As an Amazon seller, dealing with excess or unsellable inventory in Amazon’s fulfillment centers can become costly fast, especially with long-term storage fees reaching $6.90 per cubic foot after 365 days. Managing your FBA inventory efficiently is crucial to avoid these fees and protect your profits.
A simple solution is creating an Amazon removal order. This allows you to retrieve, dispose of, or liquidate overstocked or unsellable items, helping you reduce fees and stay in control of your inventory. In this blog, we’ll guide you through the process of creating a removal order to keep your FBA operation efficient and profitable.
What is a Removal Order on Amazon FBA?
Amazon removal order on Amazon FBA is a request made by sellers to remove inventory from Amazon's fulfillment centers. This can involve returning the products to your designated address, disposing of them, or liquidating them through Amazon's channels. It's a vital tool for managing inventory that’s no longer serving your business, helping you avoid unnecessary storage fees or penalties while ensuring your stock is optimized for profitability.
Efficient inventory management can be greatly simplified with tools such as SellerMate.ai, which offers AI-driven insights to help you stay ahead of these challenges
Common Reasons for Removal Orders:
Overstock Inventory: If a product isn’t selling as quickly as expected, it may start taking up valuable space in Amazon’s warehouses. Overstock items can accumulate storage fees if left unchecked.
Damaged or Unsellable Items: Returned products that can’t be resold or damaged goods sitting in your FBA inventory need to be removed to avoid ongoing fees and protect your overall seller performance metrics.
Seasonal Items: Sometimes seasonal products don’t perform as planned, and it’s smarter to remove them rather than paying to store them until the next season.
Recalling Products for Rebranding or Updates: If you’re rebranding or need to update a product, you’ll want to recall existing stock for relabeling or modifications before reselling it.
In any of these scenarios, an Amazon removal order helps streamline your inventory management, making sure your stock stays aligned with your business goals.
When Should You Create a Removal Order?
Knowing when to create a removal order is key to maintaining a profitable and efficient business on Amazon FBA. By proactively managing your inventory, you can avoid unnecessary costs and protect your seller performance metrics. Here are the most common triggers for initiating a removal order:
Storage Fees
Amazon charges storage fees for every item in their fulfillment centers, with costs split into monthly and long-term storage fees. Monthly storage fees are based on the volume of your inventory, but things get more expensive when your products sit for too long. After an item has been in Amazon’s warehouses for over 365 days, it’s subject to long-term storage fees, which are significantly higher.
These fees can quickly cut into your profits, especially if you’re holding onto slow-moving or unsellable items.
Inventory Aging
It’s crucial to keep an eye on how long your products have been in Amazon’s warehouses. As items age, their likelihood of selling decreases, all while storage fees continue to rise.
By regularly monitoring your inventory age, perhaps using SellerMate.ai's AI-powered platform, you can take action before products hit the long-term storage fee threshold.
Performance Metrics Impact
Amazon’s seller performance metrics are influenced by the state of your inventory. Unsellable items, such as damaged goods or customer returns, can negatively impact your metrics, potentially leading to penalties or account suspension.
By using Amazon removal orders to clear out unsellable inventory, you can help maintain positive seller performance ratings and ensure your account remains in good standing.
Timing for Seasonal Products
For sellers of seasonal items, timing is everything. Once the peak season has passed, it’s often more cost-effective to remove unsold products rather than continue paying storage fees until the next season rolls around.
By strategically removing out-of-season inventory, you can make room for new stock and avoid paying to store items that won’t sell for months.
Types of Removal Orders
When creating a removal order for inventory, Amazon provides multiple options for how you would like to handle the removed items. Below are the methods of removal you can choose from:
Return-to Address: Select this option if you want the inventory returned to a specific address. You’ll need to provide the return address, and Amazon will ship the items to your designated recipient. This method is ideal for items you plan to restock, resell, or use elsewhere.
Donate/Recycle: For unsellable or excess inventory, you can opt to donate or recycle the items directly at the fulfillment center. Amazon will manage the process of donation or recycling, helping you reduce waste or contribute to charitable causes without having to handle the inventory yourself.
Liquidations: With the liquidation option, Amazon helps you recover some value from your unsellable or excess inventory by liquidating it. The inventory is sold to third-party liquidators, and you receive a portion of the value in return. This method is useful when you want to recoup some of the investment from unsold stock.
Ecom Ondot’s LinkedIn post breaks down how to create a liquidation order for Amazon FBA listings, helping sellers clear excess inventory. It’s a simple guide to recover costs and avoid storage fees—worth checking out if you want to manage your stock more efficiently!
How to Create a Removal Order on Amazon FBA
Creating a removal order on Amazon FBA is a straightforward process that helps you manage unsellable or excess inventory. Follow these step-by-step instructions to get started:
Step 1: Navigate to the 'Manage Inventory' Page
Start by logging into your Amazon Seller Central account. From the main dashboard, go to Inventory > Manage Inventory. This page lists all your current inventory, which you'll use to select the items you want to remove.
Source: OnlineSellingExperiment
Step 2: Select Items for Removal
On the 'Manage Inventory' page, locate the items you wish to remove. You can check the box next to each item. To select multiple items, check several boxes at once. Once selected, these items will be prepared for the removal order.
Source: OnlineSellingExperiment
Step 3: Access 'Create Removal Order' from the Action Dropdown
After selecting the items, scroll to the top of the inventory list and click the Action on Selected dropdown menu. From the list of options, select Create Removal Order. This action starts the Amazon removal order process for your chosen inventory.
Source: OnlineSellingExperiment
Step 4: Review and Use the 'Recommended Removal' Report (if applicable)
If a Recommended Removal from Sale Report is available for your account, it’s highly beneficial to review it. This report gives insights into inventory that Amazon recommends for removal, such as unsellable or excess inventory.
Source: reasonautomation.com
This Sale report helps you decide which items to include in the Amazon removal order.
Enter the correct quantities for fulfillable and unfulfillable items on the removal screen and click “Continue.”
Source: reasonautomation.com
Step 5: Manage Unfulfillable and Stranded Inventory
Pay attention to unfulfillable or stranded inventory. Unfulfillable items are often damaged, expired, or otherwise unsellable and should be removed. Stranded inventory, which is not associated with an active listing and thus unable to be sold, should also be addressed.
Source: reasonautomation.com
Including these in your removal order helps avoid extra storage fees and manage your inventory more effectively.
Source: reasonautomation.com
Using SellerMate.ai’s smart automation, you can set up alerts for stranded or unfulfillable inventory to streamline the removal process.
Lean Media’s Amazon FBA 101: Inventory Removal Orders (2024) video walks you through the process of clearing out excess inventory, step by step. If you're looking to cut storage costs and streamline your FBA, this is the video you need to watch!
Required Information for Removal Order
To successfully create and process a removal order, you need to provide specific details to ensure the correct handling of your inventory. Here's what you'll need:
Shipping Information: If you’ve selected the Return-to-Address option for your removal, you must provide the full shipping address where the items should be sent. This includes the recipient’s name, street address, city, state, ZIP code, and country (if applicable). Ensure the address is accurate to avoid delays or misdelivery.
Order ID: Each Amazon removal order requires an Order ID for tracking purposes. This ID can either be manually generated by you or automatically assigned by Amazon. The Order ID allows you to monitor the status of your removal order and track it through completion.
Clarification of Order Contents: Clearly specify the items you want to remove and the quantities for each. This step is essential to avoid errors and ensure the correct inventory is processed. Double-check the SKUs, product descriptions, and the number of units being removed to ensure order accuracy.
Automating Removal Orders
To streamline your inventory management and avoid manual removal orders, you can automate the removal of unfulfillable inventory. Follow these steps to set up automated removal orders:
Log into your Amazon Seller Central account and navigate to Settings > Fulfillment by Amazon. This section contains the controls for managing your fulfillment preferences, including automation for removal orders.
In the 'Fulfillment by Amazon' settings, look for the Automated Unfulfillable Removal option. Enable this feature to have Amazon automatically remove unfulfillable items (damaged, expired, etc.) from your inventory without needing to manually create a removal order.
Source: Myamazonguy
After enabling automated removals, you can set a schedule for when the removals should occur. You can choose the frequency (e.g., weekly, monthly) that best fits your inventory management strategy, ensuring unfulfillable items are removed promptly.
Finally, provide your email address and delivery preferences. Amazon will notify you about upcoming removals and send details regarding where the items will be shipped if you're using the Return-to Address option. Ensure this information is correct for smooth communication and processing.
Charges for Removal Orders
When creating a removal order, Amazon charges fees based on the size and weight of the items. Below is a breakdown of the typical charges:
Standard Size: For standard-size items, the removal fees typically range from $0.25 to $0.35 per unit, depending on the weight of the item. Standard-size inventory includes most items that are smaller and lighter.
Oversize/Special Handling: For oversize or special handling items, the fees range from $0.60 to $1.90 per unit, depending on the item's size and weight. Oversize items include larger, bulkier products that require more space or special handling during removal.
Refer to Fee Structure for Detailed Costs: It’s important to check the most recent fee structure for detailed costs, as Amazon may adjust fees periodically. You can find the full breakdown in the Fulfillment by Amazon Fee Schedule on Seller Central, which outlines the exact charges based on your inventory type and size.
These charges ensure that you can plan your removal strategy effectively and minimize unexpected costs. SellerMate.ai’s comprehensive reports can help you track these costs closely.
Canceling a Removal Order
If you need to cancel an Amazon removal order, it's important to act quickly before the order moves too far into the processing stage. Here is a detailed step-by-step guide, including additional important information:
Removal Orders Can Be Canceled if Status is Pending or Planning
Removal orders can only be canceled if they are still in the Pending or Planning status. If the order is in these stages, it means that Amazon has not yet begun the physical removal process. Once the order reaches Processing or Shipped, cancellation is no longer an option. It's important to regularly monitor the status of your removal orders if you anticipate needing to cancel them.
Navigate to 'Manage Orders' and Use 'Advanced Search' by Order ID
To locate the removal order you want to cancel, go to Orders > Manage Orders within your Seller Central dashboard. Use the Advanced Search option, entering the specific Order ID of the removal order. This helps quickly locate the order, especially if you are managing multiple removals at the same time. If you don’t know the Order ID, you can search by date range or other filters.
Select 'Cancel This Order'
Once you've located the removal order, click on the order details, and select the Cancel This Order button. This action will stop the removal process immediately. If multiple items are in the order, you will have the option to cancel the entire order or just specific items within it.
Verification of Canceled Status Afterwards
After submitting the cancellation request, check the status of the order to confirm it has been successfully canceled. The order status should change to Canceled within a few minutes. It's a good practice to take note of the cancellation confirmation or download a report as proof in case you need to reference it later.
Potential Fees for Canceling
While canceling an Amazon removal order is free, it's important to be aware that if the order has already progressed to the Processing stage, you may still incur storage or removal fees. Always aim to cancel removal orders as early as possible to avoid unnecessary charges.
What Happens After Cancellation
Once a removal order is canceled, your inventory will remain in the fulfillment center. You can create a new removal order if needed or keep the items in storage. If the items were unfulfillable, ensure you monitor them to prevent long-term storage fees or address any issues causing them to be unfulfillable.
Processing Times
Understanding the timelines for removal orders helps you plan inventory management effectively.
Non-Liquidation Removal Orders: Typically processed within 10-14 business days, but may take up to 30 days during peak seasons.
Liquidation Orders: Can take between 30-60 days or longer to process.
Delivery Arrangement: After pickup, allow up to 14 days for the carrier to contact you or the recipient to schedule delivery.
Common Pitfalls to Avoid
When creating a removal order, several common mistakes can lead to unnecessary costs or complications. Here’s what to watch out for:
Late Removals: Waiting too long to create an Amazon removal order can result in steep storage fees, especially during peak seasons when Amazon's storage space is in high demand.
Incorrect Address: Always double-check your delivery address before submitting a removal order. A simple mistake could lead to your inventory being sent to the wrong location, causing delays and extra costs.
Overusing Disposal: While disposing of unsellable items may seem convenient, consider liquidation as an alternative. Liquidating your inventory can help you recover some costs, rather than losing everything to disposal.
Optimize Inventory Management with SellerMate.ai
To streamline inventory management and prevent these pitfalls, using tools like SellerMate.ai can be invaluable. Here’s how SellerMate.ai helps:
AI-Driven Insights: Provides real-time data to monitor inventory levels and avoid overstock or unsellable items.
Pricing Optimization: Helps you adjust pricing based on demand trends, ensuring faster turnover of stock.
Demand Forecasting: Predicts future sales trends, allowing you to make informed decisions on stock replenishment and Amazon removal orders.
Conclusion
Effectively managing your FBA inventory is key to maintaining profitability and avoiding unnecessary costs, such as long-term storage fees or disposal charges. By proactively using Amazon removal orders and staying on top of your stock, you can keep your Amazon business running smoothly and efficiently. Avoid common pitfalls, and make informed decisions to optimize your operations.
To take your inventory management to the next level, book a demo with SellerMate.ai today and see how their AI-driven insights can help you stay ahead of the game
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