Dominate 2025 with Smarter Amazon Inventory Management

Running out of stock? You’re losing sales. Overstocked? You’re losing money to storage fees. And as of 2024, Amazon’s now charging you for keeping too little inventory with their low-inventory-level fee. That’s why proper inventory management is critical – it helps you strike the right balance, avoid fees, and stay in control.

In 2025, with rising FBA fees, stricter IPI (Inventory Performance Index) thresholds, and added pressure from low-stock levels and excess inventory penalties, efficient inventory management isn’t optional – it’s your edge! Sellers who know their numbers, forecast demand, and stay on top of restocks, spend less and scale faster.

Amazon FBA Storage Fees Explained: What You’re Really Paying For

Before you can manage your inventory effectively, you need to understand what Amazon charges you to store it and why. FBA storage fees are based on product size, how much inventory you send into Amazon’s fulfillment network and distribution centers, how long it stays there, and how well you keep your stock levels balanced.

You can find a summary of your storage and inventory-related fees inside Amazon Seller Central. Just go to the left-hand panel, click Reports, then select Fulfillment. Navigate to the payments section in the menu on the left to locate the various reports available.

Monthly Storage Fees

Amazon charges monthly storage fees based on how much space your inventory occupies in their fulfillment centers. Rates vary depending on the time of year and the size category (standard vs oversized).

• Busiest season (Oct–Dec): higher rates due to peak demand
• Standard season (Jan–Sep): lower base rates
• Fees are calculated per cubic foot, not per unit, so bulky packaging costs you more

Aged Inventory Surcharge

If your products sit in FBA for more than 181 days, Amazon hits you with an aged inventory surcharge (formerly long-term storage fees). This fee is designed to discourage storing dead stock or slow-moving inventory that’s taking up valuable warehouse space in Amazon’s fulfillment centers.

• Charges apply monthly, starting at 181 days
• The longer it sits, the more you pay

This is why regularly monitoring your inventory age and sell-through rate is so important.

Low-Inventory-Level Fee

Amazon now penalizes sellers for keeping too little inventory of products in Amazon Fulfillment Centers. The low-inventory-level fee applies when your number of days of supply falls below Amazon’s target thresholds, based on historical demand.

• Applies to standard-size products only
• Assessed monthly based on your 30-day rolling inventory coverage

Removal and Disposal Fees

While it’s not technically a storage fee, if you decide to remove inventory from Amazon Fulfillment Centers, whether it’s unsellable, dead stock customer returns, Amazon charges per unit for either returns to you or disposal.

• Removal and disposal fees are based on item size/weight
• Can add up fast if you’re cleaning up stranded or overstocked inventory

How to Check your Inventory Performance Index (IPI) on Amazon

Your Inventory Performance Index (IPI) is Amazon’s way of measuring how well you’re managing your FBA inventory. Your IPI score determines how much FBA storage space you are allocated, how much you’ll pay in fees, and your overall account health.

Here’s how to find it:

1. Log in to Amazon Seller Central
2. Your IPI score appears right on the main dashboard

3. Click the dropdown arrow next to the score to see how you’re performing in each marketplace

4. Go to the IPI Dashboard for more insights and to see how you can improve your IPI score

Why a High IPI Score Matters

Your Inventory Performance Index (IPI) is a score between 0 and 1000 that reflects how efficiently you manage your FBA inventory. The higher your score, the more Amazon trusts you with storage space, flexibility, and fewer capacity limits that restrict how much inventory you can send in. If your IPI stays above 400, Amazon gives you additional capacity, which means you can:

• Expand your product catalog
• Keep best-sellers in stock longer
• Offer faster shipping across more SKUs
• Avoid unexpected restock limits and penalties

Factors Influencing Your IPI Score:

Your IPI score is influenced by several key factors:

• Excess Inventory
• Sell-Through Rate
• Stranded Inventory
• In-Stock Rate

You can view all of these metrics and see exactly where you stand in your IPI Dashboard. Amazon not only shows your current status but also provides personalized suggestions to help improve your score in each category.

We’ll break down each of these factors in more detail in the next section, along with practical tips you can use to improve them.

Common Inventory Issues Amazon Sellers Face

Effective inventory management is one of the most often overlooked part of running a successful Amazon business. If you’re not vigilant about restocking, or if you overstock without a clear strategy, even your best-performing products can end up hurting your business. Stockouts lead to missed sales and lower rankings, while excess inventory racks up long-term storage fees and ties up your cash flow.

Before we go deeper into the most common inventory issues sellers face, take inventory of your Amazon inventory.

To see your products currently in stock:

1. Log in to your Amazon Seller Central account
2. Click the menu icon on the left side
3. Navigate to Inventory
4. Select Manage Inventory from the dropdown
5. Look under the Inventory column to view what’s in stock, inbound, unavailable or reserved

Inventory level checks like this are your first line of defense. Now let’s break down the common inventory challenges Amazon sellers face and the solutions to fix or avoid them.

Overstocked Amazon Inventory

Overstocking happens when you send too much inventory to Amazon and it doesn’t sell fast enough. If your product has over 90 days of supply, based on historical data, or even one unit aged over 90 days, Amazon flags it as excess inventory. They expect products to move in and out of their fulfillment centers within a 90-day window.

When inventory lingers, it ties up your capital, racks up monthly storage fees, triggers aged inventory surcharges, and pulls down your IPI score, all of which eat into your profit margins.

The solution:

• Track your sell-through rate and adjust your restocking frequency based on actual demand
• Use the Restock Inventory Report in Seller Central or third-party software to stay aligned with real sales data
• Regularly monitor the Excess Inventory section in your IPI Dashboard for Amazon’s recommendations on what to remove, discount, or restock less

Low Inventory

Low inventory used to just mean missed sales – now, Amazon is charging you for it.

With the introduction of the Low-Inventory-Level Fee, sellers are now penalized for keeping too little inventory in FBA. If your historical days of supply drops below Amazon’s minimum threshold (based on your 30-day coverage), you’ll be hit with an extra fee even if you’re not completely out of stock.

Low inventory levels can also:

• Hurt your IPI score
• Reduce your Buy Box eligibility
• Cause a drop in organic rankings

The solution:

• Regularly check your Restock Report and use Amazon’s restock suggestions as a baseline
• Monitor your days of supply metric in the Inventory Dashboard and aim to stay above Amazon’s recommended threshold
• Build buffer stock for your top-selling SKUs, especially during Q4 or sales events
• Factor in supplier lead times, shipping delays, and customs when planning replenishments
• Use inventory management tools that alert you when stock levels drop below safe limits

Want to find more high-converting, profitable items? Read our guide to identifying your best-selling products on Amazon and scale with confidence.

Out-of-Stock

Running out of stock on Amazon doesn’t just stop your sales, it sets off a chain reaction that can hurt your business operations long after your inventory is replenished.

When a product goes out of stock, you immediately lose the Buy Box, and your organic keyword rankings begin to drop. Since Amazon favors listings that are consistently available, your visibility takes a hit, making it harder for customers to find your product when it does return. As a result, your Best Sellers Rank (BSR) deteriorates, and you may find it difficult to regain the same traction you had before.

Want to recover your rankings and climb to the top? Watch our How to Rank #1 on Amazon video for proven strategies.

Customers who encounter an unavailable product are likely to click away and purchase from a competitor instead and some of them may never return. On top of that, prolonged stockouts can bring down your IPI score, signaling to Amazon that your inventory management needs work, which may lead to stricter storage limits and increased fees.

The solution:

• Use your Restock Inventory Report to track low-stock SKUs
• Monitor Days of Supply and plan ahead, especially for high-volume seasons or sales events
• Build in a buffer for lead times from suppliers, manufacturing delays, and customs clearance
• Consider using dual fulfillment methods (FBA + FBM) to stay in stock even when FBA gets tight
• Prioritize restocking best-sellers with proven velocity over slower moving SKUs

Stranded Inventory

Stranded inventory is one of the most frustrating issues for Amazon business owners. It refers to products that are physically in Amazon’s fulfillment centers but aren’t available for purchase due to issues such listing errors, suppression, or missing info.

Even though these products aren’t live, you’re still paying monthly storage fees for every unit.

The solution:

• In Seller Central, go to Inventory > FBA Inventory
• From the menu, click Stranded Inventory
• You’ll see a list of affected SKUs, along with the reason they’re stranded and the “Fix Listing” options
• Address any listing errors (like missing product details, brand approvals, or price thresholds) to reactivate the inventory

Check this report regularly, especially after major catalog updates or listing changes. The longer your inventory stays stranded, the more money you lose on storage.

Low Sell-Through Rate

Your sell-through rate is one of the most important metrics Amazon uses to measure inventory performance. It’s the rate at which your inventory sells over time, calculated as the number of units sold and shipped in the past 90 days divided by the average number of units available during that period.

A low sell-through rate means your products are sitting in Amazon’s warehouse without selling which means they are tying up space, reducing your profitability, and triggering aged inventory surcharges. Amazon sees this as poor inventory management and may reduce your storage limits or increase your costs for storage.

The solution:

• Regularly review your Inventory Performance Dashboard to monitor your sell-through rate
• Identify slow-moving SKUs and take action – run a limited-time discount, coupon or lightning deal, optimize your listings
• Pause restocking for slow sellers until sell-through improves
• Consider removing or liquidating old inventory that isn’t moving

Tips to Effectively Manage Your Amazon Inventory

Effective inventory management is a balancing act. Too much stock leads to high storage costs and aged inventory surcharges, while too little stock results in low inventory fees, missed sales and lost ranking. Amazon rewards sellers who can strike that balance consistently with higher IPI scores, better Buy Box performance, and more flexible storage limits.

Below are 6 effective inventory management strategies for maintaining inventory control and maximizing your profitability on Amazon.

1. Forecast Demand

Look at recent sales history, product seasonality, and any upcoming campaigns or holidays that could impact demand. Base your projections on actual performance, not assumptions and update them regularly to reflect changes in customer behavior or marketplace trends.

Good forecasting helps you order just enough at the right time, minimizing risk while maximizing availability.

2. Stay on Top of Lead Times and Shipping Delays

Delays in manufacturing, freight, or even Amazon’s storage facility check-in process can throw off even the best inventory plans. To avoid stockouts, you need to know exactly how long it takes to restock including how long it takes for inbound inventory to be received and made available in Amazon’s system..

Track each stage of your supply chain and build in a buffer for unpredictable issues like carrier or customs delays. Review your lead times regularly and keeping communication open with your suppliers to avoid surprises. Staying in control of your lead times is a critical part of effective supply chain management, especially when selling in a fast-paced marketplace like Amazon.

3. Establish Reorder Limits and Maintain Buffer Stock

Use reorder limits or thresholds based on your sales velocity and supplier timelines. Don’t wait until inventory is critically low before placing a new order.

Set a threshold (eg. when your stock hits 60 days of supply), and make sure you always have buffer stock, especially for essential inventory like best-sellers and high-converting SKUs. This helps you avoid stockouts and keeps your products ranking consistently.

4. Monitor for Excess or Aging Inventory

Products sitting in Amazon warehouses for too long can trigger storage surcharges and hurt your IPI score. Amazon considers inventory “excess” if you have more than 90 days of supply or if a unit has aged beyond 90 days.

Routinely audit your inventory to identify what’s not moving. Take action by running promotions, improving listings, or removing products that are unlikely to sell. Staying lean protects your cash flow and lowers storage costs.

5. Check Your Inventory Performance Dashboard Weekly

Your IPI Dashboard in Seller Central gives you insight into key metrics like sell-through rate, excess inventory, in-stock rate, stranded inventory and real-time inventory updates. Reviewing it regularly helps you monitor your current inventory levels and spot potential problems before they impact your business.

Amazon also offers improvement suggestions based on your inventory performance. These are worth reviewing and can help guide your next steps, especially when it comes to restocks or removals.

Pro Tip: While you’re managing your inventory, don’t forget to check for unclaimed Amazon reimbursements you might be owed money for lost, damaged, or overcharged items. Click here for more details.

6. Automate With Inventory Management Software

Manual tracking works at first but as your catalog grows, automation becomes essential. Use inventory management systems that track sales velocity, forecast customer demand, and trigger stock alerts you when you’re running low.

This not only saves time but helps reduce the risk of human error, keeping your products in stock and aligned with actual sales behavior.

Top 10 Inventory Management Tools for your eCommerce Business

Effective inventory management is crucial for Amazon sellers aiming to optimize operations, prevent stockouts, and reduce storage fees. Utilizing specialized tools can streamline these processes. Below is a curated list of ten, top Amazon inventory management software, each offering unique features to enhance your Amazon business.​

1. Helium 10

Helium 10 is an all-in-one suite designed for Amazon sellers, featuring robust inventory management capabilities. It assists in forecasting demand, tracking stock levels, and automating reordering processes, ensuring you maintain optimal inventory and prevent stockouts. ​

2. Jungle Scout

Jungle Scout offers an Inventory Manager tool that provides data-driven insights into stock levels, sales volume, and reorder schedules. This helps sellers make informed decisions about restocking and inventory planning.

3. SoStocked

SoStocked is a dedicated Amazon inventory management software built specifically for Amazon sellers. Designed to give you full control over your stock, it combines forecasting, restock planning, and order tracking into one streamlined platform.

What sets SoStocked apart is its customizable forecasting, which accounts for seasonality, sales spikes, stockouts, and even upcoming marketing campaigns. It also lets you track inbound shipments, manage purchase orders, and set re-stock alerts, to help you avoid both overstocking and stockouts.

If you’re looking for an inventory tool tailored to Amazon’s complexities, SoStocked offers a data-driven, seller-friendly solution.

4. Skubana

Skubana is built for multichannel sellers and growing D2C brands. It integrates with various sales channels; Amazon, Shopify, Walmart, and more for syncing orders, inventory, purchasing, and analytics. Its automation features manage order routing, inventory forecasting, and shipping, helping high-volume sellers reduce overheads while scaling across multiple channels.

5. Linnworks

Linnworks automates inventory, order management, and shipping process across all your sales channels. It ensures stock levels update in real time and integrates seamlessly with Amazon and other marketplaces. If you’re selling on multiple platforms, it centralizes everything and helps avoid overselling or delays.

6. Veeqo

Veeqo offers a centralized dashboard, to support multichannel sellers, where you can manage inventory, orders, and shipping labels all in one place, including integration with Amazon Buy Shipping. This not only streamlines your logistics but also gives you access to seller protections typically offered through Seller Central. With built-in support for Amazon’s Multi-Channel Fulfillment (MCF), you can leverage Amazon’s fulfillment network while maintaining inventory accuracy across platforms. Sellers love how Amazon Buy Shipping through Veeqo enables easy rate comparisons and fast, reliable delivery, all while reducing the risk of order issues and chargebacks.

7. Sellerboard

Sellerboard is recognized for its accurate profit analytics and inventory tracking features. It offers real-time tracking of profit per SKU and advanced reorder date predictions, to help sellers maintain optimal inventory levels.

8. Sellbrite

Sellbrite is a user-friendly multichannel inventory management tool that helps sellers list and manage products across Amazon, Walmart, eBay, Etsy, BigCommerce, and more, from one central dashboard. It automatically syncs inventory levels in real time across all your sales channels, helping you avoid overselling and stockouts.

With built-in listing tools, pricing controls, and fulfillment tracking, Sellbrite gives sellers the ability to streamline operations and scale across platforms without the complexity. It also offers analytics to help optimize performance and inventory turnover.

9. Brightpearl

Brightpearl is a full-scale operations platform that handles inventory, accounting, fulfillment services, and reporting all in one place. It’s ideal for larger sellers and wholesalers who need deep integration with CRMs, warehouse tools, and POS systems.

10. Expandly

Expandly is a cost-effective tool for smaller or growing sellers. It allows you to manage listings, orders, inventory, and shipping across platforms like Amazon from a single dashboard. It’s beginner-friendly, with excellent customer support and useful reporting features for performance tracking.

Read also: How to Manage Your Amazon Inventory for a Great Q4

How Trivium Can Help

Mastering Amazon inventory management takes more than tools and reports – it takes time, strategy, and constant attention to detail.

Our Amazon account management services go far beyond basic support. We help sellers build custom inventory strategies that reduce excess stock, avoid stockouts, and keep IPI scores where they need to be. From restock planning to supply chain management and optimizing your listings for sell-through, we take the guesswork out of inventory and help you scale profitably.

Whether you’re juggling multiple SKUs, struggling with restock limits, or just want to free up your time, Trivium’s team of experts can take inventory worries off your plate and keep your business moving forward.

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