As third party sellers gear up for the approaching holiday season, Amazon has recently announced a crucial update that warrants the attention of all sellers utilizing its fulfillment centers. This announcement concerns the management of aging inventory and aims to optimize space within the centers to accommodate the surge in demand during the holiday period. In this article I will be addressing this change and explaining how it impacts your business.
Commencing September 15, 2023, Amazon is implementing a new policy pertaining to aging inventory. The core aspect of this policy involves the potential removal of aging inventory from Amazon’s fulfillment centers, unless sellers choose to opt out of this process.
In this context, aging inventory refers to units that have been stored within an Amazon fulfillment center for a duration exceeding 365 days. To mitigate the accumulation of aging stock and to make room for new incoming products, Amazon has decided to introduce an automated process for the removal of such inventory.
While the notion of automated inventory removal might raise questions, it’s imperative to acknowledge the potential advantages this policy could bring to your business:
- Aged Inventory Surcharge Reduction: Sellers are subject to charges for housing aging inventory for prolonged periods. Allowing for automated removal could potentially save sellers from incurring these surcharges, thereby leading to cost efficiency.
- Enhanced Inventory Performance Index (IPI) Score: By actively participating in the automated removal process for aging inventory, sellers have the opportunity to enhance their IPI score. This metric reflects the efficiency of your inventory management and can influence factors such as search result placement and overall visibility.
Under the new policy, you will have the following choices:
- Returning Aging Inventory: Should you wish to retain your aging inventory, the process entails providing a valid return address through the Automated Fulfillable Inventory settings. This way, Amazon will return your aging units to you, preventing their removal from the fulfillment centers.
- Recycling, Donation, or Removal: Failing to provide a valid return address prompts Amazon to take further steps, which might involve recycling, donating, or outright removal of the aging inventory to optimize storage space.
- Opting Out of Automated Removal: If you prefer to maintain full control over your inventory and prevent automated removal, the “Disabled” option within the settings allows you to opt out of this process.
It’s paramount to note that once automated removals are initiated, they cannot be reversed. This underscores the significance of making a well-informed decision in accordance with your business strategy.
For sellers currently possessing aging inventory and yet to modify their removal settings, Amazon will notify you through email and Seller Central regarding impending automatic removals. Staying vigilant and proactive will be key during this transitional period.
For adjusting your settings and making informed decisions, navigate to “Automated Fulfillable Inventory settings.” To monitor aging inventory status and overall health, access “Manage Inventory Health.”
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