Amazon fulfillment center

As Amazon third-party sellers are preparing for the forthcoming Prime Day sales event, many have turned to the company’s seller forum claiming their restock limits have been lowered for no apparent reason.

In short, restock limits are a means for Amazon to manage warehouse capacity to ensure third-party sellers mostly keep fast-moving products in the company’s warehouses. In April, the company adjusted the method on how it calculated restock limits. There seems to be some concern now that this recalculation has caused errors or the sudden lowering of limits without a real explanation or cause.

“My Maximum inventory level decreased like crazy, what should I do? It was cut down 7k today and I cannot send the goods to Amazon in a short time,“ asked one seller.

Another seller commented, “There must a new update. A few hours ago, our maximum inventory level decreased from 30K to 20K though there has been no change in sales velocity. We have remarkably stable sales. 300 hundred in a day, 9-10K in a month. So right now we cant restock our products even for 3 months.”

And yet another seller wondered how to adjust their stocking strategy, “I woke up to our limits being cut under 3 months’ sales by about 15%. We were really hoping 3 months’ sales would be the absolute lowest the limits would go to. This will make it very difficult to send new books in. I am not sure what the right strategy will be.”

There are also several comments suggesting that Amazon’s algorithm is broken such as this one from a seller, “Amazon is sending me emails asking to replenish the inventory for their S&S customers while I cannot send a single unit because the limit has dropped by close to 30%.”

Amazon Denies Technical Issues with Restock Limits

With over 250 comments and counting, the frustration from sellers is increasing about this situation and while it may not impact every seller with Prime Day ahead, others are concerned about how this may impact their year-end sales. Not being able to send inventory to Amazon could hurt some small business sellers to maximize their sales next month during Prime Day.

An Amazon forum moderator did respond to the Restock Limit concerns on Amazon’s seller forum.

“We have confirmed that there is no technical error impacting restock limits. We continually assess and update restock limits based on many factors, including past and future sales, current inventory levels, new selection and the capacity available in our fulfillment centers. If you are seeing a change in your restock limit, it is likely driven by your recent sales and future forecast. On average, sellers continue to hold approximately 3 months’ worth of inventory within our network.”

“We hear and understand your frustration. Restock limits are necessary to ensure all sellers using FBA have space for their products, and that we can efficiently receive your products. We will notify you if we make any substantial changes to restock limits.”

“Please consider checking your Shipping Queue for any old, unused shipments. The utilization metric includes in-transit inventory. If you have old open shipments, it may be unnecessarily counting toward your utilization. To cancel or delete a shipment, click the shipment name, or click View shipment or Track shipment. Then, click Cancel shipment or Delete shipment.”

If Amazon’s response is to be believed, it seems the new method of determining restock limits is causing headaches for sellers trying to adjust to the new system. Some sellers report such drastic decreases, it seems the algorithm needs adjustment or sellers may end up moving inventory to other marketplace platforms to make up for lost opportunities.

Amazon has an FAQ about the new restock limits algorithm, and sellers can follow the issue raised by other sellers in the Amazon Seller Forums here.

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