Amazon starts charging storage fees during peak season, some sellers were deducted 500,000

This week, # Cross-border e-commerce welcomes peak sales season # has become a hot topic in the circle, but the direction of the topic itself is completely different. Many sellers said that they did not feel the so-called peak season atmosphere.

However, Amazon sent out a peak season signal yesterday - it collected the first peak season storage fee of this holiday season, which is three times the usual amount. In the absence of a significant increase in sales, sellers are quite distressed about this expense, and some sellers' storage fees are even as high as five figures.

On the other hand, Amazon FBA warehouse overflows are becoming more and more serious. It is difficult to make reservations at popular warehouses such as ONT8. Warehouses have few appointments and cancellations are also common. A few warehouses have temporarily refused to accept goods, and the warehousing appointment time for some warehouses has been scheduled for two weeks later. People in the industry say that this is the most serious delivery difficulty in recent years.

The storage capacity is also fluctuating, and with shipping restrictions and storage costs, sellers are facing challenges in terms of stocking costs and paths. At this time, Amazon has begun to promote its official overseas warehouse AWD. What do sellers think about this?

Amazon charges storage fees for October peak season

Yesterday, Amazon deducted October storage fees from sellers’ accounts, and sellers said they were hit:

"The storage fee for October has just been deducted, which is three times the usual amount. I can only eat steamed buns with boiled water at night;"

"I deducted money today and found that my balance was almost half gone. It hurts."

"It's really painful to deduct the storage fee. You can just buy it directly, but they still tell you that it is a necessary expense during the peak season;"

"It's not a busy season, but it won't stop my brother-in-law from asking you for the peak season storage fee on time."

…

From October to December every year, Amazon charges three times the usual storage fee, which is also the peak sales period for cross-border e-commerce. At this time last year, some sellers paid up to $100,000 in storage fees in October, which is a considerable expense.

In previous years, orders surged, and most sellers were willing to pay more. But this year, sellers generally reported that the peak season was not very strong, sales were flat, and the costs were not low at all. Some sellers joked that since the beginning of the peak season, this storage fee was the only reason they could feel they were in the peak season.

Previously, Amazon stipulated that during the period from October to December, the monthly storage fee for standard-size goods in the United States is US$2.4/cubic foot, and the excess storage fee is US$10/cubic foot; the monthly storage fee in the United Kingdom is 0.91 pounds/cubic foot, and the excess storage fee is 7.8 pounds/cubic foot; the fees in France, Germany, Italy, and Spain are 36 euros/cubic meter and 320 euros/cubic meter respectively; the monthly storage fee in Japan is 9.170 yen × product size (cubic meter) × number of storage days/number of days in the month.

Earlier this year, Amazon US adjusted the monthly FBA storage fees. Starting from February 1, 2022, the non-peak monthly inventory storage fees (January to September) will increase by $0.08 per cubic foot for standard-sized products and $0.05 per cubic foot for oversized products. The peak season fees from October to December remain unchanged.

According to this billing basis, the storage fees during the peak season are high, and sellers can no longer just brush it off. One seller's monthly inventory storage fee exceeded $10,000, and he said he was "going to shut himself in." Another seller was charged $68,000 in storage fees, equivalent to about 500,000 yuan.

One seller did the math and found that the storage fees tripled in the three months during the peak season, which is equivalent to nine months of fees. Together with the first nine months, Amazon collected 18 months of storage fees in a year. It can be said that Amazon won the game.

During the current peak season, sellers are gradually storing inventory for Black Friday, Cyber ​​Monday, Christmas, New Year and other sales festivals. The storage level is much higher than usual, and the storage fee has increased several times, which is much higher than usual. At this time, stores with high inventory turnover and few unsaleable products face less storage cost pressure. A staff member of a large sales company said that it does not have many unsaleable products, and often the inventory is not enough to sell, so the platform cannot collect too much storage fees from it.

In addition, sellers also need to pay attention to the long-term storage fee at the end of the month. Starting from May 15 this year , Amazon began to charge expired inventory surcharges for products stored in the operation center for 271 to 365 days; for products stored for more than 365 days, the old inventory surcharge, that is, the long-term storage fee, will continue to be charged.

As the peak season approaches, storage fees, delivery fees and other expenses are rising, but traffic growth is weak or even worse than usual, which makes some sellers feel discouraged. However, after the storage fee is deducted, sellers will consciously speed up sales. For those who are very tired due to storage capacity restrictions, this may be an opportunity for Amazon to release more inventory.

However, even sellers whose storage capacity allows for this currently face considerable difficulties in the warehousing stage.

FBA warehouses are seriously overwhelmed and it is difficult to make an appointment to enter the warehouse

Recently, a freight forwarder reported that due to the recent severe warehouse overflow at Amazon, warehouses frequently fail to release appointments or cancel appointments without reason, among which 0NT8, GYR2 and GYR3 are the most affected. Another freight forwarder also stated that Amazon's popular warehouses continue to be overflowing, including 0NT8, LGB8, LAX9, SBD1, SNA4, LGB6, etc., and the situation has become more serious recently. It has become difficult to make appointments or appointments have been postponed. Some warehouse entry appointments have been scheduled for 20 days later.

Een.com further confirmed the situation with several freight forwarders.

Mr. Chen, a freight forwarder in Shenzhen, said that reducing storage capacity is a routine operation during peak season, but due to layoffs and hiring freezes, Amazon warehouses are currently understaffed. Many warehouses are not releasing appointments for delivery, and it is difficult to get an appointment in the market.

"The cancellation of contracts is more serious than in previous years, mainly in the West Coast region, such as ONT8, LGB8, LAX9, SMF3, SBD1, GYR3, SCK4, and the worst are LAX9, ONT8/9, SMF3/6, SCK4, OAK3, SBD3, and TEB6 in the East Coast, all of which have experienced varying degrees of cancellation and non-release of contracts."

Ivy , another freight forwarder , also confirmed this situation. "At present, warehouses in the western United States are seriously overcrowded. Now all appointments are pending and there are no appointment numbers. In addition, appointments are frequently changed, cancelled, and postponed. Now the only appointment time is almost December. Too many Amazon warehouses are overcrowded, and the branch warehouses are all sent to very remote places."

As for the reason, she believes that there were too many goods entering the warehouse on Black Friday and Amazon could not handle it. In addition, Amazon's closure of some warehouses also had a certain impact.

Without an appointment, there is no delivery. Currently, warehouse delivery personnel are working hard to make appointments and buy appointments. In the Amazon appointment purchase group, people are asking for appointments in various ways. One of them said bluntly: "Is there anyone who has a flat tire, a broken water tank, air or oil leakage, or a steering wheel that is locked and cannot go to deliver goods temporarily? Or you are too lazy to go to deliver goods, don't hesitate, sell the appointment to me and I will carry the burden for you. Please ask for an appointment at a high price!"

Mr. Chen said that it was not so difficult to make a warehouse reservation in previous years. This was the most serious situation in recent years. He even received some purchase appointment messages on Xiaohongshu, which shows how difficult it is to make an appointment.

Currently, many Amazon warehouses are overstocked, have cancelled appointments or are not releasing appointments, and a few warehouses have even temporarily refused to accept goods. Due to the lack of appointments, the long fleet of delivery vehicles in front of Amazon warehouses has disappeared, and only a very small number of vehicles are waiting to enter the warehouse.

An overseas delivery person from Mr. Chen's company filmed the empty scene outside the ONT8 warehouse in a video. He said: " ONT8 at 6 o'clock in the morning , there would be a long queue at this time in the past, but now it's deserted inside, there are no cars, and no need to queue . "

( Outside ONT8 warehouse )

In fact, Amazon has recently repeatedly cut its inventory, which has affected the stocking plans of many sellers. But strangely, even with the limited storage capacity, the warehouse explosion has not eased, and it has even intensified. Amazon's own competitive advantage is to quickly deliver packages to customers. Now that the warehouse staff has been reduced and more goods have been added, it will inevitably affect the customer experience.

How long will this delivery difficulty last? Mr. Chen said that the outlook for this year is not good and we can only wait and see in the second half of the month. Ivy believes that the situation is unlikely to ease in the short term. December is Christmas time and it is estimated that it will be difficult to enter the warehouse in the near future.

This reminds sellers that they need to prepare the next batch of goods in advance to avoid delays in warehousing and affecting sales. Judging from the current delayed delivery situation, the more optimistic scenario is that the goods will be delayed by 5-10 days, but if the warehouse explosion continues or continues to worsen, the waiting time for goods to be warehoused may continue to increase.

With the repeated storage capacity fluctuations, Amazon sellers have a growing demand for overseas warehouses. Last month, Amazon launched the warehouse distribution network ( AWD). Some sellers bluntly said: "Amazon's restriction on storage capacity is probably to promote this official overseas warehouse, forcing everyone to send a large part of FBA goods to AWD for storage."

Amazon AWD is now online. Is it cheaper than third-party overseas warehouses?

Last month, Amazon announced the launch of its warehouse access distribution network (AWD). The platform said that there would be no warehouse restrictions, saving sellers’ FBA inventory capacity.

According to Amazon, AWD can help sellers send and store inventory to Amazon AWD warehouses (near FBA warehouses) through third-party cross-border logistics and Amazon cross-border logistics services (AGL), and automatically replenish inventory in a timely manner based on the inventory status of the FBA warehouse. This helps sellers’ FBA warehouses to keep in stock without being restricted by storage capacity!

(Image source: Amazon)

According to the platform, sellers using AWD warehouses can obtain two major benefits:

1. Automatic replenishment . Sellers can automatically replenish inventory to FBA warehouses without worrying about returns due to insufficient space in FBA warehouses. As long as the AWD distribution center has inventory for automatic replenishment, the seller's ASIN will be in stock on Amazon.

2. Realize global inventory monitoring . AWD integrates offline logistics warehousing and online logistics systems to provide a delivery network for sellers' orders, allowing sellers to monitor their own inventory and check the progress of goods transportation at any time.

At that time, many sellers paid attention to the news and tried to apply for registration and use. In the past two days, sellers have sent feedback one after another. Some sellers calculated the usage fee and found that the price was relatively cheap.

A seller said that a hot-selling product is about to be put into AWD satellite warehouse. The product is small and light. According to the specific size, the cost of storing a box in a satellite warehouse for one month is about 4 US dollars, and the cost of storing one piece for one month is equivalent to 1.4 yuan. If it is not placed in a satellite warehouse , the price will be higher if it is transported by air. It is much more cost-effective to replenish large quantities by sea and put them in satellite warehouses than to send them by air to FBA, and there is no need to worry about out of stock.

Another seller shared the same view, believing that AWD would indeed be cheaper and the charges would be more transparent.

However, many sellers have different opinions. One seller said bluntly: " AWD is Amazon's self-operated overseas warehouse, a service created by the platform to gain profits, and the price is very expensive ! "

Amazon also explained the fees issue. AWD adopts a "pay as you go" pricing strategy, and sellers only need to pay for what they use. There are three specific fees:

1. Storage fee : Amazon charges based on daily usage, per cubic foot of space used, once a month. From January to September, it costs $0.42 per cubic foot per month, and from October to December, it costs $0.8 per cubic foot per month;

2. Processing fee : All shipping and transportation activities of goods in Amazon's warehouse distribution network, $2 per box;

3. Transportation fee : The transportation fee for boxes replenished from Amazon's warehousing distribution network to FBA warehouses is charged by cubic foot, at $1 per cubic foot.

Judging from the current feedback, sellers believe that the use of AWD should also be considered based on specific circumstances. Relatively speaking, light and small products will have certain advantages, and the cost for sellers to use them is not high, but large products still need to be carefully calculated.

Industry insiders said that they asked Amazon officials about warehouses and prices. They said that Amazon AWD is equivalent to a forward warehouse of FBA, and its prices are not comparable to those of third parties, because third parties have to pay a re-labeling fee, but AWD does not. Currently, AWD can be shipped through AGL and third-party freight forwarders, which is equivalent to an upgraded version of the satellite warehouse.

It is understood that after the seller's goods enter the AWD warehouse, if the product is out of stock, the system will automatically replenish it to the FBA warehouse, and the seller can also replenish it manually. AWD warehousing is not subject to storage capacity or quantity restrictions and is currently only applicable to the US site.

However, many sellers have not yet used AWD, and are more on the sidelines. In addition to cost issues, people are also concerned about stability and operating time.

The specific use of AWD is yet to be verified. When the excess storage fee is generated during the peak season, some sellers asked whether they can reverse the operation and move the excess FBA inventory to AWD? The official reply to this is: No. Sellers who want to take advantage of Amazon during the peak season are obviously too optimistic!

Perhaps it is just as one seller said: “Amazon’s launch of AWD shows that it is increasingly aware of how to make money from sellers during the peak season. However, sellers are not making money during this year’s peak season!”

Cross-border e-commerce sales peak season? Sellers: No feeling

This week, #Cross-border e-commerce welcomes peak sales season# has become a hot topic. Many cross-border sellers talked about their current situation on this topic. Overall, most people said that except for the storage fee, other aspects did not feel the peak season. Only some sellers said that there was a slight increase, or that they had already started to grow well.

CCTV Finance reported that due to the approaching traditional Western shopping seasons such as "Black Friday" and Christmas, China's cross-border e-commerce has now ushered in the peak sales season, and manufacturers and merchants are busy preparing stocks. According to customs statistics, the scale of China's cross-border e-commerce imports and exports has increased nearly 10 times in five years.

Many cross-border sellers said frankly that they did not feel the peak season at all, and felt that we were not doing the same cross-border e-commerce business. One seller was helpless: " Everyone is competing to lower prices and issue large coupons, but there is no increase in orders ." More sellers have the same feedback:

“—is worse than last month;

——I didn’t feel the peak season, it was just like usual;

——6 days of zero eggs;

——I only felt the fire of acos;

——The number of orders is decreasing;

——No orders were seen in November;

——This month is the worst of the year;

——The number of orders has been decreasing, which is quite different from previous years;

——After the autumn promotion, orders have been declining, and the overall sales volume is no longer comparable to before, with 1/3 less sales;

——It feels like last year, the peak season is over before we even feel it.”

Cross-border sellers' orders and traffic have not increased, and the reason behind this is that American consumers' desire to buy is decreasing. It is understood that American consumers' spending on goods has been greatly reduced during this holiday season, which has made some retailers realize that the days ahead will be more difficult.

With inflation, more shoppers have less money to spend, and many people are out of work and have no income. Surveys show that consumers are less willing to spend during the holidays, especially because rising prices for necessities such as groceries and gasoline have reduced shoppers' spending budgets.

Tim Quinlan, senior economist at Wells Fargo , said that Americans keep spending by reducing savings and increasing credit card debt. But soon they will realize that they are spending more than they earn, and this situation will not last long.

Consumer demand has dropped, and both online and offline will be affected accordingly. A large number of US retailers are on the verge of bankruptcy. These companies operate categories that are familiar to domestic sellers, such as home furnishings, bedding, and clothing. Under the impact of the epidemic, old companies that have been in business for a long time are unable to continue, which shows that the current market conditions are indeed very cold.

Online, platforms such as Walmart and Target are working hard to clear out their backlogs of inventory; due to the slowdown in e-commerce business growth, Amazon released a lower-than-expected year-end forecast in late October, and the company also announced a halt to hiring for most positions.

In this case, many sellers naturally cannot feel the peak season, but some sellers do see an increase in orders and sales.

Some sellers reported that the traffic on the US site has not changed much, but the sales on the European site started to climb in October. Some sellers on the US site have also seen growth, and it feels like the peak season has begun this week or November, with orders and traffic seeing a certain increase.

A seller said that November is here and the peak season is coming. Orders and traffic have rebounded significantly in recent days. Sellers in similar situations also saw an increase in orders this week.

However, some sellers who have seen an increase in orders are still not happy, as they have all experienced a decline in profits. One seller said: "In the previous peak season, the number of orders and profits increased simultaneously. Now, even though the number of orders has increased, the prices have become more competitive. In addition, Amazon's storage fees, advertising fees and other fees have increased, so the profits in the peak season are bleak. This is basically the case for my peers."

The peak season is here, and for many sellers, what may increase is not the orders, but the storage fees!

Storage Fees

Amazon

logistics

Peak Season