Amazon recently announced that effective April 1, 2024, a new low-inventory-level fee will apply to standard-size products that are considered low inventory relative to customer demand.
Amazon is introducing this new seller fee because carrying low inventory “inhibits our ability to distribute products across our network, degrading delivery speeds and increasing our shipping costs.”
What this means for you, as an Amazon seller
A low-inventory-level fee will be applied to each unit sold of a product with historical days of supply < 28 days and charged once the customer’s order is shipped. The fee will vary based on size tier, shipping weight, and historical days of supply.
Amazon sellers will need to maintain more than four weeks of inventory in FBA, per parent-ASIN, to avoid incurring the low-inventory-level fee.
How historical days of supply is calculated by Amazon
Amazon calculates historical days of supply on the parent-ASIN level, using a ratio of average daily on-hand units to average daily shipped units, for the previous 30-day and 90-day periods. They then use the greater of the two calculations to decide your historical days of supply.
This metric is currently available to sellers through your Seller Central FBA Inventory dashboard and found under the “Historical days of supply (Parent ASIN)” column. Selecting “details” will display the breakdown on how historical days of supply is calculated for the parent-ASIN. This metric is updated weekly.
Note: “Historical days of supply (Parent ASIN)” is not affiliated with the “Days of Supply” calculation, shown in FBA Inventory as well.
What ForecastRx can do to help
Our RestockAMZ tool tracks your inventory levels and daily sales rates to provide you with customized restock recommendations based on how much inventory you would like in stock at Amazon FBA. Simply set Ideal FBA Inventory to a number greater than 28 days, and RestockAMZ will automatically calculate how much inventory you would need to send to FBA today, to avoid these new Amazon seller fees.
You can also set up notifications to quickly sort and filter products which are nearing or dropped below the 28 days of stock minimum.
Since the Low-Inventory-Level Fee is based on parent-ASIN, it would be advantageous to have higher stock levels on your best-selling/highest-margin child-ASINs instead of slower selling variants. ForecastRx can help by evaluating child-ASIN profitability in the RestockAMZ estimated margin calculator and displays their average daily sales rates.
For more information on the low-inventory-level fee and rates starting April 1st, please check out this article on Amazon Seller Central.
