Any seller using Amazon’s FBA (Fulfillment By Amazon program), has to stick to Amazon quantity limits. Amazon is very strict about their fulfillment centers when it comes to size or number of your units. Once you could only ship 200 units per shipment, but their rules, as ever, have since then changed.
Ask any eCommerce seller ״what their biggest struggle is״ and the answer will nine times-out-of-ten be: Amazon’s finicky policies. Their terms and conditions change so often, causing major logistic headaches – storage limits included, whether it’s ASIN policies or ASIN shipment quantities.
And with Amazon being Amazon…it’s important to get updated with your inventory storage limits 24/7, as it has a lot to do with the success of your business.
So let’s get to know:
What is an Amazon FBA quantity limit? And why limit it?
Ever wonder why it’s “fulfillment” in FBA and not, let’s say, “storage” by Amazon? This is because Amazon does not want to turn into a long-term, dust-collecting warehouse. Amazon’s goal is to fulfill your order for all your items to all be sold within a limited amount of time – hence the limit on your storage.
Once Amazon gives you a storage limit, you need to stay just below the limit for your storage type. Sending more inventory than your limit to the warehouse will result in inventory rejection. This means an Inventory Storage Overage Fee of $10/cubic foot for the over limit and any monthly or long-term storage fees.
If you want extra storage, you have to have a good track record of product sales in order to prove that your products all sell, and that you sell a lot of them.
If your items overstay their welcome and your sell-through rates are lower than the industry average, your Inventory Performance Index score will take a hit, a red flag will be raised by Amazon’s algorithms and you will more than likely get a restock limit decrease.
How to increase your Amazon inventory limits?
Ah, the power of IPI!
Your IPI score, aka your Inventory Performance Index, is your queen! Do your best to improve it.
First things first: If you want to hunker down on your restock limits, improve your IPI score. According to Amazon, if your IPI scores are high, you will receive higher storage limits, adjusted for sales volume and available capacity.
The IPI measures how efficient and productive you are in managing your FBA inventory mainly by making sure:
1. Your sold and unsold items in storage are at a balanced rate.
Your aim is to sell more products at any given time while keeping a low inventory rate on Amazon FBA, so your STR (sell-through rates) will improve. Let no item overstay its welcome.
If some items are still in Amazon storage and it’s been 6 months, you’re about to get a courtesy mail that storage fees are on their way. You won’t be charged until 365 days pass.
3. Fix listing problems:
If any ASIN listings in your FBA shipment have become inactive, or have accidentally been deleted entirely (this can also be done by a predator competitor…) this means your listing can no longer be viewed on Amazon. It’s an easy fix: simply re-list the ASIN so your product will be available for purchase again.
4. Check product reviews
Constantly check in with yout seller feedback, product returns and “the voice of the customer” to better understand any issues or opportunities related to your product.
5. Stock on popular items
Make sure your most popular items are consistently in your inventory, so you never run out. At the same time, never overstock that specific ASIN.
6. Reduce excess inventory:
Amazon will catalog an item as “excess” or “overstock” if a seller’s FBA inventory exceeds a 90-days supply. If you sell all your stock within around 40-60 days, you should be in a good spot, and able to avoid overstock fees.
7. Fix stranded inventory.
Some inventory items can get lost. Amazon has nothing to do with it. Stranded inventory can happen due to discrepancy in shipments, being misplaced along the way, some unforeseen bug that rerouted the item, and many more causes. If this problem occurs, go to the sellers account and manage your inventory page. Stranded items should either be rerouted to FBA, re-listed, or just removed.
8. Be aggressive when launching new products.
When you launch a new product, Amazon is intrigued and will give these new products extra exposure to see how the items fare with customers, the “honeymoon” period, if you will. Don’t save money on PPC campaigns. Take them to the max in order to increase sales, improve rankings, and most importantly – improve your sales through rates which ultimately will affect your IPI score.
9. Liquidate long-term storage items.
Once long term items sit on your shelves for too long, they essentially impede on your income, take up space and overall stunt your business growth. Like dead leaves on a healthy plant, not only does it do harm, but you are actually paying for that space as well as overtime fees. Amazon created an FBA liquidation program in order for sellers to regain value from customer returned-products and excess inventory. This initiative taken by Amazon “is designed to help you recover value from returned inventory, avoid storage fees, and prevent the disposal of inventory.”
10. Prioritize your most profitable and best-selling products
A while back, Amazon removed all ASIN limits, only to enact a different approach: sellers can now decrease the inventory for their least profitable products and increase their best selling products.
To make more room for your profitable items, you can actually enact a removal order with Amazon either to dispose of your less profitable products or even have them disposed of (for a fee.) You can also combine FBA for your best sellers and FBM (Fulfilled By Merchant) for the slower items – where you are responsible for storing and shipping the products purchased on Amazon.
Increasing sales = increasing storage limit
Amazon calculates your sell-through rate by the amount of units you sell and ship over a period of 90 days. They then divide it by the average number of units available at an FBA warehouse in those same 90 days.
If their calculations show that your sell-through rate is low, Amazon will actually offer you the next step to take, by going to your “FBA sell-through” in your seller account and clicking “improve sell-through.” You can do that by:
- Create PPC ads, which are designed to boost site traffic, generate leads, and raise brand awareness.
- Drive your external traffic: Choose the best keywords in your product pages and hidden search-term fields, improve product discoverability and optimize your product pages – to ultimately improve your ranking.
- While you focus on selling the items most in demand on your listing, push new products on Amazon with an aggressive launch strategy, as well as running coupons.
- Lower your prices to increase your product visibility, increase conversion rates and improve sales.
Amazon is not increasing my inventory levels. What should I do?
So you’ve been working on increasing inventory and improving IPI and it still didn’t help? Don’t give up. It will get there over time. Persistence is key. In the meantime you can combine your FBA with FBM.
While waiting for your IPI to improve and raise your Amazon storage limit, you can rent your own storehouse or hire a 3PL (third-party fulfillment center) to store your inventory and fulfill FBM orders. As your IPI rises and Amazon sees the good work, Amazon will raise your limits and you will be able to work solely with FBA.
Since the pandemic, all businesses, including Amazon, had to shift their policies, acclimatizing to a harsher reality, especially with the wheels of global chain supply suddenly stuck in the mud.
Many ask if these storage limit policies will ever change – the answer is probably, but not in the foreseeable future.
Stay tuned with Amazon’s TOS for updates about this topic. That is of course why we are here, to keep you updated with any changes the second Amazon announces them.