How much is Amazon's overage inventory fee? What is the calculation logic?

Merchants who open stores on Amazon should be familiar with over-aged inventory. As a problem that needs to be dealt with within the store, there are still many derivative problems of over-aged inventory, such as how to properly handle these over-aged inventory products and how much is the storage cost of over-aged inventory? Let's learn about it below.

How much are Amazon’s overage inventory fees?

You will see this explanation on the help page of the seller platform:

If the seller stores more inventory than the limit, Amazon will charge an overage storage fee for the excess. The amount of the overage fee depends on the number of days you exceed the storage limit, which is based on the average daily volume of all the space your inventory occupies in Amazon's fulfillment centers that exceeds the storage limit. If the inventory you store in Amazon's fulfillment centers exceeds the storage limit on any day of the month, you will be required to pay the overage storage fee. Even if your inventory level later drops back to within the storage limit allocated for the month, you will still be required to pay the fee. The amount of the overage storage fee depends on the number of days you exceed the storage limit.

US station: $10/cubic foot (about $357/cubic meter)

UK station: 7.8 pounds per cubic foot (about 279 pounds per cubic meter)

France/Germany/Italy/Spain: 320 Euros/cubic meter

Japan Station: 31,727 yen/cubic meter

The excess storage charge is based on the excess days and volume.

How do you understand the above passage? Let us explain it in detail through an example.

Summarize the above paragraph into the calculation formula for excess storage fee:

Monthly storage overage fee = current overage value × (monthly fee per cubic meter or cubic foot)

or

Monthly storage excess fee = average daily excess value × (monthly fee per cubic meter or cubic foot)

or

Monthly storage overage fee = current overage value × average daily overage fee × number of charging days in the month

*Current overage value = current usage - current limit

*Average daily excess value = current excess value / current excess days

*Average daily overage rate = (monthly charge per cubic meter or cubic foot) / number of days in the month

Taking the US site as an example, the calculation logic is explained with the help of a virtual case of seller Xiaohua:

Assume that Xiaohua's standard-size commodity storage limit starting July 1 is: 1,000 cubic feet

➤ July 1st - July 4th

The current inventory space occupied by Xiaohua's standard-sized products is:

1,100 cubic feet

The storage excess value is:

1100-1000=100 cubic feet. From July 1 to July 4, Xiaohua's storage excess value totals 100 cubic feet x 4 days = 400 cubic feet.

➤ July 5th - July 31st

On July 5, Xiaohua created a removal order to remove 80 cubic feet of inventory. At this time, the inventory occupied space is:

1020 cubic feet

The storage excess value is:

1020-1000=20 cubic feet. From July 5 to July 31, Xiaohua's storage excess value totaled 20 cubic feet x 27 days = 540 cubic feet.

Xiaohua's average daily storage excess in July is:

(400+540)/31 days = 30.322 cubic feet

The storage excess fee for July is:

30.322 x 10 = $303.22

The overage inventory fee on Amazon is also called the overage inventory surcharge. Many people are also accustomed to calling it the long-term storage fee. It used to be a fixed fee, but later it was changed to a tiered fee model. The longer the overage inventory is occupied, the more expensive the subsequent fees will be.

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