FBA STORAGE MANIPULATION
I think it’s time for a thread for this. I’ve spoken to many people about this issue and have debated whether the strategy would return this year - it has! For the fourth year in a row, Amazon is severely limiting FBA storage capacity. Our capacity increased by 20% from September to October and is decreasing 37% from October to November. We don’t have the December figures yet. Meanwhile, Amazon has scheduled an October Prime Day event and has spent most of this year trying to convince us that the storage algorithm will allow for an average of six months of inventory space for 3P sellers. Why anyone would want or need six months of space is beyond me; however, the point remains - Amazon has made many efforts throughout the year to convince sellers that it’s safe to send inventory and perhaps even max out their allocation. I’m not sure whether everyone’s space increased from September to October; however, doing so encourages sellers to send even more in anticipation of holiday sales. And then, right before the holidays actually occur, Amazon cuts space by (in our case) 37%. As I expect many sellers are already at or above their allocation, this will have the wonderful effect of generating (probably many millions) storage fees and penalty fees for Amazon and will free up space for Amazon’s own holiday inventory. It’s just another way that owning the marketplace and logistics and being a seller in the same space creates divided loyalties, which Amazon turns into a 3P fee opportunity!
FBA STORAGE MANIPULATION
I think it’s time for a thread for this. I’ve spoken to many people about this issue and have debated whether the strategy would return this year - it has! For the fourth year in a row, Amazon is severely limiting FBA storage capacity. Our capacity increased by 20% from September to October and is decreasing 37% from October to November. We don’t have the December figures yet. Meanwhile, Amazon has scheduled an October Prime Day event and has spent most of this year trying to convince us that the storage algorithm will allow for an average of six months of inventory space for 3P sellers. Why anyone would want or need six months of space is beyond me; however, the point remains - Amazon has made many efforts throughout the year to convince sellers that it’s safe to send inventory and perhaps even max out their allocation. I’m not sure whether everyone’s space increased from September to October; however, doing so encourages sellers to send even more in anticipation of holiday sales. And then, right before the holidays actually occur, Amazon cuts space by (in our case) 37%. As I expect many sellers are already at or above their allocation, this will have the wonderful effect of generating (probably many millions) storage fees and penalty fees for Amazon and will free up space for Amazon’s own holiday inventory. It’s just another way that owning the marketplace and logistics and being a seller in the same space creates divided loyalties, which Amazon turns into a 3P fee opportunity!
7 replies
Seller_IEOPueKXWdvuV
Here's the email we all received from Amazon asking sellers to send 6 months of inventory. Pulled from the sellers ask sellers forum
Hello,
As the holiday season is just around the corner, we’re ramping up our capacity and operations in order to efficiently receive your holiday inventory and to ensure a delightful delivery experience for customers.
As previously announced, we recommend that you plan ahead to ensure that your shipments arrive by October 26, 2023, so that they can be received and ready to fulfill by Black Friday.
As we do every year during September and October, our fulfillment center teams are focused on receive processes to ensure that your products are properly placed in the right fulfillment centers. In November and December, we’ll focus on processing customer orders. This temporary shift in emphasis from receiving shipments to fulfilling customer orders will ensure faster delivery speed and maximize your sales potential during the holiday season.
Because of the way that we manage our fulfillment center operations through the holiday season, most sellers will see higher estimated capacity limits for October and lower estimated capacity limits for November. On average, the estimated capacity limits for November provide enough storage for six months of inventory.
If you need additional capacity, you can request to increase your limit with the Capacity Manager. To ensure that you stay in stock, you can use Amazon Warehousing and Distribution and we’ll automatically replenish fulfillment centers as needed.
With continued investments in our fulfillment network and new program offerings, coupled with your focus on ensuring healthy inventory levels by October 26, we’re excited to partner with you and deliver yet another successful holiday for customers.
The Fulfillment by Amazon team
Seller_9e0aMxU4qS2gx
I only am using 30% of my allowed capacity right now. and only send as needed.. the fees are always really really high in Q4 so don't want to get stung.. think I got like a rolling12 week supply at FBA..
Seller_LImVvUWeyiCfQ
Amazon needs some extra cash on hand to defend again that FTC lawsuit.
Seller_LImVvUWeyiCfQ
Exactly! Hence the lawsuit.
Seller_aNryBfYO3DTmL
My limits for September are higher than my limits for November. Maybe it will change by November, but it looks like Amazon is giving us tons of space in October so you can prepare for Holidays, then bring is back down in November so they can collect the higher Q4 storage fees. This is just a bad look for Amazon.
