Amazon FBA Quantity Limits will be imposed from August through to the end of the year in the US, as Amazon start to rebuild their business during what is still an accelerating coronavirus pandemic in the US and indeed around the world. Far from being subdued in the US, testing is revealig 10s of 1,000s of new infections on a daily basis in the US and so Amazon are taking what can only be viewed as prudent steps to ensure they don’t have to shut down FBA again to incoming goods.
Amazon are reassuring merchants that “Most products will have enough space available for over three months of sales”. This does mean that you can’t simply pack FBA with inventory in September and will likely have to replenish stock during the fourth quarter. For some this will create the awkward situation of having inventory for the fourth quarter arrive and be unable to dump the whole lot in FBA – a particular issue for those who ship direct from the factory to FBA. The Amazon FBA quantity limits may mean breaking incoming goods into partial shipments for onward shipping to FBA.
To help merchants manage inventory as Amazon FBA Quantity Limits are introduced, Amazon are offering free removals from the FBA warehouses in the US for a limited time commencing today. If you have aged stock now is the time to get it back… or consider liquidating it through Amazon with price cuts and promotions. Don’t miss the important point that Amazon are upping the IPI score requirement to 500 in the US (400 in the UK) so aged stock not selling could impact your entire account.
Full Amazon FBA Quantity Limits announcement
“Given the unprecedented challenges the COVID-19 pandemic has placed on all of us, we are preparing early to deliver a great holiday season for our customers and selling partners—building out capacity as quickly as we can so we can deliver products customers need and want directly to their doorsteps and help you continue to grow your business.
We’ve been investing heavily for many years to support selling partners like you, and over the course of 2019 and 2020, we’ll invest more than $30 billion to build capacity, tools, services and programs for sellers, as well as to hire more people. We’re on track to open 33 new fulfillment centers in the US this year, which will increase peak fulfillment center standard-sized product storage capacity by nearly 35 million cubic feet more than last year.
Since the pandemic hit, COVID-19 has impacted supply chains around the world, and we’ve all had to make fast adjustments. Amazon hired more than 175,000 employees and invested billions of dollars in COVID-related initiatives to help meet increased customer demand and protect the health and well-being of our employees as they pick, pack, and ship your products to customers. As a result, selling partners have had record sales on Amazon and continue to account for more than 50% of units sold in our store.
Even though it’s July, we’re preparing early for the holiday season to meet sustained increased demand, and have already reduced our own Retail product ordering to accommodate more of your products and help you continue to see sales growth.
To ensure we’re ready to best serve all of our selling partners and customers, we are introducing the following adjustments as we begin our ramp into peak:
Inventory Performance Index threshold change
We are working to manage inventory performance to ensure all products have space available during peak. To enable this, we are changing the IPI minimum threshold requirement to 500. Sellers below 500 will be subject to limits effective August 16, 2020 through the end of the year.
The majority of sellers will not be impacted by this change. Most sellers with IPI scores below 500 will have more storage space than last year.
You can improve your IPI by following guidance on improving sell through or reducing your excess and stranded inventory in the Inventory Performance Dashboard.
To maximize selection for customers during peak, we are introducing ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales.
You can view quantity limits for your products on the Restock Inventory page and the Restock report. We will continually review this and, when possible, make adjustments to allow for more of your products.
Free removals promotion
To help you avoid storage fees for products that have not been selling and create room for more productive inventory, we are offering a free removal fee promotion for a limited time. We will waive your fees for any removal order submitted for inventory in our fulfillment centers beginning July 14, 2020.
To create a removal order, please visit Inventory Age and choose Create removal order from the menu next to any FBA item in your inventory.
For further guidance, you can review frequently asked questions on this Help page.
While no one has a perfect playbook for how to respond to COVID-19, our commitment to supporting your business has never been more steadfast. We will continue to make adjustments to best support your business and keep you informed along the way. We appreciate your partnership as we improve the efficiency of our fulfillment network to prepare all selling partners for a successful peak season.”