From March 1, 2023, Amazon has introduced a new FBA (Fulfilled by Amazon) capacity management system aimed at supporting selling partners in managing their inventory more efficiently. Based on feedback from sellers requesting greater capacity, predictability, and control over their stock, Amazon has developed a new streamlined system, offering advanced capacity management resources and tools. Amazon’s objective is to provide enhanced support to sellers and facilitate their growth.
Let’s deep drive into the FBA capacity management features
FBA capacity limit for Single Month-long
Amazon understands that their sellers have been facing challenges in planning their inventory procurement and manufacturing due to the weekly restock limits. Moreover, it can be confusing for them to navigate through two sets of limits that are measured differently, i.e., storage limits and restock limits.
To address these issues, Amazon introduced FBA capacity limits that will offer a monthly limit for sellers to determine how much inventory they can send to and store at Amazon. This single monthly limit will replace the weekly restock limits and simplify the process for sellers.
Advance Approximate Capacity Limits to Help Sellers for Three Months Place
To assist sellers communities in planning their inventory over a longer time horizon, Amazon marketplace will be providing estimated limits for the following two months, in addition to the capacity limit for the upcoming month. These estimates will help sellers better understand their future capacity availability, and they can plan their inventory accordingly.
Amazon will forecast the space and labor it expects to have and provide these estimates. However, it’s important to note that these estimates may vary up or down based on how efficiently sellers are using their capacity. This efficiency will be measured using the Inventory Performance Index (IPI) score.
Opportunity to Growth Limit
With the new Capacity Manager, sellers can request additional capacity based on a reservation fee that they specify. Requests are granted objectively, starting with the highest reservation fee per cubic foot until all capacity available under this program has been allocated. When additional capacity is granted, sellers’ reservation fees are offset by earning performance credits from the sales they generate using the extra capacity. Performance credits are designed to offset up to 100% of the reservation fee, so sellers don’t pay for the additional capacity as long as their products sell through.
Main goal of this FBA is to provide sellers with more control over how much space they can have while limiting unproductive use. Teamr of Amazon have piloted this feature with certain US sellers, and will expand it for all, so all sellers can request higher FBA capacity limits.
FBA Capacity Limits in Volume to Better Reflect Capacity Usage
Amazon has set capacity limits and measures sellers’ inventory usage in cubic feet (vs. number of units), which better represents the capacity sellers’ products use in fulfillment centers and transportation vehicles. Many sellers prefer to plan in units, so it will continue to also show inventory usage in units, providing an estimate of how many units specific cubic volume capacity limits are likely to permit.
Like storage limits today, overage fees will apply if a seller’s on-hand inventory in Amazon’s fulfillment centers (not including open shipments) exceeds their capacity limit. Overage fees are calculated based on the highest estimated or confirmed limit provided for the given period. Overage fees help prevent excessive inventory levels and shouldn’t impact sellers who maintain healthy inventory levels.
FBA capacity limits are influenced by sellers’ IPI scores, as well as other factors such as sales forecasts for their ASINs, shipment lead time, and fulfillment center capacity.
To start using the new FBA capacity management system, and to view capacity limits which will take effect on March 1, as well as estimated limits, go to the FBA Dashboard on Seller Central (login required).
Source: https://sell.amazon.com/blog/announcements/fba-capacity
