Unfulfillable Inventory (Amazon)
Definition
FBA units Amazon cannot sell because they are damaged, expired or defective, usually from customer returns or warehouse handling. You must remove or dispose of them, or Amazon may do it for you.
Want a deeper explanation?
Unfulfillable units are still your inventory until removed or disposed, and their value should reflect their real condition.
If Amazon damaged them, you may be owed a reimbursement. Watch for: unfulfillable units left on the balance sheet at full cost, which overstates inventory.
Example
120 returned units are marked unfulfillable. You pay a removal fee to have them sent to your 3PL, where 70 can be repackaged and resold.