For Amazon FBA Sellers

Amazon FBA Inventory Glossary

Math, formulas, and real examples.

A working reference for the inventory vocabulary FBA sellers actually run their businesses on. Every term has the formula, a worked example with real seller numbers, and the FBA-specific context that generic ecommerce glossaries miss. We show the math behind every recommendation.

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3PL Prep Fee - 3PL prep fee runs $1-$3 per unit for FBA sellers. See what each prep service costs and how to decide between self-prep and a third-party prep center. More

A+ Content - A+ Content replaces your Amazon text description with rich media modules. Free for Brand Registry sellers. See the conversion lift math for a $3M catalog. More
ABC Analysis - ABC analysis classifies your FBA inventory into A, B, and C tiers by revenue contribution to optimize reorder frequency and safety stock levels by tier. More
Adaptive Smoothing - Adaptive smoothing auto-tunes alpha for FBA forecasts as demand patterns shift. Tracking signal formula, worked example, and pitfalls to avoid. More
Aged Inventory Surcharge - Aged inventory surcharge hits FBA units past 180 days. Rates: $0.50 at 181 days, $5.45 at 271 days, $6.90 past 365. See the full tier breakdown. More
Amazon Global Logistics (AGL) - Amazon Global Logistics ships from Asian factories direct to FBA. See current AGL rates, lead times, and where it beats a third-party freight forwarder. More
Amazon Warehousing and Distribution (AWD) - Amazon Warehousing and Distribution (AWD) is bulk storage that sits between you and FBA. See pricing, break-even math, and a worked example splitting a 4,800-unit order. More
ASIN - An ASIN is Amazon's unique 10-character product identifier. Learn how ASINs work, how they differ from FNSKUs, and why ASIN-level tracking matters for FBA sellers. More
AWD Allocation vs FBA Allocation - AWD allocation holds bulk inventory cheap; FBA allocation enables Prime fulfillment. See the cost math and how FBA sellers split between the two. More

Backorder Cost vs Lost Sale Cost - Backorder cost vs lost sale cost determines your real FBA stockout impact. See the components, the math, and why FBA economics push toward higher safety stock. More
Bill of Materials - A bill of materials (BOM) lists every component needed to assemble one FBA unit. See the formula, a real bundle example, and common BOM mistakes sellers make. More
Brand Registry - Amazon Brand Registry is free but requires a trademark. See what it unlocks, the ROI math for a $2.5M seller, and the 2026 UPC requirement change. More

Carrying Cost / Holding Cost - Carrying cost for FBA goes beyond the textbook 20-25%. Learn the real components: storage fees, aged surcharges, capital cost, and how to calculate yours. More
Cash Conversion Cycle - FBA sellers face 90-120 day cash conversion cycles. Learn how to calculate your CCC from PO to Amazon disbursement and shorten the gap. More
Contribution Margin - Contribution margin Amazon FBA tells you the true per-unit profit after all variable costs. See the formula and a worked example on a $34.95 private-label SKU. More
Cost of Goods Sold (COGS) for FBA - COGS for FBA includes manufacturing, freight, duties, labeling, and prep. See a full breakdown and worked example for a $34 private-label product. More
Cycle Service Level vs Fill Rate Service Level - Cycle service level vs fill rate measures stockouts two different ways. See the formulas, the FBA economics, and which target to set on hero SKUs. More

Days of Supply - Days of supply is on-hand FBA units divided by average daily sales. See the formula, a worked example for a $2.4M seller, and what good DOS looks like. More
Days Sales of Inventory (DSI) - Days sales of inventory (DSI) measures how many days inventory takes to convert into a sale. See the formula, a $2.1M FBA seller example, and DSI benchmarks. More
Dead Stock - Dead stock costs FBA sellers $0.87-$6.90 per cubic foot per month in storage and aged surcharges. Learn when removal beats holding and how to prevent it. More
Demand Forecasting - Demand forecasting estimates future unit sales per SKU using historical data, trends, and seasonality. Formulas, worked example, and FBA-specific tips. More
Demand Variability (Standard Deviation of Demand) - Demand variability is the standard deviation of sales that drives safety stock. Learn the formula, FBA-clean data rules, and a worked example with real numbers. More
Dimensional Weight - Dimensional weight uses L×W×H÷139 to calculate billable weight for FBA fees. When dim weight exceeds actual weight, your fulfillment fees jump. More
Distribution Requirements Planning (DRP) - Distribution requirements planning (DRP) coordinates inventory across your 3PL, AWD, and FBA. See the formula, a worked example, and DRP mistakes to avoid. More

Economic Order Quantity (EOQ) - The economic order quantity Amazon FBA formula balances ordering costs against storage fees. See the full calculation and a worked example with real FBA numbers. More
Excess and Obsolete Inventory Analysis - Excess and obsolete inventory triggers Amazon's 181-day surcharge. Learn the analysis, fee tiers, and when to remove or liquidate aging FBA stock. More
Exponential Smoothing - Exponential smoothing weights recent FBA sales more heavily for accurate demand forecasts. Formula, alpha tuning, and a worked example with real numbers. More

FBA Capacity Manager - FBA Capacity Manager governs your monthly FBA storage in cubic feet by size tier. See how the allocation formula works and when to bid reservation fees. More
FBA Fee Stack - The FBA fee stack totals every Amazon fee per unit: referral, fulfillment, storage, and more. See the full breakdown on a $34 product at 31.5%. More
FBA New Selection Program - The FBA New Selection Program waives storage fees for 120 days plus return processing and offers a 10% referral fee rebate. See the launch savings math. More
FBA Receiving Variability - FBA receiving variability is the 1 to 21 day FC check-in window. Plan reorders against the P90 not the median to avoid Q4 stockouts. See the math. More
FBA Small and Light - FBA Small and Light ended August 29, 2023 and was replaced by Low-Price FBA rates. See the fee comparison, margin impact, and what to reprice now. More
FIFO vs LIFO for FBA - Amazon ships FIFO, but which cost method should you use for taxes? Compare FIFO vs LIFO with real FBA numbers and see the tax impact. More
Fill Rate - Fill rate measures the percentage of customer demand you can fulfill from FBA stock. Learn how to calculate fill rate and protect your IPI score and rankings. More
Fixed Order Point System - How a fixed order point system works for Amazon FBA. Reorder point formula, worked example with realistic lead times, and how to combine it with periodic review. More
FNSKU - FNSKU Amazon FBA labels tie inventory to your seller account. Learn the format, how it differs from ASIN and UPC, and the cost trade-off on a 2,800-unit shipment. More
Forecast Accuracy (MAPE) - Forecast accuracy (MAPE) measures how close demand predictions are to actual FBA sales. See the formula, a worked example across 4 SKUs, and realistic targets. More
Forecast Bias - Forecast bias is systematic over- or under-forecasting that drives excess inventory or stockouts. Formula, 6-month worked example, and how to fix it. More
Forecast Override - A forecast override applies your market intelligence on top of statistical forecasts. Decision framework, Lightning Deal example, and override mistakes. More
Forward Stock Cover - Forward stock cover is on-hand units divided by forecasted daily demand. See the formula, a stepped Q4 example for a $2.5M FBA seller, and when to use it. More
Fulfilled by Merchant (FBM) - Fulfilled by Merchant (FBM) means you ship orders yourself instead of using FBA. Learn FBM vs FBA costs, when self-fulfillment saves money, and common mistakes. More

GMROI (Gross Margin Return on Inventory) - GMROI measures gross profit per dollar of inventory investment. Learn the formula, see FBA benchmarks, and compare SKU performance with worked examples. More
Gross Margin - Gross margin for FBA typically runs 60-75%. Learn how to calculate it, what counts as COGS, and how it differs from contribution margin. More

Inbound Shipment Plan (FBA) - An FBA inbound shipment plan declares SKUs, quantities, and packaging before Amazon assigns destination FCs. See the math, fees, and common mistakes. More
Inventory Aging Buckets - FBA inventory aging buckets classify stock by age (0-90, 91-180, 181-270, 271-365, 365+). See the per-cubic-foot surcharge schedule and the math. More
Inventory Performance Index (IPI) - Learn what the Inventory Performance Index is, how Amazon calculates your IPI score, and see a worked example showing how a $2.1M FBA seller moves above 400. More
Inventory Turnover Ratio - Inventory turnover ratio is annual COGS divided by average inventory value. See the formula, a worked example for a $2.8M FBA seller, and FBA benchmarks. More
IPI Tier History - IPI tier history is the rolling 13-week record Amazon uses to set FBA capacity allocation. See the thresholds, recovery math, and common mistakes. More

Kanban for FBA - Kanban for FBA explained: why pull-based inventory does not work with 60-90 day Asia lead times, and how to build a hybrid push-pull system using AWD as a buffer. More

Landed Cost - Landed cost is the total per-unit cost from factory to FBA warehouse: manufacturing, freight, duties, and prep. See a full import cost breakdown. More
Lead Time Demand - Lead time demand Amazon FBA is the total units you will sell between placing an order and receiving it. See the formula, the 7 stages sellers miss, and a worked example. More
Lead Time Variability - Lead time variability measures supply chain inconsistency via standard deviation. Formula, 5-shipment worked example, and safety stock impact for FBA. More
Long-Term Storage Fees - Long-term storage fees include monthly storage and aged inventory surcharges. See 2026 rates and a worked example showing how fees compound fast. More
Lumpy Demand - Lumpy demand is infrequent and variable, the hardest pattern to forecast. Learn how to identify it, apply SBA method, and size FBA safety stock accordingly. More

MAD (Mean Absolute Deviation) - Mean absolute deviation measures forecast error in units and feeds safety stock formulas. MAD formula, worked example, and FBA-specific gotchas. More
Master Production Schedule - A master production schedule (MPS) maps demand forecasts to weekly POs. See the formula, a 12-week FBA example, and 3 mistakes that cause stockouts. More
Merchant Fulfilled Network (MFN) - Merchant Fulfilled Network (MFN) is Amazon's term for seller-fulfilled orders. Learn MFN vs FBA costs, when to use each, and the performance metrics that matter. More
Min-Max Ordering - Min-max ordering for Amazon FBA: the formula, a worked example with real lead times, and why static min and max levels break for seasonal products. More
Moving Average Forecasting - Moving average forecasting averages recent FBA sales to predict demand. Period selection guide, formula, worked example, and common stockout pitfalls. More
Multi-Channel Fulfillment (MCF) - Multi-Channel Fulfillment ships FBA inventory to Shopify, Walmart, and DTC orders in unbranded packaging. See current MCF fees, margin math, and pitfalls. More
Multi-Pack, Case Pack, and Pallet Quantity - Case pack quantity is the number of sellable units in one FBA shipping carton. Set it right per SKU to avoid stranded partial cases and reweigh fees. More

Net Profit Per Unit - Net profit per unit is what you keep after COGS, referral fee, FBA fulfillment fee, storage, and ads. See the formula and a $34 product worked example. More
New Product Forecasting - New product forecasting estimates demand with zero sales history. Learn the analogous SKU method and how to size your first FBA inventory order accurately. More
Normal Distribution in Inventory Planning - Normal distribution in inventory planning lets FBA sellers convert service level targets into precise safety stock quantities using Z-scores and the bell curve. More

On-Time Delivery - On-time delivery is a critical Amazon Account Health metric. Learn the 97% threshold, how it differs from late shipment rate, and how FBA sellers stay above it. More
Order Point vs Order-Up-To Level - Order point vs order-up-to level explained for Amazon FBA: when to order, how high to refill, the formulas, and a worked example with realistic FBA lead times. More
Ordering Cost - Ordering cost per FBA shipment runs $800-2,000+. Learn every component from freight to prep and how it drives your reorder quantity decisions. More
Out-of-Stock Rate - Out-of-stock rate hurts BSR, rankings, and IPI scores. Learn how to calculate it from Amazon reports and recover quickly after an FBA stockout. More

Pareto Principle in Inventory - The Pareto principle shows 20% of your FBA SKUs drive 80% of revenue. Learn how to find your vital few and allocate inventory investment accordingly. More
Per-Unit Storage Fee - FBA monthly storage costs $0.78/cu ft Jan-Sep and $2.40/cu ft in Q4. See how to calculate per-unit storage and avoid the Q4 rate trap. More
Perfect Order Rate - Perfect order rate is the inverse of Amazon ODR. Learn the 99% target, how Amazon calculates defects, and what FBA sellers can do to protect account health. More
Periodic Review System - Learn the periodic review system formula for Amazon FBA. Worked example with real lead times, safety stock math, and how restock limits change the approach. More
Prep Services - FBA prep services handle labeling, poly-bagging, and inspection before inventory reaches Amazon. Compare costs for self-prep, Amazon prep, and third-party centers. More
Push vs Pull Inventory Systems - Push vs pull inventory systems explained for Amazon FBA sellers. Why FBA forces a push model, what that means for safety stock, and where pull is still possible. More

Quantity Discount Break Analysis - Learn quantity discount break analysis for Amazon FBA. See the formula, a worked example with real supplier pricing, and why FBA storage costs change the math. More

Referral Fee - Amazon's referral fee is 15% for most categories but ranges from 8% to 45%. See rates by category and how they affect your FBA margins. More
Removal Orders - FBA removal orders cost $0.97 to $13.05 per unit and take 10 to 30 days. Learn the break-even math for removing vs. holding aged Amazon inventory. More
Reorder Point (ROP) - The reorder point formula tells you exactly when to reorder FBA inventory. See the full calculation, lead time components most sellers miss, and a worked example. More
Replenishment Cycle - A replenishment cycle is the full loop from PO to FBA sale to reorder. Cycle time formula, worked timeline, cash flow math, and FBA-specific constraints. More
Reserve Quantity - Reserve quantity shows units locked in customer orders, FC transfers, or processing. Learn how to spot it in Seller Central and reorder using available stock. More
Reserved Inventory - Reserved inventory is FBA stock set aside for pending orders, warehouse transfers, or returns. Learn why units get reserved and how it affects reorder timing. More
Restock Limits - Amazon FBA restock limits cap how much inventory you can send to FBA. Learn how Amazon calculates them and see a worked example from a $1.4M wholesale seller. More
Restock Recommendations vs Restock Limits - Restock recommendations are per-SKU forecast suggestions. Restock limits are account-level capacity caps. See why FBA sellers confuse them and how to fix it. More

Safety Stock - The safety stock formula for Amazon FBA uses Z-score, demand variability, and lead time variability. See the full calculation and a worked example with real numbers. More
Seasonality Index - A seasonality index measures monthly demand deviation from the annual average. Formula, 12-month worked example, and how to apply it to FBA reorder math. More
Sell-through Rate - Sell-through rate is units shipped over 90 days divided by average on-hand units. See Amazon's formula, a worked example, and how it affects your IPI score. More
Seller Fulfilled Prime - Seller Fulfilled Prime requires 93.5% on-time delivery, 99% tracking, and 100+ packages/month. See the SFP vs. FBA cost comparison for a $4M seller. More
Service Level - Service level is the probability of not stocking out during a replenishment cycle. See the Z-score formula, a worked example, and recommended FBA targets. More
Shipment Splitting - FBA shipment splitting routes one plan to 2 to 6 fulfillment centers. See the per-unit Inbound Placement Service fees and when consolidation pays off. More
SKU Rationalization - SKU rationalization helps FBA sellers cut underperformers draining storage fees and IPI points. Learn the scoring framework to decide what stays and what goes. More
Slow-Moving SKU - A slow-moving SKU sells below average velocity and drains FBA storage fees. Learn the benchmarks to identify slow movers and the right intervention strategy. More
Sourcing Cost vs Landed Cost - Sourcing cost vs landed cost is the difference between FOB price and total cost to sell on Amazon. See the full breakdown and a real FBA worked example. More
Sporadic Demand - Sporadic demand means infrequent sales with many zero periods. Learn how to identify it from sales data, forecast with Croston's method, and stock for it in FBA. More
Statistical Forecasting - Statistical forecasting uses exponential smoothing and MAPE to predict FBA demand. Formulas, worked example with real numbers, and method selection guide. More
Stockout Cost - A stockout costs more than lost sales. Calculate the real stockout cost including BSR decay, ranking loss, and PPC recovery for your FBA products. More
Storage Limits - FBA storage limits cap how much inventory you can store at Amazon. Learn how limits are calculated, overage fees ($10/cu ft), and strategies to increase capacity. More
Stranded Inventory - Stranded inventory Amazon FBA costs you IPI points and storage fees. Learn what causes it, how to fix it, and see a worked example recovering 37 IPI points. More
Subscribe & Save - Amazon Subscribe & Save auto-enrolls FBA products for recurring delivery. See the discount tiers, margin math, and how S&S changes your inventory planning. More
Suppressed Inventory - Suppressed inventory is FBA stock hidden from Amazon search due to listing quality issues. Learn why listings get suppressed and how to fix them fast. More

Tariff and Duty Costs - Tariff and duty costs hit FBA sellers hard on China imports. Learn HTS codes, Section 301 rates, and how to calculate duty per unit on your landed cost. More
Transparency Program - The Amazon Transparency Program costs $0.01-$0.05 per unit with no enrollment fee. See the per-unit math and how a $3.2M brand gets 51x ROI from serialization. More
Trend Adjustment - Trend adjustment (Holt's method) keeps FBA forecasts on pace with growing or declining demand. Formula, beta tuning, worked example for trending SKUs. More

Unfulfillable Inventory - Unfulfillable inventory is FBA stock Amazon flagged as unsellable. Learn the causes, reimbursement rules, and removal math to stop paying storage on dead units. More

Vendor Lead Time Variability - Vendor lead time variability isolates supplier-side delivery inconsistency from total chain variance. See the formula, a CNY example, and safety stock impact. More
Vine - The Amazon Vine program costs $0-$200 per parent ASIN plus product COGS. See the per-review cost formula, a worked launch example, and when Vine is worth it. More
Virtual Bundles - Virtual bundles let Brand Registered Amazon FBA sellers combine 2 to 5 ASINs into one listing without repackaging. See the math, mistakes, and FAQ. More

Weeks of Supply - Weeks of supply is on-hand FBA units divided by average weekly sales. See the formula, a worked example for a $1.8M seller, and WOS benchmarks for FBA. More
Weighted Moving Average - A weighted moving average reacts faster to FBA demand shifts than a simple average. See the formula, weighting schemes, and a worked example for sellers. More
What-If Scenario Planning - What-if scenario planning models best, expected, and worst case demand before placing a PO. Expected value framework, 3-scenario worked example for FBA. More
Working Capital Tied Up in Inventory - FBA sellers often have $100K+ locked in inventory. Calculate your working capital tied up in inventory and learn strategies to improve cash flow. More

XYZ Analysis - XYZ analysis classifies FBA inventory by demand predictability. Learn the coefficient of variation formula and how to build an ABC-XYZ matrix for smarter reordering. More

Z-Score / Service Factor - The z-score service factor is the multiplier that turns a target service level into safety stock units. See the lookup table and FBA examples. More

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