Amazon’s Fulfillment by Amazon (FBA) program offers third-party sellers a powerful solution to manage inventory, shipping, and customer service. However, at some point, you might need to remove inventory from Amazon’s fulfillment centers. Whether you’re managing excess stock, slow-moving products, or aiming to avoid long-term storage fees, understanding how to efficiently remove inventory is crucial for your business profitability.
In this detailed guide, we will cover everything you need to know about removing inventory from Amazon FBA, including the step-by-step process, removal options, best practices, and tips to optimize your FBA inventory management.
Why Would You Need to Remove Inventory from Amazon FBA?
Before diving into the removal process, it’s important to understand why removing inventory from Amazon FBA is necessary. There are several reasons a seller might want to remove stock from Amazon’s fulfillment centers:
- Excess Inventory: You might have overestimated the demand for a particular product, leaving you with more inventory than you can sell in a reasonable time.
- Slow-Moving Stock: Certain products may not be selling as quickly as expected, tying up capital and taking up space in Amazon’s fulfillment centers.
- Seasonal Products: After peak seasons (such as holidays), you may be left with seasonal items that won’t sell until the next season.
- Avoiding Long-Term Storage Fees: Amazon charges long-term storage fees for products that remain in fulfillment centers for more than 365 days. These fees can significantly impact your profit margins.
- Defective or Damaged Inventory: Products that are defective, damaged, or returned may need to be removed or disposed of to maintain the quality of your available inventory.
Step-by-Step Guide to Removing Inventory from Amazon FBA
Removing inventory from Amazon FBA involves creating a removal order in Seller Central. Here’s a detailed breakdown of the process:
Step 1: Log into Your Seller Central Account
Start by logging into your Amazon Seller Central account. Ensure you have access to the inventory management section, where all removal orders will be created.
Step 2: Go to the “Manage Inventory” Section
In Seller Central, navigate to the Inventory tab and select Manage Inventory. This section will display all of your active FBA listings and their current stock levels.
Step 3: Select the Products You Want to Remove
Scroll through your inventory to find the products you want to remove. Use the checkboxes on the left side to select the SKUs or ASINs of the items you need to remove. You can choose one or multiple products at a time.
Step 4: Choose the “Create Removal Order” Option
Once you’ve selected the items for removal, click the Action button at the top of the list. From the drop-down menu, select Create Removal Order. This will initiate the process for removing your inventory from Amazon’s fulfillment centers.
Step 5: Choose Your Removal Method
Amazon offers three primary methods for inventory removal:
- Return to Seller: This option allows you to have your inventory returned to you at a designated location. Amazon will ship the products back, and you will be responsible for covering the return shipping costs.
- Disposal: If you no longer want to keep the products and don’t want them returned, you can choose to have Amazon dispose of the inventory on your behalf. This is often the best option for damaged or unsellable items.
- FBA Liquidations: Amazon offers a liquidation service that allows you to recover some value from excess or slow-moving inventory by selling it to liquidators. You will receive a portion of the product’s worth.
Step 6: Enter the Quantity for Each Item
After selecting the removal method, you’ll be prompted to enter the quantity of each product you want to remove. If you’re removing all available units, ensure the quantity matches the total in stock.
Step 7: Provide a Return Address (if applicable)
If you’ve chosen the Return to Seller option, Amazon will ask you to provide a return address. Make sure the address is correct, as this is where Amazon will send your removed inventory.
Step 8: Review and Submit the Removal Order
Once you’ve entered the necessary details, review the order carefully. Check the items, quantities, and removal method to ensure everything is correct. Once confirmed, click Submit Removal Order.
Amazon Removal Order Costs
It’s important to note that removing inventory from Amazon FBA is not free. The costs associated with removal depend on the removal method you choose:
- Return Fees: When you request products to be returned to you, Amazon charges a fee per unit. The fee depends on the size and weight of the product. Standard-size items typically incur lower fees than oversized items.
- Disposal Fees: If you choose to dispose of inventory, Amazon charges a disposal fee per unit. The disposal fee is generally lower than return fees.
- Liquidation Fees: For liquidation, Amazon will deduct a percentage of the product’s selling value when selling to liquidators, meaning you will only recover a portion of the product’s worth.
Best Practices for Removing Inventory from Amazon FBA
Removing inventory efficiently is essential to maintaining profitability, especially when dealing with excess stock or slow-moving products. Here are some best practices for optimizing your removal process:
1. Monitor Inventory Performance Regularly
Use Amazon’s inventory performance tools, such as the Inventory Performance Index (IPI), to monitor your stock levels, sales velocity, and overall inventory health. By staying on top of your inventory metrics, you can make informed decisions about when to remove products before incurring long-term storage fees.
2. Avoid Long-Term Storage Fees
Amazon charges long-term storage fees for products that have been in their fulfillment centers for more than 365 days. To avoid these fees:
- Monitor how long each product has been in storage.
- Run sales or promotions to move slow-moving inventory before the 365-day mark.
- Remove excess inventory well before the fee assessment date.
3. Liquidate Excess Inventory
Instead of paying for storage or removal fees, consider Amazon’s FBA Liquidation service. This service allows you to recover a portion of the product’s value by selling the inventory to Amazon’s wholesale partners. Liquidation can be a good option for clearing out products that are no longer in demand.
4. Use Removal Orders for Damaged or Defective Products
If you have damaged, defective, or unsellable products in Amazon’s fulfillment centers, create a removal order to dispose of these items. This will help keep your available inventory clean and avoid poor customer experiences.
5. Time Your Removals Strategically
During peak seasons, such as holidays, it’s wise to time your removals to avoid long-term storage fees while maintaining stock availability for high-demand products. If products don’t sell as expected during peak periods, consider removing them shortly after to prevent incurring extra costs.
How to Optimize Your FBA Inventory to Avoid Removals
While removing inventory is sometimes necessary, the best approach is to manage your inventory proactively to avoid frequent removals. Here’s how you can optimize your FBA inventory:
1. Use Forecasting Tools
Leverage forecasting tools like Helium 10 or Jungle Scout to predict sales trends and manage your stock levels effectively. This will help you order the right amount of inventory and prevent overstocking.
2. Run Promotions to Boost Sales
If you have slow-moving inventory, running promotions, offering discounts, or using Amazon Advertising (Sponsored Products, Sponsored Brands) can help increase visibility and boost sales.
3. Optimize Product Listings
Make sure your product listings are fully optimized with relevant keywords, high-quality images, and detailed product descriptions to attract more buyers and move inventory faster.
Conclusion
Removing inventory from Amazon FBA is a straightforward process, but it’s essential to stay proactive in managing your inventory to minimize costs and maximize profitability. By using Amazon’s removal order options and best practices for inventory management, you will operate more efficiently, saving money and time.
