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Everything you should be aware of regarding the 2024 IPI changes and Amazon storage limits

Amazon restricts inventories in an effort to prevent the holiday rush.   The upcoming October Amazon Prime Day is expected to make thi...

Amazon storage limits

Amazon restricts inventories in an effort to prevent the holiday rush.


The upcoming October Amazon Prime Day is expected to make this holiday season busier than ever. As part of its fulfillment plan, Amazon is increasing its storage capacity. In addition, the massive online retailer disclosed that it is imposing additional storage restrictions on its partners.


In an email to sellers, Amazon said that it will be enforcing stringent storage limitations for all third-party vendors who keep merchandise in US warehouses in order to satisfy customer demand.


The goal is to avoid having to use up storage space over the holidays due to massive shipments.


Thus, in order to avoid setbacks and difficulties during the busiest time of the year, Amazon sellers need to prepare.


Let’s get into the details.


News on Amazon Inventory In the midst of the Christmas rush, Amazon just revealed the following:


"From August 16 to December 31, storage limits will apply to Amazon sellers having an IPI (Inventory Performance Index) score of less than 500.”


What does that signify?

First of all, because this news was made without previous notice, some sellers may become anxious. But sellers still have until August 16th, and it takes time for the IPI score to adjust.


How should vendors get ready?

With Q4 quickly approaching, having an intelligent inventory management system is essential to prevent stockouts during periods of high demand.


The necessity of keeping an eye on inventory levels has increased with the introduction of new regulations. Inadequate inventory control will lower your account's health, reduce sales, and lower the Inventory Performance Index.


How well you handle your on-hand inventory will determine your IPI. Several of the significant factors are as follows:


1.   Excess inventory

2.   Sell-through rate

3.   Stranded inventory

4.   In-stock inventory


Eliminating surplus inventory that isn't selling quickly enough should be your top priority. Based on previous sales, Amazon regularly updates this metric. Therefore, storage constraints apply to your goods if your IPI score is less than 500. Utilize your Inventory Performance Dashboard to monitor your IPI score. You can raise your score by taking into account Amazon's suggestions.


Approaching the second announcement now.


Quantity Limits for ASINs

The quantity of products per ASIN that can be kept in FBA storage is limited by Amazon.


All product categories are impacted, and the limited numbers vary depending on the product. 


Why is Amazon acting in this way?


As the coronavirus pandemic spreads, Amazon finds it difficult to modify its business practices. It's possible that Amazon implemented this new restriction in order to meet the increasing demand and maximize the range of products that are available to buyers.


How can merchants address this issue?

You can keep three months' worth of sales worth of inventory, and you should routinely check the quantity restrictions for each product.


Go to the page where you can refill inventory and select "Days of supply." On the page, you may find the maximum delivery amount that is permitted. This is the highest amount of inventory that Amazon will permit.


Sellers need to be aware that restrictions at the ASIN level are already in effect. Furthermore, since sellers are unable to remove limits, you must understand the distinction between restrictions imposed at the account level and those imposed at the ASIN level.


Last but not least, Free Removals

Stale and dead inventory can always be taken out of the warehouses by Amazon. Amazon has now enabled free removes promotion, which has greatly simplified the procedure. These kinds of removal offers are becoming more common, which is not surprising given the impact of COVID-19 on the Amazon supply chain.


With this new change, sellers won't have to pay to remove FBA product from warehouses, saving them money on expensive storage fees. The alternative has limitations, the business added. It did not, however, specify the expiration date of the offer.


With immediate effect, Amazon has announced that it will no longer charge for any removal orders that are filed to its fulfillment centers.


Not sure how to locate it?


In order to initiate a removal order, go to the Amazon Inventory Age Page.


What is it that sellers need to remember?

The problems with logistics and operations aren't going away anytime soon, despite Amazon's best efforts. As a result, sellers ought to consider this while organizing their Christmas season. Companies that sell big things, particularly 1P suppliers, should anticipate some hiccups along the route.


Although Amazon merchants might profit from this revelation, they should think about the possible long-term effects on their IPI score.


For instance, before August 16th, a seller with a low IPI score is unlikely to make a profit and should probably think about leaving merchandise at the Amazon fulfillment facility. They can scarcely restock the same stock levels in the near future, which is the cause of this. However, merchants on Amazon with an IPI score higher than 500 must to closely examine their stock. Sellers who have merchandise that would be less expensive for you to store should think about removing it as storage charges can increase in Q4. Later in the year, you can transfer the stock to Amazon.


Final Thoughts

The operational problems that Amazon encountered in March and April of 2020 as a result of the coronavirus epidemic have been resolved. But given the retailer's desire to prepare for Q4, this latest update is hardly shocking. By doing this, they will be able to steer clear of any inventory and operational problems that can arise throughout the Christmas season. It might compel you to schedule your inventory far in ahead, but it can assist you in taking the essential steps to grow your company.

Read More:

How to Use Liquidation Inventory to Boost Your Amazon Sales

How to Integrate Repricing into Your Amazon Growth Pipeline

How to Reduce Risks in the Amazon Supply Chain for Sellers

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