As we move into 2025, managing inventory on Amazon is no longer just a backend operation it’s a competitive edge. Between rising FBA fees, new low-inventory-level penalties, stricter IPI (Inventory Performance Index) thresholds, and more aggressive cost structures, successful sellers need to be more strategic than ever. Whether you’re just launching your first SKU or managing a catalog of thousands, efficient inventory management is essential to profitability and scale.

Why Inventory Management is Mission-Critical in 2025

In previous years, running out of stock meant missing sales. Holding excess inventory meant paying a little more in storage fees. But in 2025, the stakes are higher. With Amazon’s new fee structures penalizing both understocking and overstocking, it’s a balancing act that demands precision.

• Low inventory? You get hit with monthly low-inventory-level fees.
• Excess stock? You pay aged inventory surcharges.
• IPI score drops? You lose restock capacity, and sales slow down.

Smarter inventory management helps you reduce unnecessary fees, improve cash flow, stay Buy Box eligible, maintain healthy margins, and prepare your business for sustainable growth—even in Amazon’s increasingly strict fulfillment environment.

Understanding Amazon’s 2025 Inventory Fees

Before diving into best practices and optimization strategies, it’s crucial to understand the different types of fees Amazon applies related to inventory management. These fees directly affect your bottom line.

1. Monthly Storage Fees

Amazon charges a monthly fee based on how much cubic space your inventory occupies in its fulfillment centers. These rates vary depending on the size category (standard-size vs. oversized) and time of year:

• Standard Season (January–September): Lower base rate
• Peak Season (October–December): Higher rates due to high demand and limited space

Products with bulky packaging will increase storage costs disproportionately. This is why packaging optimization matters as much as the product itself.

2. Aged Inventory Surcharge

Amazon doesn’t want to store your inventory indefinitely. Starting at 181 days, any unit that hasn’t sold becomes subject to an aged inventory surcharge, formerly known as the long-term storage fee.

• These surcharges increase over time the longer your inventory sits.
• The fee is applied monthly and compounds quickly if you’re not moving product.

Maintaining good sell-through rates and cycling out slow-moving items is the only way to avoid these surcharges.

3. Low-Inventory-Level Fee

This newer fee punishes sellers for maintaining too little inventory. Amazon introduced it to encourage sellers to avoid stockouts that disrupt customer experience.

• Applies only to standard-size products
• Calculated monthly using your 30-day rolling inventory coverage
• Kicks in when your coverage drops below Amazon’s target days of supply (set by product category)

This policy reinforces why sellers must strike a balance between too much and too little.

4. Removal & Disposal Fees

If you need to pull inventory from FBA—whether it’s dead stock or returned merchandise—Amazon will charge per unit. These fees differ based on size and weight.

Frequent removals due to poor forecasting can result in thousands of dollars in fees. Regular performance audits are key to avoiding this cost sink.

What is the Inventory Performance Index (IPI)?

The Inventory Performance Index is Amazon’s internal score (range: 0–1000) for FBA sellers. It gauges how effectively you’re managing inventory. If your IPI drops too low, Amazon imposes storage limits or fees.

Benefits of a High IPI:

• Priority access to FBA storage
• Higher restock limits
• Fewer inventory-based penalties
• Better shipping coverage and customer experience

How to Check Your IPI Score:

1. Log in to Amazon Seller Central
2. Go to Performance > Inventory Dashboard
3. Your IPI score appears at the top

Click the dropdown to see your performance across marketplaces.

Key Metrics Affecting Your IPI:

• Excess Inventory: Too much stock of slow-moving SKUs
• Sell-Through Rate: Ratio of units sold over units stored
• Stranded Inventory: Items in FBA that aren’t listed or available for sale
• In-Stock Rate: How well you keep top-sellers stocked

Each of these metrics is clearly displayed in your IPI Dashboard, along with tips for improvement.

The Cost of Mismanaging Inventory

Overstocked Inventory

This happens when you send more units to Amazon than your sales velocity can handle. Excess inventory:

• Racks up storage fees
• Triggers aged inventory surcharges
• Ties up capital and reduces profitability

Best Practices:

• Use Amazon’s Excess Inventory reports
• Set max inventory thresholds based on recent velocity
• Consider bundling or discounting slow movers

Low Inventory

With the low-inventory-level fee in place, understocking hurts more than just your sales. It impacts your IPI score, reduces Buy Box eligibility, and results in additional penalties.

Action Steps:

• Build buffer stock for top-selling SKUs
• Monitor restock recommendations in Seller Central
• Set stock-level alerts via software like SoStocked

Out-of-Stock Listings

Stockouts cause immediate sales drops and long-term damage to organic ranking. Recovery often requires aggressive PPC, deep discounts, or both.

How to Avoid It:

• Track Days of Supply for each SKU
• Factor in lead time + check-in delay + shipping time
• Consider dual fulfillment (FBA + FBM) for backup

Stranded Inventory

Even if you have inventory physically at FBA, listing issues can cause it to become stranded—which means it’s unsellable, but still incurring fees.

Prevention Tips:

• Check the Stranded Inventory report weekly
• Address issues like pricing errors, brand approval, or image problems promptly
• Use Fix Listing buttons directly in Seller Central

Low Sell-Through Rate

Slow sales hurt every part of your business. It kills your IPI, inflates costs, and limits your ability to scale.

Pro Tips:

• Promote through deals or coupons
• Improve listing optimization (images, A+ Content, titles)
• Pause restocking until velocity improves

6 Inventory Management Strategies to Dominate in 2025

1. Forecast Demand Intelligently

Analyze sales trends, historical seasonality, and upcoming promotions to predict demand. Revisit forecasts monthly.

Tools like Helium 10, SoStocked, and Forecastly can automate this with AI and real-time data.

2. Factor in End-to-End Lead Times

Account for every delay:

• Supplier production time
• Freight forwarding and customs
• Amazon warehouse check-in

Build in a 5-10 day buffer for each stage to minimize risk.

3. Set Reorder Points for Every SKU

Determine your reorder point by calculating:

Daily Unit Sales x Total Lead Time (in days) + Safety Stock

Automate alerts or reorders once this threshold is hit.

4. Review and Reduce Aged Inventory Monthly

Review your aged inventory report. If a SKU is over 90 days old and has low velocity:

• Discount it
• Bundle it
• Remove or liquidate it

Never let aged inventory pile up—it’s expensive and drags down your score.

5. Use the IPI Dashboard as Your Weekly Playbook

Amazon provides personalized suggestions for excess inventory, restocking, and fixing listing issues. Use them.

Create a weekly SOP (Standard Operating Procedure) to:

• Check IPI Score
• Clear stranded inventory
• Replenish in-stock alerts

6. Leverage Automation Tools

Manual inventory tracking works only to a point. As you scale, automation is essential.

Use tools like:

• SoStocked for FBA forecasting
• InventoryLab for cost analysis
• Skubana for multichannel tracking
• Linnworks for enterprise-level sync

Best Inventory Tools for Amazon Sellers in 2025

Here’s a breakdown of some of the best tools you can use to manage your inventory effectively:

How Trivium Helps Amazon Sellers Win with Inventory

Inventory management is both a science and an art. Trivium Group provides full-service Amazon account management, including:

• Customized restock strategies
• Demand forecasting and supply planning
• IPI score improvement plans
• Listing optimization to boost sell-through

We help sellers prevent fees, stay in stock, avoid waste, and unlock storage limits for real scale.

If you’re struggling with stockouts, excess inventory, or IPI penalties, our team can build a tailored system that gets your business back on track.

Final Thoughts

In 2025, Amazon sellers must evolve from reactive restocking to proactive inventory control. Poor inventory management doesn’t just cost you money it can cost you momentum, ranking, and customer trust.

By understanding Amazon’s fee structure, monitoring your IPI, forecasting accurately, and leveraging automation, you can maintain the inventory equilibrium that leads to long-term success.