If you’ve been selling on Amazon FBA since mid-2025, you already know things changed dramatically — and fast. Without meaningful warning, Amazon slashed storage capacity across the board, leaving thousands of sellers suddenly over their limits, unable to send in new stock, and sitting on FBA excess inventory with nowhere to go and fees continuing to compound.
In 2026, those cuts are still in effect. And for sellers who haven’t adjusted their strategy yet, the financial damage is ongoing.
This post breaks down exactly what happened, why it’s creating a growing FBA excess inventory crisis, and — most importantly — what you can do right now to recover your capital and get your operation back on track.
What Amazon Actually Did — And How Sudden It Was
Starting in May 2025, Amazon revised its FBA storage policy by reducing the allocation period from six months of projected sales volume to five months. The rollout created significant confusion — sellers received their new limits with very little notice, triggering disruption in inbound shipments and causing product availability issues just ahead of critical retail months. SellerApp
On paper, a one-month reduction sounds manageable. In practice, the real-world impact was far more severe.
Amazon reduced FBA storage space by up to 75% in May 2025. Sellers who had 450 cubic feet of storage dropped to just 130 cubic feet overnight. Bellavix
The seller community’s reaction was immediate and raw. On Amazon’s own Seller Forums, sellers reported being cut to just 30% of their previous storage space with only days of notice — not only unable to send new inventory in, but required to remove 30% of what they had already shipped to Amazon. AMZ PREP
What made the situation even more frustrating was that performance didn’t protect you. Even sellers with high performance scores faced major cuts. Amazon’s official update confirmed these limits are permanent — they won’t be increasing storage capacity back to previous levels. Bellavix
Why FBA Excess Inventory Is Now a Much Bigger Problem Than Before
The storage cuts didn’t just create a short-term logistics headache. They fundamentally changed the economics of holding FBA excess inventory in ways that compound over time.
Your FBA Excess Inventory Is Actively Hurting Your Best Sellers
This is the part most sellers underestimate. It’s not just that excess inventory costs you in fees — it’s that it directly limits your ability to restock the products that are actually making you money.
Storage is now linked directly to performance. Your Inventory Performance Index score, sell-through rate, and inventory health now directly impact your storage capacity. Slow-moving inventory can block replenishment of your top-performing products. Carbon6
In 2025, Amazon shifted to ASIN-level restock limits for many sellers, meaning each SKU can be capped individually — even if your total account storage is well below capacity. Amazon
The result is a double penalty — FBA excess inventory costs you in storage fees while simultaneously capping the capacity you need for your winners. Every month you hold slow-moving stock, you’re paying for it twice.
Aged Inventory Surcharges Are Now More Aggressive
Amazon introduced new storage surcharges for inventory sitting too long — nine months or more — on top of standard monthly storage fees. These policies push sellers to maintain moderate stock levels and avoid letting inventory age. Ecomclips
For sellers already dealing with reduced capacity limits, this creates a dangerous trap. You can’t easily send in new stock to replace aging inventory, and the aging inventory itself is generating compounding surcharges that erode margins with every passing month.
The Low-Inventory Fee Adds Insult to Injury
In a cruel twist, Amazon’s fee structure now penalizes sellers from both directions. Sellers reported being hit with low inventory fees for not having enough stock at the same time their capacity was slashed by 75% without warning — leaving them unable to stock enough inventory to avoid the fee, yet also unable to send more in due to the new limits. AMZ PREP
Amazon’s Built-In Solutions Don’t Solve the Core Problem
When sellers hit their limits, Amazon offers a few default paths. None of them fully address the FBA excess inventory problem.
Amazon’s Liquidation Program Amazon’s own liquidation program typically returns 5–10% of the average selling price on excess units. For most sellers, this barely covers the cost of the goods, let alone the storage fees already paid. It’s a solution that favors Amazon’s warehouse efficiency over seller recovery value.
Amazon Warehousing & Distribution (AWD) AWD inventory doesn’t count toward FBA capacity limits, and there are no FBA inbound placement fees. Automatic replenishment can eliminate aged inventory surcharges. It works best for seasonal items or longer-tail SKUs with steady demand. Astra
AWD is a useful tool for certain inventory profiles — but it doesn’t solve the core problem of having FBA excess inventory that simply isn’t selling at the pace you need. Moving slow movers to AWD delays the problem rather than resolving it.
Removal Orders Removal orders give you your inventory back — but then you’re left with product in your own warehouse, still unsold, and now with the added cost of inbound and return shipping. You’ve cleared the Amazon problem but created a new one at home.
The Fastest Exit Plan for FBA Excess Inventory in 2026
The sellers navigating Amazon’s storage cuts most effectively in 2026 are the ones who have stopped trying to manage FBA excess inventory within Amazon’s system and started moving it out decisively.
Here’s the most effective action plan:
Step 1: Identify Your FBA Excess Inventory Immediately
Log into Seller Central and pull your Aged Inventory Report. Products that aren’t selling are actively hurting your metrics and taking up valuable space that could be used for better-performing items. The Inventory Performance Dashboard highlights these problems and provides specific recommendations for resolving them. AMZ PREP
Flag every ASIN that has been sitting for 90+ days with no meaningful velocity improvement. These are your primary liquidation candidates.
Step 2: Calculate Your Real Holding Cost
Most sellers dramatically underestimate what FBA excess inventory is actually costing them. Add up your monthly storage fees, aged inventory surcharges, the IPI drag impact on your overall capacity, and the opportunity cost of capacity blocked from your best sellers. According to Investopedia’s inventory management overview, carrying costs for excess inventory typically run 25–30% of total inventory value annually — and that’s before Amazon’s unique fee structure layers on additional costs.
Step 3: Submit Your FBA Excess Inventory for a Direct Offer
The fastest way to convert idle FBA excess inventory into working capital is to sell it directly to a professional bulk buyer — bypassing Amazon’s liquidation program entirely.
Direct buyers of FBA excess inventory evaluate stock based on real market value and resale potential, not Amazon’s internal clearing model. The result is a significantly better recovery rate than Amazon’s 5–10% liquidation payout, with a faster timeline and less operational friction.
At FBA Excess Inventory, we purchase bulk lots directly from Amazon sellers — overstock, aged inventory, stranded listings, removal order stock, customer returns, and full warehouse lots across every major product category. Our team reviews every submission and delivers a competitive offer within 24 hours. Learn more about how our process works before you submit.
Step 4: Use Recovered Capital to Restock Your Winners
Once your FBA excess inventory is cleared, your capacity opens up, your IPI improves, and you have fresh capital to reinvest in the SKUs that are actually generating returns. This is how sellers turn a crisis into a competitive advantage — clearing the deadweight and doubling down on what works.
The Bottom Line
Amazon’s 75% storage cuts aren’t a temporary disruption — lower storage limits mean sellers must restock more frequently and face real risk of stockouts if inbound shipments are delayed. It also increases exposure to peak season congestion when warehouses and carriers are at capacity. eFulfillment Service
The sellers who adapt fastest are the ones who stop trying to hold FBA excess inventory within a system that’s actively penalizing them for it. Liquidating decisively, recovering capital, and rebuilding around leaner, faster-turning inventory is the only sustainable strategy in Amazon’s new storage environment.
👉 Submit Your FBA Excess Inventory Today — get a competitive offer within 24 hours, no obligation.