Poor inventory management silently destroys Amazon profits. Stockouts tank your ranking. Overstocking racks up long-term storage fees. Here is how to find the balance.
Reorder Point Formula
Calculate your reorder point: (Average Daily Sales x Lead Time in Days) + Safety Stock. This tells you exactly when to reorder.
Lead Time Matters
Know your full lead time: manufacturing, shipping to Amazon, and FBA receiving. Most sellers underestimate receiving time, which can add 1 to 3 weeks during peak periods.
Long-Term Storage Fees
Amazon charges long-term storage fees for inventory sitting over 181 days. Monitor your aged inventory report monthly and create removal orders for slow movers before fees hit.
IPI Score
Your Inventory Performance Index score affects your storage limits. Keep it above 400 by reducing excess stock, improving sell-through rate, and fixing stranded inventory.
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