How to avoid dead stock in Amazon wholesale

A product that does not sell costs you twice: the cash you paid for it is stuck, and Amazon charges you to store it. Dead stock rarely comes from one bad guess. It comes from warning signs that were visible before the order. Here is how to avoid dead stock in Amazon wholesale, and what to do with stock that has already stopped moving.

Why slow stock is so expensive

FBA storage is charged every month for every unit, it costs more in the fourth quarter, and stock that has sat for about six months starts to pay an extra aged inventory surcharge. Meanwhile the money tied up in it cannot buy products that would sell. A product with a 40 percent ROI that takes a year to sell earns less than one with 25 percent that sells in a month, again and again.

The warning signs before you buy

• Too many months of stock: divide the order quantity by your expected sales per month. More than about three months for a first order is a risk; more than six is a red flag.
• Low demand: a listing that sells only a few units a month, split between several sellers, leaves you very little.
• A crowded listing: every new seller takes a share of the same sales, so your share shrinks after you buy.
• An unstable price: a price that swings or falls makes buyers wait and sellers cut. See how to avoid price wars.
• Amazon on the listing: when Amazon holds the Buy Box, your units may barely sell.
• The wrong season: buying a seasonal product just after its peak leaves you holding it for most of a year. Check the sales history on a Keepa chart.

One sign is a reason to look closer. Two or more together are a reason to buy much less, or not at all.

When the MOQ is the problem

Often the product is fine but the supplier's minimum order is not. If the MOQ would take more than three months to sell, ask for a smaller first order, a mixed case across several products, or a split delivery. A good supplier would rather sell you less now and more later. If they will not move, the product is not a buy for you, however good the ROI looks. See how many units to order first.

Buy small, reorder on evidence

Treat every first order as a test. Buy enough to cover the lead time to a reorder and no more. When the product sells as expected, reorder; when it does not, you have lost little. Check your inventory every week and act on stock that has stopped moving early, while it can still be sold at a profit.

What to do with stock that will not sell

1. Check why: a lost Buy Box, a new seller at a lower price or a broken listing can often be fixed.
2. Lower the price step by step, toward your break-even price. Selling at a small profit beats paying storage on stock that sits. Our break-even price calculator shows how low you can go.
3. Run a promotion or a coupon to bring the sales rank back up.
4. Liquidate or remove it: Amazon can liquidate unsold FBA stock, or return it to you to sell elsewhere. Do it before the aged inventory surcharge eats what is left.

See the risk on every product

Wholesale Analyzer gives every product in a scan a dead stock risk of Low, Medium or High. It weighs the months it would take to sell the order, sales below your minimum, more sellers than your maximum, an unstable price, Amazon on the listing and an off-peak season. Your settings set the longest time you want to hold stock, every product shows how many months its MOQ would take to sell, and the order quantity is sized for the months a seasonal product actually sells in.