Amazon FBA Stock Liquidation Explained
To understand why a reseller might want or need to liquidate their Amazon FBA stock, we should look the whole picture of Amazon and the Amazon reseller climate.
The Rapid Amazon Reseller Growth of 2008
Since the U.S. market crash in 2008, many people lost their jobs and found selling on Amazon was a great way to make some money. Many of those same people ended up making more money than when they were working their 9-5 everyday job. Over the last few years, however, selling on the Amazon market place has become extremely competitive.
This video by Amazon tells a positive story about Fulfilment By Amazon.
Amazon FBA Fees Explained: How Much Does Amazon FBA Cost?
Amazon Resellers Challenges in 2019 and Beyond
The days of “easy money” as an Amazon Reseller are gone. Today, Amazon resellers have flooded the market, created such heavy competition on each item that products aren’t selling quickly enough to make a profit.
To compete on Amazon as a reseller you have to control of the “Buy Box”. But the problem is that controlling the Amazon buy-box on any given product can require HUGE advertising dollars.
Additionally, when Amazon sees a product moving well, they often jump into the sales mix directly themselves. And if you are competing to sell an item that Amazon actually owns as well - you’re fighting a losing battle.
Another challenge an Amazon reseller might face is their product listing might get restricted due to new rules and regulations in that particular category. Or maybe a brand decides to restrict other Amazon sellers from listing that particular product.
When any of the above things happen, as an Amazon reseller, you’re stuck with a product you can’t sell which is being stored in FBA (Fulfilment By Amazon) warehouses. You are stuck paying storage for items that might NEVER sell. As FBA fee’s and storage costs are on the rise, this can become a huge burden for any business entrepreneur. FBA long-term storage fees - Amazon Seller Central
Rising Amazon FBA Costs to Amazon Resellers
When amazon FBA products don't sell you run the risk of paying long term storage fees.
Amazons FBA program charges a per cubic foot monthly fee, plus additional storage penalties. Did you know that everything stored with Amazon FBA for 6 months or more has a penalty? And after 12 months that penalty increases even more. Storage rates in the 4th quarter are about 6x normal. Having long-term inventory items sitting around Amazon warehouse could be fatal to any business.
How many months of storage you want to pay is up to you. If you are overstocked, pull some back and leave some there.
A Wholesale Inventory Issue that cost this Amazon Reseller over $10,000 (Video).
What do you Do When Amazon FBA Inventory Doesn’t Sell?
When Amazon FBA inventory does not sell, you have a few choices.
1. You can continue to pay the rising FBA fees and discount the price heavily in the hope that the merchandise will sell quickly.
2. You can create an amazon removal order. For the cost of 50 cents each item, Amazon will ship your goods back to you.
By choosing the first option and reducing the price, the risk is that the item still doesn’t sell well, and you’re stuck paying additional unnecessary costs in long term storage fees – and you’re still likely to end up losing money on each sale at the heavily reduced price.
The second option is usually the best way to cut your loses more quickly. But once you have done an Amazon removal of your products, now what? Where do you sell those products? And, where are you going to store that inventory? Sending it to a storage facility or another warehouse just means you’ll be paying more storage which defeats the purpose of removing the product from Amazon in the first place. Some Amazon Resellers choose to have the product returned to their home where they can store the unsold goods in their garage or basement.
There is a third option.
Instead of creating the removal order, it would be best to contact a wholesale liquidator like SELLING EXCESS INVENTORY first.
Rather than paying 50 cents a piece to ship your product inventory to your home or another paid storage facility – where you might then need to ship it again.
We can negotiate a deal to send the Amazon removal order directly to our warehouse – saving you time, hassle and money. Freight companies charge a much higher cost to pick up the products from a residential location or a facility that does not have a dock. So before you place an Amazon removal order, call us. We will be happy to review your inventory and give you a fair offer that assures that FBA fees are stopped and your Amazon merchandise is sold in one bulk order.
Call us at 618-248-3279 or use the contact form here to get an offer for your unsold Amazon FBA.
Also, please feel free to use our free Google Sheet to create a manifest of any Amazon FBA inventory you'd like to liquidate.
SELLING EXCESS INVENTORY can help ease the pain of Amazon FBA removal
We are wholesale closeout liquidators that are very well versed in all things Amazon and FBA.
Before you have your FBA merchandise is shipped to another location where it’s taking up space or costing you more money, call us! We will make you a fair offer for your FBA stock and have the obsolete merchandise sent directly to our facility. Don’t continue running the risk of losing more money on Amazon long term storage fees. We’ll help you turn bad inventory into good cash that you can invest in winners. Save space and capital that you can reinvest. Ready to sell your Fulfilment By Amazon merchandise?