Managing Excess Inventory on Amazon

After 10 years on Amazon, I've found that storage fees can kill your profitability. Here's the brutal math: • FBA storage (Jan-Sep): $0.78 per cubic foot • FBA storage (Oct-Dec): $2.40 per cubic foot • Long-term storage (271-365 days): $1.50 per cubic foot • Long-term storage (365+ days): $6.90 per cubic foot These fees compound during growth phases, creating financial pressure during expansion. Enter AWD – Amazon's bulk storage solution designed to complement FBA: • AWD rate: $0.42 per cubic foot year-round (vs. up to $2.40 for FBA) • No inbounding fees for AWD users • Eliminates FBA's storage limits and overage fees • Auto-replenishes your FBA inventory For our clients, we implement a hybrid model: → Store 60-90 days in AWD → Keep 30-60 days in FBA This strategy balances inventory availability with minimized storage costs. For peak seasons, increase to 90 days before Q4 to handle surges. This optimization strategy improved one client's cash position by $48K annually while maintaining perfect inventory levels. Are you still storing all your inventory in FBA? You're probably paying 2-5× more than you should.

Amazon will decide what happens to your unsold inventory, unless you set your own rules Starting September 30, Amazon is updating how sellers manage excess and unfulfillable inventory in the US and Canada, introducing new defaults that affect recovery value, reporting, and donation handling. This is what’s changing: ⚠️ FBA Liquidations becomes the default If you don’t configure your automated fulfillable or automated unfulfillable settings, Amazon will automatically enroll your inventory into FBA Liquidations. • Unsold or returned inventory will be liquidated through Amazon’s partners • You’ll receive a net recovery value of roughly 5% to 10% of the average selling price • You can still opt out manually 🚨 FBA Donations becomes mandatory Previously optional, FBA Donations will now automatically apply to all eligible inventory disposals. • No opt-out option as of September 30, 2025 • Inventory that qualifies for donation will go to Amazon’s nonprofit partners • Disposal fees remain the same • Donation certificates will continue to be issued annually This matters because Amazon is changing who makes the final decision about unsold inventory. Sellers still have options, but only if they proactively manage their FBA settings. Otherwise, Amazon decides: • Liquidate it through secondary markets • Donate it through its nonprofit network • Dispose of it if it’s ineligible This shift means the cost of not managing your settings extends beyond fees, potentially affecting your recovery value, reporting, and tax strategy. So yeah, Amazon is prioritizing catalog control by creating consistent, predictable pathways for excess inventory, keeping its fulfillment network lean and its data clean. • Reducing stranded inventory • Improving storage optimization • Standardizing reporting for sustainability initiatives It’s also a sign of where the marketplace is heading: sellers are expected to operate within Amazon’s ecosystem, not around it. My take is that this isn’t just an operational update. It’s a reminder that Amazon is redesigning the end-of-life strategy for your products, and unless you set your own rules, Amazon will set them for you. #Amazon #FBA #EcommerceStrategy #InventoryManagement

You think your inventory is fine. Until peak season hits and suddenly...... One warehouse is drowning in orders while another collects dust. You're overnighting products just to keep up, burning margins faster than a bad Facebook (Meta?) ad. Your 3PL is telling you, "We need more inventory here," while your finance team is screaming, "We need less inventory there!" And you? You're left wondering why no one saw this coming. Here's my idea of an inventory allocation playbook that you should peek at. Step 1: Stop Guessing, Start Looking at SKU Velocity Not all SKUs should be stocked equally across warehouses. Your top-selling items? Get them as close to customers as possible. Slow movers? Centralize them where they won’t clog up expensive space. If you’re distributing inventory based on cooool vibes and not hard data, you’re setting yourself up for a crap time. Step 2: Regional Demand Matters More Than You Think You might think you’re saving money by keeping everything in one warehouse. Until your East Coast customers are paying California shipping rates and filing chargebacks like it’s their job. Who loves having an average zone 6/7 shipping?!? Look at heatmaps. Where are your customers actually buying? Step 3: Don’t Let Amazon’s Rules Run Your Whole Business Yes, FBA is great. Until you run out of inventory. Or they suddenly limit your inbound shipments. Last Q4 was fun trying to get an appointment with their new protocols, amiright?!? Or they hit you with long-term storage fees that make you question why you got into supply chain & logistics in the first place! Smart brands balance FBA with a reliable fulfillment network that keeps Prime-level shipping speeds without relying 100% on Amazon’s mood swings. Step 4: Your 3PL Should Be Helping You With This, Not Just Storing Boxes If your fulfillment provider isn’t actively helping you optimize inventory placement, SKU velocity, and warehouse allocation… You don’t have a partner. Sorry, it's true. You have a storage unit. Step 5: Data is King, But Execution is Queen What good is all this data if you aren’t making moves? Build a quarterly inventory allocation plan based on hard numbers. Pressure test your 3PL on how they handle stockouts and overflow. I wouldn't advise doing a new marketing initiative w/o telling your fulfillment provider. But that is typically a great gauge. Your competitors are making these decisions right now while you’re still debating if your one warehouse in Reno Nevada is good enough. Bottom line is simple. Inventory allocation is either your biggest growth lever or your biggest bottleneck. Get it right, and you lower costs, speed up shipping, and make customers happy. Get it wrong, and you’re playing inventory whack-a-mole all year. Which one do you want? If your current fulfillment setup isn’t optimizing inventory before you even notice a problem, let's chat. #ecommerce #3PL #fulfillment

“I Can Only Show You the Door”: The Two Problems Every Amazon Seller Must Face Every Amazon seller faces the same crossroads, and the path to success starts with a choice: too much inventory or not enough. These are the only two problems you’ll ever encounter—and how you respond determines everything. The Problem of Too Much Inventory If your shelves are overflowing, the reason is simple: • Your product isn’t resonating: It’s not what customers want. • Your pricing is off: Competitors are undercutting you, or you failed to justify the price. • Your value isn’t clear: Customers don’t understand why they should pay more for your product. The Problem of Not Enough Inventory If your products are vanishing faster than you can restock, here’s why: • You miscalculated demand: Your numbers didn’t add up, and now you’re out of stock. • You’re undercapitalized: You couldn’t stock the needed inventory. • You underestimated the market: Your product took off and didn’t plan for runaway success. The Solution: Choose Wisely and Adapt Success on Amazon is about addressing your problem—not the one you wish you had. If you’re stuck with too much inventory, pivot quickly: improve your listing, lower the price, or bundle the product. If you can’t keep up with demand, tighten your forecasting and invest in better supply chain planning. The door is always there, but you have to walk through it. Choose the problem, solve it, and minimize the impact on your account. Success is about mastering the decisions before you, not avoiding them.