First, understand: What is excess inventory in FBA?
Excess inventory in FBA doesn’t simply refer to “unsellable goods.” Rather, it refers to “inefficient inventory” as determined by Amazon based on factors such as inventory turnover, inventory age, and market demand. It primarily falls into three categories:
Long-term slow-moving inventory: Products that have been in the warehouse for more than 90 days and have low sales (e.g., average daily sales <1);
Overstocked inventory: Products with inventory quantities significantly exceeding the projected sales volume for the next 30 days (e.g., inventory depth >60 days);
Problem inventory: Products that cannot be sold due to listing delisting, damaged packaging, or functional defects.
This type of inventory not only takes up FBA storage space but also incurs long-term storage fees (starting after 90 days in the warehouse, and incurring high disposal fees after 365 days). It can also affect your store’s “Inventory Health” score, indirectly reducing your listing’s traffic weight. Therefore, the core logic for handling excess inventory is: prioritize reducing losses, then recovering costs, and finally clearing out occupied resources.
II. Tiered Processing: From “High-Value Rescue” to “Zero-Cost Clearance”
The handling strategies for excess inventory of varying value and status vary significantly. We recommend stratifying operations based on “value priority” to avoid blanket disposal and waste.
(I) High-Value Excess Inventory (unit price ≥ $20, or with a high cost-to-value ratio): Prioritize “rescue and reuse” to minimize losses.
The core goal for this type of inventory is to “recover as much cost as possible,” even attempting to revitalize sales rather than directly liquidate it.
Listing Optimization + Traffic Activation: Giving Inventory a “New Life”
Many excess inventory isn’t due to “poor product quality,” but rather low listing weight and insufficient traffic. Restart sales through the following actions:
Optimize core elements: Refresh the title (implement high-volume, long-tail keywords), re-shoot the main image (highlight differentiated selling points), and add A+ pages/videos (strengthen product value) to enhance the listing’s appeal.
Targeted traffic: Enable “SP Precision Ads” for the product’s core keywords, combined with coupons (e.g., 10%-15% discounts). Use low prices combined with advertising to quickly boost conversion rates and boost organic rankings.
Related sales: Designate redundant products as “complementary gifts” (e.g., when selling a coffee machine, offer a spare coffee spoon as a “free gift” upon purchase). Alternatively, use “variant merging” to add them to the same variant group as a popular listing to leverage the traffic from the hot item to drive sales.
Offline/Off-Site Channels: Expand Your Sales Scope
If Amazon continues to stagnate, consider other channels:
Offline Wholesale: Connect with local overseas wholesalers and discount stores (such as Dollar Tree in the US) to sell in bulk at low prices. While profits may be low, this approach allows for quick returns on capital.
Off-Site Discount Platforms: Post promotional information on major European and American discount websites like Slickdeals and FatWallet, using limited-time flash sales to attract off-site traffic. This is suitable for products with a strong brand base.
Social E-commerce/Independent Websites: Offer exclusive clearance prices to existing customers through Facebook groups, Instagram Shops, or your own independent website. This helps clear inventory while retaining private users.
Inventory Transfer: Move to “Demand Lows”
Cross-site Transfer: If a product is slow-selling on the North American marketplace, but similar products are popular on the European/Japanese marketplace, you can use Amazon’s “Global Inventory Transfer” feature to transfer inventory to marketplaces with higher demand (you need to confirm the target marketplace’s compliance, such as CE certification and Japanese labeling, in advance).
Third-party Overseas Warehouse Transfer: Remove excess FBA inventory to a third-party overseas warehouse. You can then use “self-fulfillment” to connect with other platforms (such as eBay and Wish), or use it as “backup inventory” to replenish FBA inventory at any time, avoiding the need for emergency stockpiling.
(II) Low- to medium-value excess inventory (unit price $5-20, medium cost): “Trade price for volume” and quickly liquidate to prevent losses.
This type of inventory does not require excessive resource investment to activate. The key is to “get rid of it quickly and reduce storage costs and losses,” prioritizing “recovery cost > storage fees + removal fees.”
Amazon Clearance Tools: Efficiently digest inventory through official channels
Clearance Deals: Apply in Campaign Management, and Amazon will place your product on the Clearance page. Discounts of 30% or more are recommended, suitable for inventory that has been unsold for 30-90 days.
Outlet Deals: Target inventory that has been in stock for more than 60 days. These discounts are higher (usually 40% or more), but they also provide additional traffic support from Amazon and allow for faster clearance.
Liquidations: Sell inventory directly to Amazon’s partnered liquidators, eliminating the need for in-house operations. While the downside is the extremely low price (usually only 10%-30% of cost), the advantage is the speed and hassle-free nature of the process, making them suitable for inventory that will soon incur high long-term storage fees.
“Extremely Low Pricing” Strategy: Forces Order Conversion
Price Reduction + Coupon Stacking: Lower the price to “slightly above cost” while offering “unrestricted coupons” to attract price-sensitive buyers with this “double discount” and quickly deplete inventory.
Bundling: Combine excess inventory with popular products to create a “bundle” (e.g., “hot-selling T-shirt + slow-selling socks” for a price less than the sum of the individual prices). Leverage the traffic from the popular products to drive excess inventory sales.
Donation: Balancing Cost and Brand Image
Through Amazon’s “Amazon Donations” program, excess inventory can be donated to partnering charities. While this program doesn’t directly recoup funds, it can:
Waste removal and disposal fees;
Obtain certain tax deductions (subject to reporting according to the tax laws of the target site);
Improve the brand’s social image and indirectly benefit long-term operations.
(3) Ultra-low-value/problem inventory (unit price < $5, or damaged/expired): “Zero-cost liquidation” to avoid additional losses
Continuing to hold this type of inventory will only incur additional costs (storage fees, removal fees). The core goal is to “clear out as quickly as possible to stop losses.”
Direct disposal: The most worry-free “stop-loss” method
Create a removal order through the FBA backend and select “Dispose.” Amazon will take care of destroying the inventory, and you only need to pay a small “disposal fee” (usually $0.1-0.5 per item). This method is suitable for the following situations:
The unit price of the product is extremely low, and the revenue from secondary sales after removal is insufficient to cover the “removal fee + shipping costs”;
The product is damaged, expired, or poses a safety hazard and cannot be resold;
The inventory quantity is extremely small (for example, only a few units left), and the cost of handling it separately is too high.
Disassembly and Recycling: For Products with Valuable Components
If a product contains recyclable, high-value components (such as batteries for electronic devices or metal parts for hardware products), the inventory can be removed to a third-party overseas warehouse for disassembly. The recycled components can then be reused in production or sold separately. This approach is suitable for industrial and consumer electronics products.
III. Key Tips: Avoiding “Reinventing Excess Inventory” and “Management Pitfalls”
Establish an inventory warning mechanism to reduce excess inventory at the root.
The best way to address excess inventory is to prevent it from occurring. Using Amazon’s Inventory Planning tool, consider historical sales, seasonal fluctuations, and replenishment cycles (production and shipping times). Set a “safety stock level” (e.g., 15 days of sales in the off-season, 30 days of sales in the peak season). Replenish inventory only when inventory falls below the “replenishment warning level” (e.g., 20 days of sales) to avoid overstocking.
Calculate your “clearance break-even point” and avoid blindly discounting.
Before clearing out inventory, calculate this: break-even point = (product cost + first-leg shipping fee + FBA storage fee) / estimated clearance quantity. If the clearance price is lower than the break-even point and holding on to the item will incur higher storage fees, dispose of it decisively. If the clearance price is higher than the break-even point, prioritize “low-price clearance” to recover some of the costs.
Beware of hidden costs associated with “removal/disposal.”
Removal orders incur a “removal fee” (charged by weight/size, usually higher than the disposal fee) and take a long time (1-4 weeks), so plan ahead.
Before disposing of the item, confirm whether it is “dangerous goods” (e.g., containing batteries or chemicals). Dangerous goods carry higher disposal fees and require advance declaration to avoid fines.
Prioritize “claims” for problem inventory before discussing clearance.
If excess inventory is caused by “Amazon operational errors” (such as damage, loss, or mislabeling during storage), first apply for compensation through the “Inventory Adjustment Claim” channel in the FBA backend. Once your claim is successful, proceed with disposing of the remaining inventory to minimize unnecessary losses.
Summary
The core of handling excess inventory in FBA is “tiered approach and timely loss control”: prioritize rescue and activation of high-value inventory, quickly liquidate mid- and low-value inventory to recover capital, and decisively dispose of extremely low-value inventory to prevent losses. More importantly, by establishing a scientific inventory planning mechanism, we can reduce excess inventory at the source—after all, “no excess inventory” is the most efficient approach.
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