Every Amazon brand eventually ends up sitting on inventory that won't move, and the decisions that follow are painful precisely because they feel emotional. On an episode of MerchantSpring Marketplace Masters, Chad Davis, founder of the agency Lucra Commerce, made the case that stuck inventory is really a math problem: diagnose the product, run the numbers on each exit, and let the dollars pick the answer. With a background spanning a family novelty-gift retail business and a stint at Sharpie, he brought real product examples. Here is the playbook.

How Inventory Gets Stuck in the First Place

Davis traces most slow-moving inventory to three causes. The first is simply poor replenishment: the wrong person watching weekly demand, or the wrong tools feeding stock into Amazon. The second is seasonality, where buying is often a one-shot bet, and the penalty for getting the forecast wrong is severe. The third is losing the pulse during peak: not tracking how demand is tracking against the days left until Christmas. His own retail roots make the stakes vivid: in a novelty-gift business, 80% of the year can happen in four weeks, so a forecast miss and a failure to sell through before demand falls off a cliff is the difference between a good year and a bad one.

Stay Nimble: SPD, LTL and Weeks of Cover

The Amazon-specific edge, Davis argues, is using two inbound methods deliberately. Small Parcel Delivery (SPD) is essentially a parcel-carrier shipment: more expensive, but it lands stock in Amazon in about a week. Less Than Truckload (LTL) is cheaper but slower, roughly three to five weeks (MerchantSpring's Amazon acronym glossary decodes these and the rest). Treat LTL as the default economical method and SPD as the break-glass option: send LTL volumes that won't tip you into overstock, then use SPD to top up when an LTL is delayed, or demand suddenly spikes.

Underpinning the calls is a simple inventory dashboard tracking fillable weeks of cover and total weeks of cover, with the gap representing inbound stock. Heading into a peak, Davis aims for roughly ten to twelve weeks of supply, adjusted by brand and category, and reads weekly units sold to judge whether last week's demand is a blip or a real trend. When cover drops below about four weeks, SPD is how you react fast.

The common failure he sees is brands sending only large, cost-efficient LTLs, or shipping to a forecast built six months ago that no longer reflects reality, which is how overstock happens. The fix is unglamorous: the person watching day-to-day demand and the ops manager replenishing to Amazon have to work in lockstep, and in most brands, tellingly, demand planning is someone's second job rather than a dedicated role.

Diagnose Before You Act: Selling, Age, Size

When a client says they have an inventory problem, Davis looks at three things per product before doing anything. First, is it actually selling, or is it dead? Accelerating a product that already has velocity is a completely different exercise from moving a seasonal item that no longer sells at all, and slapping 20% off a genuinely dead product simply won't move it. Second, how old is the inventory, because Amazon's storage costs escalate the longer stock sits. Third, how big is it, measured in cubic feet, since fees are charged on volume, so tiny products can sit almost for free while large ones bleed money.

The age point is worth spelling out, because Amazon overhauled it. What used to be the twice-a-year long-term storage fee is now the Aged Inventory Surcharge, billed monthly and escalating by how long a unit has sat: it begins around 181 days and steps up sharply, reaching roughly $5.45 per cubic foot at about nine months and $6.90 per cubic foot (or $0.30 per unit, whichever is greater) past a year, with a steeper tier beyond 15 months added in 2026 (Nova Analytics). Those three factors together tell you how urgent the decision is.

The First Fork: Will You Sell This Product Again?

Before any math, Davis asks one question: are you going to sell this product again, or discontinue it? Discontinuing gives you far more freedom. If you intend to keep selling it, some exits become dangerous. His cautionary tale is from Sharpie, which once liquidated good inventory for pennies; it went overseas, reappeared on Amazon months later through a reseller, and disrupted the brand's pricing for a long time. So if the product has a future, avoid liquidators and very deep discounts, because a keen third-party buyer almost always sees an arbitrage opportunity, and the moment they have your stock, you have lost control of your brand's pricing.

The other branch is whether to pull stock back to your own warehouse, and that too is arithmetic. Davis recalls that in the family toy business it was frequently cheaper to dispose of product than to pay to bring it back, especially when it wouldn't sell for months anyway. Worth remembering: removing aged stock and re-sending it buys you roughly another 90 days of the clock, which is sometimes enough to sell through on a fresh run.

Hold, Discount, or Dispose: The Math

Davis walked through two real products that landed in opposite places, and the difference is entirely size and age. Small acrylic Christmas ornaments occupy a tiny fraction of a cubic foot, so even the escalating surcharge is trivial, a couple of cents a month per unit, until roughly the twelve-month mark when it can jump to about 30 cents each; a thousand units then costs $300 a month, which adds up fast.

But because holding is nearly free for most of the year, his advice on the ornaments was to hold and try to sell through, since it costs pennies. The math for pricing runs the same way: at a $12.99 price, the unit clears about $6 before ads, dropping to roughly $3.57 at $9.99, and since removal or disposal both cost about a dollar, he would discount all the way down, to around $4.99, before paying Amazon to take it back.

The artificial tree is the opposite case. At about 2.4 cubic feet, normal storage already runs near $1.88 a month, but past a year the surcharge alone reaches roughly $18.50 per unit; a thousand of those is a serious monthly bleed, so the decision is urgent, and disposal or a deep discount comes into play quickly. The lesson is to project each product's cost curve and find its inflection point rather than eyeballing the P&L, because the same 'stuck' label hides two completely different economic situations, and doing the math has saved his clients many thousands of dollars (MerchantSpring keeps a rundown of the Amazon fees that shape this).

Choosing the Margin Lever: Price, Coupon, Subscription or Ads

Once the numbers say it's worth spending margin to clear a product, Davis runs low-effort, quick tests, and he starts with price. A 10% or 20% cut, depending on urgency, and he watches conversion rate and sessions, because price moves conversion fastest. For a premium brand priced above the market, dropping to market can produce a sudden jump in conversion, which validates the lever; if nothing moves, you're just giving away margin, and either price isn't the answer or the cut wasn't deep enough.

Because most of these are C and D-tier products rather than hero SKUs, he avoids paid deal placements like Lightning Deals and treats coupons as a fix for a click-through problem; that green badge earns the click. For subscription-heavy brands, a first-order Subscribe & Save discount can beat a flat price cut: if the shopper subscribes and leaves after one order, it nets out the same, and if they stay, you've bought a subscriber.

Advertising he touches last, because if you're overstocked you rarely have high confidence that more ad spend clears the position profitably, and he would never advertise aggressively on a product that has never sold, since you'd be buying organic rank for something you plan to switch off. His answer to the classic question, whether to push visibility or drop price on aged stock, is to compare against the market: if you're priced well above it, get closer and you'll likely see conversion improve within about 48 hours on a reasonably fast mover; if that doesn't move the needle, return to your original price and lean into advertising instead, accepting a higher ACoS for a similar net-margin outcome. Either way, price is the fastest lever, so start there.

Three Mistakes to Avoid

Finally, three banana skins. Don't offload stock to a third party or liquidator without thinking it through; that's the grey-market boomerang that hurt Sharpie. Don't send your entire seasonal forecast at once: if you expect to sell ten thousand units over a four-week peak, send perhaps 50 to 60% up front and keep the rest as ammunition to restock as the trend confirms, because SPD lets you react into late November and early December.

And on a new launch, don't assume you'll match another seller's volume; give yourself room to grow but stay conservative and restock slowly, because a year of unsold stock isn't just a monetary hit; it's the problem nobody in the company wants to talk about. The common thread is to resist wishful thinking and let the numbers, not hope, drive the call.

Run the Stuck-inventory Math on Your Own Catalogue

Every call in this article rests on knowing a product's true profit, its weeks of cover and what storage is costing you as it ages. MerchantSpring gives sellers and agencies SKU-level profitability with Amazon fees, storage charges and advertising all captured, plus inventory and restock visibility, so the hold-versus-discount-versus-dispose decision is arithmetic, not a guess. See it on your own accounts with a walkthrough of your data.