Amazon Inventory Management: Capacity, Fees, and Sending Stock In
Every FBA stock decision comes down to four numbers. How much you send, where Amazon puts it, how long it sits, and what you recover when units go missing. Good Amazon inventory management keeps each SKU above 28 days of historical supply. It also keeps stock clear of the 181 day age line and inside your cubic feet limit. Amazon publishes the rule behind each of those. It never publishes them in one place, and it never shows you the arithmetic. This page does both.
The Four Levers of Amazon Inventory Management
Send in. Hold. Sell. Recover. Each stage carries its own charge.
Send in sets your placement cost and receiving speed. Hold sets your storage bill, aged inventory exposure and utilisation surcharge. Sell sets your capacity allocation and low inventory level fee. Recover decides how much you claw back when a unit disappears.
Most sellers treat these as four problems with four tools. They feed each other. Send 12 weeks of cover to one warehouse and you cut placement cost while raising storage age. Send 4 weeks and you walk into the low inventory level fee. Pick the trade you can live with.
IPI and Capacity in 2026
The Inventory Performance Index still exists, and the minimum threshold sits at 400. Amazon allocates capacity monthly in cubic feet through FBA Capacity Manager. The allocation reflects your IPI, your sales velocity and your inventory efficiency.
In May 2025 the calculation tightened. Amazon moved from roughly six months of projected sales to roughly five. Sellers well above 400 reported cuts of up to 75 percent. A healthy score stopped guaranteeing headroom.
One caveat. Amazon’s help hub blocks crawlers, so no public Amazon page carries these figures. They come from industry reporting. Read your own number in Capacity Manager before you commit a purchase order to it.
The Low Inventory Level Fee, With the Arithmetic
Amazon charges the fee when both windows of historical days of supply fall below 28 days. The short term window is the last 30 days. The long term window is the last 90 days. Amazon’s low inventory level fee post says it charges the fee only “if both are below 28 days”.
The formula is average daily inventory level divided by average daily shipped units.
Run it on an example SKU. You hold 900 units on average and ship 40 units a day. That gives 900 divided by 40, or 22.5 days of supply. Below 28, so the SKU is exposed.
Now solve backwards. At 40 units a day, 28 days of cover means 40 times 28, or 1,120 units held on average. You are 220 units short. Ship and hold 220 more, and the short term metric clears.
Two exits exist. Lift short term supply above 28 days, or enrol the product in auto replenishment through Amazon Warehousing and Distribution. Clearing one window is enough, because the fee needs both below the line.
The Four Questions Amazon Left Open
Sellers asked four fair questions under that announcement. Amazon answered none. Here is what the rule lets us reason, and where reasoning stops.
Seasonal products. A Halloween seller has no reason to restock in November. Nothing published exempts a season. The second half of the trigger protects you. Once demand drops, shipped units drop too, so days of supply rises even as the pile shrinks. Exposure peaks in the shoulder weeks, when sales have slowed but the 90 day average still carries peak volume. That is reasoning from the formula, not an Amazon statement.
ASINs with multiple sellers. One seller asked whether 50 merchants on a shared listing each need 500 units. The inputs are your inventory and your shipped units, so the threshold reads as per seller per SKU. Amazon has not confirmed that in writing. Check your own fee preview first.
Slow receiving. Units queued at a fulfilment centre are not sellable inventory. If receiving runs long, your average daily inventory level stays low through no fault of yours. Amazon has published no protection for this case. Open a case with the shipment ID and receive timeline attached, and keep the record.
Nothing shipped. With zero average daily shipped units, the division has no answer. Amazon has not said how the system handles it. The workable reading is that a SKU with no sales produces no days of supply figure, so no fee applies. Watch the charge line rather than trusting that.
Storage, Aging, and the Utilisation Surcharge
Three charges apply to stock that sits, and they stack.
Monthly storage bills on your average daily volume in cubic feet, split by size tier and season. Aged inventory surcharges start once units pass a storage age threshold. Amazon’s Fulfillment by Amazon page names 181 days as the point where aged inventory fees begin. The utilisation surcharge works on a ratio, comparing volume held against volume shipped over a trailing period.
We publish no rate figures here, and that is deliberate. Third party sources disagree on 2026 rates. One describes a charge that conflicts with Amazon’s own statement that no new FBA fee types arrived in 2026. Pull rates from the fee schedule in Seller Central, or price a real ASIN in the FBA Revenue Calculator.
| Fee | What triggers it | How it is calculated | How to avoid it |
|---|---|---|---|
| Monthly storage | Any unit held | Average daily cubic feet, by tier and month | Send cover you will sell |
| Aged inventory | Age past 181 days | Cubic feet per age band | Cut price or remove by day 181 |
| Utilisation surcharge | Holding more than you ship | Volume held over volume shipped | Raise sell through, cut tail SKUs |
| Low inventory level | Both windows under 28 days | Daily inventory over daily shipped units | Lift cover, or auto replenishment |
| Inbound placement | Fewer destinations than assigned | Per unit, by weight and split | Accept the split, or meet the carton rule |
| Removal and disposal | You order units out | Per unit, by size and weight | Decide by day 181 |
The 2026 Fee Change, and the Dispute Under It
Amazon announced the 2026 update on 15 October 2025, effective 15 January 2026. Its fee update page gives sellers “at least 90 days before any fee increases take effect”.
Three facts matter. US referral fees did not rise. Amazon states plainly that “there will be no new FBA fee types in 2026”. And FBA fees rise “by an average of $0.08 per unit sold, or less than 0.5% of an average item’s selling price”.
That average is Amazon’s own figure, and sellers in Amazon’s announcement thread rejected it. One reply put the real number at “more like 30+ cent”. Others noted that the quiet year of 2025 still carried placement fees and low inventory charges. A catalogue wide average tells you little about your size tier. Price your top ten ASINs in the Revenue Calculator.
Send to Amazon, Step by Step
Amazon’s Send to Amazon guide sets out the workflow. Choose inventory, pack it, confirm shipping, print box labels, then confirm carrier and pallet information.
Box content information is where shipments break. Case pack templates cover single SKU boxes and can be reused. Individual unit packing covers mixed boxes, entered box by box. Bulk upload handles large shipments through a file, and one bad column rejects the lot. Prep and labelling can be your job or Amazon’s, set per SKU or in bulk.
Shipping method sets the box limits. The guide caps partnered small parcel delivery at 30 boxes per shipment and non partnered at 15. Less than truckload runs through Carrier Central. For partnered pickup, the carrier arrives within two business days, between 9am and 5pm. A failed pickup gets one retry the next business day.
| Step | What you do | What Amazon needs | Common failure |
|---|---|---|---|
| Choose inventory | Pick SKUs, set prep owner | Case pack template or unit counts | Prep owner left on Amazon |
| Pack | Box the units, add weights | Box content for every box | Bulk upload rejected on one column |
| Confirm shipping | Pick small parcel or LTL | Ship date and destinations | Date set before stock is packed |
| Print labels | Apply box and pallet labels | One unique label per box | Labels covering carrier barcodes |
| Confirm carrier | Add pallet count and class | Carrier detail before pickup | Pickup missed, one retry next day |
Placement Fees and the Carton Rule
Amazon assigns destination fulfilment centres for you. Accept the optimised split and the placement fee falls away. Ask to send everything to one place and Amazon charges per unit for it.
A carton condition sits on the fee free option. Trade reporting from SPS Commerce describes it. A shipment needs “at least five identical cartons or pallets per item”, matching on quantity and item mix. That is secondary sourcing, so confirm it in your own workflow.
The decision is arithmetic, not preference. Take an example shipment of 600 units. One LTL run to a single centre quotes at $420. The same units split across three destinations quote at $610.
Consolidating saves $190 in freight, so it only wins below $190 for 600 units. Divide $190 by 600 and you get $0.32 per unit. Look up your real rate in the fee schedule. Above $0.32, take the split. The answer flips with distance, weight and season, so use your own quotes.
Restock Planning That Survives a Long Lead Time
A reorder point answers one question. At what stock level do I order, so units land before I run out?
Four inputs feed it. Daily velocity, total lead time, safety stock, and review frequency. Multiply velocity by lead time, add safety stock, and you have the trigger level.
| Input | Value | Source |
|---|---|---|
| Daily velocity | 40 units a day (example) | Business Reports, units ordered, 30 days |
| Total lead time | 60 days (45 production, 15 transit) | Supplier POs and receive dates |
| Safety stock | 560 units (14 days at 40) | Demand variance and supplier record |
| Reorder point | 2,960 units (40 x 60, plus 560) | Calculated |
| Reorder quantity | 3,600 units (90 days at 40) | Cover target, capacity and cash |
Two guardrails sit on top. Check the quantity against your cubic feet allocation. Then check that 90 days of cover keeps the tail units under 181 days of age, or the surcharge eats the freight saving.
Notice that the same 40 units a day puts your low inventory fee floor at 1,120 units. A reorder point of 2,960 sits well above it, so real lead times solve the fee as a side effect.
The cost of a stockout is the rank, not the lost sales. Amazon does not publish how organic rank recovers afterwards, and any figure quoted for that is an estimate.
No public figure exists for that recovery and we will not invent one. Track it yourself. Log your organic position for the main keyword every day from the day stock lands, and you own the number inside a month.
Software, Honestly
A spreadsheet handles one channel and a stable catalogue. Software earns its fee on three jobs a spreadsheet does badly. Syncing stock across channels, tracking open purchase orders against arrivals, and forecasting demand with seasonality.
Our rule is simple. Below roughly 50 active SKUs on one channel, a spreadsheet wins on cost and clarity. Above that, or once a second channel shares the stock pool, oversell risk outruns manual updates.
| Job | Spreadsheet | Entry level tool | Full platform | Worth paying at |
|---|---|---|---|---|
| Channel sync | Hours behind | Scheduled sync | Near real time | Second channel goes live |
| Purchase orders | Needs discipline | PO arrival dates | Landed cost | Over 5 open POs |
| Forecasting | Moving average | Velocity alerts | Seasonality and promo lift | Any SKU with a season |
| Fee and age alerts | Manual pulls | Aging alerts | Profit per SKU | Age past 90 days |
| Claims | Not practical | Discrepancy flags | Automated filing | Steady loss volume |
Whatever you buy, the numbers still come from Amazon reports. Software that reconciles them earns money. Software that only redraws them does not.
When Things Go Wrong
Stranded inventory is stock in a centre with no active listing behind it, and it still accrues storage. Fix the listing error on the Stranded Inventory page, or send a removal order.
Unfulfillable units are returns Amazon graded as unsellable. Set automated removals so they leave before the aged surcharge applies, then inspect them. Repeat cases on one SKU point at packaging or an overpromising listing, which is a product research and fees problem.
Receiving delays need evidence. Record the shipment ID, the delivery confirmation and the receive date, because those fields carry every later claim.
Then there is stock Amazon loses. Lost, damaged, disposed without instruction, and fee overcharges all have claim paths. We cover that work under FBA reimbursements rather than repeating it. Watch the supply end too. A supplier who ships late twice a year sets your safety stock, so tighter product sourcing terms cut the buffer you fund.
Frequently asked questions
What is a good IPI score in 2026?
The published minimum threshold is 400. Above it you keep standard capacity terms. Treat 400 as a floor, not a target, because sellers well above it reported capacity cuts after the May 2025 change. Check your live score and cubic feet allocation in FBA Capacity Manager.
Does Amazon still use the Inventory Performance Index?
Yes. IPI remains one input Amazon uses when allocating monthly FBA capacity, alongside sales velocity and inventory efficiency. Reports that Amazon retired the score are wrong. What changed is the weight given to forward looking sales projections, which tightened in May 2025.
How are FBA capacity limits calculated?
Amazon allocates capacity monthly in cubic feet through FBA Capacity Manager. The allocation reflects your IPI score, sales velocity and how efficiently you turn stock. In May 2025 the projection window narrowed from roughly six months of forecast sales to roughly five. Your own limit moves monthly.
What is the low inventory level fee?
A per unit fee Amazon charges when a SKU’s historical days of supply falls under 28 days in both measured windows. Those windows are the last 30 days and the last 90 days. The metric is average daily inventory level divided by average daily shipped units. One window above 28 keeps it off.
How do I avoid the low inventory level fee?
Lift short term supply above 28 days of cover, or enrol the product in auto replenishment through Amazon Warehousing and Distribution. To size the shipment, multiply average daily shipped units by 28. At 40 units a day that is 1,120 units held on average.
Does the low inventory fee apply to seasonal products?
Amazon has published no seasonal exemption. Reasoning from the formula, once sales fall the shipped units figure falls too, so days of supply rises without any restock. The risk sits in the shoulder weeks, when sales have dropped but the 90 day average still carries peak volume.
What about ASINs with multiple sellers?
The inputs are your own inventory and your own shipped units, so the threshold reads as per seller per SKU rather than split across the listing. Amazon has never confirmed this in writing, despite sellers asking in its announcement thread. Check your own fee preview first.
How much does FBA storage cost?
Monthly storage bills on average daily cubic feet, priced by size tier, with higher rates in the last quarter. We quote no rates here, because third party sources disagree on 2026 figures. Pull current numbers from the Seller Central fee schedule or the FBA Revenue Calculator.
When does the aged inventory surcharge start?
Amazon’s Fulfillment by Amazon page puts the start of aged inventory fees at 181 days of storage. Charges rise through longer age bands. Decide the fate of slow units before day 181, using a price cut, a removal order or liquidation. The surcharge often costs more than the margin left.
How do I create an FBA shipping plan?
In Seller Central, open Send to Amazon, select SKUs and units, then set prep and label ownership. Pack the units and enter box content information. Confirm shipping method and carrier, print and apply box labels, then add pallet detail for less than truckload shipments.
How do I avoid the inbound placement fee?
Accept Amazon’s optimised split across the destinations it assigns. Trade reporting says the fee free option needs at least five identical cartons or pallets per item, matching on quantity and item mix. Confirm that in your own workflow. If consolidating saves more freight than the fee costs, pay it.
Where do the FBA box labels go?
One unique box label per box, printed from the Send to Amazon workflow and applied to a flat surface. Never cover carrier barcodes, and never reuse a label across boxes. Pallet shipments need pallet labels on all four sides. Obscured labels are a frequent cause of receiving delays.
Can I send inventory before or after my scheduled ship date?
Amazon works to the ship date you confirm, and destinations expect stock in that window. Shipping early or late risks receiving delays and reconciliation problems. If dates move, update the shipment instead of sending against a stale plan. A missed partnered pickup gets one retry the next day.
Do I need inventory management software?
Below roughly 50 active SKUs on a single channel, a spreadsheet does the job. Add a second channel drawing on the same stock, or more than five open purchase orders, and manual updates start causing oversells. Buy for the job you need, such as channel sync or forecasting.
Check the Arithmetic on Your Own SKUs
Fees, capacity and restock timing move together, so one change shows up as a cost elsewhere. If you want a second pair of eyes on your numbers, our Amazon account management team runs a free audit first. You keep every file and login either way.