Sellers should also be aware that there are two kind of FBA Amazon storage costs in the UK:
Amazon will charge you a monthly fee if your inventory is in one of their warehouses at the end of the month. This may be subtracted from your seller account balance or added to your credit card balance – i.e. if/when your Amazon account doesn’t have sufficient funds to clear the fee.
The current monthly FBA storage fees for using Amazon’s fulfilment centres (as of mid-2022) is:
Standard size – £0.67 per cubic foot (Jan-Sept) and £2.14 per cubic foot (Oct-Dec)
Oversize – £0.43 per cubic foot (Jan-Sept) and £1.07 per cubic foot (Oct-Dec)
The 15th of each month is Amazon’s inventory clean-up time. During these ‘clean-ups’, Amazon records all products which have been in their fulfilment centres for 365 days or more. Any of your items stored in their fulfilment centre for this duration are charged £6.15 per cubic foot of storage utilised or £0.13 per unit, whichever value is greater.
Much like monthly storage fees, long-term fees are also deducted monthly on the same date from your Amazon account balance – or from the credit card which you have attached to your seller profile.
How do I know what my Amazon UK selling fees are?
Amazon UK selling fees depends on a number of things – e.g. your product category, the selling plan you’ve chosen, your fulfilment strategy, and more. Amazon offers very flexible options which are wide and varied – we’d have to dedicate a lengthy article to just breaking down the options and costs involved. The information on this page, however, should set you on the right path.
Back to: Amazon FBA storage costs in the UK
Everything we’ve discussed so far begs the question: How to reduce your Amazon FBA storage costs?
Well, this is where Amazon IPI scores come in – you need to educate yourself on this as much as possible because there’s a direct correlation between this and your Amazon FBA storage costs.
As we discussed at the opening of the article, the percentage of your FBA storage fees is based on your IPI score – the better (higher) the score, the lower the costs.
How do we accomplish this?
Certain factors influence your Amazon IPI score, which can not only affect storage costs but also capacities and your eligibility to use specific Amazon programmes. Before we discuss those factors, you need to focus on:
- Maintaining a healthy balance between ‘sold’ and ‘available’ inventory, and without excess stock;
- Avoiding long-term storage costs (which we also discussed briefly at the start of the article);
- Resolving any problems with your listings;
- Ensuring that popular items are always in stock to satisfy customer demand.
Here are four main factors that influence your Amazon IPI score, and in turn, Amazon storage costs in the UK:
1. Excess inventory
Quite possibly the biggest factor influencing your IPI score is excess inventory. Amazon is a fulfilment centre not a long-term storage facility, per se – so they want FBA products moved from their warehouse floor to your customers’ front yard as soon as possible.
Amazon will regard an item as “overstock” or “excess” if the FBA inventory amount goes over a 90-day supply, based on the item’s forecasted demand. So what this means is this: maintain only 30-60 days of supply in order to avoid overstocking. If you look at your Inventory Dashboard, you’ll get a fairly good indication of the products in demand along with Amazon’s restock recommendations.
2. FBA sell-through rate
The sell-through rate is the total number of units sold and shipped over a period of 90 days divided by the average number of units available at the FBA warehouse during the same time period.
If your sell-through rate is low (according to Amazon), they will let you know how to improve it. This will help to keep your storage fees under control and prevent you from incurring long-term storage fees.
3. Stranded inventory
When your inventory is stored in Amazon’s warehouse, but there are no active offers on the products due to listing issues, that’s when you have ‘stranded’ inventory on your hands. This means that your customers will no longer be able to buy anything from that inventory – meaning lost sales and unnecessary storage fees for you.
Fortunately, this is fairly easy to remedy – Amazon will indicate how many units are stranded and what you should do with them.
4. In-stock inventory
One of the ways Amazon tracks your seller performance is how good you are at consistently keeping popular ASINs in stock. This metric isn’t exactly responsible for negatively impacting your Amazon IPI score – rather, it can improve it!
Amazon reinforces the importance of keeping well-stocked on popular ASINs by estimating the number of FBA sales you didn’t make over a period of 30 days – this is based on estimated sales on the days you had no stock.
Products that are non-replenishable can be safely excluded from your IPI score – therefore, any item that is, say, no longer in production or a limited edition, you can mark it as “non-replenishable” in order to protect your IPI score.
Final Thoughts: Best practices for improving your IPI score
As we bring the article to a close, we just want to re-emphasise some of the points made earlier and add some more bits to it:
Improve sell-through rate
All Amazon wants is for each one of their sellers to maintain a good 90-day sell-through rate so that you can be placed in the “green” on their IPI graph. Go to your “Inventory Age” page and sort products according to lowest sell-through rate. Study Amazon’s recommendations and get to work!
Reduced stranded inventory
Rather obvious but deserves some reiteration, nevertheless. Amazon doesn’t like storing any products at their warehouses that take up space and don’t sell. Go to the “Manage excess inventory” section and view recommendations on what to do with excess inventory.
Avoid long-term storage fees
Get rid of inventory before it hits the 365-day mark in FBA and you’re golden! Create a removal order if you must or ask Amazon to dispose off your inventory.
Stay on top of listing issues
Any stranded inventory or other listing issues preventing people from buying your products need to be dealt with straight away.
This article merely skims the surface of Amazon storage costs in the UK, Amazon UK selling fees and how your Amazon IPI score ties in. Get in touch with Chris and his team to gain valuable insights – your road to seller success starts here.