Amazon Lowers Seller Restock Limits Without Warning Ahead Of Holidays

November 4, 2022
3 min read

Everything was good. Then, it wasn't. That's this week's sentiment among folks that use Fulfilled by Amazon (FBA). 

Let's level-set real fast. More than 3.4B items are sold on Amazon annually. 50%+ of those items are sold by 3rd-party sellers like yourself, then fulfilled by Amazon. 

To manage all that, FBA has always limited how much inventory it'll hold for any 1 seller at 1 time. Until last week, these restock limits were rarely an issue. 

Then, as Cole South, co-founder of Gold BJJ and BirdRock Baby, so delicately put it: "Amazon [went and] absolutely wrecked 3rd-party sellers' inventory limits."

The changes came without warning. One Amazon seller shared that when they went to bed, their restock limit was 40k. When they woke up, it was less than 4k. And only weeks before the busiest shopping season, no less. 

"FBA just constrained my restock limit as of this morning. It was 40,000 items. Today it is 3,090."
Source: @colesouth

Amazon hasn't given a reason for these changes. But the change comes at a time when the tech behemoth is working to boost its bottom line. So, more likely than not, higher margins for the ~$1T company is the end goal. 

They have, however, conservatively estimated that only 6% of sellers will be impacted. But needless to say, many of these sellers have reached their limits – in more ways than one. 

Why are lower restock limits such a big deal? 

When sellers hit their FBA restock limit, they can't send any more replenishments to their Amazon fulfillment centers.

But brands are currently awaiting their holiday shipments, which they planned months before this change was communicated. 

Suddenly overstocked, these shipments now have nowhere to go. And brands still need the bestsellers in those shipments to make their months-in-the-making holiday promotions happen. 

"The problem for me (& many others) is that at an account level, it looks like I have a good amount of inventory. But at a SKU level, my bestsellers are going to suffocate," Shinghi Detlefsen, an Amazon seller and former employee, tweeted. "Had I known of these [inventory] restrictions earlier, I would have planned [differently]."

Perhaps the worst part, however, is yet to come. Amazon sellers get slapped with inventory storage overage fees when they exceed their allotted limit for a given month. So, suddenly overstocked folks have less than a month to sell through that excess inventory, move it elsewhere, or pay the price.  

Couldn't you just ditch FBA?

Sure, but you'd still need to move that inventory. And Amazon is basically set up so that if your items are not FBA, they won't appear prominently in search and won't sell as well. 

That's because being shipped FBA gives your product that shiny Prime badge that tells customers, "hey, you can trust us." Losing that badge means losing business. 

(Seller Fulfilled Prime can also earn you this badge, but it's much harder to maintain.)

The more strategic play is to only fulfill your bestsellers through Amazon. Then, move any slower-moving SKUs to another fulfillment center, where they'll be picked, packed, and shipped by your team. 

With the holidays only a few weeks away and the first overage fee likely to hit on December 1st, sellers have a hard and fast deadline to make this happen. Admittedly, this deadline that might not be realistic without leaning on a trusted third-party logistics provider (3PL). 

And with little to no time to shop for a new 3PL, might we suggest ShipBob?

Meet ShipBob

ShipBob is the best-in-class 3PL solution trusted by over 7k+ ecommerce brands (including Chamberlain Coffee and 100 Thieves). 

With it, you can fulfill Amazon orders (and countless other channels) across North America, Europe, and Australia – without leaning heavily on FBA or sacrificing 2-day shipping options.  

Best part? In light of Amazon’s recent inventory limit changes, ShipBob’s offering Cogsy readers $300 in free shipping credits

🔥 Tip: Use Cogsy’s ShipBob integration plus the new multi-location support to track your inventory as you move it from Amazon to ShipBob.

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