As an Amazon seller, managing inventory is crucial for success in the competitive online marketplace. One important aspect of inventory management is understanding Amazon’s restock limits.
In this article, we will explore what Amazon restock limits are, how it is determined, and how sellers can optimize their inventory management strategy to stay within limits and improve their sales performance on the platform.
What are Restock Limits and Why Do they Matter to Sellers?
Restock limits are the maximum quantity per storage type a seller can send to a fulfillment center for storage and sale. Amazon calculated and determined these inventory quantity limits and organized them to ensure FBA sellers could manage their inventory and storage space effectively.
Amazon has different restock limits for each storage type:
- Standard Size Storage
- Oversize Storage
- Apparel Storage
- Footwear Storage
Restock limit is an essential consideration for Amazon sellers, as it can affect the amount of FBA inventory they can keep on hand and how quickly they can respond to changes in demand. Sellers that exceed their restock limit number may be subject to additional fees or penalties. They may struggle to maintain good standing in Amazon’s seller inventory performance index or IPI.
How to Check the Restock Limits in Seller Central?
To check the restock limits in Amazon Seller Central, follow these steps:
- Log in to your Amazon Seller Central account.
- Click on the “Inventory” tab in the top menu bar.
- Select “Inventory Planning” under the Inventory tab.
- Select the Inventory performance in the Inventory drop-down menu.
- At the bottom, you will see the Restock Limits and Storage volume.
- Click the Restock Limits tab drop-down menu.
- You will see a table showing the restock limit for each storage type and other information such as utilization quantity, maximum inventory level, and maximum shipment quantity.
- Utilization quantity – The seller’s current in-stock inventory and all shipping inventory going to fulfillment centers, including the shipment in Working, In transit inventory, and Receiving status in Amazon. Inventory pending removals and reserved inventory are not included in utilization computation.
- Maximum Inventory level – or the restock limits are calculated based on the seller’s past and forecasted sales
- Maximum shipment quantity – is the total number of units a seller can ship to Amazon fulfillment centers. Maximum shipment quantity is the difference between the Maximum Inventory level and Utilization quantity.
Please note that the limits may adjust anytime based on Amazon’s restock algorithm and the seller’s inventory management practices.
What are the different storage types in Amazon Restock limit?
Amazon FBA restock limit is categorized into four storage types. Each of them has different storage type limits determined by Amazon:
Standard Size Storage
Amazon’s standard-size storage is a storage type used in their fulfillment centers to store and manage inventory for their sellers. The standard-size storage is designed for items that are smaller than 18″ x 14″ x 8″ and weigh less than 20 pounds (lbs)
Amazon offers oversized storage options for Amazon sellers needing larger items unsuitable for standard-size storage. Oversized storage is available for items larger than 18 inches on the longest side and weighing more than 20 pounds.
Apparel storage is offered to Amazon sellers who specialize in clothing and accessories.
This storage type stores items such as shoes, slippers, boots, etc.
How Amazon FBA calculate restock Limits: Key Factors and Variables
Amazon calculates restock limits based on several factors, such as sales history or sell-through rate, inventory levels, and FBA shipment lead time. Restock limits aim to help sellers manage their inventory more effectively, reduce the risk of overstocking and ensure products are available to customers when needed.
To calculate the restock limits, Amazon considers past sales data such as:
- sales velocity
- rate of inventory turnover
- seasonal trends
- current FBA inventory levels
Based on this information, Amazon will set a restock limit for each SKU, representing the maximum number of units a seller can send to their fulfillment centers at a given time.
Restock limits can change over time based on sales performance and other factors. If a seller’s sales volume increases, Amazon may adjust and set higher restock limits to allow the seller to send in more inventory. Conversely, if the sales volume slows or there’s excess inventory, Amazon may lower a seller’s restock limits to help them manage their inventory more effectively.
It is important to note that restock limits are not the same as storage volume limits.
Difference between Restock limit and Storage Volume Limit
In Amazon Seller Central, restock limits and storage limits have specific meanings related to managing inventory in Amazon’s fulfillment centers.
Restock limits in Amazon FBA are the maximum quantity per storage type based on past and forecasted sales; a seller can send to a fulfillment center for storage and sale. Below is other information that differentiates restock limits from storage limits.
- Manages the inflow of inventory
- IPI score relevance: Applies irrespective of IPI score
- Regular refresh cadence
- The limit format or measurement is in Units
- No fee is applicable if utilization is greater than the limits
- Includes inventory at Amazon and shipments in-transit
Storage volume limits in Amazon FBA refer to the maximum amount of inventory a seller can store in Amazon’s fulfillment centers. Amazon determines this limit as the seller’s available storage space in Amazon’s warehouses. It is organized to prevent overcrowding and ensure all sellers can access adequate storage space. Amazon charges fees for storing inventory in their fulfillment centers; thus, managing storage limits can help sellers avoid unnecessary expenses.
- Based on volume, measured in cubic feet, determine the fulfillment center capacity a seller can use.
- Controls the physical storage volume
- IPI score relevance: This applies if your IPI is below the threshold
- Refresh cadence quarterly
- The limit format or measurement is in the cubic foot or cubic meter
- Overage fees are applied if utilization is greater than the limits
- Includes inventory at Amazon
Understanding Amazon’s ASIN-level Limits and Storage type FBA Limits
Way back in July 2020 and due to Covid, Amazon introduced the ASIN-level quantity limits to their sellers. These inventory quantity limits restrict sellers from sending in inventory to the FBA warehouse above the pre-specified limit for each SKU. This policy of Amazon resulted in an unsuitable effect on their seller’s sales, especially for seasonal items, and received a considerable backlash from the Amazon seller community.
To rectify the issue, Amazon replaced the ASIN-level quantity limit with Storage type-FBA limits. The storage-type FBA limits provide sellers a better place to play around the market as they can already send in and store FBA inventory according to storage types: standard-size, oversize storage, footwear, apparel, etc.
Many sellers can now create and manage FBA shipments without having to worry about the ASIN-specific limits while working on the new increased restock limits of the overall FBA sellers’ account.
How to increase FBA Restock Limits and Storage Limits?
Amazon’s restock limits and storage limits are based on sales history, inventory performance, and available storage space in Amazon’s warehouse. Here are some steps on how to increase the FBA Restock Limits:
Optimize your Inventory
Ensure you keep a healthy balance of inventory levels in the fulfillment centers by monitoring the sales velocity and FBA shipment lead times. This will help you avoid stockouts while minimizing the risks of overstocking.
Improve your Inventory Performance
Keep your inventory in good standing by ensuring that products have accurate descriptions, pricing, and information. This will help improve your product’s visibility and increase the sell-through rate, which can lead to an increase in restock limits.
Monitor your storage usage
Ensure you utilize the storage space efficiently by regularly removing stale or slow-moving inventory. This will help increase the available space, which can lead to an increase in restock limits and higher storage limits.
Request an Increase
If you have had a reasonable sell-through rate in the past and have been managing your inventory efficiently, you can request an increase in your restock limit through Amazon’s Seller support team. Ensure to provide supporting documents and a solid business case for the rise.
Improve Amazon’s Inventory Performance Index (IPI)
Amazon’s Inventory performance index, or IPI score, measures how well you manage your FBA inventory. Maintaining consistently higher IPI scores can increase restock limits and other benefits, such as reduced storage fees.
Amazon Sponsored Ads
Amazon-sponsored ads are one way to increase storage and restock limits. The higher the sales volume, the more chance to receive higher storage limits from Amazon.
Reduce excess inventory
A balanced inventory is vital to avoiding overstock. Overstock can significantly impact your restock limits; thus, find a way to sell or move your FBA inventory quickly.
Fix stranded inventory
When you have stranded inventory, fix it as soon as possible. Having stranded inventory could affect your sales as existing inventory is unavailable to sell. Fix any listing issue to keep your products buyable at all times.
How does Multi-channel fulfillment orders affect the restock limits?
Amazon’s multi-channel fulfillment programs can affect the restock limit in several ways:
- MCF orders are fulfilled from the same inventory pool as Amazon orders. This means that when a seller fulfills MCF orders, it will reduce the available inventory for the Amazon orders, potentially reducing the restock limit.
- MCF orders have longer shipping lead times which can lead to delays in receiving inventory replenishments. For example, suppose a seller has a high volume of MCF orders and low FBA inventory levels. In that case, this can impact the seller’s restock limit by reducing the inventory a seller can send to Amazon fulfillment.
- If MCF orders cannibalize the seller’s Amazon sales, this can lead to a lower restock limit as the algorithm may view the sales as more bass than forecasted.
Why did Amazon Implement Restock Limits?
Amazon implemented restocking limits for several reasons, including:
To manage inventory: Amazon uses restock limits to ensure sellers do not send in more inventory than is necessary. This helps Amazon manage its space and that it has enough room to store inventory for all sellers.
To prevent stockouts: Restocking limits also help prevent stockouts, which occur when a seller runs out of inventory before they can replenish it. By setting restock limitations, Amazon can ensure that sellers maintain a steady supply and enough inventory in their fulfillment centers.
To reduce competition: Restock limits can also help reduce competition between sellers by limiting the number of units each seller can send in. This can help ensure that all sellers have a fair chance to sell their products and prevent a few dominant sellers from monopolizing the market.
To improve customer service experience: Finally, restocking limits can improve the customer experience by ensuring that products are available when customers want to purchase them. By preventing stockouts and guaranteeing a steady supply of inventory, customers are more likely to find the products they want in stock and available for purchase.
What happens when a shipment sent to Amazon exceeds the restock limit?
Suppose the FBA shipments sent in exceed the restock limit set by Amazon. In that case, the excess inventory will not be accepted by Amazon and will be returned to or disposed of, depending on the seller’s chosen option.
When does Amazon update the restock limits?
The restock limit on Amazon is updated periodically, but the exact timing and frequency of these updates can vary based on several factors.
Amazon typically updates restock limits regularly, but the specific timing can be challenging to predict when the new restock limits are implemented. As a result, sellers need to monitor their FBA inventory levels and adjust their restocking plans accordingly.
In conclusion, Amazon’s restock limit is crucial for sellers looking to optimize their inventory management. By knowing how Amazon determines the restock limit and the factors that affect it, sellers can make informed decisions about when and how much inventory to send to Amazon.
It is important to regularly monitor inventory levels and adjust restock quantities accordingly to avoid out-of-stock or excess inventory. Ultimately, a thorough understanding of Amazon’s restock limit and effective inventory management practices can help sellers succeed in the Amazon marketplace.
Frequently Asks Questions
What happens if I’m out of stock on Amazon?
Your product is currently unavailable for purchase at Amazon and the listing might go inactive if not replenished right away. OOS or out-of-stock may affect your sales and Amazon’s algorithm resulting in a decrease in restock limits.
Is it possible to get unlimited storage space on Amazon?
How often does Amazon reset the restock limits?
The frequency with which Amazon resets restock limits can vary and is not publicly disclosed. Amazon regularly evaluates key factors and variables to determine if restock limits need to be adjusted
What is the restock limit difference between Individual and Professional sellers?
Professional Amazon sellers may have higher restock limits and receive higher storage limits due to their higher sales volume and greater account activity.