Four top tips to manage Amazon Inventory Restock Limits
Updated: Feb 14, 2022
https://www.thompsonandholt.com/Logistical roadblocks have become an increasing issue for many Amazon Sellers over the last 18 months, with the global pandemic having a constantly changing effect on supply, demand and storage.
During the same period, Amazon restock limits have changed numerous times and continue to do so, with several reports suggesting that they could be amended again in December 2021. Amazon is constantly looking at your sales levels, and can amend your FBA storage limits as a result, with fines for going over those marks.
It’s becoming an increasing issue for Amazon Sellers to deal with, but one that is navigable if you bear certain key factors in mind constantly. Thompson and Holt managing partner Stuart White is vastly experienced on the site and provides his four top tips for managing Amazon’s Inventory Restock Limits.
1. Focus on Driving Sales
Thompson and Holt’s Stuart White: “This sounds obvious, and is a fundamental target for any Seller on Amazon, but its impact on Amazon Inventory Restock Limits shouldn’t be underestimated. Amazon looks at the last three months of sales when updating your capacity, so if sales are going down, your storage space will follow suit. If you’ve not looked into pay-per-click advertising, it’s something that is worth researching to see whether it could help your business.”
2. Prioritise your Best-Selling Products
Thompson and Holt’s Stuart White: “Back in April, Amazon Amazon announced the removal of individual ASIN limits and instead imposed overall account ASIN limits. What that means is you can control how you use the space you’ve been allocated, rather than having that imposed on you as a direct result of individual product sales. But it also means you need to keep track of what your best-selling products are, and then prioritise those within your storage. You can make room for these products by either having Amazon return less popular inventory to you, or have them disposed of for a fee.”
3. Get Rid of Excess Inventory
Thompson and Holt’s Stuart White: “This follows on from the last tip. It’s important to avoid overstocking and sell excess inventory as soon as possible - the last thing you want is for storage space to be taken up in Amazon’s warehouse for extended periods of time. Lowering prices is one way of doing that, while FBA Liquidations offers Sellers the chance to recover some value from excess stock. For a fee Amazon arranges a buyer (or liquidator) for the items that sellers have deemed excess and subject to liquidation. The liquidators involved in the program sell Amazon-owned and FBA inventory to downstream consumers, but not on Amazon. It’s not always an ideal situation and can be frustrating to lose items at reduced cost, but if it frees up storage space for best-selling products and avoids overstocking fees then it could be worth it for you.”
4. Improve Your IPI (Inventory Performance Index) Score
Thompson and Holt’s Stuart White: “Understanding this is crucial. Your Inventory Performance Index, or IPI, is the metric Amazon uses to assess your inventory performance over time. You can track your IPI score at any time on the Inventory Performance dashboard in Seller Central. What’s important is that your IPI score relates directly to the amount of warehouse storage space Amazon will allot you as an FBA seller. You can improve this score by reducing excess inventory as above, and improving your ‘sell-through’ rate. That is calculated by diving your units sold and shipped over the past 90 days by the average number of units on-hand in Amazon warehouses during that time period. Getting that balance right between sales and storage is absolutely key.”
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.
Thompson and Holt are also offering a free month’s trial of their Monitor and Protect service to help sellers prevent a suspension of ASINs or an their account during the COVID pandemic, more information on how to protect your Amazon seller account from a suspension can be found here.