• Amazon Storage Limits

    By ZonSupport | Posted on April 30, 2021| Blog

    Amazon’s recent announcement regarding the change to how they will calculate storage limits is arguably two steps forward and two back.

    Yes, it makes it so much easier to understand and to plan for. But, you really need to get into the detail to ensure you understand the implications, particularly around shipping plans.

    Your restock limits are now at the account level, not the ASIN level, and they are by “storage type,” at the account level. This is a very significant change in direction by Amazon.

    The different storage types have limitations listed eg standard size storage, oversize storage, apparel storage, and footwear storage. 

    As always there are two sides to every coin and this will impact sellers in different ways depending on their activity. I read a blog written by Helium 10 and found it the most informative I have seen on this topic.  So, I reached out to them for the OK to summarize their blog on this simple but complex change.

    Here’s the Amazon announcement:

    “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.”

    How can you see what your limitations are?

    First, go to your Shipping Queue in seller central.

    Then scroll ALL the way down to the bottom and you’ll see tiny tabs that are very easy to miss:

    Click on the Restock limits, and it will expand and show you your limitations. 

    It’s not all rainbows and unicorns though.

    The Negative Implications of Amazon’s Changes

    This inventory capacity also includes your inbound shipments. So, if you are stocking up ahead of a sales season for your product, you can quickly run out of “capacity.” This will stop you from creating a new shipment plan so for now we remain stuck with using a 3PL service.

    Many sellers are already posting about this so maybe over time Amazon might change how this new limit is executed.

    What are the current options for Amazon Sellers?   

    You will have to play the waiting game and use a 3PL as your local storage and trickle in your inventory as your limit allows.

    The transit time will be a week in most cases (assuming Amazon can actually get them processed) as opposed to around 2 months from China, Vietnam, India, etc.

    Shipping products to a 3PL is just like shipping them to Amazon. However, any warehouse will charge you money to receive and store this inventory so you need to ensure you take account of these costs ahead of time.

    A Closer Look at Amazon’s Changes

    Amazon has a very detailed FAQ page about the ins and outs of this new standard. Let’s go over a few of the questions to see what we can learn. 

    First of all, Amazon offers a big highlighted text warning to the sellers out there who, like during the Covid limitations last year, might want to try to skirt the system by using browser tricks or other hacks to get extra inventory.

    How are restock limits by storage type determined?

    Amazon explains that the limitations are based on past and forecasted sales. So, in many cases, you should be ok if you have had steady sales, and do not have too much stock on hand and on the way. 

    How do you calculate utilization?

    As mentioned earlier, your utilization doesn’t just consist of your on-hand inventory.

    As with the previous ASIN level inventory limitations, all of your incoming shipments, including shipments in working, transit, or receiving status are also included.

    What is NOT included in your utilization are inventory pending removals as well as reserved inventory.  

    Will my FBA restock limits change?

    Amazon says that they “will update restock limits regularly.” How regularly, we are not sure. It seemed like for the ASIN level restrictions, they would update it daily. 

    How can I reduce my utilization to create additional shipments?

    There are various ways to do this. Selling more product, pulling inventory OUT of Amazon to your local warehouse, or canceling open shipments that you have that you do not plan to use. 

    How do my Multi-Channel Fulfillment (MCF) orders affect my restock limits?

    There is a positive here. If you sell on Shopify or other websites and use MCF to fulfill those orders,  you will be happy to know that these shipments are included in your past and forecasted sales, and absolutely will have an impact on your restock limits. 

    In summary, it is even more critical that you create a realistic sales forecast and plan your inventory requirements in detail.

    If you are near their limit and your sales velocity and lead time are going to take you to the wire then stop. Longer shipping times are our new reality so don’t cut yourself short to avoid using a 3PL and end up running out of stock! 

    If you are well under the limit with your current product range, then launching a new product just became easier as you are no longer limited to  200 units. 

    Regardless of which bucket you fall into, just remember that all sellers are being affected in the same way. The key is to understand your new reality and plan accordingly. 

    As always, ask us anything. If we don’t know the answer, we’ll know someone who does!

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