How do you track inventory for an Amazon FBA business?

Record every unit at landed cost

The foundation of inventory tracking is recording each unit at its true cost when it enters your system. That cost is its landed cost: the supplier price plus inbound freight, duties, and prep, divided across the units in the shipment.

Costs change shipment to shipment, so you need a method to value units as they sell. The two common approaches are FIFO (first in, first out), where the oldest cost layer sells first, and weighted average, where all units share a blended cost. Pick one and apply it consistently. This is what keeps your COGS and inventory asset value accurate as prices drift.

• •Per-unit landed cost = (product cost + inbound freight + duties + prep) / units in shipment
• •FIFO: oldest cost layer is expensed first as units sell
• •Weighted average: all on-hand units carry one blended cost

Reconcile Amazon's reports to your records

Amazon gives you several reports to reconcile against: the Inventory Ledger (quantity movements by event type), the FBA Inventory report (current on-hand), and shipment reconciliation for inbound discrepancies. Pull these regularly and compare them to what your own records say you should have.

Discrepancies are routine, not rare. Units go missing in Amazon's warehouses, get damaged, or arrive short on inbound shipments. When your records and Amazon's ledger disagree, that gap is often money Amazon owes you. A free FBA reimbursement audit can surface lost, damaged, and short-shipped units that you're entitled to be reimbursed for but that never get auto-credited.

Cycle count and a worked example

You can't physically count FBA stock, so reconciliation is your cycle count for Amazon-held units. For inventory you hold yourself (prep center, 3PL, or self-fulfilled), do rolling cycle counts, checking a subset of SKUs each week rather than a full count once a year. This catches errors while they're small and traceable.

Here is an illustrative reconciliation. Your records say you should have 500 units of an ASIN. Amazon's Inventory Ledger shows 472 on hand plus 11 marked lost in fulfillment-center operations and 6 damaged. That accounts for 489 units; the remaining 11-unit gap is unexplained shrinkage to investigate. The 17 lost-and-damaged units are reimbursement candidates.

• •Records expect: 500 units
• •Amazon on hand: 472 units
• •Lost in FC operations: 11 units (reimbursable)
• •Damaged: 6 units (reimbursable)
• •Unexplained gap to investigate: 11 units

Keep cost and quantity in one system

Spreadsheets work at low volume but break once you have many SKUs, multiple inbound shipments at different costs, and units spread across channels. The failure mode is a quantity that looks right but a cost that's a stale guess, which quietly corrupts your margins.

BeanHawk maintains perpetual per-SKU inventory valuation so quantity and landed cost stay tied together as stock moves and sells, and flags the discrepancies that turn into reimbursement claims. That keeps your inventory asset on the balance sheet and your COGS on the income statement both grounded in real cost.

Accurate inventory tracking starts with each unit's landed cost — the all-in cost that should flow into COGS as you sell.

Frequently asked questions

How do you keep track of inventory?

Keep a perpetual record that updates every time stock moves in or out, with each unit valued at landed cost. Reconcile it against Amazon's Inventory Ledger and FBA reports on a regular schedule, and cycle count any stock you physically hold. The aim is to always know quantity, location, and cost without doing one big annual count.

Can QuickBooks track Amazon FBA inventory?

QuickBooks can hold inventory quantities and values, but it doesn't natively understand FBA movements, multi-channel stock, or per-shipment landed cost. Most sellers pair it with an inventory system or integration that feeds accurate quantities and COGS into QuickBooks, so the books stay reconciled without manual entry.

What is cycle counting in inventory?

Cycle counting is checking a small subset of your SKUs on a rolling schedule instead of counting everything at once. It catches discrepancies while they're small and recent enough to trace. For FBA, your equivalent of a cycle count is regularly reconciling Amazon's inventory reports against your own records.

What is landed cost and why does it matter for inventory?

Landed cost is the full per-unit cost to get a product ready to sell: supplier price plus inbound freight, duties, and prep. It matters because valuing inventory at landed cost (not just the supplier invoice) is what makes your COGS and gross margin accurate. Underloading these costs overstates your profit.

How often should you reconcile FBA inventory?

Monthly is a sensible baseline, with shipment reconciliation done as each inbound shipment is received and checked in. Higher-volume sellers benefit from weekly reconciliation because lost and damaged units have time limits on reimbursement claims, and stale data compounds quickly across many SKUs.

Keep learning

• How do you find cost of goods sold (COGS)?
• Does Amazon reimburse for lost or damaged inventory?
• How do you do bookkeeping for an Amazon FBA business?