Exciting changes are coming to Fulfilled by Amazon (FBA) Capacity limits for seller central accounts. These changes were recently announced by Amazon and take effect 3/1/23.
What is Changing:
Historically Amazon applied two limits simultaneously on Seller Central accounts. The first being a Storage Volume Limit and the second being a Restock Limit. The Storage Volume Limit constrained the cubic feet of Amazon’s FBA warehouse allotted to the seller account. The Restock Limit constrained the number of units the seller account could hold in an FBA warehouse. Starting March 1,2023 the Storage Volume Limit and Restock Limit are being replaced by a single limit called the Capacity Limit. The new limit is driven by the accounts IPI (inventory performance score), Amazon’s forecasts, fulfillment center availability, and other variables. The Capacity Limit will only constrain the cubic feet available to a seller in Amazon FBA Warehouses and the unit limit will be eliminated.
The Capacity Limit for the current and coming months are published on the “Send to Amazon” page in Seller Central. Going forward, Amazon will adjust the capacity limit monthly, during the third week of each month. New professional seller accounts will have unlimited capacity until they have been active for 39 weeks, allowing sellers to prove a capacity need and establish a quality IPI score (IPI scores can be found within the FBA Dashboard). Any seller can bid to increase their Capacity Limit by 20% or 2,000 cubic feet, whichever is greater. The bidding takes place in the new Capacity Manager tool that will be launched 3/1. If the seller has a winning bid and demonstrates effective use of it with sales, they will receive credits to offset their winning bid.
More details about the Capacity Limit can be read here on Seller Central.
Thoughts from Run AMZ:
While we won’t know the direct impact of this change on the accounts of our partners until it occurs, Run AMZ anticipates the change having a positive impact on most seller central accounts. FBA restock limits have long been the Achilles Heel of fast-growing Seller Central businesses. This fresh perspective on restock capacity will allow for more rapid growth of our partners and allow for consistent product flow of seasonal businesses that have run into restock limits in the past.
What we like about the change:
- Amazon is offering sellers a mechanism to increase warehouse capacity
- New accounts can stock to their full demand out of the gate vs starting with an arbitrary 1,000 unit limit
Potential Risks:
- Be aware of your product dimensions to be able make decisions on how to fill your capacity
- Continue to have a good understanding of your demand to stock FBA appropriately
- Make sure your logistics teams have permissions set to access to the new tools within the FBA Dashboard in Seller Central
As Amazon continues to evolve the landscape in which we transact business, Run AMZ’s logistics team is ready to adapt. We will be monitoring the updated capacity limit for each of our clients. Changes will be made, as necessary, to your injection plans and forecasts to maximize sales and inventory turns on the platform.
If you are a current client and have any questions, please reach out to your Client Success Manager. If you aren’t a current client and need help managing your Amazon business, please contact us.
