Amazon Updates Automatic Inventory Removals to Make Room for Prime Day

In a recent announcement, Amazon made changes to its automated inventory removal feature, which largely affects third-party seller inventory stored in FBA that are slow moving or are not selling that well.

Beginning April 15, 2022, the following inventory will be removed automatically:

• Units that have been in fulfillment centers for more than 365 days and that are subject to long-term storage fees
• Units of ASINs that haven’t sold in six or more consecutive months and that have been in fulfillment centers for more than 180 days

Sellers Can Opt Out

Within the Automated fulfillable inventory settings dashboard, you can tell Amazon to ship the removed items back to you for potential resale by providing a valid shipping address. Alternatively, you can have your removed inventory liquidated in order to recover some of the value. Taking no action means Amazon will have the removed inventory automatically donated, recycled, or disposed of some other way.

The automatic removal will trigger monthly, unless sellers ‘opt out’ by ticking Disable on the settings page.

A word of caution: some sellers have noticed that Amazon has force enabled automatic removals despite having such settings disabled for more than a year—ergo, they’ve had to toggle the Disable option again. This is something to watch out for if you’re currently storing the affected product types inside FBA warehouses.

Amazon Doesn't Like Warehousing

The announcement largely applies to slow-moving goods subject to long-term storage fees (LTSF) and low-converting products that have been in Amazon FCs for more than 180 days.

This could mean that the long tail strategy is no longer sustainable (if it still was after Amazon implemented LTSF) for sellers who want to make use of FBA storage. On the flip side, Amazon would very much prefer its football-field-long warehouses to be used to move products that sell like hotcakes.

According to the announcement, the automatic removal of old inventory can help sellers save on LTSF and improve their Inventory Performance Index, while freeing up more space to accommodate more popular inventory.

In a relatively recent update to its restocking policies, Amazon is encouraging sellers to ship in 30-day cycles, instead of sending 6 months worth of goods in bulk into FBA centers. Taken together, these policies reflect Amazon’s goal of becoming more of a global logistics powerhouse than a warehousing or storage company for marketplace sellers.

Gearing Up for Prime Day

This update to automated inventory removals could be one of several actions Amazon may take to make room for this year’s Prime Day, which is expected to take place somewhere around the end of June or in July.

Removals will trigger monthly starting April 15, and sellers who want to update their settings accordingly, such as putting in a return address, should do so at least 24 hours before such date to avoid hiccups.