wiki/knowledge/amazon-strategy/doudlah-awd-inventory-crisis.md · 678 words · 2026-04-05

Doudlah Farms — Amazon AWD Inventory Crisis & FBA Migration

Overview

During the November 2025 weekly review, Mark and Gilbert identified a significant inventory management crisis stemming from Amazon's AWD (Amazon Warehousing & Distribution) service. Unreliable replenishment, full AWD warehouses, and approaching expiration dates on perishable goods forced an immediate pivot to FBA-only fulfillment and a more aggressive inventory ceiling policy.

Related meeting: ^[1]

The AWD Problem

Amazon AWD was originally adopted for Doodla because it offered lower per-unit shipping and storage costs, particularly for bulk pallet shipments. Over time, however, several compounding issues made it untenable:

Replenishment failures: AWD was not reliably transferring stock to FBA fulfillment centers, causing phantom inventory — units that existed in AWD but were unavailable for customer orders.
Warehouse capacity locks: Amazon declared AWD full, blocking new inbound shipments entirely.
Expiration date enforcement: AWD will not ship any product expiring within two months, leaving perishable goods stranded and unsellable.

"AWD became unreliable because they were giving us all this trouble about replenishment, and we were having all kinds of problems with it. And then I tried to make a shipment into AWD, and it said that AWD was full."
— Mark Hope

Expired & At-Risk Stock

Several SKUs were flagged as expired or imminently expiring at the time of the call, with no viable path to sale:

Product	Location	Status
1 lb Pinto Beans	AWD	~1,000 units; will not sell through in time
1 lb Black Beans	AWD	Already flagged by Amazon as expired
25 lb Kidney Beans	AWD	26 units; flagged for disposal

These units are expected to be disposed of by Amazon, representing a direct write-off. The root cause was over-stocking AWD during the initial launch phase when the goal was to build a deep buffer.

Resolution: FBA-Only Migration

The immediate corrective action was to halt all new AWD shipments and route everything directly to FBA. Key directives from the call:

All new inbound shipments go to FBA only — including Carly's upcoming order, which Mark confirmed should be redirected.
Maximum inventory target: 3–4 months on hand — enough to avoid stockouts without risking expiration or excessive storage fees.
AWD to be monitored but not used — the team will watch for stability improvements before reconsidering AWD, potentially for high-velocity SKUs like popcorn.

"What we need to do is keep our inventory at three months or four months or less and have everything at FBA, at least for a while."
— Mark Hope

Coupon Policy for Excess Inventory Liquidation

To accelerate sell-through of existing overstock before expiration, a tiered coupon policy was established:

Inventory Age	Coupon Discount
6–12 months on hand	20% off
> 12 months on hand	25% off
< 6 months on hand	No coupon required (unless new product launch)

Specific SKUs actioned during the call:
- 1 lb Pinto Beans → increase to 20–25%
- 25 lb Great Northern Beans (14 months inventory) → set to 25%
- 25 lb Yellow Popcorn (14 months inventory) → coupon re-enabled at 25%
- Whole Wheat Flour (>6 months) → increase from 10% to 20%

The guiding principle: selling at a 20–25% discount is always preferable to disposal at zero recovery.

"We'd rather sell it at a 20% or even a 30% discount than to throw it away."
— Mark Hope

Ongoing Inventory Management Targets

Going forward, the Doodla account should be managed against these guardrails:

Hard ceiling: No SKU should exceed 6 months of inventory on hand
Coupon trigger: Any SKU crossing 6 months automatically gets a 20% coupon
Escalation trigger: Any SKU crossing 12 months escalates to 25% coupon
AWD moratorium: No new AWD shipments until the service demonstrates stability

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