What Is FBA?
FBA stands for Fulfillment by Amazon. FBA is a service where Amazon takes care of warehousing your inventory at their fulfillment centres, where they take care of picking, packing and shipping out orders as they come in. They’ll even handle returns, disposals, as well as some aspects of customer service.
There are a number of reasons why you may want to remove your inventory from an Amazon FBA warehouse.
- Not wanting to pay long-term storage fees
- Products are nearing their best-before or expiry date
- Items are not selling as well or as quickly as you anticipated.
Depending on the product you’re looking to remove, the below two options are very much situational and should be taken into consideration on a case by case or product by product basis.
We would recommend this option for near-dated or expiring products. That being said, even slow-moving products without a shelf-life might have minimal salvageable value. If so, you’re probably best to let Amazon dispose of these products.
If the product has no shelf life and relatively healthy margins, it’s likely in your best interest to incur the fee to have the inventory returned to you. This option will give you the opportunity to remarket the product and still capture some profit. Alternatively, if this is a low cost, low margin item (if the fee works out to be higher than the cost of the product or your margin), it may be in your best interest to cut losses and have the inventory disposed of, or perhaps even explore some charitable donation avenues.
In both cases you’ll want to look at and analyze the product in question, then consider costing, fees, and margins when seeing which option is really worth your time.
At the end of the day, look at your cash flow for help with that decision. Although Amazon fees are nominal, if your purchasing dollars are currently being tied up in older moving inventory, these fees can add up quickly.