Why is it important to have just the right amount of product stock when doing FBA?

Maintaining optimal stock levels for Fulfillment by Amazon (FBA) is crucial for several reasons. Overstocking leads to increased storage fees, especially for long-term storage, directly impacting profitability. Amazon charges monthly storage fees based on the daily average volume of inventory, and these fees can escalate significantly for excess or aged inventory. Conversely, running out of stock (stockouts) can be detrimental, particularly if you've invested in advertising to rank for specific keywords. When a product is out of stock, your ad campaigns become ineffective, and the ranking you've worked to achieve can diminish, requiring further investment to regain visibility once stock is replenished. While stockouts or overstocking are generally not direct causes for account suspension, they negatively affect performance metrics and profitability.