Amazon Unfulfillable Inventory: Complete Guide
If you're an Amazon seller, you know that inventory management is critical to the success of your business. But what happens when you have inventory that can't be fulfilled? Amazon unfulfillable inventory can be a frustrating and costly problem for any seller. That can happen for a variety of reasons, such as damaged or expired products. When your products are marked unfulfillable, they can't be shipped to customers.
In this post, we'll explore what unfulfillable inventory is, why it happens, and, most importantly, how to deal with it. Whether you're a seasoned seller or just starting, understanding how to manage unfulfillable inventory is crucial to maintaining a successful Amazon business.
What Is Amazon Unfulfillable Inventory?
Unfulfillable inventory on Amazon refers to products that cannot be sold to customers for various reasons, such as defects, damage, expiration, incorrect labeling, or regulatory issues. These items are typically flagged as unfulfillable by Amazon and cannot be listed for sale on the platform.
Whenever FBA shipments are sent to Amazon fulfillment centers, Amazon conducts an inspection of each unit to ensure that it is in a sellable condition and that the correct quantity has been delivered. Suppose any item is received in poor condition, such as having damaged packaging, requiring repair, expired, or displaying signs of mold or corrosion. In that case, it will be deemed unsuitable for sale, and Amazon will categorize it as "Unfulfillable." If that happens, the item will be separated for removal.
Unfulfillable inventory can occur for various reasons, such as incorrect shipments from suppliers, manufacturing defects, or items returned by customers that can no longer be resold. In some cases, unfulfillable inventory may also result from changes to Amazon's policies or regulations, which may impact a seller's ability to sell certain products.
Why Are Your Items Unfulfillable?
Amazon may mark your inventory as unfulfillable for various reasons.
Defective inventory — if a shopper returns a product to Amazon because it has a design defect (e.g., a chair collapses due to improper design), manufacturing defect (an item doesn’t work as it should due to an accidental mistake during production), and marketing or labeling defect (e. g. missing warning labels, incorrect user instructions, false advertising).
Customer-damaged inventory occurs when a buyer returns a damaged or opened item that cannot be resold as new. Since Amazon does not reimburse such items, you can submit a removal order to get them back and decide what to do with them.
Warehouse damaged inventory — items damaged in the warehouse due to mishandling. In such a case, you can file a Fulfillment Center Operations Claim to get reimbursement.
Carrier-damaged inventory — units damaged by a carrier during shipping to FBA, to the buyer, or back to Amazon in a return request. Amazon will reimburse you per their Inventory Reimbursement Policy in such a case.
Distributor-damaged inventory — was received by Amazon in a damaged state from the distributor to the point where it is unfit for sale.
Expired inventory — items with expiration dates within 50 days of the arrival date at FBA, such as grocery items and consumables.
Non-compliant inventory — products that don’t comply with Amazon’s requirements, are prohibited or are improperly packaged.
What Does Amazon Do With Unfulfillable Items?
If Amazon considers a unit unfulfillable and not fit for sale, it will change its status in your Seller Central to Unfulfillable. They take it away from your FBA inventory and send you a removal notification to lift it from the fulfillment center. You will have 30 days to file a removal order in that case. The item will be automatically disposed of if you don’t create a removal order.
How to Identify Unfulfillable Inventory?
If any of your items are marked unfulfillable in your Seller Central FBA inventory, you will see a number in the Unfulfillable column. This number shows how many units are unfulfillable. You can find out the reason by clicking on that number.
How to Deal With Unfulfillable Inventory
If you are a seller on Amazon and have inventory that has been marked as unsellable, there are several things you can do:
Request a removal order: You can request a removal order for unsellable inventory and have it shipped back to you. Once you receive the inventory, you can inspect it and decide what to do with it.
Sell the inventory elsewhere: If the inventory is still usable, you can try selling it on other marketplaces or through your own website or retail store.
Sell the inventory on Amazon as used: With FBA Grade and Resell program, you can relist unfulfillable returned inventory as used items. When you submit the inventory into the program, Amazon will assign them the appropriate condition (Used – Like New, Used – Very Good, Used – Good, or Used – Acceptable) and create a new listing.
Donate the inventory: If the inventory cannot be sold, consider donating it to a charity or nonprofit organization. With Amazon’s FBA Donations program, you can donate your inventory to US charities. In this program, Amazon partners with Good360 to donate inventory. This option allows for avoiding removal and disposal fees and potentially provide a tax deduction.
Work with liquidators: You can work with liquidation companies to sell off your unsellable inventory in bulk. This option may not give you the total value of your inventory, but it can help you recoup some of your losses. With Amazon’s FBA Liquidations program, sellers can file a liquidation request in Seller Central. Amazon will evaluate the average product’s selling price, and you can get around 5% to 10% of it from wholesale liquidators within 60 days.
Dispose of the inventory: If the inventory is damaged beyond repair, it may need to be disposed of properly. Amazon can dispose of inventory for you. To do so, you must create a Removal Order and select Return or Destroy/Dispose. The service comes with a fee.
Related: Amazon Inventory Management
Understanding the concept of Amazon's unfulfillable inventory is crucial for sellers who want to succeed on the platform. Unfulfillable inventory can arise due to various reasons, such as customer returns, defective or damaged products, expiration dates, and more. Knowing how to manage and address unsellable inventory is essential for maintaining a healthy business and protecting profits. By following the tips outlined in this post, sellers can minimize the impact of unsellable inventory on their business and work towards maintaining high-quality standards and positive customer experiences. With the right strategies in place, sellers can overcome the challenges of unfulfillable inventory and continue to grow and thrive on Amazon's platform.
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