FBA Changes as we prepare for a successful peak (US)


#1

Given the unprecedented challenges the COVID-19 pandemic has placed on all of us, we are preparing early to deliver a great holiday season for our customers and selling partners—building out capacity as quickly as we can so we can deliver products customers need and want directly to their doorsteps and help you continue to grow your business.

We’ve been investing heavily for many years to support selling partners like you, and over the course of 2019 and 2020, we’ll invest more than $30 billion to build capacity, tools, services and programs for sellers, as well as to hire more people. We’re on track to open 33 new fulfillment centers in the US this year, which will increase peak fulfillment center standard-sized product storage capacity by nearly 35 million cubic feet more than last year.

Since the pandemic hit, COVID-19 has impacted supply chains around the world, and we’ve all had to make fast adjustments. Amazon hired more than 175,000 employees and invested billions of dollars in COVID-related initiatives to help meet increased customer demand and protect the health and well-being of our employees as they pick, pack, and ship your products to customers. As a result, selling partners have had record sales on Amazon and continue to account for more than 50% of units sold in our store.

Even though it’s July, we’re preparing early for the holiday season to meet sustained increased demand, and have already reduced our own Retail product ordering to accommodate more of your products and help you continue to see sales growth.

To ensure we’re ready to best serve all of our selling partners and customers, we are introducing the following adjustments as we begin our ramp into peak:

Inventory Performance Index threshold change

We are working to manage inventory performance to ensure all products have space available during peak. To enable this, we are changing the IPI minimum threshold requirement to 500. Sellers below 500 will be subject to limits effective August 16, 2020 through the end of the year.

The majority of sellers will not be impacted by this change. Most sellers with IPI scores below 500 will have more storage space than last year.

You can improve your IPI by following guidance on improving sell through or reducing your excess and stranded inventory in the Inventory Performance Dashboard.

Quantity limits

To maximize selection for customers during peak, we are introducing ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales.

You can view quantity limits for your products on the Restock Inventory page and the Restock report. We will continually review this and, when possible, make adjustments to allow for more of your products.

Free removals promotion

To help you avoid storage fees for products that have not been selling and create room for more productive inventory, we are offering a free removal fee promotion for a limited time. We will waive your fees for any removal order submitted for inventory in our fulfillment centers beginning July 14, 2020.

To create a removal order, please visit Inventory Age and choose Create removal order from the menu next to any FBA item in your inventory.

For further guidance, you can review frequently asked questions on this Help page.

While no one has a perfect playbook for how to respond to COVID-19, our commitment to supporting your business has never been more steadfast. We will continue to make adjustments to best support your business and keep you informed along the way. We appreciate your partnership as we improve the efficiency of our fulfillment network to prepare all selling partners for a successful peak season.


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#2

You basically saying to your sellers ‘‘change your business to FBM, do not use our fulfillment services, we don’t want your business unless you are 6 figure seller’’


#3

And launching new products is essentially out the window now for FBA…


#4

Suddenly increasing the IPI threshold to 500 is going to have a big impact on a lot of sellers.


#5

I posted this on another thread… I hope that this thread is monitored by the mods…so, for your attention
“Besides the quantity limits and changing the IPI treshhold, amazon does not acknowledge that since mid June some shipments are received weeks after delivered (and those FCC were efficient before that)… how can a seller plan anything ? ship more to FBA in hope that the shipments will be put into inventory ? not shipping ? sell FBM ? order more products from suppliers or not ?
These issues have to be addressed by amazon if they want sellers to be able to plan ahead.”


#6

@AP123 The link from the announcement to their help page (FAQ) states the follow

What about new products or products that do not have recent sales?

We provide an initial quantity limit for all products to build your sales history. Your quantity limit will increase as you build sales performance for your products, which can take up to four weeks. You can check the quantity limits for products that are new or do not have recent sales on the Restock Inventory page and Restock report.


#7

So even with a +500 score, we won’t really get unlimited storage. What score do we need to get for reasonably prompt shipment checkins, competitive buybox eligibility, and orders shipped within 2 days to the customer? Our requirements continue to rise, and Amazon’s service level and predictability to us continues to fall.


#8

This will be a big problem as we ship via sea and it takes 40 days in transit. If we can only create a shipment plan once the restock inventory report allows us to then we will surely go out of stock for some time which will in turn affect our IPI.


#10

agreed

I’m waiting for delivered shipments to be checked in right now

They were delivered 8 days ago.

This is all a one way street.


#11

@Rishav Many sellers that source from overseas have started storing their product in USA based warehouses so that they can send into Amazon quicker when they are allowed to. Bonus is that you can sell the product on other marketplaces if you have the product stored at a 3P fulfillment center.


#12

Gosh you know maybe…just maybe put IPI and inventory info on a front main page, like, something called Seller Central? Wouldn’t that be a great idea. So we could all find our scores and see them regularly?


#13

logic- does not compute


#14

This really does not make sense, and does not account for the huge amount of sales made during Christmas. I also don’t understand how Amazon is constantly making changes with no notice to Sellers. I feel like I deal with one new problem, only to have 5 more quickly thrown my way.


#15

It’s starting to feel like there’s a troll working in the "US Announcements " department now. This coming hot on the heels of the announcement to disclose sellers personal names and addresses.


#16

Well hmmm, Amazon just won’t let go. The entire concept of massive warehouses sounds surprisingly monolithic and proved to be during the pandemic, at any time an entire FC can be shuttered by a Covid outbreak. Not really cutting edge but more regression to Soviet Union style economic management. Just my .02


#17

@JwsMarket

So if I have never sold oversize and my storage is capped at 25 cu ft, but the restock report is telling me to send 200 units, what do I do?

Thanks


#18

@AP123 These two things do not go together. If you have never sold it, how can it be on your restock report?


#19

Just another reason, to invest in your own business, & not do FBA…

In addition to diversifying your marketplaces…

Well — they do have free removal, if they can find it!..

Free removals promotion ----
—To help you avoid storage fees for products that have not been selling & create room for more productive inventory, offering a free removal fee promotion for a limited time. We will waive your fees for any removal order submitted for inventory in our fulfillment centers beginning July 14, 2020. …


#20

Nothing about how they are going to get stuff checked in faster.

For years we have used FBA exclusively.

We are now transforming to do in-house as well.


#22

Really trying their hardest to get rid of businesses that have a lot of SKU’s that constantly change and deal with manufacturers that do limited runs of products that change all the time. We do a relatively good job taking out excess inventory, we do a great job keeping items in stock that we have available to us for as long as we can, we currently have stock at Amazon that is currently estimated at 11 turns a year and even with all of that…our IPI has ranged from 488 to 497 the last 3 months. I realize for most people that deal with only a few SKU’s or manufacture your own products, staying way above 500 is really easy but for those of us with constantly changing inventory, it is going to be really hard. Going to keep working on things as we get closer but at some point, the only answer will likely be quite a few less SKU’s.

Just as we had really started ramping up again. Most of which was driven by what items Amazon was telling us to restock and in what quantities. But tbh, looks like we will have to pull back a bunch of what we sent in based on their recommendations to try to get our score up. Just a new nightmare problem every day to deal with. Seriously depressing.