ALERT: Amazon FBA Capacity Limits
We wanted to update you on some exciting changes that Amazon has recently announced regarding their FBA capacity limits. Starting March 1, 2023, Amazon will be simplifying their capacity limits by replacing the weekly restock limit and quarterly storage limit with a single monthly capacity limit per storage type. This new system is designed to give you more predictability and control over your inventory.
Based on feedback from sellers, Amazon has made several improvements to their capacity management system. These include:
A single, month-long FBA capacity limit to make it easier to plan inventory.
Estimated capacity limits for the next three months to help with planning.
The opportunity to request a higher limit, with a reservation fee that can be offset by performance credits earned from sales.
FBA capacity limits measured by volume, which better represents capacity usage.
Your FBA capacity limit will be influenced by your Inventory Performance Index (IPI) score, as well as other factors such as sales forecasts and fulfillment center capacity. You can view your capacity limit and estimated limits in the FBA dashboard.
We believe that these changes will make managing inventory even easier and help grow your overall business making additional capacity available. If you have any questions or need assistance, please do not hesitate to reach out to us.
Thank you,
Commerce Canal Team
Full announcement below (January 17, 2023):
Simplifying FBA capacity limits for your business
Effective March 1, 2023, we're replacing the weekly restock limit and quarterly storage limit with a single monthly capacity limit per storage type to give you more predictability and control over your inventory.
Based on your feedback, this new capacity management system will provide the following improvements:
A single, month-long FBA capacity limit. You've told us that having weekly restock limits can make it difficult for you to plan how much inventory to procure and manufacture and that navigating two sets of limits that are measured differently, storage limits and restock limits, can be confusing. FBA capacity limits will resolve these pain points by offering a single monthly limit to determine how much inventory you can send to and store at Amazon. Capacity limits for the upcoming month will be announced in the third full week of each month via the Capacity Monitor in Seller Central and an email notification. To learn more, go to FBA capacity limits.
Estimated capacity limits to help you plan three months in advance. In addition to your upcoming monthly capacity limit, we'll provide estimated limits for the following two months to help you plan. Estimates may vary up or down based on how efficiently you are using capacity, as measured by your Inventory Performance Index (IPI) score, and how much space and labor we have available to support you.
The opportunity to request a higher limit. With our new Capacity Manager, you can request additional capacity based on a reservation fee that you specify. Requests are granted objectively, starting with the highest reservation fee per cubic foot until all capacity available under this program has been allocated. When your request is granted, the reservation fee is offset by performance credits that you earn from the sales you generate using the extra capacity. Performance credits are designed to offset up to 100% of your reservation fee, so you don't pay for the capacity as long as your products sell through. Our goal is to provide you with more control over how much space you can have while limiting unproductive use. We've piloted this feature with certain US sellers, and we're excited to expand it so all sellers can request higher FBA capacity limits. To learn more, go to Capacity Manager.
FBA capacity limits in volume (vs. units) to better reflect your capacity usage. We'll set capacity limits and measure your inventory usage by volume, which better represents the capacity that your products use. We know many sellers prefer to plan in units, so we'll continue to show inventory usage in units and provide an estimate of how many units your capacity limits permit. Like restock limits today, capacity limits consider inventory that is on-hand in Amazon's fulfillment centers and shipments you’ve created that have not yet arrived.
Like storage limits today, overage fees will apply if your on-hand inventory in Amazon's fulfillment centers, not including open shipments, exceeds your capacity limit. Overage fees are calculated based on the highest estimated or confirmed limit that we provided for the given period. Overage fees help prevent excessive inventory levels and shouldn't affect sellers who maintain healthy inventory levels. To learn more, go to FBA inventory storage overage fees.
Your FBA capacity limit is influenced by your IPI score, as well as other factors such as sales forecasts for your ASINs, shipment lead time, and fulfillment center capacity. You can view your capacity limit that will take effect on March 1, as well as your estimated limits, in the FBA dashboard.
Thank you for using FBA and for all you do to provide an excellent customer experience by managing your business and inventory levels efficiently.
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