Amazon FBA Glossary

The inventory terms that actually move money on Amazon, defined in plain English. Each one explains why it matters for a private-label seller and how it ties into your restock decisions.

• Aged Inventory Surcharge

  Escalating FBA fees on inventory that sits too long.

• AI Employee Handbook

  Your business's permanent, team-shared AI memory.

• Amazon Rufus

  Amazon's AI shopping assistant that answers buyer questions in the app.

• Buffer Stock

  The cushion of extra stock that absorbs demand and supply swings.

• CIF (Cost, Insurance and Freight)

  Supplier pays freight and insurance to the destination port; risk still passes at origin.

• Cycle Stock

  The working stock you sell through between reorders.

• Days of Supply

  How many days your stock lasts at current sales velocity.

• DDP (Delivered Duty Paid)

  Supplier delivers all the way in, duties paid; you just receive the goods.

• EXW (Ex Works)

  Supplier just has the goods ready at their door; you handle everything after.

• FBA Inbound Placement Service Fee

  Per-unit FBA fee for shipping inventory into Amazon's network. Cheaper or free when you split the shipment as Amazon recommends.

• FCA (Free Carrier)

  Supplier hands export-cleared goods to your carrier; risk passes at the handoff.

• Fill Rate

  The share of demand you actually fill from stock.

• FNSKU (Fulfillment Network Stock Keeping Unit)

  The Amazon barcode that ties a physical unit to your account.

• FOB (Free On Board)

  Supplier loads the vessel at the origin port; you own the goods from there.

• Fulfillment Center

  The warehouse where Amazon stores and ships your FBA inventory.

• Handling Fee

  The labor-and-materials cost of prepping an order to ship.

• Inventory Optimization

  Holding the right amount of each product, no more and no less.

• Inventory Reserve

  An accounting write-down, or FBA units temporarily unavailable to sell.

• Inventory Risk

  The chance that stock loses value, stops selling, or costs more to hold than it earns.

• IPI (Inventory Performance Index)

  The 0 to 1,000 score Amazon uses to decide how much FBA storage you get.

• Lead Time

  Order to sellable: production plus freight plus FBA check-in.

• Long-Term Storage Fee (LTSF)

  Amazon's old 365-day storage fee, now replaced by the aged inventory surcharge.

• Lot Number

  A code identifying one production batch of a product.

• Low-Inventory-Level Fee

  An FBA fee for running chronically thin on fast-moving SKUs.

• MCP (Model Context Protocol)

  The open standard that lets your AI plug into real tools and data.

• MOQ (Minimum Order Quantity)

  The smallest quantity a supplier will accept on a purchase order.

• Obsolete Inventory (Dead Stock)

  Stock that has stopped selling and is unlikely to move at full price.

• Product Cannibalization

  When one of your products steals sales from another of your own.

• Raw Materials

  The unprocessed inputs that become a finished product.

• Reorder Point

  Demand during lead time plus safety stock. The trigger to reorder.

• Restock Limits

  Amazon's cap on how much inventory you can send into FBA.

• Safety Stock

  The buffer that absorbs demand spikes and late shipments.

• Sales Velocity

  Units sold per day. The base rate behind every restock calculation.

• Seasonal Inventory

  Stock built ahead of a predictable demand peak, then drawn down.

• Sell-Through Rate

  Units sold divided by average units on hand. The core efficiency number.

• Serial Number

  A unique code for one individual physical unit.

• SKU (Stock Keeping Unit)

  Your own unique code for one sellable product variation.

• Stockroom Organization

  The space where you store stock, and the system that keeps it findable.

• Surplus vs Shortage

  Too much stock versus too little, and the cost of each.

• Virtual Warehouse

  A logical stock pool that spans multiple physical locations.

• WMS (Warehouse Management System)

  Software that runs the operations inside a warehouse.