Amazon Inventory Management Guide (2025)

Mastering Amazon Inventory Management: Track, optimize, and scale your FBA and FBM listings with smart tools and strategies.

Introduction

Effective inventory management is the backbone of a successful Amazon business. Whether you're using FBA (Fulfillment by Amazon), FBM (Fulfilled by Merchant), or Remote Fulfillment, managing your stock accurately is critical to avoid lost sales, overstock fees, or account suspensions.

This guide covers:

• FBA vs. FBM listing strategies

• How Remote Fulfillment works

• Maintaining strong Inventory Health metrics

• Best practices to scale efficiently

🔁 What Is Inventory Management on Amazon?

Inventory management on Amazon refers to the monitoring, planning, and control of stock levels to meet customer demand while minimizing costs and avoiding policy violations.

You must decide:

• How to fulfill orders (FBA vs. FBM)

• How much stock to send

• Where to store it (regional distribution, US/EU)

• How to react to performance metrics

🏷️ FBA vs. FBM Listings: What's the Difference?

📦 Fulfillment by Amazon (FBA)

FBA means you send your products to Amazon's warehouses, and Amazon handles shipping, customer service, and returns.

Advantages:

• Prime badge = higher conversion

• Amazon handles shipping/logistics

• Eligible for Remote Fulfillment

• Better Buy Box chances

Disadvantages:

• Storage fees

• Aged inventory removal costs

• Requires shipment planning

📬 Fulfilled by Merchant (FBM)

FBM means you store the product and ship it directly when the customer places an order.

Advantages:

• No storage or removal fees

• Full control over packaging/shipping

• Suitable for low-margin items

Disadvantages:

• Lower chance of winning Buy Box

• Slower delivery = lower conversion

• Must manage returns and support yourself

🌍 What Is Remote Fulfillment with FBA?

Remote Fulfillment with FBA (NARF) allows you to use your US-based FBA inventory to fulfill orders in Canada and Mexico without creating separate accounts or sending inventory internationally.

How It Works:

• You opt in via Seller Central

• Amazon lists your US inventory on Canada and Mexico marketplaces

• Amazon handles customs, shipping, and duties

• Customers see local currency and delivery timelines

Benefits:

• No need to ship inventory to CA/MX

• Increase sales across borders

• Fully automated

Requirements:

• US FBA account in good standing

• Product must be eligible (certain restricted products are excluded)

• Adjust pricing to include duties & shipping

📊 What Is Inventory Health?

Amazon’s Inventory Health Report shows how well you're managing your stock across fulfillment centers. It includes metrics like:

Key Metrics:

Metric	What It Means
Sell-Through Rate	Units sold ÷ units stored (over 90 days)
Excess Inventory	Overstocked units not selling quickly
Aged Inventory	Units stored for 90, 180, or 365+ days
Stranded Inventory	Listings active but not sellable
In-Stock Rate	% of your top-selling ASINs in stock

Why It Matters:

• Affects storage fees

• Impacts IPI score (Inventory Performance Index)

• Poor health = restock restrictions

• Helps optimize reorder cycles and profits

🛠️ How to Maintain Good Inventory Health

✅ Best Practices:

• Use Amazon's Restock Report

• Set up automated low-stock alerts

• Create removal orders for dead stock

• Fix stranded listings weekly

• Improve sell-through with pricing adjustments or ads

• Bundle slow movers with fast sellers

• Avoid over-ordering based on seasonality

Tools That Help:

• Amazon Inventory Dashboard

• Restock Inventory Tool

• Inventory Age Report

• Manage Excess Inventory Tool

🧠 Conclusion: Why Inventory Management Is a Game-Changer

Proper inventory management leads to:

• Higher profits

• Lower fees

• Better Buy Box visibility

• Long-term account health

Whether you choose FBA, FBM, or a mix of both, keeping your inventory optimized will help you scale your Amazon business efficiently in 2025.

Important Note: If you experience confusion or uncertainty, it is strongly recommended to review Amazon’s official policies.