Inventory Management Metrics
Amazon has added some new features in Inventory Management. So today we will discuss what Amazon did for us.
Fix stranded inventory
Manage FBA returns
The Inventory Performance dashboard helps you identify opportunities to grow your sales, reduce costs, and track key performance metrics.
Inventory Performance Index
The Inventory Performance Index, or IPI, is a metric to gauge your inventory performance over time.
The Inventory Performance page also provides additional metrics of interest within each factor, which you can see by selecting Show more details. Clicking the Show more details box associated with each category will take you to related inventory management tools, which provide recommendations to improve your performance.
Excess inventory percentage
We consider an item excess (overstock) if it has over 90 days of supply based on the forecasted demand.
Track your Excess inventory percentage, which is the percentage of your FBA inventory units that have been identified as excess.
In addition to the performance bar, three related metrics of interest are displayed with the Excess inventory percentage on the Inventory Performance dashboard:
Estimated total storage cost is the sum of estimated costs you would incur if you take no action and leave your inventory idle in the fulfillment center over a 3-year period. This includes monthly storage fees and long-term storage fees.
The Reduce excess inventory button shows how many SKUs you have with excess inventory. Click the button to visit the Manage excess inventory page and take action on the inventory.
Stranded inventory percentage.
When inventory is not available for purchase due to a listing problem, it results in lost sales and storage costs. This inventory is referred to as stranded inventory. Your Stranded inventory percentage is measured by the percentage of your FBA inventory units that are currently not available for purchase on Amazon.
Fix Stranded Inventory
Stranded inventory overview
Stranded inventory is FBA inventory in fulfillment centers that does not have an associated active offer and thus is not available for sale on Amazon. When inventory is stranded, it requires either reactivating the listing or removing inventory.
When you delete or close a listing, or change it from Fulfilled by Amazon to Fulfilled by Merchant, it might strand your inventory. Product listing issues, infringement concerns, or system errors can also result in stranded inventory.
For a complete list of reasons for stranded inventory, refer to the ‘How to resolve stranded inventory’ table in Resolve stranded inventory issues. For a breakdown of units in stranded status, see Stranded inventory report.
Note: If you have units of an ASIN stranded in the fulfillment center, do not send an additional inventory of that ASIN to Amazon. If you add an ASIN with stranded inventory to your shipment, you will receive an alert and your shipment will not be processed.
Amazon will notify you about stranded inventory in three ways:
On Fix Stranded Inventory, also accessible via the tab on Manage Inventory
Under Fix stranded inventory in the Notification section of your Inventory Dashboard
Note: If you address the cause for the stranded inventory yourself, please allow 24 hours for the updates to reflect in your stranded inventory.
Manage FBA returns
FBA customer returns policy
With FBA, Amazon provides fulfillment and customer service for your orders, including processing customer returns. We use Amazon’s customer returns policies to determine if a purchased FBA item is eligible for return. To ensure a great customer experience, we may accept returns beyond the timeframe stated in these policies.
A refund is a customer credit for all or part of the cost of a purchased item. In some cases, we issue customers a “returnless refund.” This means that the customer is not required to send the item back to the fulfillment center. Some items that are not eligible for return may be eligible for a refund.
A return is an item a customer sends back to a fulfillment center. Amazon team evaluates the condition of each returned item. If they determine that the item is sellable, they return it to your inventory. If they determine that it is unsellable (defective or damaged, for example), they assess who caused the damage (Amazon or the customer). Then they decide if you are eligible for reimbursement.
Returns time frame
In most cases, customers can request to return an item within 30 days of receiving it. Amazon may make case-by-case exceptions and accept return requests beyond 30 days of receipt.
When Amazon refunds a customer for your FBA order, we debit your seller account for all or part of the refund value. In some cases, for example, when an item is lost or damaged when under Amazon’s control, you may be eligible for reimbursement for refunds on your FBA orders.
Important: Amazon does not reimburse for refunded items that cannot be returned by customers per our returns policy unless it is for a reason for which we take responsibility.
Important: Amazon will not reimburse you for any refund that you issue directly to a customer.
Selling on Amazon and FBA fees
FBA credits your account for all or part of the Selling on Amazon referral fee and, where applicable, the variable closing fee for a returned item. We do not reimburse you for applicable FBA fees. For more information, see Selling on Amazon Fee Schedule.
In some cases, (for example, when a returned item has been opened) they may charge the customer a restocking fee. If so, your account is credited in the amount of the restocking fee. However, you do not receive a restocking fee credit if we take responsibility for the condition of the returned item and have issued you a reimbursement.
Returns processing fee
For items in the apparel, watches, jewelry, shoes, and luggage categories, a returns processing fee applies. For more information, see Returns processing fee.