How To Get Rid Of Amazon Inventory

When we send inventory to Amazon for FBA, we pay them to store it for us, pick pack & ship out orders, and handle returns.

In a perfect scenario, we project our inventory levels accurately in order to keep our storage fees at a minimum, and we never want to pay long term storage fees if they can be avoided.

Unfortunately, that's not always the case, so it's important to know how to get rid of Amazon inventory when the time comes.

Amazon FBA Inventory Disposal

There's two primary reasons that we'd be removing inventory from Amazon:

1. The inventory was returned by a customer and deemed unsellable by Amazon
2. The inventory has been in storage for too long and may incur a long-term storage fee penalty

A big part of what makes Amazon a great platform for sellers is that they understand how much we value automation, allowing "solopreneurs" (solo entrepreneurs) like myself can scale a business with little to no employees.

In the case of removing inventory, they allow us to automate both unfulfillable inventory as well as inventory that's about to incur long-term storage fees. Here's how:

1. Open Seller Central
2. Hover over "Settings" in the top-right corner, and click "Fulfillment by Amazon" from the dropdown menu
3. Find "Automated Unfulfillable Removal Settings" & Click "Edit"
   1. Set "Automated Unfulfillable Removals" to Enable
   2. Set "Return or Dispose" to either option (I use dispose)
   3. Set "Schedule" to Weekly
   
4. Find "Automated Long-Term Storage Removals Settings" & Click "Edit"
   1. Set "Automated long-term storage removals" to either Dispose (I use dispose) or Return (if you choose to have it returned, be prepared to potentially have massive amounts of inventory sent to your return address)
   2. You can also choose to set price guidelines for inventory to be disposed of, so that high-dollar inventory isn't treated the same as your less valuable items
   3. Following each removal, you'll receive an email from Amazon with a removal order ID
   

Amazon Inventory Removal Fees

Amazon charges a removal fee on a per item basis. The removal order fees are subject to change, and can be viewed here.

The cost per item will depend on the product size tier, as well as if it's a return or a disposal. On occasion, Amazon will waive removal fees in hopes of clearing up space for new inventory in their fulfillment centers.

It can take anywhere from 10 to 30 business days to process the removal order, with longer wait times during peak periods (Feb, Mar, Aug, Sept).

FBA Inventory Performance Metrics

Amazon introduced an inventory performance meter widget to the Seller Central homepage around late 2017/early 2018, that grades you on your ability to turn over FBA inventory in a timely fashion.

It evaluates different metrics to ultimately assign you a score in the range of 0 to 1,000 based on your inventory health, with 350 being the minimum acceptable threshold.

The performance index includes indicators based on your excess/stranded/in-stock inventory and creates recommendations on what is overstocked, as well as what listings need to be improved in order to gain more traffic and increase sales.

It also indicates how much money was spent on storage fees the previous month.

Pay attention to the "Ways to improve your performance" section as well, which helps you stay on top of the following key inventory metrics:

• Excess inventory percentage
• FBA sell-through
• Stranded inventory percentage
• FBA in-stock rate