If you're an Amazon seller, you know that stocking your inventory can be a costly endeavor. Not only do you need to pay for the products themselves, but you also have to pay for storage space in an Amazon fulfillment center. And if you go over your allotted storage limit, you'll be charged additional fees.
But there are ways to save on stocking costs and make the most of your Amazon fulfillment center storage limits. In this article, we'll discuss some of them. So read on to learn more!
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How Amazon Receives and Stores Your Inventory
Amazon provides a secure environment to store your inventory when you send it to them for fulfillment. When sending your inventory to Amazon, follow their guidelines on preparation, packaging and labeling so that they can process your shipment quickly and accurately.
They store inventory either in bulk or in individual "pickable" locations. Specialty items like food or high-value goods may be placed in specific secure or climate-controlled areas of the fulfillment center as appropriate.
If your inventory is misplaced or damaged while in Amazon's care (at the fulfillment center, during delivery to or from a customer), Amazon will purchase the inventory from you.
Once your inventory arrives at the fulfillment or receive center, it can be sold. Keep in mind that it might take up to 21 days to reconcile shipped inventory. You can track the status of your shipment by checking the Shipping Queue; its status will go through In Transit, Delivered, Checked-In, Receiving and finally Closed.
The Receiving process begins with scanning your item's barcodes and entering them into the tracking system. They capture the dimensions (to the nearest 1/10') and weight (to the nearest 1/10 lb) for storage and fulfillment.
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What is an Amazon FBA Storage Limit?
While Amazon has dozens of fulfillment centers in most countries worldwide, they do not have unlimited storage space for your products.
Amazon has instituted a storage limit for sellers in an attempt to keep product turnover high and ensure that items sent to their fulfillment centers will sell. This policy is designed to FBA from being used as long-term storage - Amazon's facilities are called fulfillment centers for a reason, after all, not warehouses.
To better manage fulfillment center storage space so that products are received and delivered to buyers more quickly, inventory storage limits may be applied.
Your current and potential storage limits together with an Inventory Performance Index are evaluated by Amazon.
If you send products that don’t sell well or that overstock, your Inventory Performance Index score will take a hit, causing Amazon to decrease your restock limits.
If you’re sending products with a high sell-through rate, Amazon will likely allow you to send more and more products because you have proven sales.
Your current and potential storage limits and usage are shown in your Seller Central dashboard when you expand Storage volume, which you can view in your Inventory Performance dashboard and Shipping Queue.
What Is The Current Amazon Storage Quantity Limit?
Storage limits are calculated using several factors, including the following:
Your sales volume, including your sales' seasonality periods
Your historical IPI scores
Available fulfillment center capacity
Your IPI score is updated weekly based on your ongoing inventory management. Effective January 1, 2022, the IPI threshold for storage limits is 400 (previously 450).
Sellers with consistently higher IPI scores will receive higher storage limits, adjusted for sales volume and available capacity. When setting limits for an upcoming quarter, Amazon considers both your recent sales volume and seasonal volume from the last year
Storage limits are based on volume, measured in cubic feet, and are set for each storage type. Storage limits are applicable for seven storage types: standard-size, oversize, apparel, footwear, flammable, aerosol, and extra-large.
Amazon determines the storage type of your inventory based on the characteristics of the product. Storage type is not a category that sellers can adjust. Products are not classified by more than one storage type.
Professional selling accounts may or may not have storage limits, depending on the following criteria:
Sellers who maintain an Inventory Performance Index (IPI) score at or above the required threshold on either of two score checkpoints will not be subject to storage volume limits for standard-size, oversize, clothing, and footwear items.
New sellers who have been active for less than 26 weeks, or sellers who don’t have enough sales data to generate an IPI score during both of the two score-check weeks, will not receive storage limits.
Professional accounts that do have storage limits will still have a minimum of 25 cubic feet for standard-size, oversize, clothing, or footwear inventory.
To see the storage types for your products and how many cubic feet they occupy, go to Manage Inventory Health and the Manage Inventory Health report. If you don’t see a storage type when you expand Storage volume, it’s because you have a limit of zero for that storage type.
Exceeding your FBA storage limit
Under the FBA inventory storage limits policy, you will not be able to create a new shipment to Amazon for a storage type until your inventory level drops below your limit for that storage type.
For example, if your current limit for standard-size inventory is 25 cubic feet, and you have 26 cubic feet of standard-size inventory at a fulfillment center, you cannot create a new shipment for standard-size inventory. However, if you are below your storage limit for oversize inventory, you can create shipments of oversize inventory.
If you send more inventory than your storage limit allows, the extra inventory may be refused at the fulfillment center.
Storage overage fees will be charged if your existing inventory exceeds your storage limit for any storage type on any day within a given month.
How To Manage Your Amazon Storage Limit And Save FBA Cost
Amazon's strict allocation of storage limits and the weekly evaluation of the Inventory Performance Index leads to sellers having to very closely monitor their FBA inventory movements.
For example, you have products that are selling about 3,000 times per month. Let's say these items are standard size and you're given restock limit for standard-size products is 4,000 units.
However, it might be difficult to launch more standard-sized products and keep extra inventory in stock during the high-demand holiday season.
The restock limit encompasses the stock you currently have available in FBA as well as inventory that's en route to a fulfillment center. If, for example, you have 1,000 units available and 1,000 more on their way to an Amazon fulfillment center, we would count that combination as 2,000 towards your restock limit.
You will not be able to create a new shipment in Seller Central for that storage type if your available inventory and in-transit inventory surpasses your restock limit. In addition, the fulfillment center may refuse any additional inventory.
Amazon's recommendations to decrease the amount of inventory you have in a fulfillment center are:
Sell more inventory. Manage Inventory Health provides recommendations to increase sales.
Request to have inventory returned to you by creating a removal order
Request to have inventory disposed of by creating a removal order
Also, think about automating your inventory planning is not only helpful, but it's necessary to maintain accurate predictions for ordering inventory. In addition, utilizing a proper inventory management tool will help keep Amazon's requirements in check concerning your IPI score; this way you're never left with too little storage space when you need it most.
If you don't have access to your own warehouse, or if you would prefer not to use one, think about utilizing a third-party fulfillment center (3PL.) A 3PL can store your inventory and fulfill FBM orders until you are ready to send more products into FBA.
Frequently Asked Questions
What is Amazon's restock limit?
Professional accounts that do have storage limits will still have a minimum of 25 cubic feet for standard-size, oversize, clothing, or footwear inventory.
What is the minimum quantity for Amazon FBA?
Minimum quantity is determined by product type and storage type. Additionally, Amazon employs strict FBA product requirements and restrictions policy guidelines.
How can I increase my Amazon storage limits?
Sellers with consistently higher IPI scores will receive higher storage limits, adjusted for sales volume and available capacity. When setting limits for an upcoming quarter, Amazon considers both your recent sales volume and seasonal volume from the last year.
How does Amazon determine my storage limits?
Storage limits are calculated using several factors, including the following: Your sales volume, including your sales' seasonality periods, Your historical IPI scores, Available fulfillment center capacity
Are there any ways to get around Amazon's quantity limits?
Storage space cannot be purchased and storage types are determined by Amazon based on the characteristics of a product. Sell more inventory or request Amazon to return or dispose of unwanted inventory
When do Amazon quantity limits reset?
Amazon doesn't give any clues about when it will change its inventory limitations, but Amazon does recalculate your IPI score every week. This weekly calculation is based on factors such as sales volume, excess inventory, stranded inventory, and sell-through rates.
Final Words on How To Save On FBA Stocking Costs
If you are storing products in an Amazon Fulfillment Center, it is important to understand their stocking costs and storage limits. By understanding these factors, you can save money on your inventory and make sure that your products are available when customers need them.
If you liked this article, take a look at our guide to selling private label products on Amazon.
Ready to dominate the tool industry & save on FBA stocking costs? Get started