Looking for a way to increase your profit margins this holiday season? Cutting your warehousing costs is one of the simplest and most overlooked ways to earn more as an Amazon FBA seller.
While Fulfillment by Amazon is a convenient way to ship, stockpile and sell product, those services come at a cost. And Amazon’s storage rates are notorious for increasing dramatically during the peak selling months of October, November and December.
Optimizing your inventory management system - and working with a third-party service provider that offers logistics and warehousing speciﬁcally for Amazon sellers - could save you thousands of dollars on storage costs over the holiday season and beyond.
Avoid Amazon’s Seasonal Price Hikes
From January through September, Amazon FBA storage rates range from $0.48 per cubic foot for Oversize items to $0.69 per cubic foot for Standard goods. Once the Christmas shopping season rolls around however, Amazon’s prices jump to $1.20 and $2.40 per cubic foot respectively for the months of October, November, and December.
Volume sellers (those typically doing more than $500,000/year in sales) don’t typically use Amazon FBA warehouses as their sole storage option for a couple of very good reasons:
They’re aware that the fees attached to storing their product at an Amazon fulfillment center vary by season.
They know they can find extremely competitive rates elsewhere that don’t fluctuate over the course of the year.
Working with an external logistics expert who’s well-versed in how Amazon FBA works could reduce your overall storage and inventory costs during the holiday season.
Take Advantage of Just in Time Inventory
Combining third-party warehousing services with Just in Time (JIT) gives many Amazon sellers a highly effective strategy for inventory optimization.
By shipping product in throughout the holiday season, rather than all at once, you can optimize your stock on hand to meet consumer demand - without having to stow excess inventory.
There are several advantages to using a JIT system, including:
Avoiding stock-outs during peak selling periods.
Cutting back on the amount of unsold product after the holiday rush.
Reducing warehousing costs by keeping your storage needs to a minimum.
Third-party Amazon FBA logistics specialists typically provide real-time inventory updates that make it easy to manage your JIT strategy.
Do Away with Dead Stock
Removing dead or slow-moving stock from FBA storage before the holiday season begins is a proven way to cut warehousing costs during peak shopping months. Inventory that doesn’t turn over is not only expensive to store, it occupies space that could be devoted to stocking your holiday best-sellers.
One of the many benefits of working with an end-to-end Amazon fulfillment center is that they offer a place to ship goods back into their warehouse before the holiday season storage kicks into effect thus reducing your overall costs and allowing you to better plan for the year ahead.
Increasing your profits through the holiday season is possible with a plan to cut storage and warehousing costs. And for many Amazon FBA sellers, finding the right third-party logistics provider not only helps them save during the peak selling months, it provides a profitable year-round solution.