Leveraging Amazon's Fulfillment Services (FBA) can greatly enhance business operations, including shipping, packaging, and storage. Entrusting your inventory to Amazon allows you to concentrate on sales and marketing efforts, freeing up valuable time and resources.
However, it's essential to remain vigilant and proactive to avoid the challenges that come with Amazon stranded inventory.
Stranded inventory can be a significant setback for sellers if not addressed promptly. It refers to products that are not available for purchase due to various reasons, such as listing issues, policy violations, or logistical complications.
When inventory becomes stranded, it hinders your ability to generate sales and negatively impacts your overall business performance.
To prevent and address Amazon stranded inventory effectively, it's crucial to understand its causes and take proactive steps to resolve the issues.
By optimizing your inventory management strategies and staying updated on Amazon's guidelines and policies, you can mitigate the risk of stranded inventory and ensure a smooth selling experience.
In this blog post, we will delve into the complexities of Amazon stranded inventory, exploring its impact on sellers and providing practical solutions to address and prevent this issue. We will discuss the common causes of stranded inventory, such as listing errors, policy violations, and storage limitations.
Additionally, we will provide actionable tips on how to identify and resolve stranded inventory, optimize your inventory management practices, and maintain a healthy and profitable Amazon business.
What is Amazon stranded inventory?
A stranded inventory on Amazon is a significant concern that often goes unnoticed by many Amazon sellers.
It occurs when a product occupies storage space within Amazon's fulfillment centers but is not associated with any active listings on your seller account.
In other words, the product becomes disconnected or "stranded" from your active inventory, rendering it unavailable for purchase by customers.
Stranded inventory poses several challenges for Amazon sellers. First and foremost, it hampers your ability to generate sales and revenue from the affected products.
With these items disconnected from active listings, potential customers cannot find or purchase them, resulting in missed opportunities for sales and potential revenue loss.
Furthermore, stranded inventory consumes valuable storage space within Amazon's fulfillment centers, which incurs additional storage fees and may impact your overall inventory management efficiency.
Stranded Inventory vs. Unfulfillable Inventory
Stranded inventory and unfulfillable inventory are two distinct FBA inventory issues, often confused and used interchangeably. While they both fall under the category of inventory problems, they have different causes and require specific solutions.
Unfulfillable inventory refers to products that cannot be sold due to various reasons such as being damaged, expired, perished, or classified as restricted items.
These are items that customers can still order through your Amazon account, but they cannot be shipped to customers due to quality issues or other restrictions. Unfulfillable inventory is typically identified as unsellable and requires proper disposal or removal from your inventory.
On the other hand, stranded inventory is a situation where products are available in your inventory but are disconnected from active listings or appear as inactive on your account.
Despite having sufficient stock, these products do not have a visible means for customers to purchase or even know that they are available. This leads to a significant problem as the products remain "stranded" and cannot be sold, resulting in lost sales opportunities and potentially increased storage fees.
How does stranded inventory impact Amazon sellers?
There are multiple reasons why having a stranded inventory and leaving it unresolved is terrible for you as a seller on Amazon.
First, storing your products through Amazon's fulfillment centers costs you storage fees. The more time your products stay at Amazon warehouse, the more it will cost you. And it will continue incurring money from you because they have no means to be sold to the customers.
Which then leads to poor sales. Having inactive listings while having enough stock of your products will translate into negative sales.
Stranded inventory also affects your account health as it directly translates to your IPI or Inventory Performance Index.
IPI is one of Amazon's metrics in determining the efficiency of inventory management and the performance of Amazon sellers using its fulfillment services.
IPI scores range from 0 to 1000. A low IPI score of 400 and below will likely limit your storage; Amazon might give you restricted or lower storage limits in its fulfillment centers.
What causes stranded inventory?
Various mismanagement practices can cause a stranded inventory as an FBA Amazon seller. If Amazon notifies you of having a stranded inventory, you may want to look into these possible causes:
Listing error.
A listing error happens when your product is not connected to an ASIN (Amazon Standard Identification Number), an identification and tracking number that Amazon assigns to each product in its marketplace.
The easy way to resolve this issue is to relist your item so it reconnects to your inventory. If this does not work, it is best to contact Amazon Seller Support for guidance.
Closed listing.
Your product might be in a closed listing, which means that it is in inactive status. While it may not be deleted entirely from your product listings, customers will not have the option to purchase your product or to at least know that it is available.
Incomplete listing information.
When Amazon identifies any lacking information on your product, it will only be listed if you provide it. This listing information includes the product's price, SKU, and categories.
Suspended or suppressed listing.
Not meeting the requirements set by Amazon might get your product listings suspended or suppressed. These requirements include information such as images, age requirements, bullet points, etc. A high number of customer returns may also result in the suspension of the listing.
Qualification Required.
Sometimes, you will have to secure approval to sell a particular brand or category. You may contact the authorized distributor via Amazon's approval system and get an invoice to get approval.
Other causes for stranded inventory may be expired products, deleted listings, potential logo and trademark misuse, quality issues, etc.
How to fix stranded inventory
The first step to solving a problem is to identify it. Amazon typically informs you if and when an inventory from your storage becomes stranded. You will then be required to take action within 30 days of receiving the notification.
Here’s what you can do during that period:
Find your stranded inventory.
To better understand what is left in your inventory, go to your account's Seller Central. Go to your inventory, then select 'Manage Inventory' from the dropdown menu.
A clickable section will appear as 'Fix stranded inventory' if you have stranded products. Upon clicking, a few information and reason(s) why your product is stranded will be provided to you.
Remove or relist the product.
As you navigate through the stranded inventory menu, you will be given an option on how to handle your stranded inventory. Many causes for a product to be stranded can be resolved by relisting your product.
To relist your product, navigate to the 'Fix stranded inventory' page. At the top right side of the corner, click the 'Edit automatic action settings button.' You will then be asked to set the number of days for Amazon to relist your inventory automatically.
In worse cases, you will have to remove your inventory from your product listings. This may typically be needed for products that are expired or damaged.
To get rid of a stranded product, you may create a removal order. Doing this means that Amazon is authorized to dispose of your item(s) or return it to you.
How to Avoid Amazon Stranded Inventory
As an Amazon seller, there are plenty of ways to efficiently manage and track your inventory to prevent product issues such as stranded inventory.
This includes having an understanding of the policies around storage fees and the inventory performance index (IPI); knowing what strategies to do to prevent stock from being stranded; managing your FBA inventory to maintain good account health; and optimizing management of your active listings and inventory performance.
Understanding storage fees and inventory performance index (IPI)
Before availing of Amazon's fulfillment services, you should know the fees they will charge you, including the storage fees, which are monthly and long-term storage fees.
Amazon will charge you according to the size of your inventory used in their fulfillment center. Hence your inventory must stay on track. Every space that is filled up by your product is paid for and is part of your FBA fulfillment costs.
It is also advisable that you know when Amazon conducts its inventory clean-ups, where they remove products that have stayed in the fulfillment center for more than 181 days.
During and before these clean-ups, you may review your IPI score and try to improve them by maintaining a healthy sell-through rate and reducing or adding inventory depending on their selling performance.
Strategies to prevent future occurrences of stranded inventory
You need to know some strategies as an Amazon seller to prevent stranded inventory. Prevention may start with researching whether you are allowed to sell a product, especially when selling wholesale. This may include looking more into the particular brand or category.
Generally, you should maintain a balanced inventory level. Your most popular products should be restocked regularly, and products not selling well should be reduced or removed.
Maintaining a healthy seller central account and managing FBA inventory
Suppose your products are ready to be shipped to the FBA warehouses. In that case, it will save you much more time and capital if you use proper packaging, ensure compliance, and ensure all product data are translated to your Seller Central account.
Effective management of active listings and inventory performance
Having an optimized way of listing your products goes a long way. Manage your inventories by filling in your listing information completely before sending it to an FBA storage.
Get into the practice of adding images, product features, connecting your products to an ASIN, and all the likes.
It will also be better for your operational costs if you do not immediately delete your listings when they encounter any issues.
Make use of the time to decide what to do with your stranded inventory and look for possible fixes to maximize profitability.
Take Control of Your Stranded Inventory
A lot goes through at the front side of selling a product, but what happens at the back end, especially on your inventory, is just as crucial and needs some attention.
If not given attention, you may experience issues such as stranded inventory. As discussed, encountering this issue will cost you money, affect your sales, and risk your account health.
There are various ways to resolve this issue:
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better management of your inventory
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optimizing your product listings
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implement preventive measures to avoid stranded products
Another preventive measure that you can do is to invest in Seller Candy's services on Inventory Management and have an expert team handle your inventory for you. These experts will provide you with customized solutions that will depend on your needs and requirements.
By partnering with Seller Candy, you can expect your business to succeed on Amazon by having our experts provide an efficient guide to managing your inventory and other aspects to improve your operations.
Grow your business with us, and contact us today to learn more about how we can help you take control of your inventory.
