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The Amazon FBA program is a service that provides sellers with a convenient way to fulfill orders on the Amazon marketplace.
With fulfillment by Amazon, sellers only have to ship their products to an Amazon fulfillment center while Amazon takes care of everything from storing and handling your Amazon products to picking and shipping them to customers.
However, amidst these benefits, the FBA program also has its limitations. One of them is the Amazon FBA inventory limit.
As an Amazon FBA seller, understanding your Amazon FBA inventory limit is critical to proper inventory management and your overall success.
In this article, we look at all you need to know about an Amazon FBA inventory limit and how it can affect your business.
An Amazon FBA Inventory Limit, now referred to as FBA Capacity Limit is a storage limit placed by Amazon on sellers. It specifies the maximum number of Amazon inventory you can store at Amazon fulfillment centers. This inventory limit varies from seller to seller.
You may be thinking, why does Amazon have an inventory limit? Well, while Amazon has many fulfillment centers all over the world, Amazon wants to have fewer products in their storage picking up dust.
If you have a high sell-through rate, you will likely be able to send more products to fulfillment centers. On the other hand, if you overstock or have a slow-selling inventory, your Inventory Performance Index (IPI) will take a dip, decreasing your FBA inventory limits.
To check your Amazon FBA inventory limits, simply go to your Seller Central Dashboard, and on the Inventory menu, click on Manage Inventory > Manage FBA shipments.
At the end of the page, you will see “Storage Volume” and “Restock Limits”. Go to “Restock Limits” to see how much storage space is available for different storage types. You will also find the following quantities:
In February 2022, Amazon placed restock limits for different storage types. Each product is categorized into one of six storage types: standard, oversized, footwear, apparel, flammable, and aerosol. These categories are based on the product's characteristics, and storage limits are applied depending on the type. This means that sellers were no longer limited to ASIN-level restock limits which were introduced in 2020 due to the pandemic.
With the storage-based restock limits, sellers can create shipment plans without worrying about ASIN restrictions.
However, this type of inventory limit also has its limitations. For example, it may be difficult to add new products or more products to a particular storage type. Also, if your available inventory and inventory in transit go over your restock limit, you won't be able to create a shipment on your Amazon seller account.
If you try to ship inventory above your restock limit, you will be violating Amazon's Terms of Service. When your on-hand inventory exceeds your capacity limit, Amazon charges excess inventory fees. These fees are calculated based on the difference between your actual inventory and your capacity limit. Continuously shipping above your FBA capacity limits can lead to account suspension and if you consistently fail to comply with FBA capacity limits, Amazon may delist certain products from sale.
The only way to get around your Amazon FBA inventory limit is to store your inventory at a third-party fulfillment center or your own storage space. Any shipment plan created will be canceled.
Here are effective strategies to manage and avoid hitting your FBA storage limits:
Amazon revises inventory limits based on how well a seller performs. So here's how you can increase your Amazon FBA inventory limit:
Amazon calculates your restock limits using your sales history. If you can generate more sales, you may get a little increase in your maximum inventory limit. Several strategies can help you increase sales for slow-selling inventory. You can invest in PPC campaigns to increase visibility and ultimately boost sales. Additionally, you can drive external traffic to your product listing using email marketing and social media.
Your IPI score or Inventory Performance Index is a metric that reflects your inventory performance over a period. It shows how effectively you are managing your Amazon inventory.
Improving your IPI score may earn you a boost in your FBA restock limits.
Here are a few ways you can improve your IPI score:
If your IPI score is above 450, it is considered good on Amazon. If maintained for a few weeks, you get unlimited storage space for each storage type. However, restock limits will still apply.
Amazon charges long-term storage fees if your inventory is stored in Amazon fulfillment centers over a full year. You want to avoid these fees by generating sales for slow-selling inventory.
Inventory management can become challenging especially if you are selling multiple products. As an Amazon seller, you want to ensure you have enough products in stock and also avoid overstocking products.
To accurately predict this, you can invest in inventory management tools. This will automate the process and help you maintain a good IPI score.
Use historical sales data and market trends to accurately forecast demand. This helps you get just the right amount of inventory to meet customer needs without overloading your FBA storage. Be proactive in managing your inventory levels, especially during peak seasons. This can help you avoid last-minute rushes that could lead to exceeding your storage limits. If you have slow-moving items or inventory that cannot be stored in Amazon's fulfillment centers, you can consider using Amazon’s secondary warehouses or a third-party logistics (3PL) provider to manage your inventory and free up FBA space.
Restock limits for individual sellers are different from those for professional sellers.
Individual sellers have a fixed restock limit of 500 units for standard-size storage products and 100 units for oversized storage products. In contrast, professional sellers may have more flexible and higher restock limits, which can increase over time based on their performance and adherence to Amazon's policies
There are no scheduled dates when Amazon revises restock limits. The restock limits are revised based on the performance of sellers, particularly their Inventory Performance Index (IPI) scores. Amazon regularly assesses your performance, including aspects like sell-through rates, return rates, and order fulfillment rates and improvements in these areas can lead to higher restock limits. So, following best practices to increase your restock limits improves your chances of getting a good review.
Handling Amazon FBA inventory limits can be quite challenging. However, with proper planning, you can navigate the restock limits and manage your inventory properly.
If you have further questions on how to handle Amazon FBA inventory limits effectively, you can speak to one of our Amazon FBA consultants on ePlaybooks right away.
To check your Amazon FBA storage limits, log in to your Amazon Seller Central account, and on the Seller Central dashboard, locate and click on the "Inventory" menu. Select "Manage Inventory" to view and manage your inventory across all channels, including Amazon FBA. Next, choose "Manage FBA shipments". At the end of the "Manage FBA shipments" page, you will find information regarding your "Storage Volume" and "Restock Limits". These details indicate how much storage space is currently available for different types of storage.
The FBA storage limit or FBA capacity limit, is a monthly limit that determines how much inventory sellers can send and store at Amazon's fulfillment centers. Your FBA storage or capacity limits are determined by various factors, including your sales volume, historical IPI scores, and available fulfillment center capacity. Amazon uses these metrics to calculate your storage limits.
To review your FBA storage fees, go to your Amazon Seller Central account, and click on the menu button located on the top left-hand corner of the page. From the dropdown menu, select "Reports". Then, click on "Fulfillment" under the Reports section. You will be directed to a fulfillment-related page. On the left side of the page, under the "Payments" section, select "Monthly Storage Fees". You will be able to review your short and long-term FBA storage fees.
Amazon calculates FBA storage fees based on several factors, including the daily average volume of the space your inventory occupies in fulfillment centers, the product type, size tier, and the time of year. Amazon does not provide a public formula for calculating storage fees, however, you can estimate their costs using an FBA calculator.
Amazon FBA has specific size limits for the boxes used to ship products to fulfillment centers. When preparing your shipments for Amazon FBA, aim to pack your products within the optimal box dimensions of 6 x 4 x 1 inches to 25 inches on any side. Also, the maximum allowed weight per box is 50 lbs. You want to stay within these limits to avoid delays and restrictions.
New professional sellers who are less than 39 weeks old are not immediately subject to FBA capacity limits since Amazon has not yet evaluated their inventory performance. However, after 39 weeks, new sellers do not have a fixed starting capacity limit. Instead, their FBA storage limits are determined by several factors, primarily their Inventory Performance Index (IPI) score. This IPI score evaluates performance based on factors such as order fulfillment rate, on-time delivery rate, cancellation rate, and return rate. A higher IPI score indicates better performance and leads to higher FBA capacity limits.
You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us Now