3 Major Amazon FBA Issues & How to Fix

The Chicago Journal Staff

Amazon FBA (Fulfillment by Amazon) is a game-changer for e-commerce sellers, offering access to a vast customer base and leveraging Amazon’s robust logistics network. However, some common pitfalls can negatively impact your business. Here are the three major issues and how to address them:

Amazon FBA Storage Limits

Amazon enforces storage limits based on your Inventory Performance Index (IPI) score, which considers excess inventory, sell-through rate, stranded inventory, and in-stock inventory. A low IPI score can lead to limited restocking quantities, making your products less visible and competitive.

How to Fix It:

Automate Inventory Management: Use algorithmically automated systems to monitor and optimize inventory levels.
Leverage Amazon’s New Selection Program: This can help with new product sales and managing inventory health.
Liquidate Slow-Moving Stock: Remove stale inventory, stranded items, and unfulfillable units to avoid restocking limits.
Optimize Storage: Consider strategies like using smaller packaging or consolidating products to maximize storage efficiency.

Amazon Subscription & FBA Fees

Amazon charges various fees, including a $39.99 monthly subscription for professional sellers and referral fees ranging from 6-45%. Fulfillment fees are also significant, especially for larger or slow-moving products.

How to Fix It:

Verify Product Dimensions: Ensure that product dimensions are accurate to avoid overcharges.
Optimize Product Size and Weight: Reduce packaging size or weight to fit within lower fee bands.
Utilize the FBA Small and Light Program: This program offers reduced fulfillment costs for qualifying small, lightweight items.
Regular Monitoring: Keep a close eye on Amazon’s fee structure and adjust your product listings accordingly.
Invest in Inventory Management Software: Automate tracking and updating inventory to avoid missed sales opportunities and unorganized stock management.

FBA Inventory Management

Effective inventory management is crucial to avoid stock-outs, excess inventory, and the associated costs. Poor inventory management can lead to lost sales, increased storage fees, and reduced IPI scores.

How to Fix It:

Monitor Supply Chain: Keep a close eye on suppliers and lead times to prevent delays and ensure a steady flow of products.
Build Vendor Relationships: Strong relationships with vendors can help mitigate supply chain issues.
Use Automation Tools: Implement tools to minimize human errors and uncertainties in inventory management.
Track IPI Regularly: Use Amazon’s Inventory Performance Dashboard to monitor and improve your IPI score.
Follow Amazon’s Recommendations: Implement strategies suggested by Amazon for better inventory management during peak periods.

Additional Tips:

Be Proactive: Address inventory issues immediately by contacting Amazon’s customer service.
Hire Consultants: Consider hiring experts to manage complex inventory issues and prevent profit loss due to high return rates.

By addressing these common FBA issues proactively, you can maintain a healthy inventory, reduce costs, and maximize your sales potential on Amazon.

For a more detailed discussion on tackling Amazon FBA issues and maximizing your e-commerce potential, be sure to read the full article: Top 3 Amazon FBA Issues & How to Fix Them. Dive deeper into practical solutions and strategies to overcome common challenges and succeed in the competitive Amazon marketplace.