How to Reduce Amazon Storage Fees & Optimize Inventory Management in 2025?
Written by Shahid R. KhanReviewed by Andrew L. Adler & Jonathan M. Adler
As an Amazon seller, one of the biggest challenges you face is managing inventory efficiently while minimizing storage costs.
With Amazon’s fee structures constantly evolving, understanding how to avoid unnecessary storage fees can significantly impact your bottom line.
This comprehensive guide explores proven strategies to reduce Amazon storage fees and optimize inventory management for maximum profitability in 2025.
Understanding Amazon Storage Fees & Their Impact on Profits
Amazon’s storage fee system is multi-layered and can quickly erode profit margins if not managed properly. Before diving into optimization strategies, it’s essential to understand exactly what you’re being charged for.
Amazon Storage Fee Breakdown
🔹 Monthly Storage Fees – Charged per cubic foot for both standard and oversized items. Fees increase during peak Q4 months (Oct–Dec).
🔹 Long-Term Storage Fees – Applied to inventory stored 365+ days in Amazon’s warehouses.
🔹 Overage Fees – Additional charges if you exceed your storage limits.
How Storage Fees Impact Your Profits
🚨 High storage costs reduce profit margins on each sale.
🚨 Excess inventory ties up capital that could be used for marketing or new product launches.
🚨 Long-term storage fees can sometimes exceed the product’s actual value.
🚨 Amazon disposal fees apply when inventory remains unsold for too long.
Avoiding these pitfalls is key to maintaining a healthy cash flow and scaling your business efficiently.
Common Reasons Sellers Overpay for Amazon Storage Fees
1️⃣ Holding Too Much Inventory in FBA Warehouses
Many sellers send all inventory to Amazon for convenience, but this leads to excessive storage fees—especially for slow-moving products.
2️⃣ Poor Demand Forecasting
Without accurate sales projections, it’s easy to overstock slow sellers and understock bestsellers.
3️⃣ Failing to Manage Restock Limits
Amazon sets restock limits based on sales history. Exceeding limits results in higher fees and inventory restrictions.
4️⃣ Ignoring Long-Term Storage Fees
Not tracking inventory age can result in 365+ day storage penalties, often costing more than the product itself.
How to Reduce Monthly Storage Fees on Amazon
✅ Send Smaller, More Frequent Shipments
Instead of bulk shipments, adopt a Just-in-Time (JIT) inventory approach to maintain lower inventory levels.
✅ Remove Slow-Moving Inventory Before Fees Apply
Check your Inventory Age Report in Seller Central and remove products before they hit the long-term storage fee threshold.
✅ Optimize Packaging to Reduce Storage Volume
Since Amazon charges by cubic foot, reducing package size can significantly lower storage fees.
✅ Use Third-Party Warehouses (3PLs)
For slow-moving or seasonal inventory, store excess stock with 3PL providers (e.g., Deliverr, ShipBob) and replenish Amazon FBA as needed.
How to Avoid Long-Term Storage Fees
📌 Monitor Your Inventory Performance Index (IPI) Score
Amazon tracks your IPI score to measure inventory health. Maintain an IPI score above 400 to avoid storage restrictions.
📌 Use Amazon’s Aged Inventory Dashboard
This tool helps identify slow-moving SKUs before they incur long-term storage fees.
📌 Run Clearance Promotions & Discounts
🚀 Amazon Coupons & Lightning Deals – Drive quick sales.
🚀 Buy One Get One (BOGO) Promotions – Increase order volume.
📌 Use Amazon’s Disposal or Liquidation Programs
If a product isn’t selling, remove or liquidate inventory to avoid ongoing fees.
Leveraging Amazon’s Restock Limits & Forecasting Tools
📌 Understand Amazon’s Restock Limit Policies
Amazon limits warehouse space based on sales velocity and account health. Monitor your allowed storage space regularly.
📌 Use Amazon’s Restock Suggestions
Amazon provides inventory restock recommendations—use these as a baseline for your planning.
📌 Track Supplier Lead Times
Slow supplier production and shipping delays lead to stockouts and excess inventory buildup. Keep buffer stock but don’t over-order.
📌 Adjust Reorder Points Based on Sales Trends
Use tools like SoStocked, InventoryLab, and Forecastly to optimize restocking based on real-time sales data.
Best Tools for Inventory Optimization & Storage Fee Reduction
Amazon Seller Central Reports
✔ FBA Inventory Age Report – Identifies aging inventory.
✔ Excess Inventory Report – Recommends action for overstocked items.
Third-Party Inventory Management Tools
✔ SoStocked – Advanced forecasting & restock planning.
✔ InventoryLab – Tracks FBA fees, profitability, and inventory levels.
✔ Helium 10 Inventory Protector – Prevents overstocking & excessive storage fees.
Automated Pricing & Sales Acceleration
✔ RepricerExpress – Adjusts prices dynamically to boost sales.
✔ SellBrite – Manages inventory across multiple platforms.
When to Use FBM Instead of FBA to Reduce Storage Fees
📌 How FBM Can Help Cut Costs
✅ No Amazon storage fees – You store inventory yourself or via 3PLs.
✅ Full control over stock levels & costs.
📌 FBM vs. FBA for Long-Term Inventory
FBM works best for slow-moving or bulky items. While not Prime eligible, the cost savings can outweigh potential sales loss.
📌 Hybrid Model: Using Both FBA & FBM
✔ FBA for bestsellers (Prime-eligible)
✔ FBM for slow sellers (lower storage costs)
How to Automate Inventory Management & Prevent Stock Issues
📌 Set Up Automated Inventory Alerts
Tools like SoStocked & RestockPro notify you before inventory becomes problematic.
📌 Use AI-Based Demand Forecasting
AI-driven tools analyze sales trends, seasonality, and competitor pricing to predict demand accurately.
📌 Outsource to 3PL Warehouses
For seasonal sellers, third-party fulfillment services offer flexible storage solutions.
Key Takeaways: Reduce Amazon Storage Fees & Improve Inventory Flow
✅ Track FBA storage costs and avoid long-term penalties using Amazon’s reporting tools.
✅ Optimize demand forecasting with data-driven insights to prevent overstocking & stockouts.
✅ Use discounts, liquidation, or removal orders to clear slow-moving inventory.
✅ Consider 3PL storage or FBM for products with low sales velocity.
📌 Want to save thousands in Amazon storage fees? Start optimizing your inventory today! 🚀
By mastering inventory management, you’ll gain a competitive advantage, increase profitability, and ensure your Amazon business remains sustainable despite evolving fee structures.
