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Running a business on Amazon can be a good way to make money, but it also has its challenges. One big problem that many sellers face is old inventory—products that aren’t selling and are just sitting in Amazon’s warehouse. These products can be very costly. Not only do they take up space, but they also make you pay more storage fees. This problem is often called Stale Stock Syndrome.
In this article, we’ll talk about how old and excess stock can hurt your business, who is most affected by this problem, and what you can do to fix it.
Old inventory is any product that has been sitting in Amazon’s warehouse for more than 271 days without being sold. Once a product has been there this long, Amazon starts to charge you excess fees to keep it there. The longer it sits unsold, the more money you have to pay. This can really hurt your business.
Excess inventory is when you have too much of a product that isn’t selling fast enough. Amazon says that if you have more than 90 days’ worth of stock on hand, it’s considered excess. Even if you have just one item that has been in the warehouse for more than 90 days, Amazon considers that excess inventory.
When you have too much old or excess stock, it can create many problems for your business. Let’s look at who is most affected by this and what those problems are.
Some sellers are more likely to have issues with old and excess stock. Here are the types of sellers who are most at risk:
New Sellers
If you’re new to selling on Amazon, it’s easy to make mistakes. New sellers often don’t know how much stock to buy or how fast it will sell. As a result, they might buy too much and end up with excess products that don’t sell quickly.
Small or Solo Sellers
Small or solo sellers often don’t have the resources (like money, tools, or staff) to manage their stock effectively. Without help, it’s harder to keep track of what’s selling and what’s not, which can lead to a buildup of old inventory.
Sellers with Low-Profit Products
If you’re selling items that don’t have a big profit margin (for example, cheap electronics or household goods), it’s hard to make up for the cost of storing unsold items. These sellers are hit harder by the fees Amazon charges for old inventory.
Sellers in Busy Markets
If you’re selling in a very competitive market—like toys or consumer electronics—you have to sell fast. These markets change quickly, and if you don’t sell your products soon enough, they can become old stock.
Sellers Who Don’t Check Their Stock Levels Regularly
Some sellers don’t check how much stock they have left or how fast it’s selling. If you don’t pay attention to your inventory, you might end up with too much of something that isn’t selling.
Sellers Not Using Amazon’s Tools
Amazon provides tools to help sellers manage their stock. Sellers who don’t use these tools are more likely to have trouble keeping track of their inventory. Without these tools, you might not know when you have too much stock.
Old and excess inventory doesn’t just cost you money in storage fees. It can also cause other problems for your business. Let’s look at some of the biggest issues that old inventory can create.
Amazon uses something called the Inventory Performance Index (IPI) to measure how well you manage your stock. If you have too much old or excess inventory, your IPI score goes down. If your score falls below 500, Amazon may limit how much stock you can store in their warehouses. This means you could run out of space to store your best-selling products.
When you have too much excess inventory, it takes up space in Amazon’s warehouse. This can lead to storage problems. If Amazon limits your storage space, you won’t have enough room to store new products. Worse, you might run out of stock on popular items, which can cause stockouts. A stockout happens when you don’t have enough products available to sell, and it can hurt your business.
When products don’t sell quickly, Amazon gives them less visibility. This means your products will appear lower in the search results when customers are looking to buy. If your products are harder to find, you’ll sell even less, and your profits will drop.
Your inventory turnover ratio (ITR) is the rate at which you sell your stock. If you have a lot of old inventory, your ITR will be low, which makes your business less attractive to potential investors. A low ITR means you’re not selling products quickly enough.
Old inventory ties up your money. The more unsold stock you have, the less cash you have to invest in new products or other parts of your business. You also have to pay more storage fees, which further reduces your cash flow.
When your money is stuck in old stock, you miss out on opportunities to buy new, high-demand products. This is called opportunity cost. Instead of using your money for profitable items, you’re wasting it on stock that isn’t selling.
Over time, products lose their value, especially if they’re part of fast-moving trends (like electronics or fashion items). If you hold onto products for too long, they could become outdated and harder to sell.
Amazon has tools that can help you keep track of your inventory. Experts like AMZ-DOC recommend using these tools to find old or excess stock before it becomes a problem.
For example, Amazon’s Inventory Performance Dashboard lets you see which products are selling and which ones are sitting in the warehouse too long. By using this tool, you can spot old inventory early and take action before it costs you more money.
Old and excess inventory is a big problem for many Amazon sellers. It costs you money, takes up space, and can even hurt your ability to sell new products. But by keeping track of your inventory, using Amazon’s tools, and taking action early, you can avoid these problems and run a more profitable business.
Always remember to check your stock levels, manage your inventory wisely, and don’t let old products sit in Amazon’s warehouse for too long. Doing this will save you money and help your business grow!
Old inventory refers to products that have been stored in Amazon’s warehouse for more than 271 days without selling. After this time, Amazon charges excess fees for storing these items.
excess inventory is when you have more stock than you can sell in the next 90 days. Even one item stored for more than 90 days is considered excess inventory.
Old and excess inventory can cost you a lot of money because Amazon charges excess fees for storing unsold products. It also takes up space that could be used for new products, and having too much old stock can lower your Inventory Performance Index (IPI) score.
The Inventory Performance Index (IPI) score is a number Amazon gives sellers based on how well they manage their inventory. A low score can lead to storage limits, meaning you can’t store as much stock in Amazon’s warehouse.
Sellers who are most affected include:
New sellers who don’t know how much stock to buy.
Small or solo sellers who don’t have help managing their inventory.
Sellers of low-profit products who can’t afford excess storage costs.
Sellers in busy markets with lots of competition.
Sellers who don’t check their stock levels regularly.
Sellers who don’t use Amazon’s inventory tools.
You can use Amazon’s Inventory Performance Dashboard. This tool shows which products are not selling and have been sitting in the warehouse for too long. It helps you spot old and excess inventory early.
If your IPI score falls below 500, Amazon will limit how much inventory you can store in their warehouse. This can make it harder to sell new products because you won’t have enough storage space.
Old inventory ties up your money, meaning you have less cash to spend on new products or other business needs. Plus, you’re paying excess storage fees for products that aren’t selling.
Yes! When your products don’t sell, they get less attention on Amazon’s search results. This makes it harder for customers to find your products, leading to fewer sales.
To avoid old and excess inventory:
Check your stock levels regularly to know what’s selling and what’s not.
Use Amazon’s inventory tools to manage your stock.
Don’t overstock products that aren’t selling quickly.
Clear out old stock by running promotions or offering discounts.
Products that don’t sell for a long time can become obsolete, especially in fast-changing markets like electronics or fashion. These items lose value and become harder to sell.
Yes, you can use Amazon’s removal service to get old inventory back or have them dispose of it for you. This can help you free up space and reduce excess fees.
