Stocking Up for Q4: FBA Holiday StorageCaitlin Donnelly
Have you considered storing your inventory with a third-party warehouse?
Fourth quarter is the busiest time of the year for Amazon sellers. Last year, overall Amazon sales increased by 22% during the fourth quarter.
There are several important events during the fourth quarter that increase sales: Halloween, Thanksgiving, Black Friday, Cyber Monday, Christmas, and the New Year. Expect the higher demand of goods to lead to an increase in shipments to the U.S. In turn, this can lead to higher shipping prices and longer transit times.
Many Amazon sellers send their entire inventory to Amazon’s fulfillment center and store it throughout the fourth quarter, or wait until the last minute to send it in. However, with the growing trend of “stocking up,” Amazon initiated a holiday storage rate which, this year, has skyrocketed – An average increase from $51 to $188 per pallet per month. With the increase in storage rates, it no longer seems beneficial to store your entire inventory at Amazon’s warehouses anymore. Amazon recommends only sending in products that will sell before the end of the year.
There are some surprising benefits to storing your products with a third-party company:
Third Party Companies Offer More Affordable Storage
This year, the Amazon’s storage rates increased from $0.64 to $2.35 per cubic foot per month (or $0.43 to $1.15 for oversized items). Amazon has a limited amount of storage at their fulfillment centers. It only becomes tighter as the holiday season comes around, thus the need for more expensive storage. Therefore, it makes sense that other companies can offer storage at cheaper rates.
Amazon is Charging Holiday Storage Fees for One Month Longer in 2017
Last year, Amazon offered normal storage rates through the end of October to encourage sellers to ship their products in early. This year, Amazon has included the month of October into their storage fee increase, meaning the entire fourth quarter will be charged at $2.35 per cubic foot. In contrast, Amazon’s storage fees in 2016 were $2.25 per cubic foot per month during only November and December. Fulfillment fees will drop by a few cents, depending on your product and whether it is standard, large, or oversized. Although, the drop is less than it has been in past years.
Ability to Order More Stock to Create an Inventory Buffer & Eliminate Expensive Emergency Shipments
There’s nothing worse than spending all your would-be profits on an expensive air express shipment because you are running out of inventory. This is especially important to those who have never gone through a Q4 as an Amazon seller. We’ve seen sellers of hot-seller products spend tens-of-thousands of dollars to ship their products via air express, just so they don’t run out of inventory.
If you are selling a product that is even remotely gift-related, do yourself a favor and purchase extra inventory. When shipping by sea, and with such low storage rates, it is worth the small increase in overall cost to have extra inventory on hand.
You Have Better Control of Your Supply Chain
You have the ability to test different quantities and see what works well. This is especially helpful for sellers who are new to the holiday season at Amazon. There is no sense in keeping a lot of inventory at Amazon, only to lose any potential profit on storage. You’ll want to only keep inventory at Amazon that has a high likelihood of selling out quickly. Amazon recommends only sending in products that will sell before the end of the year.
Items that don’t sell too well during the holiday season can be kept in storage and sent right at the end of 2017 or beginning of 2018. Your products can be back at Amazon’s fulfillment centers right as fourth quarter storage prices disappear. You can also diversify where your inventory is kept. Many large sellers dislike keeping all of their inventory at Amazon for various reasons.
Less Risk to Your Seller Account – Easier to Keep your Seller Account Healthy
Running out of inventory puts you in a situation where your first page ranked products drop off the map… fast. Any veteran Amazon seller can tell you that this is an especially dire circumstance during the holiday season. Don’t find yourself in a bind this year – Store any extra inventory nearby instead of rushing to express ship your products to Amazon.
Storage is Flexible – Same or Next Day Forwarding to Amazon Fulfillment Centers
Though we can’t guarantee same or next day forwarding from other third-party logistics companies, we can promise that any shipment stored at our facilities will ship out immediately. What does this mean for you? You get the peace-of-mind that, even though your products aren’t stored at Amazon’s fulfillment centers, your inventory will reach fulfillment centers as soon as possible.
The holiday season will be here before you know it. You can expect some big expenses to creep up as you try to order and stock enough inventory to last you through the busy season. Don’t let fourth quarter (Q4) storage be one of them!
FBAforward is offering Q4 storage at $20 per pallet when you pre-order. Storing large amounts of product at Amazon’s FCs during the period from October to December can potential cost you thousands of dollars.