How to Optimise Inventory Levels to Avoid Storage Fees on Amazon FBA

Amazon FBA is brilliant for hands-off fulfilment—but it can also become a silent profit killer if you’re not careful with your inventory levels. Between monthly storage fees, long-term storage charges, and restock limits, poor inventory planning can drain your margins and hurt your ability to scale.

At FA Prep, we help sellers optimise their inventory strategies so they can stay lean, avoid unnecessary fees, and keep products flowing to Amazon at the right pace. Here’s how to do it effectively.

1. Understand Amazon’s Storage Fee Structure

Before you can avoid fees, you need to know what you’re being charged for.

Amazon charges:

• Monthly storage fees (charged per cubic foot).

• Aged inventory surcharge (long-term storage fees) for items stored 181+ days.

• Overage fees if you exceed your storage limit.

💡 Tip: Fees are much higher in Q4 (October–December)—up to 2–3x standard rates.

2. Know Your Sell-Through Rate

Your sell-through rate is the number of units sold over a specific time period, divided by the number of units stored. A low sell-through rate = red flag to Amazon.

✅ Track this metric monthly in Seller Central under your Inventory Performance Dashboard.

✅ Identify slow-moving products early and reduce incoming stock or offer discounts to shift them.

💡 Tip: Amazon rewards healthy sell-through with better restock limits and storage priority.

3. Use a Prep Centre for Buffer Stock

FA Prep Can Help!

Instead of sending all your stock to Amazon, store it with a third-party prep centre like FA Prep. This lets you:

• Hold bulk inventory off-Amazon at lower storage costs.

• Send in smaller batches based on real demand.

• Avoid long-term storage fees and restock limitations.

💡 Example: Keep 2 months' worth of inventory at Amazon, and the rest at FA Prep. Top up weekly or bi-weekly.

4. Forecast Demand Accurately

Use historical data to predict your sales trends. This helps prevent both overstocking and stockouts.

✅ Review past sales from the same period last year.

✅ Adjust for promotions, seasonality, and growth.

✅ Use tools like Amazon’s Forecasting Tool or third-party software.

💡 Tip: If you’re launching a new product, start with conservative quantities and increase gradually.

5. Monitor Inventory Age

Amazon now charges extra for units stored more than 181 days, and the longer they sit, the higher the surcharge.

✅ Set reminders to check inventory age monthly.

✅ Prioritise removing, discounting, or promoting aged stock.

✅ Use Amazon’s “Manage Inventory Health” tool to spot at-risk SKUs.

💡 Tip: You can have FA Prep accept removal orders, rework the stock (e.g., re-bundle, relabel), or send it to alternative sales channels.

6. Set Reorder Points Based on Lead Time

Rather than restocking randomly, use this formula to calculate smart reorder points:

Reorder Point = (Daily Sales x Lead Time) + Safety Buffer

✅ Know your supplier’s average lead time

✅ Add a 1–2 week buffer for unexpected delays

✅ Send replenishments to Amazon just before hitting the reorder point

💡 Tip: FA Prep can receive and hold stock in advance, so you’re always ready to top up FBA inventory without delay.

7. Use Multi-Channel Fulfilment to Clear Slow Stock

Multi-Channel Fulfilment is A Great Tactic!

Got slow-moving FBA stock? Rather than letting it sit, use Amazon’s Multi-Channel Fulfilment (MCF) to sell it elsewhere.

✅ List excess inventory on Shopify, eBay, or TikTok Shop

✅ Fulfil those orders from Amazon’s warehouse

✅ Move units faster and avoid long-term fees

💡 Tip: For future inventory, store with FA Prep and fulfil multi-channel orders directly from the warehouse at a lower cost.

8. Automate Inventory Alerts & Reports

Manual tracking doesn’t scale. Use tools to:

✅ Set low stock alerts

✅ Track storage costs over time

✅ Predict restock dates

📦 Tools to try:

• Amazon Inventory Dashboard

• RestockPro

• SoStocked

• Sellerboard

💡 Tip: FA Prep can work alongside your forecasting tools, so stock flows from your warehouse to Amazon automatically when needed.

Final Thoughts – Store Smarter, Not More

Optimising your inventory levels isn’t just about reducing storage fees—it’s about running a lean, profitable, and scalable Amazon business.

By storing your overflow stock with a prep centre like FA Prep, and sending smaller, timely batches into Amazon, you can:

✅ Avoid long-term and monthly storage penalties

✅ Stay within Amazon’s restock limits

✅ Improve your sell-through rate and IPI score

✅ Keep your cash flow healthy

🚀 Want to take control of your inventory and cut storage costs? Contact FA Prep today and streamline your FBA strategy.