Big news! Amazon's storage capacity policy may undergo major changes

Since Amazon began limiting its warehouse capacity, sellers have been frequently restricted from stocking up. In the past two months, this restriction has become tighter and tighter. After the platform reduced its warehouse capacity again this week, many sellers’ warehouse capacity was in the red, and they were unable to stock up for the Spring Festival and subsequent sales, and were about to run out of goods.

Meanwhile, many sellers’ applications for expansion were rejected. Yesterday, news broke that Amazon will start paying for storage space around January 10, which caused an uproar in the industry. According to further news, Amazon will also revise its storage restrictions, from limiting the number of warehouses to limiting the storage volume. If the news is true, then the storage link will undergo a huge change.

Amazon's warehouse adjustment? Storage capacity may start to pay model

Recently, a seller heard that Amazon will open up paid purchase of storage capacity after the 10th, so he consulted a business manager about this matter and soon received a reply - " It will be announced on the 10th and will be implemented on March 1st ."

As soon as the news came out, the sellers were shocked and asked the investment managers around them for confirmation. One seller said that he had asked several managers and it was basically confirmed. A manager confirmed the matter and said that there would be an inventory bidding tool later.

Cross-border blogger "Amazon Melon Farmer Forest" said that he has confirmed with several managers that the new storage capacity policy will begin around March this year, when Amazon will open up the purchase of storage capacity services. The official announcement time is January 10, and the specific purchase method is uncertain. The background should be able to operate directly, using a model similar to advertising bidding.

At present, a framework can be seen in the background, as shown in the figure below. The picture shows that the requested capacity (cubic feet), reservation fee, etc. need to be filled in. The seller guesses that this is to prepare for bidding.

In addition, the original expansion service may be cancelled or the review will be more stringent; IPI will be changed to monthly assessment, and regular Amazon inventory can basically only be kept for 3 months, but it can be expanded. The seller lamented: "Amazon's sickle is getting faster and faster."

Since the beginning of this year, Amazon has continued to reduce warehouse space and staff. It is conceivable that there is great pressure on warehousing, so the platform has been tightening its storage capacity, but because the amount of shipments has continued to decrease, many sellers have complained. After all, before the epidemic, no one thought that even "shipping freedom" would become a luxury. Next, if Amazon releases storage capacity in a paid form, there will inevitably be resistance among the seller community.

Regarding this change, the investment manager explained that, contrary to what sellers were worried about, this new policy gave sellers many opportunities. After the policy is officially announced on January 10, there will be an official comprehensive interpretation.

A manager revealed: " The new policy will take into account the seller's IPI and account health (whether there are violations, new products, and many other factors), and this policy only applies to the part that the seller exceeds. The policy for the non-excess part is the same as before. " A seller also said that after learning of this point of view, the new policy will be particularly friendly to new accounts, but old accounts will have to rely on their own abilities.

Regarding the new policy, several PPT contents have been leaked. The information shows that after the policy change on March 1, only storage restrictions will be implemented, and factors such as historical expected sales, storage capacity and IPI scores will be considered. Only volume will be measured, and the calculation method is in-transit inventory + in-stock inventory, which will be updated monthly; if the limit is exceeded, an excess storage fee will be paid and the creation of shipments will be stopped.

Image source : Amazon melon farmers forest

Industry big V "Yun Feiyang AMZ" also sorted out the change information, pointing out that the new policy will cancel the storage quantity limit and unify it into storage volume limit; the original storage volume was only limited to the inventory in the warehouse, now if the estimated volume of the goods is exceeded, the goods will also be restricted, but the original quantity limit will no longer exist. In addition, the expansion of storage capacity will continue the previous policy and adopt a bidding strategy. He said, "Based on experience, the competition will be fierce."

At the same time, informed sellers said that the new policy will be released on January 10, and the PPT content is relatively accurate, but other content is mostly speculation and the information is relatively vague, and everything is waiting for the official announcement.

Amazon's new adjustments may alleviate sellers' storage capacity problems. Amazon sellers have been reducing storage capacity throughout 2022. In early January 2023, Amazon cut storage capacity again, which many peers called a critical hit at the beginning of the year.

Many sellers urgently expanded capacity but failed, and began to try overseas warehouses and AWD

Some sellers’ storage capacity has been reduced from more than 9,000 to 2,000, and normal FBA cannot create shipments, and shipments are restricted; some sellers’ storage capacity on Amazon has been reduced from 25,000 to more than 3,000, and they cannot ship at all; some sellers’ new store’s storage capacity has suddenly been cut from 5,000 to less than 2,000, and some sellers are unable to ship due to limited storage capacity, resulting in 80% of SKUs being out of stock ...

More sellers have been hit by the cuts in storage capacity and are helplessly asking: "When will Amazon lift the storage capacity restrictions?"

When storage capacity is limited and shipments cannot be made, many sellers urgently seek ways to expand storage capacity, but the results seem to be minimal.

One seller said: “ I opened a case and wrote several long paragraphs, giving several reasons to expand the inventory capacity, but was rejected immediately. Was it because I didn’t write enough to impress the customer service? ”

Experienced people said that opening a case for insufficient storage capacity may solve the problem, but the reasoning must be well-founded, detailing how much storage capacity needs to be increased, with precise data, and reasons from multiple aspects. Some sellers followed the relevant methods, but it didn't work. One seller wrote a demand but it was rejected; another seller made up a lot of reasons but still failed to expand capacity.

While the expansion failed and delivery was restricted, sellers also encountered other delivery problems.

A seller's goods were in transit and the storage capacity was cut. When he created the shipment, the replenishment limit was about 8,000. As a result, after the goods were shipped, he took a vacation for nearly half a month. When he returned to the company, he found that the replenishment limit had been updated and directly reduced to 1,000. Now the goods are in transit, but the replenishment limit has exceeded the limit, and he does not know whether they can be put into the warehouse normally.

Some peers also created FBA with a quantity of 500 pieces, but only 250 pieces were delivered, which was 250 pieces missing. They were worried whether FBA could receive them normally and whether it would affect their accounts. In response to this, peers said: It’s okay if it happens once, but if it happens multiple times, there will be inventory performance problems, and in serious cases, shipments will be prohibited. A logistics person said that Amazon requires CARRIER’s reservation manifest accuracy to be greater than 70% before delivery. If 4 "random delivery" behaviors are found within 8 weeks, the CARRIER center account will be directly blocked.

If sellers are not careful, they will encounter various difficult situations when shipping. In addition to the limitations on storage capacity, many sellers have begun to try overseas warehouses and Amazon AWD in order to ensure they have stock.

"The storage capacity has been cut again and again. It was six thousand last week and only two thousand this week. Is there any big guy who can recommend a reliable and easy-to-use overseas warehouse?" a seller asked helplessly.

Many peers have also encountered similar problems. One of them lamented: "Amazon cut more than 1,000 warehouse capacities in a week, and only gave nearly 10,000 replenishment quantities under storage restrictions. It exceeded the limit if we shipped more than 1,000 pieces of goods. It's useless at all! The platform seems to be forcing us to use their AWD." The person further introduced that in addition to AWD, overseas warehouses are used, but now many overseas warehouses have a bad attitude, are not responsible if goods are lost, and will make various unreasonable demands.

An old seller said bluntly: " Amazon just wants sellers to use their AWD! But AWD is not perfect. The last leg can only be delivered by truck delivery, and the courier will refuse to accept it. The shipments created by AWD were sent to a remote warehouse and truck delivery was not allowed. As a result, I couldn't ship them even if I wanted to."

Whether it is AWD or overseas warehouses, sellers will encounter pitfalls when shipping. In the new year, shipping is still a problem. I don’t know if there will be any improvement after Amazon adjusted its storage and storage capacity policies.

Amazon

Warehousing Policy

Storage capacity