Since its introduction in 2006, the Fulfillment by Amazon (FBA) program has been an incredible time saver for sellers. The program allows sellers to list their products on the site and have them store their inventory in Amazon’s fulfillment centers for them to pack and ship on behalf of sellers.
During the height of COVID-19 lockdowns in 2020, the demand for e-commerce drastically increased. Amazon did not have enough fulfillment centers to handle this, and the need to decrease their warehouse workforce to respect social distancing forced the platform to develop a solution to solve logistic problems.
Amazon has since then implemented restocking limits, which we will focus on in this blog post. We will also talk about where you can view your Amazon FBA storage limits and how to overcome the difficulties that come with these new changes.
What Changes Have Occurred in Amazon’s Restocking Limits?
In July 2020, Amazon started a restocking policy called ASIN Level Limits wherein new ASINs were only allowed to store 200 units of inventory each. There was a lot of backlash from Amazon sellers over this.
The policy also considered an ASIN’s sales performance. If an ASIN was selling well, sellers were allowed to restock or hold a higher quantity of that particular ASIN. If an ASIN was not selling well, sellers would only hold a lower quantity of that particular ASIN.
Later on in 2021, Amazon suddenly implemented a Total Storage Level limits system for an entire account.
This Total Storage Level limits system is based on the storage capacity of Amazon’s fulfillment centers for each particular seller. This means that not all sellers are provided equal amounts of storage for their inventory.
There are positives and negatives to any sort of change, which we will tackle in the next few sections.
How Does This Recent Change Affect Me as an Amazon Seller?
Since Amazon no longer sets any restocking limits on particular ASINs, this gives an Amazon seller the liberty to decide how many units of each particular product they want to store in the inventory that Amazon provides for them.
This takes a bit more effort on the part of Amazon sellers because they will need to constantly observe the sales trend of their items and restock accordingly. Amazon sellers can even feel the need to remove items from their inventory to make space for better selling products if necessary.
A benefit, however, is that sellers will be able to choose to store more units of items that the previous ASIN Level Limit system had set restrictions for.
For example, if your best selling item is a Toothbrush Set and Amazon allowed you to store 500 units of it under the ASIN Level Limit system, you can now choose to store as many as you want as long as it does not exceed the storage capacity Amazon has assigned to you.
This new implementation gives Amazon sellers opportunities to:
- Experiment the best number of units to restock for per product
- Manage inventory for new launches
- Manage our shipments
- Allocate more storage for new ASINs
What Are Some Downsides to the New Restocking Limits?
With any kind of positive change, some downsides will always be noticed at some point.
Many Amazon sellers have recently complained about inconveniences brought by the new Total Storage Level restocking policy. The sudden implementation was a headache for sellers who already had their inventory en route to fulfillment centers.
Over time, sellers have experienced decreases in their restocking limits, observable by up to 70%.
Sellers have also been experiencing situations where the number of units stored in Amazon warehouses exceeds the number of units that Amazon was allowing to be shipped to the warehouses.
This has been affecting the ability for sellers to create a feasible shipping plan. Shipping plans are crucial to ensure that products are constantly in stock at the right quantities based on how fast the products sell.
How Can I Check My Personal Restocking Limits?
Like mentioned earlier, each Amazon seller is now provided a different restocking limit.
These limits get updated regularly and are calculated based on a collection of data on sales history and forecast of sales, and there are set limits for each storage category.
To access your allotted restocking limits, log on to Seller Central, then on the main toolbar, hover over Inventory and click on Manage FBA Shipments. Scroll to the bottom to find “Restock Limits” and “Storage Volume”.
When you click on Restock Limits, you will see the number of units Amazon will allow you to store with them.
To know how many units Amazon will allow you to ship to them (Maximum Shipment Quality), just deduct the Maximum Inventory Level from your Utilization Quantity.
What Can I Do to Overcome the Restocking Limits?
Liquidate slow moving items
Amazon created a new program to help sellers liquidate their items that are not profitable so that they can create more inventory space for better selling items.
Ship only profitable items
It would be a disaster if you run out of stock for fast-selling items because your inventory mostly consists of slow-selling products. Prioritize the items that you know sell at a fast rate to take advantage of the limits set in place.
Create removal orders for items that are not selling
If one or more of your ASINs are not selling well and are at excess inventory in warehouses, you can reconsider the quantity that you will be storing these items for. Create removal orders to be able to free up space and give priority to better selling ASINs.
Increase sales using Prime Day, PPC, Promotions
Use these methods to improve the speed of sales, which will then free up inventory space and allow you to decipher the number of units per ASIN that should be stored in warehouses.
Prime Day is a 2 day event where Amazon sellers provide huge discounts exclusively to Prime members.
PPC (Pay Per Click) marketing is used by Amazon sellers to pay a certain amount per click for their product to appear on relevant search results.
Promotions like Lightning Deals give Amazon customers a very limited amount of time (usually 4 to 12 hours) to buy discounted products. Only a few Lightning Deals are offered for each product.
Increased sales in your Amazon store will be a factor for your restocking limits to increase!
It’s no surprise that Amazon has been in high demand due to COVID-19. The need to stay home gave people no choice but to buy their wants and needs online as much as possible.
The restocking limits have had its positives and negatives for Amazon sellers. We hope that this article helped you understand them and think of the best way to persevere.
If this sounds like something you need help understanding or managing, don’t hesitate to reach out!
For more Amazon inventory content, read the Sourcing Monster blog!