What to Know About Donating Excess Inventory Through Amazon

Updated: Oct 7


Change isn't simply about a charitable deduction

At Color More Lines, our mission has always been simple. To help brands grow their eCommerce business faster.


Specifically, mission-driven brands. And for all the scrutiny they've faced over the past few years, Amazon is also driven by a mission.


It's not just to become “earth's most customer-centric company.” Whether it's establishing a climate pledge fund to reduce carbon emissions or their charitable contributions, Amazon's goal has been to enrich the lives of both consumers and the world around them.


And it begins with giving.

What is the Amazon FBA Donation Program?

The Amazon FBA Donation Program is a program designed to allow FBA sellers to donate excess inventory to select charities in the US. By simply requesting disposal of eligible overstock, returned, or other excess inventory in US fulfillment centers, Amazon makes it available to selected charities partnering with Good360, a global leader in purposeful giving and product philanthropy.


Excess Inventory and FBA

For inventory that doesn't sell, Amazon charges a daily overage fee of up to $10 per cubic foot. That doesn't include additional long-term storage fees for inventory which has been stagnant for 365 days.


Those numbers can add up quickly. While Amazon has recently established a liquidation program for FBA sellers, it may be more realistic to donate inventory to a charitable cause. It doesn't just help you avoid overage fees. It gives back to your community — a benefit that can be worth more than any sale.

Excess Inventory and Tax Deduction

Generally speaking, IRS law indicates a charitable contribution deduction can include the cost of donated inventory, plus half the difference between cost and fair market value, for any companies registered as C corporations. There's just one issue.


Many FBA sellers aren't registered as a C corporation. And while a small LLC can receive a federal income tax deduction based on liquidated inventory donated, you will want to contact your tax adviser to discuss the FBA Donations program and what implications it will have on your reporting obligations.


Automatic Enrollment

You may not know it, but you're enrolled in the FBA Donations program by default. Amazon can automatically make eligible inventory available to charitable organizations when you choose to dispose of overstock, returns, and other unwanted products.


You can verify your enrollment status by going to Settings > Fulfillment by Amazon > FBA Donations program in Seller Central.


Alternatively, you can choose to opt out of the FBA Donations program at any time by disabling it in your FBA Settings.


Donation Delivery is Arranged by Amazon

Although disposal and donation fees apply, Amazon can make FBA inventory available for donation and will make the delivery arrangements on your behalf at no additional cost.


Tracking the Removal of Unwanted Inventory

Tracking the removal of unwanted inventory is easy. Simply look in your Removal Shipment Detail report and look for items marked Donation in the Carrier Name field.


Amazon, Communities, and FBA Sellers: We're in This Together!

Donating inventory brings change

More than 30 percent of all online orders will wind up being returned. And it's been estimated that over 25 percent of those returns are eventually destroyed. It's not only wasteful. It's not only harmful to the environment. It's entirely unnecessary.


The FBA Donation program creators expect to see hundreds of thousands of products that were once doomed for disposal going to good use transforming lives and strengthening communities. You can do your part by ensuring unwanted and obsolete inventory finds a good home.


Because much like your relationship with Amazon... we're all in this together.

 

Color More Lines is just as dedicated to the world around us as we are to the growth of your Amazon business. Find out more at Color More Lines.

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