Did you know sellers worldwide lose over $1.8 trillion because of poor inventory control? And for Amazon sellers, one of the biggest issues contributing to this problem is excess inventory on Amazon.
Many sellers think going out of stock is the ultimate failure, and it definitely hurts your ranking and sales. But the fear of stockouts often pushes them to over-order, and that’s when excess inventory starts draining profits fast.
A lot of Amazon sellers don’t understand how excess inventory works, so they ignore the alerts inside Seller Central. By the time they notice the impact, storage fees and slow sell-through have already eaten into their margins.
This guide will talk about how excess inventory on Amazon affects sellers, how to check inventory age, and ways to reduce overstock. Our Amazon agency will also share best practices like Amazon Outlet deals, Lightning Deals, liquidation, and targeted promotions to help improve cash flow and free up storage space.
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What Is Excess Inventory on Amazon
Excess inventory on Amazon refers to stock that sits longer than it should based on your recent sales pace. When units pile up past Amazon’s age and supply thresholds, they’re flagged as excess because they’re no longer moving at a healthy rate.
Amazon typically marks an item as excess when it has more than 90 days of supply or when at least one unit has aged beyond 90 days in storage. Once this happens, the risk of higher storage fees, slower sell-through, and potential long-term penalties increases fast.
What Causes Excess Inventory on Amazon
There are several reasons why sellers end up with excess inventory on Amazon, and many of them happen slowly without being noticed. Knowing these causes helps sellers avoid costly mistakes that affect storage fees and overall cash flow.
- Poor demand forecasting leads to ordering more units than your sales pace can support.
- Ignoring seasonality causes sellers to stock products at levels that don’t match real buying cycles.
- Weak competitor tracking results in overestimating demand when new sellers enter the market.
- Not monitoring the product life cycle creates overstock on items already heading into decline.
- Bulk buying or MOQ requirements force sellers to take more units than they can move.
- Slow supplier communication leads to delays and mistimed replenishment decisions.
- Quality issues create unsellable units that pile up in storage and add to the excess count.
How Does Excess Inventory on Amazon Affect Sellers
Although many sellers think excess inventory on Amazon doesn’t impact them much, when slow-moving stock accumulates, it can quickly drain profits and resources. Ignoring it often leads to storage fees, cash flow problems, and lost selling opportunities.
- Higher storage costs eat into profits and increase overall operating expenses.
- Lower Amazon IPI scores can limit your FBA storage capacity.
- Excess inventory clogs warehouse space, leaving less room for top-selling items.
- Slower-moving products hurt your listing’s search rankings on Amazon.
- Reduced inventory turnover signals poor performance to investors or stakeholders.
- Capital is tied up, limiting cash flow for marketing, new products, or other growth initiatives.
- Products risk deterioration, obsolescence, or becoming out of trend.
- Clearance or discount sales to move excess stock erode profit margins and brand perception.
How to View Excess Inventory on Amazon
Many sellers don’t know how to check their inventory age and excess stock, which leads to overstocking and unnecessary storage fees. To find out which products are tying up capital, you need to use the Inventory Planning tools in Amazon Seller Central.
Step 1: Access the Inventory Dashboard
Log in to your Amazon Seller Central account and hover over the “Inventory” tab at the top of the page. Click on “Inventory Planning” from the dropdown menu to open the FBA Inventory Dashboard, where you can see key metrics like your Inventory Performance Index.
Step 2: Navigate to “Manage Excess Inventory”
On the Inventory Dashboard, look for the “Excess Inventory” box or the link labeled “Manage Excess Inventory”. This section will direct you to the page where Amazon highlights overstocked items and provides recommendations for taking action.
Step 3: Review the Excess Inventory Report
The Manage Excess Inventory page shows the estimated excess quantity, storage costs you can save, and the days of supply for each product. These metrics help you identify which items are overstocked, how much they’re costing you, and when it’s time to take action, like promotions or removal orders.
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Best Practices to Lessen Excess Inventory on Amazon
Excess inventory is a major drain on both capital and storage space, which is why sellers need to actively find ways to lessen or completely eliminate it. Even though each seller’s situation is unique, there are proven best practices that can help reduce overstock and keep inventory levels healthy.
1. Use Amazon’s FBA Liquidations Program
Amazon’s FBA Liquidations Program allows sellers to recover part of the value of their excess stock by sending it to wholesale liquidators. While you won’t recoup the full selling price, recovering 5–10% of your product’s value is better than paying long-term storage fees or having unsold stock returned.
By using this program, you can free up warehouse space and reduce storage costs significantly. It also provides a structured way to remove aging inventory without impacting your main sales channels.
2. Create Listings on Amazon Outlet
Amazon Outlet lets sellers put excess items on sale at discounted prices, improving sell-through and cash flow. Products listed here must meet certain eligibility criteria, like being at least 90 days old and having more than ten units in stock.
This is a free way to reach buyers looking for deals while reducing inventory accumulation. It also helps move slower-selling items without affecting your main product listings.
3. Take Part in Amazon Lightning Deals
Lightning Deals offer time-limited, high-visibility discounts to attract buyers quickly. They are effective for seasonal or slow-moving items and appear on the “Today’s Deals” page, increasing exposure and urgency.
By running these deals strategically, you can clear excess inventory while maintaining your brand image. Participating requires meeting certain eligibility requirements, including product ratings and sales history.
4. Create an Amazon Removal or Disposal Order
If you cannot sell excess inventory profitably, you can request that Amazon return it to you or dispose of it. This prevents long-term storage fees from piling up and allows you to consider alternative channels to sell or repurpose the products.
Disposal is particularly useful for items that may have limited resale value or are at risk of obsolescence. It ensures your storage space is reserved for products that contribute to your revenue.
5. Sell Excess Inventory to Liquidation Companies
There are external liquidation companies that purchase overstock inventory at discounted rates. While the recovery amount is lower than retail, it provides a fast exit for surplus items.
This method also reduces holding costs and avoids penalties for long-term storage in Amazon warehouses. For sellers needing immediate cash flow, liquidation is often the fastest solution.
6. Adopt Inventory-Minded Marketing
Inventory-minded marketing combines sales strategies with inventory management to move slow-selling stock. Marketing campaigns are designed based on available stock, helping to push both popular and excess items without overstocking.
This approach keeps your best sellers in stock while increasing sell-through for slower products. Teams work together to forecast demand accurately and plan promotions that optimize inventory levels.
7. Implement Forecasting & Prevention Tactics
Accurate demand forecasting prevents overstock by predicting future sales based on historical trends, seasonality, and sales velocity. Dynamic inventory controls and flexible reorder points ensure you don’t purchase more stock than needed.
This proactive approach minimizes the risk of excess inventory before it happens. Multi-channel demand analysis and supplier negotiations also help keep inventory aligned with actual market needs.
8. Run Targeted Promotions and Bundling
Strategic discounts, product bundles, and flash sales help clear excess inventory without drastically affecting margins. Bundling slow-moving items with popular products creates value for customers while reducing surplus stock.
Targeted promotions, including email campaigns and social media giveaways, increase exposure and accelerate inventory turnover. This method improves cash flow and ensures your storage space is used efficiently.
FAQs About Excess Inventory on Amazon
Protect Your Profits by Managing Excess Inventory on Amazon
Excess inventory can be a silent killer for Amazon sellers since it ties up capital, increases storage costs, and reduces your ability to focus on fast-selling products. Some sellers think it’s just a small surplus that won’t affect them, but even minor overstock can quickly escalate into costly fees and missed opportunities.
Understanding how to identify and manage excess inventory is essential to keeping your business profitable and your cash flow healthy. By implementing best practices like Amazon Outlet deals, Lightning Deals, and liquidation strategies, sellers can turn stagnant stock into revenue and reduce unnecessary holding costs.
Are you having difficulty managing excess inventory on Amazon? Contact our full-service Amazon agency and let our team help you clear overstock, optimize your listings, and maximize your profits.
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