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Fulfilled by Amazon (FBA) works best for fast sellers. Smart brands may limit what they send to FBA and hold the rest of their inventory in third-party warehouses.
Fulfilled by Amazon (FBA) is built for speed, not storage. While it’s convenient for fast-moving products, Amazon’s warehouses are some of the most expensive places to store slow-turning inventory, or anything that doesn’t meet Amazon’s strict packaging and labeling requirements. Many brands use overflow storage outside of FBA to avoid these costs.
1. Products That Don’t Sell Fast
FBA charges long-term storage fees for inventory that doesn’t move. If products sit for more than 180 days, Amazon starts stacking extra charges on top of its already high monthly rates. To combat this, brands may store the following product types in third-party warehouses:
- Holiday or seasonal products (e.g., ornaments, themed apparel)
- Products with inconsistent demand (e.g., novelty items)
- SKUs that sell slowly but are still profitable (e.g., atypical sized apparel or uncommon colors)
These types of products can sit in a third-party warehouse until needed. Brands may send small batches into FBA based on real-time demand instead of paying for unused space.
2. Bundled Items or Products Not Prepped for FBA
Amazon doesn’t want to do your prep and if you make them, they charge heavily for it. If inventory shows up without the right labels, in non-compliant packaging, or as loose components, you’ll pay for the fix. Amazon expects everything to arrive in a ready-to-ship format. But not all inventory is “FBA-ready” out of the gate, including:
- Multi-item bundles that aren’t pre-assembled (e.g., skincare kits)
- Products that still need Amazon-compliant barcodes (e.g., products labeled with supplier SKUs instead of FBA barcodes)
- Items that need to be tested or inspected for quality control before shipment (e.g., electronics shipped in bulk).
This kind of prep is easier and cheaper to manage outside of Amazon, where you’re not paying for extra prep services.
3. Inventory That Exceeds Amazon’s Capacity Limits
Amazon limits how much of each product you can send to their facilities. Amazon uses a performance algorithm that looks at how quickly an item has sold in the past. If sales are slow or the product is new, you may get less space, regardless of how much inventory you have or plan to sell.
Example: A brand imports 10,000 units ahead of the holidays, but FBA only allows 4,000 in. The rest needs to go somewhere.
A third-party warehouse acts as a buffer. The brand stores the overflow and ships smaller loads to FBA as space opens up or thresholds increase.
4. Inventory for Other Sales Channels
Not all inventory belongs in Amazon’s system. If you sell on multiple channels, like your website, other marketplaces, or have a retail location, some inventory should stay out of FBA. Overflow warehouses let you manage inventory by channel with more control over how it’s packed, stored, and shipped. Product examples may include:
- Subscription boxes with custom inserts and tissue wrap that violate Amazon’s packaging rules
- Bundles sold through your website that don’t match FBA’s bundling or labeling requirements
- Packed inventory for retail stores that isn’t broken down into individual units for Amazon
Get Matched with an Overflow Warehouse
FBA is optimized for fast-moving, prepped inventory, not for holding inventory for any significant period. Brands that rely on Amazon alone often run into space limits, added fees, or shipping delays that could’ve been avoided. Overflow storage gives you more control and helps keep costs in check,
Need help finding a warehouse that can support your overflow strategy? Get matched with a vetted provider that fits your volume and prep needs.
