Amazon’s low-inventory-level fee can quickly transform profitable products into costly liabilities. Understanding how to manage and avoid this fee is crucial for maintaining your margins in today’s competitive marketplace.
This guide gives you everything needed to navigate Amazon’s inventory fee system confidently. You’ll discover exactly how the fee works, when it applies, and five proven strategies to avoid paying it altogether.
As a 3PL with extensive Amazon fulfillment experience, we’ve identified the critical metrics that trigger these fees and developed practical solutions that work. Whether you’re new to FBA or a veteran seller, you’ll gain actionable insights to protect your profitability immediately.
What you’ll learn
The basics of the low-inventory-level fee–what it is, what metrics apply, what it means for sellers, and more.
Exemptions and affected products.
How to calculate, track, and avoid the fee.
TL;DR:
Key takeaways
Amazon will charge a low-inventory-level fee if your stock runs low relative to sales.
The fee is calculated weekly based on size tiers, shipping weight, and inventory level.
It’s triggered when your short- and long-term historical days of supply metrics fall below 28.
You can avoid the fee by balancing the current stock, sales, and lead times.
The basics of Amazon’s low-inventory-level fee
What is a low-inventory-level fee?
The FBA low-inventory-level fee is a surcharge Amazon applies when your stock is low in relation to sales. It’s charged when the customer’s order is shipped.
It was announced in December 2023 and took effect on April 1, 2024.
The goal is to optimize fulfillment and avoid running out of stock (i.e., stockout).
Stockouts hurt everyone—Amazon loses commission revenue, sellers lose sales and rankings, and customers can’t get what they want.
This fee incentivizes sellers to maintain adequate inventory levels.
NOTE: The Low inventory fee only applies to the FBA program. It doesn’t affect anyone selling through Amazon FBM. To learn more about the difference between the two programs, see our Amazon FBM vs. FBA comparison.
What inventory metrics apply?
Amazon uses historical days of supply to assess whether a product will incur the low-inventory fee.
Calculations and examples
Historical days of supply are calculated by dividing the average daily inventory units by the average daily shipped units.
Amazon calculates it over the long and short term: 90 and 30 days.
If both metrics are lower than 28 days, they’ll append a low-inventory-level fee.
NOTE: Historical days of supply are calculated once a week, usually on Sunday night or Monday. If your product is flagged for having low inventory, a fee will be added for each item shipped in the following week, even if you restock immediately.
Let’s explain it more clearly through examples.
The short-term historical days of supply apply to the last 30 days.
Example:
Your average stock over the last 30 days is 400 units.
You shipped an average of 8 units per day over the period.
Your short-term historical days of supply is 50 (400 divided by 8).
The long-term historical days of supply are calculated over 90 days.
Example:
Your average stock over the last 90 days is 500 units.
You shipped an average of 20 units per day over the period.
Your long-term historical days of supply is 25 (500 divided by 20).
Result: Amazon won’t charge the fee because one of the inventory metrics (long-term) is greater than 28.
NOTE: If you have ASINs with parent-child relationships, the fee will be calculated at the parent level. For example, if you’re selling blue, red, and white balloons and you have separate (child) ASINs for the colors, the days-of-supply metric will include all colors (parent ASIN).
Where can you find the historical days of supply in Seller Central?
You can find the historical days of supply on the FBA Inventory page of your Seller Central account.
It’s in a separate column titled “Historical days of supply (Parent ASIN).”
This column will display either the long- or short-term historical days of supply, whichever is greater.
To see the exact numbers, hover over the link that reads “details.”
A report will pop up to show:
Average daily units on hand across 30 and 90 days
Average daily shipped units for the same periods
Short and long-term historical days of supply
Implications of short- and long-term calculations (with examples)
Amazon’s two-fold approach to calculating the days-of-supply metric has two key benefits for sellers:
01
It allows sellers to avoid the add-on fees by restocking before their metrics fall below 28.
02
It dampens the risks of outlier scenarios, such as seasonal surges.
Let’s use two hypothetical Amazon sellers to explain the benefits.
Bob is selling blankets, and Ava is selling Christmas lights.
Bob’s scenario:
Bob notices his supply reserve is nearing the 28-day threshold.
He sends a fresh batch to the Amazon warehouse.
Bob’s average daily inventory increases while his average sales remain unchanged.
His short-term historical days of supply go up.
Bob avoids the low-inventory fee because the short-term metric applies.
NOTE: This solution assumes that Bob has stock on hand or that his lead times allow for timely restocking. If that’s not the case, he might restock by buying locally (if it makes financial sense). If none of that works, Bob will be charged the low-inventory-level fee.
Ava’s scenario is more nuanced.
She sees a seasonal demand spike in December, but her sales are low before and after that.
Around Christmas, Ava’s short-term historical days of supply will plummet because of the high average sales in the last 30 days.
Her long-term numbers will be impacted less because the sales are spread across 90 days.
Ava avoids the low-inventory-level fee because the long-term metric applies.
How does the fee affect Amazon sellers?
The fee can impact the profit margins of sellers who don’t strike the correct balance between inventory and sales.
It may also:
Tie up more capital.
Make it more challenging for small sellers to stay profitable.
Complicate the cash flow because sellers have to hold extra units.
Change the way sellers plan and order stock. Ordering smaller batches more frequently might be a way to optimize inventory, but it can mean higher prices per unit.
BOTTOM LINE: It’s about finding an inventory equilibrium
If you don’t maintain sufficient stock, you might be charged the new low inventory fee.
If you have over 90 days of inventory based on forecast demand, Amazon will consider it excess.
These policies shift some of the inventory-management burden from Amazon to sellers.
Exemptions and how to qualify for them
Some products and sellers are exempt from the low inventory fee.
- New FBA sellers for 365 days.
This grace period allows new sellers to find their footing, get familiar with the reporting interface, and overcome other initial challenges of starting on Amazon. - New parent-level products for 180 days since the FBA launch.
This exemption allows sellers in the FBA New Selection program to gather data, predict demand, and plan inventory. For example, if you’re selling airbeds and want to start selling pumps under a separate parent ASIN, the new product will be exempt for about six months. - SKUs that are auto-replenished through AWD (at least 70% of the inventory over the last 90 days).
If you’re using AWD to feed your FBA inventory, any issues would be Amazon’s “mistake,” so it doesn’t make sense to charge you for it.
On the flipside, AWD charges other fees, such as storage and transfer. - Oversized and heavy products.
It sounds counterintuitive, but oversized items like furniture are exempt. The likely reasons are slower turnaround times and higher storage fees.
Based on seller feedback, Amazon added a few exemptions in May 2024.
These include:
Products with fewer than 20 sales in the previous seven days. This helps sellers of low-volume products with unpredictable demand.
Fees triggered by low inventory that resulted from delays in Amazon or Amazon-managed services.
Products included in the Prime-exclusive Lightning Deals and Best Deals. This exemption was limited to the four weeks following Prime Day 2024. In our opinion, it may become a regular thing.
Which products are impacted by the Amazon low inventory fee?
Some products will be more affected because of the supply-sales dynamics and pricing.
The most vulnerable product groups are:
- Products with unpredictable demand.
If you can’t predict the sales, it’s harder to optimize inventory. - Products with long or unpredictable lead times.
If you can’t be sure how long it takes to make and ship the product, your risk of triggering the fee increases. - Inexpensive products that rely on sales volume to profit.
The fees are flat and not a percentage of the price. A $1 fee might be 30% of the margin if you sell potato peelers. If you’re selling high-end jewelry, the fee might be a non-factor. - Products that rely on social networks for advertising.
The patterns can be erratic if your sales mainly come from social media like TikTok or Instagram. When a product goes viral, it’s hard to maintain healthy stock without overcommitting capital.
PRO TIP: Predictability in the supply chain and in sales lowers the risk of add-on fees. If you’re selling on Amazon, consider this when choosing products, manufacturers, and shippers.
How is the fee applied?
The low inventory fee is applied automatically to each unit shipped based on product size tier (small or large standard), shipping weight, and inventory level.
It’s billed as part of your FBA fees.
We’ll get into the specifics of calculating the fee in the following section.
Calculating, tracking, and avoiding low-inventory-level fees
To understand what the new fees mean for your business, you must learn to:
Calculate the potential fees for each product you’re selling.
Track the risk through short- and long-term inventory levels (days of supply).
Track the charges on the product level.
Devise effective strategies for avoiding the fee.
Calculating the fees
Here’s how to calculate the potential fee for your products and inventory level:
01
Determine the size tier for your product via Amazon’s product size tier charts.
02
Find the current “historical days of supply” metric on your FBA inventory page.
03
Find the specific rate in the table below.
| Size Tier | Shipping Weight | Up to 13 Days |
14 to 20 Days |
21 to 27 Days |
|---|---|---|---|---|
| Small standard | Up to 16 oz | $0.89 | $0.63 | $0.32 |
| Large standard | Up to 3 lbs | $0.97 | $0.70 | $0.36 |
| Large standard | 3-20 lbs | $1.11 | $0.87 | $0.47 |
NOTE: The rates table is based on the latest available data at the time of publishing. You can see the exact current amounts on Amazon’s Seller Central.
Amazon’s fee-application policies also mean that:
If you have no stock, you won’t be charged a low inventory fee because you’ll have no sales.
It might make sense to pause paid traffic to the affected listings. Since the fee is applied when shipping a product, it can turn profitable clicks into losses if your profit margins are thin.
The fee applies to each seller’s inventory independently. Amazon evaluates your stock levels separately from other sellers offering the same product (ASIN).
Tracking the potential and actual fees
There are a few ways to check for low inventory fees from different “angles.”
You can:
01
See an estimate of potential fees for your products (helps with pricing and financial planning).
02
Check if any fees will be charged during the week (allows time to restock or adjust marketing).
03
Check if the fees have been charged for a specific product (identifies which products need inventory optimization).
04
Check if a specific order incurred a fee.
Log in to your Seller Central account and follow the steps below.
To see the estimated fee for an SKU:
01
Go to Inventory > Manage All Inventory.
02
Find the column named “low-inventory-level fee” and click the dropdown sign.
03
Tick the box that says “Fees will be applied”.
04
Click the fee link that appears in the “Estimated fee per unit sold” column.
03
When a pop-up appears, scroll to the bottom to see the estimated fee per unit sold.
To check if a fee will be charged in the upcoming week:
01
Go to Inventory > FBA Inventory.
02
Locate the “low-inventory-level fee” column.
03
Click the heading twice to sort by the lowest days of supply.
04
Check for upcoming fees.
05
Click on the “details” next to the historical days of supply.
06
A pop-up table will open.
07
Examine the two metrics (30- and 90-day). This will help you pinpoint the problem and devise a restocking plan.
To see the fees through the SKU Economics report:
01
Go to Inventory > Manage All Inventory.
02
In the product details column, click the SKU link.
03
SKU Economics report will open.
04
From the “Data Shown” dropdown, choose the date range.
05
The report on the right will show a breakdown of your FBA fees, including base fulfillment and low inventory charges.
06
SKU Economics report will open.
Since the fees depend on the current stock level, they can vary on order level, even for the same SKU number.
To check the fee on the order level, follow these steps:
01
Go to Payments > Translation View.
02
Enter the order ID.
03
Click Search.
04
Enter the Transaction Details page by clicking quicklink in Total.
05
Click “fees quicklink” under FBA Pick & Pack Fee.
06
If the fee was charged, you’ll see it under Fee Explainer – FBA fulfillment fee in the Calculation Tab.
Avoiding the low inventory fee
Avoiding the low inventory fee is about optimizing your inventory in relation to sales and lead times.
That’s easier said than done, and anyone who’s ever sold through Amazon FBA knows it.
We’ve compiled a few pro tips to help you stay in the green:
Develop a clear inventory strategy
01
Gather the data. Make a plan. Stick to it.
Here’s an example:
If you’re selling 10 units a day on average, aim to have 400-600 units in stock.
If you’re ordering products in batches of 300 and the lead time is 20 days, put in a new order when the inventory hits 550.
In the 20 days it takes to replenish, you’ll sell ~200 units.
There will still be ~350 units in stock when the new batch gets to the Amazon warehouse.
Both your short- and long-term days of supply will be above the threshold.
Even if the new order is late and the short-term inventory reserve falls below 28 days, the long-term inventory will be above it for a good while.
This plan gives you a healthy buffer between low-level and excessive stock.
Keep reserve stock on hand
02
If you’re shipping from China, you might:
Ask the manufacturer to ship 100 units to your address or a storage facility instead of the Amazon warehouse.
Monitor your inventory level weekly.
Replenish with the reserve stock when inventory gets low.
NOTE: This strategy is a fail-safe patch and can’t replace long-term planning. It’s limited because it assumes you have enough space to store the extra products and the capital to cover the added costs.
Use Amazon’s services for auto-replenishment
03
Using AWD to auto-replenish is the simplest way to avoid the fee altogether.
It’s probably the most expensive, too.
For many sellers, the added cost of AWD will spread the profit margins too thin.
For some sellers, it will erase them.
Check your inventory health regularly and replenish as needed
04
Make it a habit to check inventory metrics in your Seller Central regularly.
Look up the following at least twice a week:
Available and reserved units
Sales summary
Inbound quantity
Historical days of supply
This will allow you to react to immediate or potential issues, including stockouts, overstocks, or surcharges.
Experiment with pricing and promotions
05
Experiment with lowering the sales speed for a product with low inventory.
You might:
Limit ad spend
Limit social media posts
Increase the price (conservatively, more on that below)
WARNING: Be careful when increasing prices on Amazon because it can hurt your listing and your BSR, especially when competing for the Buy Box. Make it the last resort and do it conservatively–no more than 5 to 10% weekly.
Opt for Fulfilled by Merchant (FBM)
06
The low-inventory fee doesn’t apply to Fulfilled by Merchant (FBM) sellers who manage their own inventory and shipping. Granted, you’ll need to run the numbers to determine whether switching to FBM is feasible given your unique situation. But if low-inventory fees are battering your bottom line—or keeping you up at night—FBM will help you avoid the fee altogether.
If you opt for FBM, consider partnering with a third-party logistics (3PL) provider for your FBM operations, as they can streamline your logistics while offering numerous advantages. Some 3PLs, such as Red Stag Fulfillment, offer FBA prep, Seller Fulfilled Prime, and FBM fulfillment solutions.
Staying profitable in a changing marketplace
Take control of your Amazon inventory strategy
Amazon’s low-inventory fee is more than just another expense—it’s a fundamental shift in how sellers must approach inventory management. The days of just-in-time ordering or running lean on popular products are becoming increasingly costly.
Smart sellers will turn this challenge into opportunity by developing a comprehensive inventory strategy that balances:
- Precise inventory forecasting
- Strategic restocking schedules
- Calculated reserve stock levels
- Careful monitoring of both 30-day and 90-day metrics
This approach doesn’t just help you avoid fees—it transforms your entire fulfillment operation into a competitive advantage.
For many sellers, partnering with a 3PL like Red Stag Fulfillment provides the expertise and infrastructure needed to execute this strategy flawlessly. Our Amazon-compatible fulfillment processes, transparent custom pricing, and industry-leading guarantees ensure you maintain control while minimizing costs.
Ready to protect your margins and reclaim control of your Amazon business? Let’s talk about building a fulfillment strategy that works for you, not against you.
