Amazon unfulfillable inventory refers to products that, for various reasons, cannot be sold to customers on the platform. These items are flagged as unsellable by Amazon and are typically removed from your inventory. 

Understanding why items become unfulfillable and how to manage them is crucial for maintaining a successful Amazon business.

6 Reasons Why Your Items Are Unfulfillable

Defective Inventory

Defective inventory encompasses items with design, manufacturing, or marketing defects that make them unsuitable for sale. These defects can range from structural flaws to incorrect labeling. 

Design defects occur when the product design itself is faulty, such as containing choking hazards or breaking upon minor impact.

Manufacturing defects are specific to certain batches or units and may result from contamination or human error during production. 

Marketing or labeling defects occur when products lack necessary warning labels or instructions, potentially causing injury or harm.

Customer-Damaged Inventory

Customer-damaged inventory occurs when a buyer returns an item in a damaged or opened condition, rendering it unsellable as new. This damage may occur during shipping or handling by the customer. 

While Amazon does not accept responsibility or reimburse sellers for such items, sellers can request a removal order to have the damaged unit returned for inspection.

Warehouse-Damaged Inventory

Warehouse-damaged inventory refers to items damaged while stored in Amazon’s fulfillment centers due to mishandling by warehouse staff. Damage may result from impacts, water exposure, or extreme temperatures. 

Sellers can file a Fulfillment Center Operations Claim to seek reimbursement for warehouse-damaged items, provided they meet certain eligibility criteria.

Carrier-Damaged Inventory

Carrier-damaged inventory occurs when items sustain damage during shipping to or from Amazon’s fulfillment centers. Responsibility for mishandling during transit lies with the carrier, and Amazon will reimburse sellers per their Inventory Reimbursement Policy. 

Sellers can manually file a reimbursement claim if reimbursement has not yet been received.

Distributor-Damaged Inventory

Distributor-damaged inventory occurs when products arrive at Amazon’s fulfillment centers already damaged due to mishandling by the distributor. This damage may result from improper packaging or storage during transit. 

As Amazon and its partner carriers are not responsible for distributor-damaged items, sellers must seek reimbursement from the distributor or their insurance company.

Expired Inventory

Expired inventory refers to items with expiration dates approaching or past their expiry date. This is common for perishable goods such as food or cosmetics. Amazon may flag such items as unfulfillable to ensure compliance with expiration guidelines. 

Sellers should keep track of expiration dates and set up reminders to sell products before they expire.

How to Deal With Unfulfillable Inventory

Managing unfulfillable inventory effectively requires proactive steps:

Request a Removal Order

Take action promptly when notified of unfulfillable inventory by requesting a removal order. This allows you to inspect the items and decide on the next course of action.

Sell the Inventory Elsewhere

If the inventory is still usable, explore alternative sales channels such as other e-commerce platforms or retail stores.

Work with Liquidators 

Liquidation companies can help sell off unfulfillable inventory in bulk, albeit at a reduced price. This can be a viable option for clearing out excess stock and minimizing losses.

Dispose of the Inventory

For items that are damaged beyond repair or have expired, disposal may be the most appropriate option. Amazon offers disposal services, but be mindful of associated fees.

Install a Good Inventory Tracking System

Implementing an inventory tracking system is essential for monitoring product movement throughout the supply chain. With an inventory tracker in place, sellers can quickly identify discrepancies, such as missing units or items marked as damaged by carriers or warehouses. 

This allows for prompt action, such as requesting reimbursement from Amazon or opening a case with the carrier in the event of missing shipments.

Regularly Check Your Inventory Adjustment Report for Status Changes

Maintaining vigilance over inventory adjustments is crucial for identifying and addressing discrepancies before they escalate. Sellers should regularly review Amazon’s disposal order emails and Inventory Adjustment Reports within their Seller Account. 

Notifications such as “Required removals: First notification” and “Automated unfulfillable removal notification” should be monitored closely to ensure timely action. 

Additionally, setting up automatic removals for damaged or expired inventory helps keep FBA inventory lists clean and accurate.

Work With a 3PL Company

Partnering with a reputable third-party logistics (3PL) provider can streamline warehousing and fulfillment processes, particularly for sellers lacking in-house resources. 

3PL companies offer professional warehousing and pack-and-ship services, minimizing the risk of unfulfillable inventory due to damage or theft. 

Transparent reporting and technology provided by 3PLs enable sellers to maintain control over inventory levels and mitigate inventory shrinkage effectively.