Introduction
Six-figure Amazon sellers hit a tipping point where spreadsheets and guesswork aren’t enough. One stockout or delay can wipe out days of ad spend and momentum. In 2025, inventory efficiency is the difference between scaling up or shutting down.
Proven Tip:
Use real-time inventory sync across all fulfillment centers and set automated reorder triggers based on velocity and lead times.
Proven Tip: Use Real-Time Inventory Sync with Reorder Triggers
When your product sells across Amazon FBA, 3PLs, and direct FBM channels, tracking stock in multiple systems can create:
- Overselling
- Stockouts
- Late shipments
- Lost Buy Box ranking
Use integrated tools like SoStocked, InventoryLab, or Skubana to:
- Forecast demand based on historical sales
- Sync FBA + FBM inventory levels
- Trigger reorders based on lead time + sales velocity
- Track inbound shipments to Amazon warehouses
IRC Tax Code Relevance
Inventory and fulfillment impact your IRS compliance, especially with:
- IRC §471 Requires accurate valuation of inventory using FIFO, LIFO, or cost methods
- IRC §263A Capitalization of inventory-related expenses including shipping and handling
- IRC §446 Determines accounting method for when sales and COGS are recorded
Proper tracking is essential for accurate tax deductions and audit safety.
Relevant IRS Forms
| Form | Purpose |
|---|---|
| Form 1125-A | Cost of Goods Sold (COGS) calculation |
| Form 1120 / 1065 | Business returns that include inventory |
| Form 4562 | Depreciation of equipment used for warehousing/inventory |
| Form 3115 | Required for changing inventory accounting methods |
| Form 1099-NEC | For payments to sourcing agents or fulfillment consultants |
Example: Seller Avoided $25,000 in Lost Sales with Better Inventory Tracking
A pet supply brand doing $80,000/month in revenue missed reordering two high-volume ASINs in Q3 2024. The result? Stockout for 11 days, loss of keyword ranking, and $25,000 in missed revenue.
In 2025, they added SoStocked and integrated it with their 3PL and Amazon FBA. Automated reorder triggers helped maintain a 97.9% in-stock rate and kept their ads running without interruption.
Step-by-Step Guide to Amazon Inventory Management in 2025
Step 1: Choose a Forecasting + Inventory Management Tool
Use SoStocked, Skubana, or InventoryLab based on your Amazon integration needs.
Step 2: Set Lead Times and Buffer Stock
Account for supplier delay, freight time, Amazon check-in lag, and 10–15% buffer.
Step 3: Track Inventory by Fulfillment Channel
Separate FBA from FBM, and sync stock daily. Watch for stranded or unfulfillable inventory.
Step 4: Create Reorder Triggers and PO Automation
Base reorder points on actual sales velocity and production lead times. Generate automatic purchase orders or restock requests.
Step 5: Reconcile Monthly for Tax
Ensure inventory data syncs with COGS tracking in your accounting software. Report to your CPA for Form 1125-A and year-end inventory reporting.
Conclusion
Inventory is your biggest asset and your biggest liability if not managed well. In 2025, six-figure Amazon sellers must invest in systems that forecast, automate, and protect stock levels. That’s how you stay in the Buy Box and on top.
Call to Action
Want help setting up your Amazon inventory system with tax-ready COGS tracking?
Email Anshul Goyal, CPA EA FCA at anshul@kkca.io to schedule a full inventory and fulfillment audit.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a CPA before making decisions regarding your inventory accounting or IRS compliance.
FAQs
1. What’s the best inventory tool for Amazon sellers in 2025?
SoStocked and Skubana are top-rated for six-figure sellers with FBA + FBM needs.
2. Can I deduct inventory software fees?
Yes, software used for business operations is deductible under IRC §162.
3. How do I calculate Cost of Goods Sold for Amazon inventory?
Track beginning inventory + purchases – ending inventory. File on Form 1125-A.
4. Do I need to track Amazon returns and damaged goods?
Yes. Returns, removals, and lost inventory should be adjusted monthly in your COGS reporting.
5. What’s the ideal in-stock rate for Amazon sellers?
Aim for 95%+ in-stock rate across all ASINs to maintain visibility and sales velocity.
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S.-licensed Certified Public Accountant and IRS Enrolled Agent. With over a decade of experience in inventory-heavy businesses and FBA compliance, Anshul helps Amazon sellers streamline inventory, track COGS, avoid IRS penalties, and scale profitably.
To book a consultation, contact anshul@kkca.io.