Amazon warehouse distribution is abnormal! Sellers: forced charges

After the warehouse configuration fee came into effect, some sellers felt helpless due to the rising costs and the huge increase in inventory. Especially during the important time of preparing for Prime Day, abnormal warehouse distribution problems occurred frequently. Especially with the recent increase in freight costs, how to properly distribute warehouses to avoid high costs has become one of the most concerned issues for sellers. Amazon has also made the latest response to the impact of the warehouse configuration fee on sellers.

The warehouse distribution is abnormal, and the seller's shipping costs have increased again

Recently, many Amazon sellers have discovered anomalies in warehouse distribution. A large amount of goods were sent at one time, but the goods were only distributed to three warehouses, or even only one warehouse. Such problems are not isolated cases.

One seller shipped 200 cartons of goods with more than 5,000 boxes, but they were not divided into warehouses; another seller said that he shipped 100 cartons last week, but they were not divided into warehouses either. Another colleague was charged $1,100 for shipping 200 cartons of goods because Amazon did not give him a warehouse division.

According to Amazon's warehousing configuration service fee rules, if you want to be exempted from the warehousing configuration service fee, the number of warehouses must be greater than four. If you do not have warehouses, it means you have to pay high fees.

Faced with the current situation where warehouse division is impossible, many sellers complain that the platform is "forcing fees". In fact, this may not be the case. Perhaps some sellers do not understand how warehouse division works.

Amazon's warehouse distribution rules are to ensure that a product is available in every warehouse, ensuring that the product is closer to the customer. The specific points are as follows:

1. If the quantity of goods sent by the seller is less than 4 boxes, it will basically not be divided into warehouses, and the configuration fee is inevitable;

2. If the goods shipped are more than 4 boxes or a lot, but the goods are the same product, they may not be separated into warehouses;

3. If the quantity of goods shipped is greater than 4 boxes or a large quantity, for example, 5 boxes of goods containing 5 different products can be divided into warehouses in most cases.

Based on this, many sellers have come up with a solution to ship different products together, such as putting a small product in each box and mixing them in different warehouses. In a nutshell, adding different products together during shipment can make it free. However, it is worth noting that some sellers have encountered the problem that there is an account that cannot avoid the warehousing configuration fee no matter how it is operated, which means it cannot be free.

Regarding warehouse division, it depends on the seller's product to calculate whether it is suitable for warehouse division. Some sellers can save more shipping costs by dividing their products into warehouses. For example, a seller said that if you don't pay the configuration fee, you will basically get the goods in the East and Central US. In most cases, we choose to divide them into three warehouses in the West US, pay the configuration fee and go by card, which is more cost-effective.

However, for many domestic sellers, who deal relatively more in light and small products, most people still want to divide the warehouses reasonably to avoid high warehousing configuration fees.

How to decide whether to split warehouses? It depends on different situations: First, make reasonable calculations based on the size and weight of the products. Some products are light and numerous , so it is a loss to go through the US West Coast because the configuration fee is charged according to the quantity. On the contrary, if the products are heavy but few, it will be more cost-effective to go through the US West Coast . Second, see if the seller is in a hurry to ship. If not, it is okay to go through the US East Coast slowly. However, if it is a member day or peak season, the seller is in a hurry to ship, and it would be better to go through the US West Coast because in the warehousing configuration fee, the goods will be charged if they exceed 30 days, and the timeliness of the US East Coast and US- China will be slower.

Based on this, sellers should make calculations before shipping each time, and then choose a channel after comprehensive consideration .

More inventory and higher costs

In addition to the fees charged for warehouse division, the warehousing configuration fee also has other impacts on sellers.

The first thing that is affected is the timeliness. Seller Wang Huan said that before, I only needed to prepare two or three months of goods for delivery, but now I need to prepare four to five months of goods, because the timeliness is too slow, and if I don’t pay the inventory configuration fee, it will be very slow.

Secondly, if the seller does not have to pay the warehouse configuration fee, but may have to pay the inventory defect fee, because all the goods in the warehouse must arrive within 30 days, that is, after the first shelf arrives, the last shelf must arrive within 30 days, which means that if the slow ship in the East Coast of the United States is used, it is very likely that the goods will not be able to enter the warehouse for more than 30 days, and the seller will be charged an inventory defect fee again.

Seller Wang Huan said that this inventory defect fee is charged even if the goods are not delivered within 30 days. And according to Amazon's explanation, the inventory defect fee is slightly higher than the inventory allocation fee.

Finally, there is the issue of listing products. Popular warehouses in the western United States will not list products for a long time. Some sellers’ products have not been listed in warehouses in the western United States for more than a month. The speed of listing products is a big problem.

Another seller had a product that was not available for sale. There were more than 100 reserved items, but they were not available for sale for a month. The backend link showed that the product was on sale, but the frontend showed that it was out of stock. I opened a case and the customer service said that the inventory was currently located in the replenishment operation center XJF1 , KRB9 and SAV7, so it was not available for sale. The same problem made other peers feel helpless: "I reserved hundreds of items last month, but the listing was not available for sale. When I asked, they said it was being transferred."

Optimize the supply chain and take full advantage of distribution to defend against competitors

As the warehousing configuration fee has been in effect for some time, sellers have discovered that the impact of this policy is not limited to the increase in costs, but also includes other uncontrollable factors.

On May 24, at a media communication meeting announcing the launch of the "2024 Export Cross-border Logistics Accelerator Program", Amazon made the latest response to the warehousing configuration fee.

One of the key points of Amazon's original intention and consideration is that we want to bring the distance between goods and consumers as close as possible. Because only in this way can we achieve same-day and next-day delivery. On the one hand, consumers can have a better experience, and on the other hand, the frequency of consumers returning to Amazon and this brand to shop again will increase. Gradually, sellers will have more loyal consumers. After placing an order, faster speed and more efficient response are what we want to achieve in the entire logistics system.

Based on this thinking, we hope to observe with sellers how to ensure sufficient inventory and how to arrange inventory in various regions, rather than considering charges. Because the speed is improved, it also means more business improvement. The reason for adjusting logistics costs here is that Amazon wants to work with sellers to do regional layout. We also recommend that sellers provide deeper inventory so that we can work together to do regional layout.

Although we have good intentions and the goal of optimizing the supply chain, for sellers, they find that the fees have been reduced through end-to-end comparison, but the work has become more complicated. We are also actively collecting many recent feedback from sellers, and these problems need to be solved step by step. Next, we believe that through the feedback from sellers and their specific problems, we will do a better job in optimizing the supply chain.

According to recent foreign media reports, Amazon is also working hard to make full use of its delivery advantages to fend off competitors.

According to reports, Amazon signed at least six new leases in the first five months of this year, equivalent to the lease space it signed throughout 2023. All six new leases are located in the western United States.

In an article titled "Amazon is resuming its logistics expansion and reshaping U.S. distribution - the largest e-commerce retailer in the United States is leasing more warehouse space to speed up delivery and cope with increasingly fierce competition," The Wall Street Journal stated that Amazon's "post-epidemic logistics expansion slowdown" is over.

The Wall Street Journal mentioned that the demand brought by the 2020 epidemic put pressure on Amazon's resources. The company revealed in November 2021 that its production capacity had doubled as a result, but by June 2022, it was reported that as online consumption stabilized, the company found excess capacity.

Some reported figures show that Amazon operates 413 million square feet of industrial real estate and plans to expand by another 16 million square feet.

Other media outlets , citing The Wall Street Journal, reported that Amazon decided last year to diversify its network and expand it this year, in part to counter competitive pressure from Walmart , Temu and SHEIN.

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Warehouse configuration fee