The Fulfillment by Amazon (FBA) program makes it easy for sellers to outsource storage and fulfillment. But this perk is bound by Amazon restock limits.
This is the threshold set for the products sellers can store in fulfillment centers.
Back in 2020, Amazon set new restock limits for FBA sellers. These changes aimed to avoid potential pitfalls during the holiday season.
Amazon FBA Inventory Storage Limit 2021
In 2021, the retail giant announced the new Amazon storage limits for retail sellers in response to the growing number of fulfillment centers in the USA to 33.
Each one with a total storage capacity of 35 million cubic feet!
Now, the retail giant introduced some new changes to its restock policy. It’s crucial that sellers keep track of these updates, so it won’t affect their current storage levels and hurt their long-term sales.
So, without further ado, here’s a rundown of these new Amazon restock limits so you can crush 2022.
What are Amazon Restock Limits?
As its name states it, this is the limit set by Amazon for any FBA storage in their fulfillment center. Amazon put it in place to ensure brands sell their stock.
So, if you own a low-selling product, you won’t be able to restock until you sell those units and get them out of the warehouse.
If you remember, Amazon set the ASIN-level quantity limit to only 200 units in 2020. This move caused some controversy among sellers, because it made it harder for them to launch new items.
Now, the marketplace outlined some new changes regarding new Amazon restock limits in February 2022.
For starters, sellers have no ASIN-level restrictions anymore. However, they now have storage-level limitations.
This means that Amazon restock limits now depend on the restock limit criteria you fall into, and your storage type. These are standard-size, apparel, oversize, footwear, aerosol, and flammable.
Restock thresholds also depend on volume (measured by cubic feet), and on the stock in transit to the fulfillment center.
Amazon FBA Storage Limits
Amazon counts the recent sales volume and the previous year’s seasonal volume to establish the FBA storage limits for the upcoming quarter.
Restock limits will also change depending on available fulfillment center capacity, and on Inventory Performance Index (IPI) scores.
Individual selling accounts have a set restock limit of 10 cubic feet. These accounts are not subject to restock limit promotions.
Professional accounts with storage limits will have at least 25 cubic feet for standard-size, over-size, apparel, and footwear items.
However, professional selling accounts are subject to the new restock limits, depending on whether they meet some criteria:
- Keep an IPI score of 400 or above to be exempt from restock limits for clothing, footwear, oversize and standard-size products.
- Sellers active for less than 26 weeks, or without sufficient data to generate an IPI score won’t incur restock limits.
To calculate IPI scores, sellers must keep popular products in stock (which drives sales), and manage their on-hand inventory efficiently (no over- or under-stocking).
Professional account holders can track their IPI on the Inventory performance dashboard and learn more about IPI from the IPI help page. The dashboard works as a hub for optimizing your FBA business, including customized recommendations to increase sales and reduce costs.
The IPI score is updated weekly and determined by your ongoing inventory management.
How to Increase Amazon Restock Limits
Your Amazon restock limits may vary, according to the product type and inventory situation at the warehouse where you stock your products.
However, there are a few tactics Pro sellers can use to boost their Amazon restock limits:
· Increase your sell-through rate to balance out the inventory (selling more steadily rather than in spurts).
· Avoid stranded inventory and fix any issues immediately to make sure that all your inventory is sellable.
Now, let’s review some more in-depth solutions:
1. Keep your IPI scores within the Excellent and Good Range
Starting January 1st, 2022, Amazon increased its IPI minimum threshold from 450 to 400. With these changes, Amazon estimates that less than 10% of brands will have restock limit issues.
The Inventory Performance Index measures your in-stock inventory, excess inventory, sell-through rates, and stranded inventory. Overall – how well you manage your inventory.
Keep an eye on your inventory management throughout the year to avoid running out of stock during this busy season.
Moreover, poor inventory management and sales loss can lead to storage restrictions and affect your seller account and IPI.
An IPI score of 550 or above is commendable.
If your score is lower than 400, this means you’ll need to step up your game to avoid Amazon putting any limits to your storage capacity.
In case you have extra inventory that isn’t selling fast or at all, you’ll get a low score.
If you have sufficient inventory at a given time that is enough to fulfill the orders and some extra when sudden demand emerges, you’ll likely get a high score. A strong sales volume helps as well.
Sellers with a low score will be subject to storage limits. So, keep track of your score on the Inventory dashboard now. If your score is below 400, try to figure out what adjustment you should make to meet the new minimum threshold.
If you have good sales volume and Amazon warehouses have the capacity to stock more of your items, your score will eventually increase.
2. Use Third-Party Fulfillment
If you can, use your own storage space to keep some inventory at hand. Another great option is to hire a 3PL, or third-party fulfillment center.
You can set up these facilities to handle FBM orders. Then, rely on Amazon’s warehouse when you are ready to restock your FBA items.
3. Set Up an Inventory Manager
Invest in an inventory management software to keep track of your storage levels. You can also use it to predict the estimated stock levels you need to meet user demand.
Product Suites like ZonGuru and JungleScout offer great inventory management apps for sellers. They can help you keep tabs on your IPI score, and stay in line with Amazon’s inventory requisites.
That way, you’ll prevent getting excess inventory, and exceeding your restock limits.
Amazon Storage Types
Amazon has different storage limits for six storage types:
- Flammable, and
Each product is classified by only one particular storage type.
You may not see a storage type on the storage monitor if you have a limit of zero for that storage type.
Dangerous goods, such as flammable items and aerosols, are handled separately and require different storage limit adjustments according to the FBA Dangerous Goods (hazmat) Program.
The storage type of your inventory is further determined by the products’ characteristics.
Amazon may adjust your limits based on this.
Calculating Cubic Feet
A cubic foot is measured by multiplying the length by the width by the height of the product in inches to get the volume, then dividing the volume by 1728 (12 cubic inches).
Amazon verifies the weight and dimensions of products using representative samples. If there’s a difference between Amazon’s information and the seller’s information on a product’s weight and dimensions, Amazon’s data will be used to calculate fees. Amazon may change the information about a product’s weight and dimensions from time to time to reflect updated measurements.
How to Deal with Exceeding Amazon Restock Limits
According to the FBA Inventory Storage limits Policy, you won’t be able to create any new shipments to Amazon for a storage type until the inventory level for that particular storage type drops below the given limit.
If you send more inventory than your storage limit allows to a fulfillment center, the excess inventory will be rejected.
Read the Shipping and routing requirements carefully.
Moreover, Storage overage fees will be charged if the existing inventory exceeds your storage limit for any storage type on any day within a given month.
Have a look at the Overage fee help page to know more about this.
To prevent such pitfalls, let’s look at how you can decrease your Amazon inventory levels.
When sellers predicted greater demand, but ended up with excess stock, they can create two problems:
· Holding on to dead inventory – that is, products that won’t sell.
· Creating Long-Tail stock – an extended slowdown on your sales.
Such scenarios only generate higher long-term storage fees for sellers. Plus, you reduce the warehouse space available for selling items. In that case, it’s crucial to reduce your inventory levels.
If you want to reduce the amount of inventory you have at an Amazon fulfillment center, you can sell more inventory. The Manage Excess Inventory page gives recommendations to increase sales.
If that won’t solve the problem, you can submit a request to return the inventory to yourself or have the inventory disposed of by creating a removal order. This works well for products that aren’t selling well. See Remove inventory (overview) for more information.
Submit a Removal Order
Note that when you submit a removal order, the inventory Storage Monitor won’t show the changes until your request has been processed (usually on the following day). Customer returns also impact your overall inventory count.
You may be eligible for free removals under a limited-time Amazon promotion. (There is no set end date for this promotion.) If you predict that you will have excess inventory issues, it is a wise move to take advantage of this and place removal orders.
Removing stock will help you avoid storage fees on excess/stranded inventory. You’ll also be able to create more space for inventory that sells well. Visit the Inventory Age tool and choose “Create Remove Order” from the menu next to the FBA item in question.
Remember, this free promotion is for removal orders only and not for storage fees. If you miss the opportunity to get free removals and end up with stranded inventory, you’ll still be charged storage fees. And they might be higher if your IPI is low. You can go for FBA alternatives if you are looking for a new fulfillment option.
A few more notes on Amazon Restock Limits
- Amazon does not offer the authority to purchase storage space.
- They determine storage types based on the characteristics of that particular product.
- You cannot trade inventory between storage types.
- The previous storage type ‘hazmat’ has expanded to two storage types: aerosol and flammable. They must now be handled separately.
- If you are a new FBA seller, you will not be subjected to storage limits for two full storage limit cycles after you first receive an IPI score. Most sellers will first receive their IPI score nearly 15 weeks after FBA receives their first product.
- A whole new product can get its limit enhanced within two weeks of launch, even without having massive sales.
- Amazon might create the status of any particular product active, even if the product isn’t received by Amazon yet (depending on the characteristics and sales volume of the product).
2022 is set to be another busy year for Amazon. Seasonal sales, Prime Day, Black Friday, and Cyber week are not that far off. Sellers need to prepare to meet customer demand. And to keep sales smooth, Amazon set its new restock limits to prevent the pitfalls faced during COVID-19.
The adjustments to Amazon restock limits are great for both Amazon and sellers. Why? Because they compel sellers to plan for better inventory management.
You need to maintain a high IPI, strong selling velocity, and low storage fees to extract more benefits from the Amazon restock limits promotion.
Start investing in inventory that sells and in marketing campaigns now. Get rid of poor stock and replace it with fast-moving items.
Content Writer & Copywriter at AMZ Advisers