To accommodate the increased number of sellers using FBA in the early days of the global pandemic in 2020, Amazon FBA restock limits were imposed to help ensure that all sellers had space for their products. This may have impacted your business due to not being able to put stock into Amazon FBA and at the same time Amazon also paused shipping all but essential products for a period of time. Amazon had to effectively reset in order to cope with the onslaught of demand caused by the pandemic.
If you are not aware of what to do, or what Amazon restock limitation means, then, it can be quite a handful to deal with. Not only the Amazon restock limit itself, but the fact that it constantly changes.
It’s also not helping that restock limitations are still within early stages, so sellers have to tread to unknown territories most of the time.
Within this article, we’ll give you things you need to know about the Amazon restock limits, as well as some tips that can help you out in your biz.
2021 Amazon Restock Limits Update
Previously, Amazon imposed an ASIN-level quantity limit for products that are sent through Fulfilment By Amazon. Amazon said they made this change from ASIN level to restock limits to ensure that they could receive and store products sent by all sellers who use FBA allowing sellers to benefit from sending in inventory in relation to their utilisation capacity without an ASIN level restriction. However, needless to say, this update was met with unpleasant reactions from sellers.
The official Amazon correspondence reads as:
“Effective April 22, 2021, FBA products will no longer be subject to ASIN-level quantity limits. Instead, restock limits will be set at the storage-type level, offering you more flexibility in managing your shipments.”
With this, restock limits are now based per seller’s account level, not the ASIN level and are measured by Storage Type. For a seller to check their restock limits, they need to go to the Inventory Performance Dashboard in Seller Central, scroll down to the bottom, and click on the Restock Limits tab. Doing this will expand and provide the Restock Limits on that account. Sellers can also review their Storage Volume per Storage Type clicking on the Storage Volume tab.
As of the 16th of May 2021, Amazon FBA restock limits have been decreased so that your products can be received as quickly as possible. This change does not affect customer delivery. On average, sellers can restock 2 to 3 months of inventory in fulfilment centres. Amazon says that they have already taken similar steps for their own retail products.
How does this affect sellers?
The change was primarily due to Amazon’s efforts in improving the policies and programs to better receive and store sellers’ products. However, not all sellers are ecstatic with this recent development. Despite some sellers benefiting from this, there are some that still find it unfavorable.
While it’s still new, the policy states that for sellers, each storage type allows for 1,000+ total units of storage. The storage types consist of Standard, Oversize, Apparel and Footwear. Also for new sellers, it seems that each type has a 200-cubic foot storage limit. On the other hand, for seasoned sellers, so long as you have an Inventory Performance Index Score of above 500 (as of the July 2021 update), you theoretically have unlimited storage - taking into consideration the restock limits.
Consequences
With this change, some sellers had a massive drop in their restock limits and storage capacity overnight since Amazon announced this without prior warning. There were some sellers who immediately got tagged as exceeding their limit. Some even received emails from Amazon advising that their incoming shipments have been canceled, and that they need to contact their provider to have the shipment sent back.
Quick Fix To Improve Amazon Restock Limits
You can create more room for products by selling through your inventory, creating removal or disposal orders for products that are unlikely to sell, and canceling non-urgent open shipments. Note that restock limits are determined by multiple factors that include Prime Day deals, new selection, your past and future sales, current inventory levels, shipping times and available fulfilment centre capacity.
Remove Unnecessary Inbound Shipments - Immediately!
The sooner you delete unnecessary inbound shipments, the better.
Your utilisation, and potentially your sell-through rate are affected by your inbound shipments. If you have shipments created a while back that are still open, you might want to delete those as it will improve your utilisation total, meaning you can send more stock in.
You have to delete these shipments as Amazon factors them into your sell-through rate (unit basis), which will be carried through for the next 90 days as part of your average utilisation. If you are having a problem deleting a shipment, call up Amazon, ask for assistance, and they will delete it for you instead.
Amazon Double-Counted Inventory Glitch - U.S. Only
Before we discuss this tip, we have to know what the North America Remote Fulfilment or NARF program is first. Enrolling in the NARF program means that all of your stock is sent to the United States, which means that Canada and Mexico are fulfilled through your United States inventory.
Now, in order to avoid the Amazon double-counted inventory glitch, follow these steps:
Inspect your levels for possible double-counting
Document it
Report it to Amazon
Turn off or unenroll from the NARF program to see if it will fix the problem.
Amazon’s New FBA Liquidations Program
In order to help sellers who have stale inventory (excess and slow selling), and wants them cleared off, Amazon has launched a liquidations program within FBA.
Amazon has stated that you will recover 5-10% of your item’s average selling price, which will be paid around 60 to 90 days after the liquidation order has been submitted. It may not be a really profitable amount, but you have to remember that you are doing this to increase your inventory limit, not to mention that a slow-selling product incurs storage fees. Also, think of it this way, would you rather keep a slow-selling product within your FBA inventory, than send in a fast-selling product in replacement of the one liquidated?
Here’s how you can increase Amazon FBA storage space through the liquidations program:
Create a “Removal Order”
Choose “Liquidation”, or you can download a flat file and do a “Bulk Liquidation order”
Note: Liquidation fees apply if your inventory is sent to a liquidator. Amazon will be charging you a certain amount per unit based on the product’s weight.
Here’s a snapshot of the fee matrix:
As with other programs, this one also has it’s pros and just a single con. Pros include freeing up space from stale inventory, and despite the small amount you will get from it, it’s still money you can use for other expenses. The only con is that the removal orders do not count towards your sales velocity.
Increase Amazon Storage Limits - Key Metrics To Look At
Sell-Through
Sell-through is the most significant inventory for Amazon. As a seller, you have to understand that Amazon warehouses are distribution centres, and not storage facilities. They prefer you sending items that sell out, rather than items that are stuck in their facilities.
Utilisation
On the other hand, Utilisation is when Amazon looks at how you utilise your allotted storage limit. Amazon basically looks at your ability to sell out products.
The most basic explanation would be, you sending out your items to an FBA facility, and not being able to turn them over could potentially hurt your goal of having an increased storage.
PPC Adverts To Increase Sales
To increase your sales and sell through rate (thus helping to allow for more shipment capacity) you could commence using Amazon sponsored ads for your listings which you have or do gain the Buy Box for. Sponsored Product ads are the most popular type of ad for Amazon PPC. The winner of the auction pays Amazon each time a shopper clicks on their ad (not every time it shows up).
There’s a reason why Sponsored Product ads are the most popular—they can appear on almost every page throughout a shopper’s Amazon journey and have a substantial effect on boosting sales.
Cross Fulfilment to Other Marketplaces/Platforms
With 14 country-specific marketplaces, 175+ fulfillment centers around the globe, and active shoppers in over 180 countries, Amazon Marketplace has become a globally recognised name. Its international footprint alone is enough to entice any online business to consider expanding internationally. But the marketplace giant boasts much more than just reach. There are also a ton of cross-border Amazon tools that can help sellers successfully reach new markets for you to investigate and launch across Europe and beyond to sell your goods and increase your sales. Just bare in mind the set up and VAT requirements when doing so.
You can also look to start selling your listings on other platforms such as eBay to provide greater customer reach and manage the fulfilment of sold products manually or automatically via Amazon's multi-channel fulfilment (MCF) programme. This programme makes it easy for you to fulfill orders with accuracy and ease, while taking advantage of the logistical tools and shipping and delivery services Amazon has to offer.
Final Words
This new policy change has had a huge impact on seller’s but it is those that pivot and change their approach who will succeed and in utilising the steps in this article, to perform closer inventory management checks regularly will help to improve your utilisation capacity and expand your sales.
Within any business you need to follow the Ultimate Formula for Success which is:
Know your outcome
Always know your reason why
Take consistent action
Understand the results and what you get
Change your approach
This is exactly what we teach our Academy members to do day in and day, and assist them with the most strategic way of dealing with and effectively managing new policy changes so they can come out on top. Feel free to contact the OSC team to learn more about how we can help you do the same!
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