Today, Amazon announced inventory limits for some third-party sellers that may impact their holiday season.
The announcement explains that the company itself is also making considerations as it is trying to manage what it must believe will become a significant holiday season in 2020 due to the coronavirus pandemic.
The fallout for some sellers will be that they may need to consider some changes to their holiday season selling strategy.
However, unlike in March, when Amazon abruptly stopped accepting shipments, this time Amazon sellers are given ample time to make the necessary changes.
The good news is that those sellers who this restriction will not impact may be in a for a very good holiday season as the company is already concerned about resources to manage the rush.
Here Is The Announcement By Amazon
Given the unprecedented challenges the COVID-19 pandemic has placed on all of us, we are preparing early to deliver a great holiday season for our customers and selling partners—building out capacity as quickly as we can so we can deliver products customers need and want directly to their doorsteps and help you continue to grow your business.
We’ve been investing heavily for many years to support selling partners like you, and over the course of 2019 and 2020, we’ll invest more than $30 billion to build capacity, tools, services and programs for sellers, as well as to hire more people.
We’re on track to open 33 new fulfillment centers in the US this year, which will increase peak fulfillment center standard-sized product storage capacity by nearly 35 million cubic feet more than last year.
Since the pandemic hit, COVID-19 has impacted supply chains around the world, and we’ve all had to make fast adjustments.
Amazon hired more than 175,000 employees and invested billions of dollars in COVID-related initiatives to help meet increased customer demand and protect the health and well-being of our employees as they pick, pack, and ship your products to customers.
As a result, selling partners have had record sales on Amazon and continue to account for more than 50% of units sold in our store.
Even though it’s July, we’re preparing early for the holiday season to meet sustained increased demand, and have already reduced our own Retail product ordering to accommodate more of your products and help you continue to see sales growth.
To ensure we’re ready to best serve all of our selling partners and customers, we are introducing the following adjustments as we begin our ramp into peak:
Inventory Performance Index Threshold Change
We are working to manage inventory performance to ensure all products have space available during peak. To enable this, we are changing the IPI minimum threshold requirement to 500. Sellers below 500 will be subject to limits effective August 16, 2020 through the end of the year.
The majority of sellers will not be impacted by this change. Most sellers with IPI scores below 500 will have more storage space than last year.
You can improve your IPI by following guidance on improving sell through or reducing your excess and stranded inventory in the Inventory Performance Dashboard 186.
To maximize selection for customers during peak, we are introducing ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales.
You can view quantity limits for your products on the Restock Inventory 87 page and the Restock report 30. We will continually review this and, when possible, make adjustments to allow for more of your products.
Free Removals Promotion
To help you avoid storage fees for products that have not been selling and create room for more productive inventory, we are offering a free removal fee promotion for a limited time. We will waive your fees for any removal order submitted for inventory in our fulfillment centers beginning July 14, 2020.
To create a removal order, please visit Inventory Age 21 and choose Create removal order from the menu next to any FBA item in your inventory.
For further guidance, you can review frequently asked questions on this Help page 12.
While no one has a perfect playbook for how to respond to COVID-19, our commitment to supporting your business has never been more steadfast.
We will continue to make adjustments to best support your business and keep you informed along the way.
We appreciate your partnership as we improve the efficiency of our fulfillment network to prepare all selling partners for a successful peak season.
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