Where To Store Extra FBA Inventory?
In October 2022, Amazon rolled out its seasonal restock limits for FBA Sellers. The holidays bring big traffic for e-commerce sellers. So when Amazon limits their ability to restock inventory – it’s a problem. Why does Amazon limit inventory & how do the limits work? This article discusses how your Sell-Through Rate & IPI score both impact your FBA inventory limits. It also recommends solutions on where to store your extra product for the holidays.
How do Amazon Restock Limits Work?
Amazon Restock limits are generated by an algorithm that uses variables derived from your Sell-Through Rate & IPI score. The algorithm communicates Amazon’s confidence in a seller to move product at a rate that is most profitable for Amazon.
Why Did Amazon Cut Restock Limits?
Amazon is not in the business of warehousing. It’s in the business of product fulfilment. In other words, amazon does not want to receive more products than it will sell. This is especially true during the holidays. As such, it employs limits on restocking inventory for sellers with a low Sell-Through Rate & IPI score.
What is a Sell-Through Rate?
Your Sell-Through Rate reflects the balance between inventory levels vs sales. The calculation is simple. Divide the total units sold & shipped to your customers over the last 90 days by the average number of FBA inventory units during that same time. Your Sell-Through Rate is available to review in as a FBA Inventory Tool in Seller Central.
What is an IPI score?
An IPI score is an Inventory Performance Index. It summarizes the collective health of your inventory in Amazon’s fulfilment network. It is illustrated with a number between 0-1000. As a seller, you want to be above 350 out of 1000 during Q1-Q3. However, during Q4, it’s anyone’s guess as to where Amazon cuts sellers off. All the same, you’ll want a healthy IPI score to avoid Amazon restock limits.
So how does Amazon determine IPI scores between 0-1000? While Amazon’s algorithm is proprietary information, it does pull the curtain back on three categories it uses to derive your final IPI number.
Excess FBA Inventory (Low Sell-Through Rate)
Excess Inventory captures the data related to your profitability related to FBA storage fees and holding costs for slow moving FBA inventory. These Excess Inventory percentages offer insight to sellers on how to manage their inventory. Amazon restock limits impact sellers who hold too much inventory.
In-stock FBA Inventory (High Sell-Through Rate)
The In-Stock variable monitors how much of your stock has been held within the last 30 days & 60 days. If you sustain a higher In-Stock Inventory rate – it translates into fewer lost sales. Make sure you prevent ‘stock outs’ and the lost sales that follow.
Stranded FBA Inventory
Standard inventory illustrates which products are held by Amazon, which cannot be sold due to Listing Issues. If you shipped products to Amazon, but forgot to turn on the listing – your inventory is stranded. Standard FBA inventory incurs storage. As a result, it also bumps up your Stranded Inventory score and lowers your IPI .
How to Check Amazon Restock Limits?
You can check your Amazon restock limits through Seller Central.
- Log in to your Seller Central and head over to the Inventory menu. Click “Dashboard” from the drop-down.
- Once on the dashboard, navigate to the bottom to find the Restock Limits tab aka Amazon restock limits monitor tool. Click to expand.
- You’ll find three quantities listed there: i) Utilization quantity, ii) Maximum inventory level, and iii) Maximum shipment quantity. The maximum inventory level quantity is your FBA restock limit and is the sum of Utilization quantity and Maximum shipment quantity.
How to Increase Amazon Restock Limits?
The short answer – you can’t.
Aside from entering Q4 with a a high IPI, there’s no over night fix to boost Amazon inventory limits. Especially, right after Amazon shrinks those limits.
Where to Store Extra FBA Inventory?
Unless you have space in your garage – you need a warehouse.
You need a 3PL partner. You need a team that receives, stores and forwards your FBA inventory on short notice. Q4 comes quick. You need a partner who can react to your needs in real time.
As former sellers, the employees at FbaZoom respect how difficult Amazon restock limits can be. As such, we know how to support your inventory warehousing needs when you need it most. That’s why our clients can call or email and connect same day with our owners for any request.
At FbaZoom, we offer affordable FBA storage. SPD & LTL receiving is simple too. To get started in sending us product, complete our Onboarding Form.
Call today at 858-381-3458 and schedule a delivery to our warehouse.