Overview - Removals, Disposal & Liquidations
Amazon sellers may find it necessary to remove their inventory from FBA fulfillment centers. In such cases, Amazon offers various ways to remove inventory from FBA.
Here is an overview webinar video where Chelsea Cohen and Vanessa Hung from Carbon6 discuss the theory behind removing FBA inventory. Below the video is a breakdown of the pros and cons of all three types of inventory removals.
NOTE: There are some risks that sellers should be aware of when utilizing some of these removal methods. Information on such risks can be found at the bottom of this article under Reseller Risks.
THREE METHODS TO REMOVE INVENTORY
The three main methods are Removals, Disposals and Liquidations. We will cover the pros and cons of all three in this article, as well as linking to the source policies within Seller Central Support.
Pros
- You will stop incurring fees on removed units as soon as the order is placed, even if they are not physically removed for several weeks.
- Aged Inventory is assessed every 15th of the month. Placing your order by the 14th by 11:59pm PST will prevent those units from incurring those monthly aged fees.
Cons
- Amazon can cancel removals and you can then be retroactively charged for those units.
- Amazon won’t let you send in inventory for the next 90 days.
Recommendations
- Place removals before the 15th.
- Track removals using the Pending Removals column in SoStocked.
- Keep an eye out for any canceled or partially canceled removal orders.
- Keep at least 120 days of supply at FBA and only remove high impact units.
REMOVALS
Amazon removal orders can be set to automatic or you can create manual removal orders. With Removals, Amazon ships stock back to you, the seller to your designated address.
Pros
- Avoid excess storage fees.
- Sell on another channel.
- You can return ASIN to Amazon to sell after 90 days.
Cons
- Removal is often more expensive than the aged fees incurred.
- You need a physical address to ship to.
- You will incur labor costs in receiving, grading and reselling stock.
Recommendations
- Factor removal, labor, return shipping and additional fees when making your decision.
- For EU removals, cost varies widely between origin and destination points.
Resources Links
LIQUIDATION
Your stock is sold to a liquidator. With FBA Liquidations, Amazon finds a liquidator for you and handles everything. They take a percentage of the gross recovery value and charge a processing fee.
Pros
- You often see some cash back.
- You avoid excess storage fees.
- You don’t have to figure out what to do with the stock.
Cons
- A liquidator can legally sell your liquidated stock against you on your listing.
- Not all products are eligible.
- A liquidator won’t always be found.
- The associated costs may be higher than the recovery value, meaning you lose money.
- Amazon won’t let you send in new inventory for that ASIN for the next 90 days.
Recommendations
- If removing a portion of stock, keep 120 days of stock at FBA as a cushion until Amazon let’s you send stock back in after 90 days.
Resources Links
Update Automate Unfulfillable Settings in Seller Central to activate automated Liquidations.
DISPOSAL
Amazon handles getting rid of your FBA inventory.
Pros
- Avoid excess storage fees.
- You don’t have to store the inventory.
Cons
- Disposal is often more expensive than the aged fees incurred.
- Disposal in US is the same price.
- Amazon doesn’t always actually dispose of items. They may end up on your listing similar to when you liquidate. It is a lower risk than liquidation but still a risk.
Recommendations
- If product is not eligible for liquidation, disposal may be a good option.
- For EU, disposal may be less than removal due to the removal costs variation. See Removal section.
FBA Donations
There are several options for dealing with inventory that may be at FBA that a seller has elected not to sell. Removals, disposals and liquidation are usually the top options. For US sellers, donation has now become another opportunity.
The FBA Donations program allows US sellers using Fulfillment by Amazon (FBA) to donate unwanted inventory to select charities. Those who participate can then access donation certificates for tax purposes. These certificates detail the quantity and description of donated inventory.
Donation can be an option for items in several categories including returned items, refurbishment, grade and resell or liquidation.
The program supports Good360, a non-profit that distributes donated goods to charities, benefiting those in need. Amazon handles the logistics, but usual the disposal fees apply.
Sellers are automatically enrolled, but can opt out. Any returned product ineligible for resale may be automatically donated while ineligible products are recycled.
Pros
- Tax Benefits: Donation certificates may provide tax deductions, potentially making it financially advantageous. Certificates are generated annually and easily accessible on Seller Central.
- Social Impact: The program helps redistribute unused products to charitable causes, reducing waste and benefiting communities.
- Default Enrollment: Accounts are automatically enrolled.
Cons
- Decreased Profit Potential: If products can be resold elsewhere for a higher profit, FBA Donations may not make financial sense.
- Limited Eligibility: Not all products are eligible for donation.
- Disposal Fees: Usual disposal fees still apply, which can be a drawback for those looking to minimize costs.
- Opt-Out Required: You must manually opt out if they don't wish to participate, potentially leading to unintentional donations.
Recommendations
- Consider Donation: Evaluate the tax benefits of donating over liquidating unsold inventory, especially if the fair market value exceeds liquidation earnings.
- Verify Eligibility: Ensure your products meet the donation criteria and develop a backup plan for any ineligible products.
- Opt-Out Option: If not interested in the program, opt out through Seller Central settings.
- Consult Tax Advisor: Seek advice from a tax advisor to understand the specific tax incentives and benefits of the FBA Donations program.
Reseller Risks
Whenever your inventory is no longer in your control, you open yourself up to reseller risks. By this is meant that a reseller that gets his hands on your product has the opportunity to list that product against you.
Since he has your actual branded product, he is legally within his rights to sell your product on your listing on Amazon.
There are several ways you can expose yourself to such risks through forfeiture of product, including (1) liquidation, (2) donation, or (3) disposal.
Liquidation holds the highest risk of a reseller listing against you since a liquidator is in the business of turning a profit with the liquidated stock he has purchased. It is not, by any means, a guarantee that you will see liquidated product surface on your listing, but the risk is certainly there.
Donation also poses a risk though to a lesser degree. Donated product is usually given to a charity that can benefit from the goods you provide, such as donated toys going to children’s homes. However just because your products are donated, does not mean that they won’t end up on your listing later.
Disposal, interestingly enough, also holds risk as well, though it doesn’t seem that this would be the case. Just because Amazon claims to have disposed of the product does not always mean that they tossed it in the trash. Sellers have found, at times, that when they requested a disposal, the products actually found their way onto their listings anyway, so it can’t be relied upon that Amazon is disposing of your stock.
The potential consequences of these methods, while having varying degrees of risk, should all be weighed when making the right decision on how to handle your excess inventory. 

If you do not plan to continue to sell the product on Amazon, the risks may not bother you, but if you do plan to keep selling, you should be prepared for this.
Remember, a liquidator or other reseller likely got your stock at a significantly reduced rate so many be prepared to list against you at a greatly reduced price, further hindering your ability to profitably sell through what stock you still have.