Stranded inventory is a common issue for sellers using Amazon FBA (Fulfillment by Amazon). It occurs when your products are stored in Amazon’s fulfillment centers but are not available for sale due to listing issues. Stranded inventory can lead to storage fees without the possibility of generating sales, negatively impacting your profits and inventory performance.
In this guide, we’ll explore the causes of stranded inventory, steps to identify it, and strategies to resolve and prevent it effectively.
1. What is Stranded Inventory?
Stranded inventory refers to items in Amazon’s fulfillment centers that are not linked to an active, purchasable listing on Amazon. This means these products are stored in Amazon’s warehouse but cannot be bought by customers.
Why Stranded Inventory is a Problem:
- Lost Sales: Products are unavailable for purchase, leading to missed revenue opportunities.
- Storage Fees: Amazon continues to charge storage fees for stranded inventory.
- Lower Inventory Performance Index (IPI): Stranded inventory impacts your IPI score, which could result in reduced storage limits.
2. Common Causes of Stranded Inventory
Understanding the reasons behind stranded inventory can help you address and prevent it:
Listing Issues
- Inactive Listings: Listings may become inactive due to errors or expiration.
- Suppressed Listings: Amazon suppresses listings that do not meet its standards, such as missing information or poor-quality images.
- Listing Removal: Listings may be removed due to policy violations.
Account Issues
- Suspensions: Seller account suspensions or restrictions can result in stranded inventory.
- Category Approval: Certain categories require approval, and failure to obtain it can strand your inventory.
Pricing Issues
- Minimum and Maximum Pricing: Amazon disables listings that exceed set pricing thresholds or violate fair pricing policies.
Fulfillment Settings
- ASIN Status Changes: Changes in ASIN eligibility, such as being flagged as ineligible for FBA, can strand inventory.
- Marketplace Discrepancies: Listings active in one marketplace but not another can cause mismatches.
3. How to Identify Stranded Inventory
Amazon provides tools in Seller Central to help sellers track and manage stranded inventory:
Using the Stranded Inventory Report
- Log in to Seller Central.
- Go to Inventory > Manage Inventory > Fix Stranded Inventory.
- Review the list of stranded SKUs, along with the reason for their status.
Using Notifications
- Amazon may send notifications or alerts about stranded inventory. Keep an eye on your dashboard and email for updates.
Inventory Performance Dashboard
- Navigate to Performance > Inventory Dashboard. This tool highlights inventory issues, including stranded inventory, and its impact on your IPI score.
4. Resolving Stranded Inventory
After identifying the stranded inventory, you can take steps to resolve the issue:
Step 1: Fix Listing Errors
- Relink Listings: If the listing has been disconnected, relink it by matching the SKU to the ASIN.
- Update Information: Correct missing or inaccurate details, such as titles, images, or descriptions.
- Resolve Suppression: Address suppressed listing issues by fulfilling Amazon’s content requirements.
Step 2: Address Pricing Issues
- Adjust Pricing: Ensure your pricing aligns with Amazon’s fair pricing policy and the thresholds you’ve set.
- Check Automations: If you use automated pricing tools, verify they are functioning correctly.
Step 3: Remove Policy Violations
- Review Policies: If your listing was removed due to a policy violation, review Amazon’s guidelines and correct the issue.
- Appeal Decisions: For disputes, submit an appeal through Seller Central with the necessary documentation.
Step 4: Manage Fulfillment Settings
- Re-Enable Fulfillment: If the product was marked as ineligible for FBA, review the ASIN eligibility and address the issue.
- Update Marketplace Listings: Ensure your listings are active in all relevant marketplaces where you sell.
Step 5: Remove Unsellable Inventory
- If you cannot resolve the issue, consider removing the stranded inventory to avoid ongoing storage fees. Options include:
- Removal Orders: Request Amazon to ship the inventory back to you.
- Disposal Orders: Ask Amazon to dispose of the inventory.
5. Preventing Stranded Inventory
Proactively managing your inventory and listings can minimize the risk of stranded inventory:
Optimize Listing Management
- Regularly review your listings for errors, suppressions, or policy compliance.
- Use Amazon’s Listing Quality Dashboard to monitor and improve listing health.
Monitor Pricing Rules
- Set realistic minimum and maximum pricing thresholds to avoid automatic deactivation.
- Use pricing tools to stay competitive and compliant.
Stay Updated on Policies
- Regularly review Amazon’s selling and category-specific policies to ensure compliance.
- Be aware of changes in ASIN eligibility and product restrictions.
Track Inventory Performance
- Monitor your IPI score and address issues promptly.
- Use Amazon’s restock recommendations to avoid overstocking or understocking.
Use Automation Tools
- Utilize third-party tools or Amazon’s inventory management solutions to streamline tracking and updates.
Plan for Seasonal Adjustments
- During peak seasons, ensure your inventory matches demand to avoid excess or stranded stock.
6. Dealing with Long-Term Stranded Inventory
For inventory that remains stranded despite your efforts, consider these options:
Liquidation Programs
- Participate in Amazon’s FBA Liquidations program to recover a portion of your inventory’s value.
Promotional Discounts
- Use promotions or discounts to clear excess inventory quickly.
Diversify Sales Channels
- List stranded inventory on other marketplaces or your own website to maximize sales opportunities.
7. Benefits of Proactively Managing Stranded Inventory
Proactively managing stranded inventory offers several advantages:
- Cost Savings: Avoid unnecessary storage and removal fees.
- Improved Cash Flow: Free up capital tied up in unsellable stock.
- Enhanced Seller Metrics: Maintain a healthy IPI score and improve overall account performance.
- Customer Satisfaction: Ensure products are consistently available for purchase, boosting customer trust.
8. Conclusion
Stranded inventory is a challenge that can hinder your business’s success on Amazon FBA. However, with a proactive approach and regular monitoring, you can minimize its impact. By identifying stranded inventory quickly, resolving issues efficiently, and implementing preventive strategies, you can maintain an optimized inventory system and enhance your profitability on the Amazon platform.