What is safety stock?
Safety stock is extra inventory kept as a buffer against uncertainty — unexpected demand spikes (e.g., a viral product moment) or supplier delays (holiday factory closures, port congestion, QC holds). Without safety stock, any variance above average can cause a stockout.
How much safety stock do FBA sellers typically hold?
FBA sellers commonly hold 2–4 weeks of safety stock. For products with long lead times (60+ days from China) and volatile demand, 4–6 weeks is safer. The right amount depends on your demand variability and supplier reliability.
Does holding more safety stock hurt my IPI score?
Amazon's Inventory Performance Index (IPI) considers excess inventory. Holding 6+ months of stock without sales can reduce your IPI score and lead to storage restrictions. Balance safety stock with sell-through rate — enough to prevent stockouts without creating an overstocking penalty.
What is the difference between safety stock and reorder point?
Safety stock is the minimum buffer inventory you should never dip below. The reorder point (ROP) is the stock level that triggers a purchase order. Reorder Point = (Average Daily Sales × Lead Time) + Safety Stock. Safety stock is a component of the reorder point, not the same thing.