Sell it cheaper, in most cases, and liquidate only when the markdown price cannot clear the remaining fees and storage. The decision turns on one figure per option: cash you will receive from here forward, minus cash you will spend from here forward. The money you already paid for the units is gone under every option and belongs in none of the arithmetic. Below are the four exits Amazon gives you, the numbers on one illustrative SKU, and the reason the answer changes when the inputs do.
Markdown ladder. Cut the price in steps until velocity clears the stock inside a window you choose. You keep the referral and fulfillment fees on every unit, keep paying storage until the last unit sells, and keep any ad spend needed to hold velocity.
Amazon's liquidation program. Amazon's FBA page on sell.amazon.com lists FBA Liquidations among the tools for maintaining balanced inventory and avoiding long-term storage costs, and states that you can have Amazon return, dispose of, or liquidate inventory in a fulfillment center for a per-item charge. Liquidation recovers a fraction of the retail price, quickly, and ends storage. The recovery rate and per-item charge are set by Amazon and change; check the current terms in Seller Central before modeling.
Removal. Amazon ships the units back to you, or to a 3PL, for a per-item charge per the same FBA page. You then sell them through another channel, wholesale them, or hold them where storage is cheaper. Cash comes later and depends on a second sale you have not made yet.
Donation or disposal. Amazon can dispose of units for a per-item charge. Donation options exist through Amazon and through third parties; the terms move, so confirm them before counting on any deduction, and ask your CPA about the tax treatment. Cash recovery is zero. The gain is that storage stops.
Illustrative numbers. Take a seller discontinuing a yoga strap set in Sports and Outdoors, where Amazon's published referral fee on sell.amazon.com is 15 percent. There are 1,200 units at FBA, received 60 days ago, with a landed cost of $4.80 per unit already paid: $5,760 that is sunk under every option. Fulfillment fee is $3.60 per unit and monthly storage is $0.12 per unit; both are illustrative, since Amazon sets them by size tier and season. Amazon's FBA page states that aged inventory charges apply monthly to units stored more than 181 days; the illustrative surcharge below is $0.50 per unit per month on units past that mark.
Current velocity is 80 units a month, so the stock clears in 15 months.
At $11.99 the seller's history says velocity triples to 300 a month, clearing in 4 months, before the aged surcharge starts.
Illustrative recovery of $2.10 per unit net of Amazon's charge, paid within weeks.
Illustrative removal charge of $1.00 per unit, then sale through the seller's own site at $6.00 net of payment fees and shipping, with $0.75 per unit of own-warehouse handling, over 6 months.
On total cash, holding wins: $8,058 against $7,020. On cash per month, the markdown wins by more than three to one: $1,755 a month against $537. The hold also carries two risks the markdown does not. Velocity on a discontinued product decays, and if 80 a month becomes 50, the hold takes 24 months, storage and surcharge roughly double, and ad spend grows with them; the net falls below the markdown's $7,020 well before then. The second risk is the calendar. Fifteen months crosses a Q4, when Amazon's storage rates rise, and the numbers above use a flat rate. The Q4-specific version of this decision is in Amazon Q4 storage fees: keep, discount, liquidate, or remove.
Liquidation, at $2,520, is the answer only when the markdown cannot clear the fees. That happens on low-priced, heavy items. A $9.99 product with a $5.50 fulfillment fee and 15 percent referral nets $2.99 a unit at full price; mark it down 30 percent and it nets $0.44. At that point $2.10 from liquidation, with storage ended today, is the better number, and no amount of patience fixes it.
Removal makes sense when a second channel already sells the product at a price that beats the markdown net. In the example it does not: $5,100 with execution risk against $7,020 with none.
Sellers who hold too long usually do it because $5,760 of paid inventory feels like a loss they can avoid by waiting. It was spent the day the PO cleared. The comparison is between the four forward numbers above, and the paid cost appears in none of them. The full argument is in the glossary entry on cash contribution. The gross-margin view, by contrast, shows the $11.99 markdown earning $1.79 a unit over landed cost against $6.04 a unit at full price, and sellers read the $4.25 gap as money the markdown throws away. The hold only collects the $6.04 by paying storage, surcharge, and ads for 15 months, which is the part the gross-margin view leaves out, and it is the view that keeps 1,200 units in a warehouse for over a year.
Ask Crunch, the analytics AI inside ConnectBooks, whether to liquidate a discontinued product or keep selling it at a lower price, and it evaluates the SKU from the cash-contribution view above. It treats already-paid COGS as a sunk cost and weighs future storage fees, long-term and aged inventory fees, expected sell-through, selling fees, sales velocity, expected cash recovery, and incremental cash contribution, then ranks the SKU as hold, discount, liquidate, or remove. The inputs come from reconciled data: units on hand by warehouse from the inventory tracking layer, fee history from settlements, velocity from the sales history, landed cost from the PO.
What it cannot do. It cannot know that velocity at $11.99 will be 300 a month; it projects from what the SKU did at that price before, or from the catalog, and if the product has never been priced there the projection is an estimate. It cannot see a wholesale buyer you have been talking to, or a second channel where the product might sell. It cannot know your liquidation recovery rate before Amazon quotes it. And it takes no action: the price change, the liquidation request, and the removal order stay with you.
Run the four numbers on your own discontinued SKU. If the markdown clears the fees, sell it cheaper. If it does not, liquidate this week and stop paying storage on a decision you have already made.
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