New Fee From Amazon: Low-inventory-level Fee What is Next?

March 30, 2024 Posted by Lewis Fletcher
low inventory level fee

Amazon will introduce a new fee starting April 1, 2024. This fee will target standard-size products with “consistently low inventory relative to customer demand”. Amazon claims that low inventory leads to slower delivery speeds and increased shipping costs.

The new fee, “low-inventory-level fee” will be applied to the products whose inventory levels (historical days of supply) are below 28 days.

Historical days of supply will be computed for parent ASINs weekly, and the resulting calculation will apply to all child ASINs for the following week.

How to Calculate Historical Days of Supply?

Historical days of supply will be calculated for both long-term (last 90 days) and short-term (last 30 days) periods. The greater of the two will serve as the product’s historical days of supply. It is determined by dividing the average daily inventory units on hand by the average daily units shipped. product’s historical days of supply.

“Average daily inventory units” includes sellable FBA inventory units within the Amazon US fulfillment network. “Sellable” refers to inventory units available for sale, including those in the process of being transferred between fulfillment centers.

“Average daily shipped units” comprises all units shipped from the Amazon US fulfillment network. Units shipped outside of the US is also included in this number.

Let’s use the following ASIN as an example. The short-term (30 days) historical days of supply is calculated to be 25.2, derived from dividing 117.43 by 4.67. This indicates that the store had an average of 117.43 units on hand and sold 4.67 units per day over the previous 30 days.

The long-term (90 days) historical days of supply is 28.2 (72.44/2.57). The store had an average of 72.44 units on hand and sold 2.57 units per day over the previous 90 days.

28.2 will be the historical days of supply since it is the greater one.

So, the item will not incur any low-level inventory fees because its historical days of supply is above 28.

Historical days of supply calculation (Parent ASIN)

This metric is calculate at the parent-ASIN level, so all the child products (variations) related to the same parent-ASIN will have the same historical days of supply.

Parent ASIN
Short term (Last 30 days) Long term (Last 90 days)
Historical days of supply : 28.2 25.2 (117.43/4.67) 28.2 (72.44/2.57)
Average daily on-hand units 117.43 72.44
Average daily shipped units 4.67 2.57

How to Calculate Low-inventory-level Fee?

The new fee, “low-inventory-level fee” will be added to the FBA fulfillment fee for products whose inventory levels are below 28 days for both the last 30 days and 90 days. If either of these exceeds 28 days, no fee will be applied.

If historical days of supply is below 28 days for a parent ASIN, all items under that parent ASIN (child ASINs) will incur low-inventory-level fee per order based on the size tier during the following week:

April 1, 2024 and after
2024 size tier Shipping weight Low-inventory-level fee (per unit fulfilled)
0 ≤ historical days of supply < 14 14 ≤ historical days of supply < 21 21 ≤ historical days of supply < 28
Small standard Up to 16 oz $0.89 $0.63 $0.32
Large standard Up to 3 lb $0.97 $0.70 $0.36
Large standard 3+ lb to 20 lb $1.11 $0.87 $0.47

What if your products are out of stock or sold 0 units in the past?

No fee will be incurred if your products are out of stock or have had no sales in the last 30 or 90 days.

Which products are excluded?

The following products are excluded from this fee:

  • Products of new professional sellers, for the first 365 days.
  • Parent products that are new to FBA for the first 180 days (you must be enrolled in FBA New Selection program).
  • Products in Amazon Warehousing and Distribution.
Lewis Fletcher
Senior Content Manager