Understanding Amazon Inventory Fees

Managing inventory on Amazon isn’t just about staying in stock—it’s about protecting your margins. From hidden storage costs to penalties for holding too little inventory, Amazon’s FBA system rewards efficiency and penalizes poor planning. Imagine this: You send 1,000 units into FBA for Q4, expecting a sales rush. But demand stalls. Six months later, you’re hit with an aged inventory surcharge that wipes out your profit—and now you’re paying even more just to get those units removed. It happens more often than you think.

This guide breaks down the most common Amazon inventory fees, explains how they work, and shows you how to avoid unnecessary charges through smarter, more strategic inventory management.

The Big Picture: Why Inventory Fees Matter

Amazon’s fulfillment network is one of the most powerful tools available to sellers—but it comes with strict rules. You’re not just paying for pick, pack, and ship. You’re paying for how much you send, how long it sits, and how well you manage it. Neglect these factors, and fees can quietly drain your profitability. Going out of stock can also cost you more than lost sales. It may trigger low-inventory-level fees, harm your IPI score, and reduce your future restock limits.

Key Amazon Inventory Fees to Watch

You can find detailed, up-to-date information in Amazon’s official fee guide.

Avoiding Common Inventory Fee Pitfalls

Even experienced brands can be caught off guard by Amazon’s evolving FBA policies. Here are the most common missteps—and how to prevent them.

Mistake #1: Overstocking Without a Clear Sell-Through Plan

Large FBA shipments without a plan to sell through quickly lead to higher storage costs, aged inventory fees, and ultimately profit loss—especially for seasonal or untested products.

Why It Happens:

• Overconfidence in sales projections
• Bulk production requirements or discounts
• Lack of launch strategy tied to ad or promo spend

How to Fix It:
Start small. Use early sales data to gauge performance before restocking. Monitor your Inventory Performance Index (IPI) to track your sell-through rate, excess inventory, and in-stock metrics. Amazon uses IPI to determine restock limits—so staying in good standing directly affects your ability to scale.

On the flip side, going out of stock too often can be just as damaging. Stockouts can trigger Amazon’s low-inventory-level fee, hurt your organic rankings, and force you to spend more on ads when you finally restock to regain lost momentum. The key is balance: avoid overcommitting without data, but don’t understock to the point where you can’t meet demand.

Mistake #2: Relying Too Heavily on Manual Inventory Tracking

Spreadsheets might work when you’re just starting out—but they don’t scale. Manual tracking increases the risk of errors, delayed reactions, and missed sales opportunities.

Why It Hurts:

• Higher chance of stockouts or excess
• No real-time visibility into trends or seasonality
• Limited ability to respond to Amazon restock limits

How to Fix It:
Upgrade to inventory management software that integrates with Amazon. These platforms give you real-time alerts, demand forecasting, and restock recommendations based on actual performance—not guesswork. Many can also factor in sales trends, supplier lead times, and even peak-season spikes.

Mistake #3: Ignoring Amazon’s Inventory Health Reports

Amazon gives you the tools—you just have to use them. Skipping dashboards like FBA Inventory Age or Excess Inventory is like ignoring a check engine light. Problems pile up fast.

Why It Matters:

• Aged or stagnant products can be addressed early with price cuts or removals
• Staying ahead of restock recommendations prevents low-inventory penalties
• Ignored issues eventually impact your IPI score and restock limits

How to Fix It:
Build a weekly inventory check-in routine. Focus on:

• FBA Inventory Age – Highlights SKUs nearing the 181-day surcharge
• Excess Inventory – Flags SKUs with too much stock for current demand
• Restock Inventory – Amazon’s forecast of what and when to reorder

Taking early action helps prevent fees, frees up capital, and keeps your account healthy.

Strategic Inventory Management: Best Practices

Beyond just avoiding fees, smart inventory practices set the stage for sustainable growth and profitability. Here’s how to stay proactive.

1. Forecast Intelligently

Great forecasting isn’t about guessing—it’s about reading patterns. Incorporate:

• Seasonality – Adjust for holidays, Prime Day, and sales cycles
• Sales Velocity – Know how quickly each ASIN sells week to week
• Lead Times – Account for production, shipping, and FBA check-in delays

Review forecasts every 2–4 weeks and adjust restock plans accordingly. This keeps you lean, agile, and ready for changes in demand.

2. Segment Inventory by Performance Tier

All SKUs aren’t created equal. Group products by performance to make smarter decisions:

• Top Performers: Fast sellers with strong reviews. Restock regularly and protect ad budgets.
• Moderate Movers: Steady but slower. Watch trends and shift strategy if needed.
• At-Risk Inventory: Low-velocity or aging SKUs. Reprice, promote, or liquidate early.

Use these tiers to focus resources where they’ll drive the most return.

3. Automate What You Can

You can’t watch every SKU all the time. Automation helps prevent surprises and streamlines your operations.

• Automated Removal Settings: Let Amazon return, dispose of, or liquidate aging or unsellable units.
• Threshold Alerts: Set alerts for inventory age, IPI drops, or stock running low.
• Scheduled Reviews: Build routines for checking Seller Central dashboards weekly.

By automating key steps, you reduce risk and free yourself to focus on growth.

The Trend: Amazon Fees Only Go Up

Amazon’s storage and fulfillment fees have consistently increased over time, making careful fee management more important than ever. Marketplace Pulse offers insight into this trend and highlights why sellers need to stay proactive.

Final Thoughts

Amazon rewards proactive sellers. Those who treat inventory as a strategic asset—not just a logistics task—protect their margins and fuel growth. Understand your fees, track performance actively, forecast thoughtfully, segment inventory wisely, and use automation to stay lean and efficient.

Key Takeaways: