SoStocked Best Practices

Amazon Inventory Management Best Practices

At SoStocked, we believe operational excellence happens when Inventory, Marketing, and Finance work in lockstep. Inventory is the fuel that keeps the car running, while Marketing is the driver that determines where the business goes. Both must work together — with Finance ensuring profitability — to avoid costly fees, maximize sales, and maintain rankings.

Below are the core best practices, why they matter, and how SoStocked enables them.

1. Maintain 35–90 Days of Supply at Amazon FBA

Best Practice: Keep 35–90 days of supply in FBA. If your supply chain is very fast, you may lower the max to 75 days. Avoid dropping below 35 days.

Why It Matters:

Reduces risk of stock-outs (which hurt sales and rankings).
Prevents excess inventory that triggers high storage or aged inventory fees.
Keeps you above Amazon’s Low Inventory Level (LIL) fee thresholds.

SoStocked Support:

Min/Max Restocking Tool lets you set custom minimum and maximum days of supply.
Restock Alerts notify you when you approach restocks.

2. Manage Low Inventory Level (LIL) Fees

Best Practice: Keep stock above Amazon’s LIL threshold (28 days of supply). If you approach this, consider a gradual price increase to slow sales and offset fees. Marketing should make these decisions with advice from the Inventory team.

Why It Matters:

Falling below 28 days triggers extra fulfillment fees per unit, called Low Inventory Level fees.
Both 30-day and 90-day supply averages must be under the threshold for fees to apply.
Exception: products selling fewer than 20 units in 7 days are exempt from the fee.
Dropping too low impacts geo-ranking (Amazon pushes your product down in regions with low stock, hurting visibility and ads).

SoStocked Support:

Low Inventory widgets are shown in the Command Center.
Low Inventory Fee Dashboard shows ASINs at risk or already incurring LIL fees.
Exempt products are automatically filtered so you focus only on what matters.

3. Understand & Plan for Geo-Ranking

Best Practice: Maintain good stock levels to allow Amazon to provide broad stock distribution across the country to support Prime’s 2-day guarantee.

Why It Matters:

Low stock in certain regions → Amazon pushes listings down (geo-ranking).
Impacts both organic ranking and ad placements regionally.
Directly tied to LIL fees and stock dispersion.

SoStocked Support:

Days Until Stockout shows your stock levels allowing you enough stock to avoid negative geo-ranking results.
Proper minimums set in min/max restocking and buffer stock.

4. Use Inventory Tiering for Prioritization

Best Practice: Classify products into inventory priority tiers. Example:

Tier 1 (Cannot Stock Out) – Hero products, Subscribe & Save SKUs.
Tier 2 (May Stock Out) – Medium-priority products.
Tier 3 (Can Stock Out) – Low-priority SKUs.

Why It Matters:

Helps navigate capacity limits.
Subscribe & Save products are especially sensitive — stocking out here damages rankings and program eligibility.

SoStocked Support:

Capacity Manager feature in SoStocked adjusts forecast based on capacity limits.
Use Tags & customize Min/Max settings to apply supply strategies based on tiers.

5. Storage & Aged Inventory Fees

Best Practice: Track and plan around FBA storage and aged inventory.

Why It Matters:

Overstocking leads to aged inventory and high storage fees.
Running lean avoids fees but risks stock-outs — balance is key.
Amazon charges aged inventory fees to products sitting too long at FBA starting at 6 months and escalating to $5.40 / cu ft at 9 months and continuing to climb to $6.90 / cu ft by 12 months.

SoStocked Support:

Overstock Fees Dashboard tracks costs and risks.

6. Coordinate Inventory & Marketing Plans

Best Practice: Align marketing promotions with inventory availability.

Why It Matters:

Running promos on products at risk of stocking out worsens stockouts and affects profitability by expending ad spend on products that are running out of stock.
Overstocked products need sell-through campaigns to avoid fees.
Coordination between marketing and inventory ensures balance – Inventory can ensure enough stock on hand to fulfill the demand Marketing is creating.

SoStocked Support:

Stockout Risk Report guides Marketing on which promos to pause.
Overstock Reports informs on which ASINs need sell-through campaigns.
Bulk Forecast Settings upload allows inclusion of marketing plans into inventory plans.

7. Placement Fee Avoidance & Shipment Optimization

Best Practice: Avoid FBA Inbound Placement fees by shipping using Amazon’s Optimized placement method whenever possible to avoid costly per-unit fees.

Why It Matters:

Inbound Placement fees can add up quickly and eat into profit margins.
Using Amazon Optimized allows you to avoid these fees by shipping to 5 or more Fulfillment Centers (FCs) rather than the Minimal Split method which allows for just 1-2 FCs. Minimal Split shipments incur per-unit fees.
If you don’t meet Amazon’s 5-box minimum rule for every SKU in a shipment, your shipment is disqualified for Optimized Placement.
If the 5-box rule is not met, Amazon assigns Minimal Split (1–2 FCs), but then charges an extra per-unit placement fee across the entire shipment.
Optimized Placement also results in faster check-in times, since you are essentially doing the distribution for Amazon upfront whereas sending to 1-2 FCs means Amazon has to distribute stock after arrival.

How to Apply:

Ensure each SKU has at least 5 identical cartons in any FBA shipment.
If not, split shipments: send qualifying 5-box rule SKUs in an Optimized Placement shipment, and the rest in a Minimal Split shipment.
Use tags or filters to separate “5-box minimum” SKUs from lower-velocity SKUs.

SoStocked Support:

Minimum Transfer Quantity (MTQ) setting for Amazon-Optimized to enforce 5-box minimums for selected SKU
Use tags to flag SKUs for optimized vs. minimal-split shipments.

8. Optimize Shipping & Operations

Best Practice: Use the most cost-effective shipping methods and maintain strong operational records.

Why It Matters:

FTL/LTL = cheapest, SPD = fastest check in time, quite expensive (use in a pinch).
Live Unload service can speed FTL/LTL deliveries as it checks in at dock upon arrival but costs more and is not always accepted.
Keeping trailer numbers on record helps resolve missing shipment disputes faster than using FBA Shipment IDs.

SoStocked Support:

Tags & Custom Dashboards can segment shipments by shipping method.
Use Notes fields in Purchase Orders and Work Orders to store trailer numbers and other operational details.

9. Factor Profitability into Replenishment Decisions

Best Practice: Only restock profitable products — or improve costs to restore profitability.

Why It Matters:

Fee avoidance is part of profit strategy.
Products slipping below profitability should be flagged for review (costs, ads, fees).

SoStocked Support:

BETA: ProfitFlow Forecasting highlights profitable vs. unprofitable products. This pinpoints profit leaks (landed cost, ad spend, fees) for improvement.
Overstock Fees Dashboard exposes storage and aged fee risks to prevent fees before they hit

10. Leverage Reporting & Accuracy Tools

Best Practice: Continually refine forecasting and visibility with advanced reporting.

Why It Matters:

Forecast accuracy improves cash flow, reduces waste, and keeps operations lean.

SoStocked Support:

Forecasted vs. Actual Report improves accuracy with variance %.
Multi-ASIN Search with Comma Delimiter speeds up bulk analysis.
Tags & Dashboards organize data for flexible reporting.

Summary

Best-in-class Amazon inventory management balances in-stock rates, fee avoidance, profitability, and operational efficiency.

SoStocked was built to make this alignment possible with customizable tools that combine forecasting, replenishment, profitability, and reporting — ensuring Amazon sellers can operate at true best-in-class levels.

Additional information can be found in our help desk including several other Strategy guides.