Who is Affected by Amazon’s Restock Limits in October 2022?
If you are reading this – your FBA inventory limits were slashed in the last couple weeks. You are not alone. Amazon alleges the recent slate of restock limits only affected 6% of US Sellers. However, a deluge of feedback from sellers says otherwise. In fact, we’ve seen veteran sellers report their inventory limits being slashed anywhere from 30% – 70%.
One veteran seller reported a 30% cut in inventory limits.
Another seller commented that their restock limits were cut by 50%.
In the worst cases, sellers saw restock limits slashed by 70%.
Amazon replied to these comments by issuing a statement: “To ensure a successful holiday season, we are updating our standard and apparel restock limits to allow all sellers to have 3-4 months of inventory in FBA, including accounting for seasonality and scheduled deals.”
What does this mean for you? Do you know what exactly the restock limits are? What is your plan to manage excess inventory? This guide explores these questions and answers to ensure your Q4 is protected against these seasonal inventory limits.
What are Q4 FBA Inventory Limits?
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 did Amazon Limit my FBA Inventory?
Amazon does not want to receive more products than it will sell. Amazon emphasizes floor space for its best sellers during Q4. Smaller sellers (allegedly, only 6% of sellers), received notice that their restock limits are being slashed. Where everyone seemingly got hit by these cuts – in Amazon’s eyes, if you aren’t first, you are last. They want to reserve space for their best sellers while everyone else gets the short end of Q4.
How do FBA Inventory Limits work?
FBA inventory limits are generated by evaluating your IPI score and Sell-Through Rate among many variables. Amazon’s algorithm communicates their confidence in a brand to sell product at a rate that is most profitable for Amazon.
What is an IPI score for Amazon Sellers?
In short, an IPI score is an Inventory Performance Index. It summarizes the collective health of your inventory in Amazon’s fulfilment network. It utilizes three basic variables to build a score between 0-1000 that sellers are evaluated by:
- Excess Inventory
- In-stock Inventory
- Stranded Inventory
How to Manage FBA Inventory in Q4?
Managing your FBA inventory limits in Q4 is a balancing act for sellers. Even the best planned supply chain and forecasting can be turned upside down if Amazon simply refuses to accept your units. Here are the best practices we recommend to manage FBA inventory limits in Q4
- Keep Your Supplier Close
- Balance Sell Through Rates with 60 Days of Supply
- Reduce Excess Inventory
- Plan for Contingencies in Inventory Shortages
- Lower Product Demand if Running Low on Product
- Partner with a Trusted 3PL to hold extra FBA inventory
When will Amazon Increase Restock Limits?
Amazon historically has loosened its grip on restock limits after Q4, in the middle of Q1. Any experienced seller knows, the Q4 wave rides well into Q1. After all, many shoppers simply receive cash money as gifts for the holidays. And that money tends to burn holes in pockets if not spent! So, sellers will continue to see a high volume of sales well after Christmas going into February.
Consequently, sellers can expect to see restock limits normalize in February, once the dust has settled for the Q4 holiday hustle. So make sure you plan accordingly with your supplier, shipper, and 3PL partner to get stock going again into Amazon’s fulfillment centers.