Amazon Imposes “Long Term Storage Fee” to Fasten Selling Process

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Amazon has come up with “Long-term storage fees” to tackle the problem caused by stocked/ filled storage houses. The e-commerce company recently found that in case a storage unit/ warehouse was filled/ stocked with various products for a long period of time, it could not be used for holding onto other products which further resulted in lack of space for fast selling products. Due to this, products were displayed as “out of stock”.

Amazon has been providing customers with good quality products, at low prices through various drool worthy Amazon offers. Further, it has been able to keep both customers and sellers happy by putting in place a user-friendly system.  

Lately, the company has made certain changes in the seller fee. One such change is the introduction of “Long-Term Storage Fee”. The simple meaning for this is that Amazon will charge money from sellers whose products are stored in the inventories or Amazon’s fulfillment centers i.e. FCs for 6 months in case of shoes and 12 months in case of apparel categories. So any third party seller on Amazon is now subjected to sell more in order to keep their products in Amazon’s FCs for more time. The fee has been imposed as a limiting factor. The same is likely to stop indefinite storing of products in FCs by one or two sellers.

One of the major reasons behind doing so is the competition between Flipkart and Amazon’s India. Amazon is trying to beat the competition by improving its marketplace’s attractiveness among the buyers and the sellers. Amazon has issued various referral fees under numerous categories for the same reason.

Despite of being an economic strategy, the idea is not to generate income from the fee collected, but to increase the availability of fast selling products in the FCS. According to Amazon, the slow moving products acquire space which could have been allotted to fast-moving goods.

In a recent communication with a  seller, Amazon India spokesperson mentioned that they have heat the big number of 3 lakh sellers in their marketplace who offer almost 160 million items for selling. Usually, these sellers come from semi-town or semi-urban or rural areas i.e. mostly underdeveloped areas. The spokesperson said that their prime objective is to provide exposure to each and every one of their sellers at the national level through their portal.

Amazon has also changed its weight handling fees. As per the recent changes, the weight handling fees will be charged less in case the shipping is subjected to a near locality of the seller. According to the latest rate card, sellers will now be able to measure their savings while shipping for regional or local customers. The same method has already been introduced by Flipkart and eBay. Amazon too has high hopes for the same.

E-commerce business is built on the relationship between the seller and the buyer. The objective is to create a profitable marketplace for both ends. Third party sellers have now become an integral part of big e-commerce websites and Amazon is not an exception from that.

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