"Your Inventory Is Too Low" — The Amazon Alert That Cost Me $143,000

Hey, it's Yonah from Amazon Growth Lab.

Three years ago, I made a $143,000 mistake with my own Amazon brand. And it started with an innocent-looking alert: "Your inventory is too low."

Like most sellers, I rushed to send in more inventory. Big mistake.

The Inventory Trap Amazon Sets For Sellers

What Amazon doesn't tell you is that "low inventory" doesn't always mean you need to send more. Sometimes it means you need to sell through faster.

Here's what happened: I had a product selling about 30 units per day. Amazon flagged it as "low inventory" when I had 600 units left (20 days of coverage). I panicked and sent in 2,000 more units.

Sales immediately dropped to 15 units per day. Why? Because Amazon's algorithm detected my overstock and reduced my organic visibility to help me avoid long-term storage fees.

By the time I realized what was happening, I was stuck with 1,800 units, facing monthly storage fees and declining sales velocity.

The Inventory Sweet Spot

After analyzing data from hundreds of SKUs across our client portfolio, we've identified the perfect inventory coverage formula:

Optimal Coverage = (30-day sales velocity × 2) + √(30-day sales velocity × 14)

For a product selling 30 units daily, that's about 81 days of coverage—not the 120+ days most sellers maintain.

When we implemented this formula for our clients, their average organic ranking improved by 14% while storage fees decreased by 37%.

The key insight? Amazon rewards efficient inventory management with better organic placement.

Remember: On Amazon, too much inventory can be just as damaging as too little. Find your sweet spot and watch your rankings climb.

Talk later,

Yonah
Founder, The Prime Playbook

PS. If you have any questions, just reply to this email.