You’ve nailed your sales strategy, your advertising campaigns are generating buzz, and your products are top-notch in quality.
But have you ever paused to consider the silent factor that could be chipping away at your profits?
We’re talking about Walmart Fulfillment Services (WFS) storage fees—a topic often overshadowed by the more glamorous aspects of eCommerce but equally crucial to your bottom line.
Think storage fees are just a minor concern? Think again.
A few cents per cubic foot might sound inconsequential, but when you’re dealing with large inventories or bulky items, these “minor” costs can snowball into a financial avalanche.
And that’s not all; storage fees can fluctuate with the seasons, catch you off guard, and disrupt your carefully planned budgets.
But worry not! We have crafted a comprehensive guide that doesn’t just stop at enlightening you about the financial impact of storage fees.
We dive into the nitty-gritty of calculating these fees and offer a step-by-step roadmap to help you navigate this often-overlooked aspect of your business.
From the importance of accurate inventory management to the prerequisites for precise calculations, we’ve got it all covered.
What is Walmart WFS?
Walmart Fulfillment Services, commonly known as WFS, is a program that allows sellers to store their products in Walmart’s warehouses.
Once a customer places an order, WFS takes care of the packing, shipping, and customer service.
This service is particularly beneficial for sellers as it allows them to focus on growing their business rather than dealing with the complexities of fulfillment.
Now, the storage fee is the total cost of storing your WFS products within Walmart’s warehouse. It is calculated based on the product’s dimensions and the amount of time it spends in the warehouse. Other factors contribute to storage fees such as seasonality.
Why Understanding Walmart WFS Storage Fees is Crucial
When it comes to operating a successful business on Walmart Marketplace, many sellers focus on sales, advertising, and product quality.
While these factors are undoubtedly important, there’s another variable that often goes unnoticed but has a significant impact on your bottom line: storage fees.
The Financial Impact
Storage fees may seem like a minor expense at first glance, but they can quickly add up, especially if you have a large inventory or products with larger dimensions.
Just a few cents per cubic foot might not sound like much, but multiplied by thousands of units and over an extended period, this can amount to a substantial sum.
In essence, understanding your storage fees is crucial for accurately calculating your business expenses and, ultimately, your profitability.
Inventory Management
Another reason understanding storage fees is vital lies in inventory management.
Knowing the cost of storing each product can guide your decisions on how much inventory to keep in the Walmart Fulfillment Centers.
Keep too much, and your storage fees escalate; keep too little, and you might miss out on sales opportunities due to stockouts.
Therefore, an accurate understanding of storage fees can help you strike a balance, ensuring you neither overstock nor understock your inventory.
Predicting Seasonal Trends
Storage fees can also vary seasonally. For example, fees during the holiday season can be different from other times of the year.
If you’re unaware of these changes, you could be in for an unpleasant financial surprise.
By understanding how these fees are structured, you can better predict your expenses during peak seasons and plan your budget accordingly.
Transparency with Customers
Lastly, having a thorough understanding of storage fees allows you to be more transparent with your customers.
When you include these fees in the overall cost of your products, you can provide a more accurate representation of pricing, thereby building trust and encouraging repeat business.
Walmart’s WFS Calculator
Before we get into meticulously calculating WFS storage, we will have you know that Walmart provides a way to calculate storage fees as well.
However, this calculator is less specific but gives a general idea of what your storage fees might look like over different time periods.
Here’s the thing, the WFS Calculator operates in broad strokes. It only provides estimates for three distinct time bands — January to September, October to December, and long-term storage from January to December — it doesn’t allow for more specific calculations.
So, if you’re looking to crunch numbers for a unique time range, say February to June for example, you’ll find the tool lacking.
You might wonder why you’d need to be so specific with your time periods. Well, the storage fees can influence your inventory management decisions, budget planning, and overall profitability.
Understanding your fees for specific months can help you plan promotions, decide on inventory turnover, and even predict your profitability during peak seasons or sales events.
Hence the need to know how to calculate Walmart WFS storage fees so you are aware of how Walmart charges you (or will charge you) for the products they fulfill on your behalf.
Prerequisites for Calculating Storage Fees
Before you dive into the nitty-gritty of calculating storage fees for your products in Walmart’s Fulfillment Centers, there are some crucial prerequisites that you need to have in place.
These requirements ensure that your calculations are accurate and relevant to your specific situation.
Product Details: Dimensions and Weight
You can’t calculate storage fees without knowing the dimensions and weight of your products. Make sure you have this information readily available.
Walmart Seller Central often provides these details, but it’s always a good idea to double-check for accuracy.
Spreadsheet Software
Having a spreadsheet software like Excel or Google Sheets can be incredibly useful.
You’ll likely be dealing with multiple products and varying dimensions, so having a tool that can help you organize this data will make the process much smoother.
By ensuring that you have these prerequisites in place, you’re setting the stage for a smooth and accurate calculation process.
Each of these elements plays a crucial role in determining your storage fees, and missing even one can lead to inaccurate results.
So before you jump into calculations, make sure you’re fully prepared.
Step-by-Step Guide to Calculating WFS Storage Fees
If you’re selling on Walmart through their Fulfillment Services (WFS), understanding how to calculate your storage fees is essential.
While the process might seem daunting, this guide will provide you with a comprehensive and detailed step-by-step approach.
Step 1: Log into Walmart Seller Central
First things first, log into your Walmart Seller Central account. This is your command center for all things Walmart, including the crucial data needed for our calculations.
Step 2: Gather Your Product Information
Navigate to the ‘Inventory’ tab in Seller Central. Here, you’ll find detailed dimensions and weights for each of your products.
You’ll need these specifics for the calculations, so take note or export this data into a spreadsheet.
Step 3: Calculate the Storage Fee Formula
To calculate your storage fee, the first thing you need to do is to get the unit cubic feet. You do that by using the formula below:
Unit cubit feet = (Height × Length × Width) ÷ 1,728
NB: Height, Length, and Width are in inches
After getting the unit cubit feet, calculate the daily storage cost, which is represented by the formula below
Daily Storage Fee = Monthly Storage Fee ÷ 30
The current monthly storage fee is given in the image below.
So now that you have the unit cubit feet and daily storage cost use this formula to calculate your storage cost:
Storage cost = unit cubit feet × daily storage cost × storage period
So if, for example, you have a product that has the following dimensions:
H = 20 in, L = 12 in, W = 18 in
If you start storing your item in May for a duration of 60 days, your storage fee will be calculated as follows:
Unit cubic feet = (20 × 12 × 18) ÷ 1,728 = 2.5
Daily storage fee = $0.75 ÷ 30 = 0.025
Storage cost = 2.5 × 0.025 × 60 = $3.75
Step 4: Make Business Decisions
Now that you have an understanding of your storage costs, use this data to make informed inventory decisions.
Maybe you discover that storing large, slow-moving items isn’t cost-effective.
Or perhaps you find that you can afford to store more of a fast-moving product.
Ecom Circles WFS Calculator: Your All-in-One Solution for Walmart Fulfillment Fees
Great news for all Walmart Marketplace sellers! If you’ve been grappling with the limitations of Walmart’s WFS Calculator, we’ve got the perfect solution for you: the Ecom Circles WFS Calculator.
This advanced tool takes the guesswork out of your business planning, offering a one-stop solution for calculating not just your storage fees but also your fulfillment fees.
More Than Just Storage Fees: ROI and Profit Margins
What sets the Ecom Circles WFS Calculator apart? Unlike the Walmart WFS Calculator, our tool doesn’t stop at giving you a generic overview of your storage costs.
It delves deeper, calculating your Return on Investment (ROI) and profit margins. This means you get a holistic view of your business financials, making it easier to make informed decisions.
User-Friendly and Efficient
Using the Ecom Circles WFS Calculator is a breeze. All you need to do is input your selling price, and the calculator takes care of the rest.
No need to juggle multiple metrics or sift through complex formulas; our calculator does all the heavy lifting for you.
The Competitive Edge
In the fast-paced world of eCommerce, every bit of insight counts. Our calculator gives you that much-needed edge, allowing you to quickly adjust your strategies based on real-time data.
Whether it’s deciding on the optimum stock levels or setting competitive pricing, you’ll have all the information you need at your fingertips.
The Best of Both Worlds
While our step-by-step guide offers you the deep insights gained from manual calculations, the Ecom Circles WFS Calculator provides the convenience of quick, automated calculations.
Together, they offer a comprehensive toolkit for mastering your Walmart Fulfillment Service fees and maximizing your profits.
