Understanding Amazon’s Aged Inventory Surcharge

Today I got hit with another charge as an Amazon seller–the long-term storage fee or also known as aged inventory surcharge. I thought they only start charging this once FBA inventory is stored for 270 days and more but I couldn’t be more wrong.

The aged inventory surcharge is charged based on the total volume in cubic feet of units that have been stored in Amazon fulfillment centers for more than 180 days.

One of my products, launched last May, has now been sitting in Amazon’s warehouses for 180 days. As frustrating as it is, the charge is accurate according to Amazon’s policies. However, that doesn’t make it any less stressful. For sellers, these fees add another layer of anxiety, especially when managing inventory for slower-moving products.

As an Amazon consultant, I often advise clients on how to avoid these charges, but experiencing them firsthand as a seller has given me an entirely different perspective. It’s one thing to recommend strategies and another to feel the financial and operational strain they cause.

To explain further, what exactly is the Aged Inventory Surcharge?

Amazon’s Aged Inventory Surcharge is a fee introduced to encourage sellers to manage their inventory more efficiently and reduce overstocked or slow-moving items in Amazon’s fulfillment centers. This surcharge is applied to inventory that has been stored in Amazon warehouses for an extended period, creating a financial incentive for sellers to avoid holding stagnant stock. Here’s a detailed look at what this fee is and how to manage it effectively.

The Aged Inventory Surcharge applies to items stored in Amazon’s fulfillment centers for 180 to 365 days. The surcharge amount varies depending on the item’s volume, measured in cubic feet. It’s charged on a monthly basis, making it important for sellers to consistently monitor their inventory age.

Why Did Amazon Introduce This Fee?

Amazon’s fulfillment centers are optimized for high-turnover inventory. By introducing the Aged Inventory Surcharge, Amazon encourages sellers to:

• Clear slow-moving stock to make room for fast-selling items.
• Improve inventory turnover rates, which benefits both the seller and Amazon by increasing operational efficiency.

How the Aged Inventory Surcharge Affects Sellers

If left unmanaged, the surcharge can significantly reduce a seller’s profit margins. For example, storing oversized or low-margin items for too long may make them unprofitable once the surcharge is applied.

Tips to Avoid the Aged Inventory Surcharge

1. Regularly Review Inventory Age: Use Amazon’s Inventory Age Report to identify stock that is approaching the 181-day mark.
2. Run Promotions: Discount older items or offer deals to clear slow-moving stock.
3. Plan Restocks Strategically: Avoid over-ordering by aligning stock levels with demand forecasts.
4. Utilize Removal Orders: Remove aging inventory before it incurs additional charges.

The Importance of Proactive Inventory Management

This experience underscores the importance of proactive inventory management—monitoring stock, forecasting demand accurately, and creating timely promotions to clear aging inventory. While these surcharges are a reminder of how critical it is to stay on top of your FBA strategy, they also serve as a stark reality check for anyone navigating Amazon’s highly competitive marketplace.

It’s a tough lesson, but one that reinforces the need to balance growth with efficiency in the Amazon selling journey.

And if I’m being honest, if you have space in your home to stock inventory, I would suggest doing FBM in the beginning to avoid any of these inventory and storage fees. Once your product gets traction, then you can start sending inventory to Amazon fulfillment centres. It’s all about trial and error, to see what works and what not, and to maximize the returns of your limited resources.

Got questions? Drop a comment or send me an email.