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Amazon Seller Dictionary

This dictionary is designed to help Amazon sellers quickly understand the most important terms used inside Amazon’s ecosystem.

Excess Inventory

Excess inventory on Amazon FBA refers to stock sitting longer than needed (typically >90 days supply), leading to higher storage fees, aged inventory surcharges, and reduced IPI scores.

What is Excess Inventory?

It's FBA stock exceeding forecasted demand for the next 90+ days. Amazon flags it in the Inventory Performance dashboard and applies surcharges (especially for items aged 181+ or 365+ days).

Costs and Risks of Excess Inventory

  • Monthly long-term/aged surcharges on top of standard storage
  • Lower IPI score leading to storage limits
  • Tied-up capital and higher risk of obsolescence
  • Peak season spikes make fees even steeper
  • Can trigger removal orders or forced liquidations

How Amazon Calculates Excess Inventory

Compares current stock to predicted sales velocity. Anything over 90 days' supply counts as excess; older stock (271+ days) faces escalating fees.

Best Practices to Avoid or Reduce Excess

  • Forecast demand using sales history and trends
  • Restock in smaller batches instead of bulk
  • Run promotions, coupons, or Lightning Deals on slow movers
  • Use removals or liquidations for dead stock
  • Mark seasonal items accurately to protect IPI
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