Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon FBA restock limits and IPI threshold updates
To accommodate the increased number of sellers using FBA in the early days of the global pandemic, Amazon FBA restock limits were imposed to help ensure that all sellers had space for their products. This may have impacted your business due to not being able to put stock into Amazon FBA and at the same time Amazon also paused shipping all but essential products for a period of time. Amazon had to effectively reset in order to cope with the onslaught of demand caused by the pandemic.
Amazon invested heavily to increase the square footage across their fulfilment and logistics network by 50% in 2020, and continue to open new fulfilment centres across the UK and the EU. They are looking for an additional 10,000 staff in the UK alone during 2021.
As soon as capacity in their fulfilment network stabilized, Amazon increased restock limits and reduced the Inventory Performance Index (IPI) threshold. Amazon say that they are glad that you responded by sending in a record amount of products in preparation for Prime Day.
Seller products now account for more than 60% of the inventory in Amazon UK and EU fulfilment centres. They now need to take steps to ensure that all sellers who use FBA have space for their products and that inventory can be received as quickly as possible, particularly in the lead-up to Prime Day. As a result, Amazon are making the following temporary changes to help provide customers with the widest possible selection and to maintain the best customer experience.
NB We are expecting Prime Day to take place a month early in June 2021, rather than the regular date at the start of Q3 in mid July.
Amazon FBA restock limits
As of the 16th of May 2021, Amazon FBA restock limits have been decreased so that your products can be received as quickly as possible. This change does not affect customer delivery. On average, sellers can restock 2 to 3 months of inventory in fulfilment centres. Amazon say that they have already taken similar steps for their own retail products – this will impact Amazon Vendors.
You can create more room for products by selling through your inventory, creating removal or disposal orders for products that are unlikely to sell, and canceling non-urgent open shipments. Note that restock limits are determined by multiple factors that include Prime Day deals, new selection, your past and future sales, current inventory levels, shipping times and available fulfilment centre capacity.
To review your restock limits and maximum shipment quantity, go to the Inventory Performance dashboard or your Shipping Queue. For more information, go to Restock limits by storage type: Frequently asked questions.
Amazon Inventory Performance Index
As of the 1st of July 2021, the IPI threshold for storage limits will change to 500 (previously 450).
If your IPI score is below 500 during the week of the 17th of May 2021, and the week of the 21st of June 2021, storage limits will apply for Q3 2021. Storage limits will continue to be evaluated on a quarterly cycle.
Sellers who maintain an IPI score of 500 or greater will continue to have unlimited storage for standard-size and oversize items. Monthly storage and long-term storage fees still apply, and all sellers regardless of IPI score are subject to restock limits.
You can track your IPI score on the Inventory Performance dashboard, where we also provide you with ways you can improve your performance.
“We appreciate your patience as we continue to make adjustments so that all sellers can benefit from FBA.”
The reality has been different to their statement.
Sellers, including myself, are reporting that their stock limit has decreased by more than 50% in a couple of days.
I went from planning what I could do with 30,000 spare units to working out where I send stock now I am 15,000 units over limit.
Amazon still send me emails telling me that I need 5000 plus units to stock my Prime Day deals. I can’t send them.
No sellers are reporting an increase in levels. All seem to have an IPI of well above 500 (mine hovers around 700).
Amazon even called me a couple of weeks ago and confirmed that the new limits set would not decrease this quarter. They have since gone down at least twice in less than a week.
There looks to have been a huge miscalculation/error by Amazon in the last week or two.
There’s plenty of this on the Seller Forums.
By all accounts, this does not appear to be a temporary measure. Restock limits are here to stay. The key issue we’re encountering is the restock level is much lower than expected. Ours only equates to about 1 month of sales, not the 2-3 months their email suggested. It can often take a fulfillment center 2-4 weeks to even receive stock so these ridiculous limits are unworkable. For seasonal businesses like ours, it’s an even bigger nightmare as we will be unable to produce and send in the appropriate volume of Christmas stock. It’s especially sad to see how little respect Amazon now has for its partner sellers. They announce this news without any prior warning leaving us no time to prepare. Such a drastic operational change will negatively impact many small UK businesses at a crucial time when they are already struggling to stay afloat.
Mine has been decreased 90% now. Every single day my restock limit is reduced. The first thing I do now, when I get in to the office is check how much my restock limit has decreased over night. Always had good account stand and my IPI has always been in the green. I am sure this must a technical error for it to be reduced by 1000 unit+ day after day every single day. Last Wednesday, I had a limit of 11,000 units which I was shocked at considering I have 10k units in fba warehouses and previously my restock limit was over 50k. Thursday it went down to 8k limit. Friday it went down to 5k limit. Monday morning (today) it’s gone down a 4k limit. I think I see a pattern and expect tomorrow will be 3k.
Surely this isn’t what amazon originally intended? For it to decrease every 24 hours?
I now have a restock limit of 1000 units in total even though just one of my skus sells over 40 units a day. I have 13 active skus, none of them are over stocked. It’s half term next week and we are going away for the first time since first lockdown- I wanted to stock up before, but I can’t send anything. All my best sellers will be out of stock in less than a week. It’s ridiculous 🙁
The most recent update obviously has some glitches.
Hopefully Amazon rectifies this soon. Many sellers are affected and cannot replenish
best selling items.
Who cares about storage limits when they apply sudden, draconian restock limits? This is so ridiculous. And who is getting all the space they are taking away from us?
What got us is that they didn’t allow for seasonal adjustments, and made it mathematically impossible for us to have adequate stock in the key Christmas season. Maybe they’ll relent and raise it, but that’s not something you can base a business decision on.
In Canada, we have only 220 items, most of them silk scarves. The entire lot of items could fit inside an oven. Yet they just halved our storage again to 200 items, so suddenly we’re in violation. It’s insane. What’s really crazy is Amazon gives no guidance as to their criteria or their future plans. To make especially annoying, they phrase it as if they’re doing us a favor. I’m sure the people who write these policy statements are laughing at us over beers at the end of the day.
I’ve talked to 46 3PL providers as we need to deal with this in every marketplace. It’s going to hit the bottom line, but that’s life. Must get more independent of Amazon before they drop the next bomb.