Imagine the countdown to Prime Day has begun, but your best-selling products can't be stocked due to insufficient warehouse space - all while watching competitors reap massive profits. This frustrating scenario is exactly what Amazon aims to prevent with its newly announced FBA inventory "slimming initiative."
Amazon's Inventory Cleanup: Is Your Stock at Risk?
Amazon has implemented significant changes to its automatic inventory removal system, targeting two specific types of FBA inventory:
- Aged inventory: Products stored in fulfillment centers for over 365 days that incur Long-Term Storage Fees (LTSF)
- Slow-moving inventory: ASINs that haven't sold for six consecutive months and have been stored for more than 180 days
Proactive Strategies for Sellers
Sellers can take control of their inventory management with these key approaches:
1. Choose Your Removal Method:
- Returns: Provide a valid return address in the "Automated Fulfillable Inventory Settings" dashboard to have items shipped back for potential resale on other platforms
- Liquidation: Opt for inventory liquidation to recover partial value rather than complete loss
- Inaction: Without seller intervention, Amazon will automatically donate, recycle, or dispose of removed inventory
2. Manual Opt-Out Option:
Sellers may disable automatic removals through their settings, though some reports indicate Amazon may override this selection in certain cases. Regular monitoring of settings is recommended.
3. Monitor Inventory Performance Metrics:
Amazon's Inventory Performance Index (IPI) remains crucial for warehouse space allocation. Higher scores indicate efficient inventory management and qualify sellers for increased storage capacity and lower fees.
Amazon's Strategic Focus
These policy changes reflect Amazon's broader goal to optimize logistics efficiency rather than serve as a storage provider. The company encourages sellers to adopt "small batch, frequent replenishment" strategies with 30-day shipment cycles instead of six-month inventory dumps.
Prime Day Preparation
This inventory purge clearly prepares for the anticipated product influx during Prime Day. Sellers must act now to ensure their top products are properly stocked for the sales event.
Immediate Action Steps:
- Review FBA inventory reports for at-risk products
- Evaluate and improve IPI scores
- Update automated fulfillment settings
- Confirm opt-out preferences are active