Amazon cuts storage capacity again! FBA rules changed

Amazon's warehouse capacity has been cut again, and sellers are complaining that their hot-selling products cannot be shipped, and they have missed the peak season. Recently, Amazon's warehouse capacity has changed more frequently. While sellers' warehouse capacity is limited, Amazon has taken the opportunity to promote its own overseas warehouses. Sellers bluntly said: "This is forcing us to use AWD!"

As Amazon repeatedly changed its warehouse capacity, FBA rules also changed, which put forward new requirements for the accuracy of logistics companies' delivery to warehouses. Only when the accuracy is greater than 70% are the goods eligible to be handed over to Amazon warehouses. For a while, many logistics companies' outrageous operations of delivering goods from far warehouses to nearby ones were exposed.

Amazon's inventory capacity has been cut again! Sellers: Let everyone clear out their inventory and leave?

Yesterday, Amazon’s inventory capacity was updated again, and the inventory capacity of most sellers was severely cut.

One seller said that the shipment quantity of two stores was reduced to less than two months' sales. Another seller questioned: "We are selling goods while our inventory capacity is reduced. The reduction is based on the sales volume. Does Amazon want everyone to clear out their inventory and leave? "

Similar feedback from more sellers came in like a tide. Faced with the platform's repeated reduction of storage capacity, everyone felt uneasy. Just as sellers were complaining about Amazon's storage capacity policy, a colleague said bluntly: It's really toxic. I can't complain anymore. I can only raise prices to vent my anger.

Amazon's inventory capacity adjustment is linked to the IPI score. Generally speaking, if the IPI score reaches the standard, the probability of inventory capacity being cut is small, and even if it is cut, the impact is limited. However, in this change, some sellers found that their IPI score was over 600, but their inventory capacity was still being reduced, and they could only watch one link after another run out of stock.

An old seller said that the inventory of stores with IPI scores below 400 has been continuously cut by Amazon since September. In just a few months, the store with the largest inventory change was reduced from more than 90,000 to only 20,000. Stores with IPI scores above 400 have relatively stable inventory and always have a quantity that can be shipped, but the amount that can be shipped is pitifully small.

Regarding Amazon's adjustment of inventory capacity, one seller seemed helpless: " Amazon cuts inventory capacity every week, and all products are facing out-of-stock conditions but are still being cut. This operation is one-size-fits-all and forces people to use AWD. " But sellers using AWD were not spared, and their inventory capacity was also cut.

After the storage capacity was cut, sellers are looking for ways to expand capacity. Experienced people shared that they can send an email to apply for capacity expansion, adding more sales data in the reason for the application, and they have increased their storage capacity by more than 1,000. Some sellers have also personally tested that through the transparent plan, they can apply for storage capacity from the investment manager.

Amazon has been adjusting its inventory capacity frequently recently, and sellers are bound to complain every time there is a change. In terms of shipping, sellers are caught in uncontrollable anxiety at any time.

Amid concerns about inventory capacity, some sellers’ peak season sales rhythm has been disrupted. Some sellers said that they raised prices in a panic in December because they were worried about insufficient inventory, and they must consider this factor when preparing for the peak season next year. Amazon has been changing its inventory capacity during the peak season for two consecutive years, and it will be the norm in the future.

According to the situation in previous years, Amazon's inventory capacity will rise after Christmas, but this year's situation seems unusual. In mid-December, Amazon was still adjusting its inventory capacity. Industry insiders analyzed that the purpose of the platform doing this is to allow sellers to control inventory turnover and promote their own overseas warehouse AWD.

Experienced sellers remind their peers that after December 15, they must pay attention to the turnover rate of Amazon inventory! After all, this directly affects the seller's IPI in the first quarter of 2023. If the IPI score is high enough, you can use AWD if the restricted inventory is insufficient; if the IPI score is not high enough, it will be troublesome, and you may not even be able to use overseas warehouses and AWD.

While Amazon has repeatedly changed its storage capacity, there are also many sellers whose goods are delayed in getting on the shelves during the peak season. This may be due to the logistics companies' long-distance warehouses and nearby delivery.

Another logistics expense? Sellers start to claim compensation

In the past two days, some sellers noticed that Amazon’s backend had been revised. The receiving information of FBA shipments changed from “Registered” to “Registered + Warehouse Name”. As a result, many sellers found that the actual warehousing address and warehouse establishment address of the shipment were inconsistent . For example, the seller’s delivery address was SMF7, but the registered warehouse was XLX2.

This is the recent popular "far warehouse near delivery" strategy. In order to save transportation costs, the logistics company will deliver the goods from the farther warehouse to the nearest warehouse. The logistics company will make an appointment with the warehouse using the ID of the XLX2 warehouse, and then mix the seller's goods among them and send them to the FBA warehouse, but this is not the seller's original destination warehouse.

But more often, the goods that sellers want to send to warehouses such as SCK1 and GYR3 are all sent to warehouses near the docks such as ONT8. "First of all, ONT8, LAX9, and LGB8 are large warehouses. Secondly, both Matson and COSCO are based in Los Angeles Port, so many freight forwarders' overseas warehouses are near Los Angeles in the western United States. When delivering, if you want to send mixed goods, you will easily choose these warehouses." Shenzhen freight forwarder Li Hang analyzed.

After Amazon's backend was updated, this issue quickly attracted attention. After checking, a seller found that many of his shipments were sent to large warehouses such as ONT8 and LGB8, which were inconsistent with the original addresses of the shipments. The previous saying that "warehouses were overloaded during the peak season" when the listing was slow was no longer applicable.

"Some of our shipments were delivered to nearby warehouses. The solution was to ask the freight forwarder for compensation. The freight charges for the shipments were settled based on the quotation for the warehouse at that time, and the extra freight I paid was refunded to me," said a seller in Guangdong. However, the freight forwarder refused to refund the fees, believing that it was a problem of the local agent. The seller was not convinced and planned to deduct the amount from the bill later.

In addition to slow listing, delivery from a distant warehouse to a nearby warehouse may also cause warehouse transfer fee performance issues. A seller said that the shipment was originally to be sent to the IND9 warehouse in the eastern United States, but the freight forwarder sent it to ONT8 in the western United States to save costs . He was worried that Amazon would charge a transfer fee and even incur a performance penalty for the account entry.

A seller consulted customer service about this, and they said that this situation would affect the warehousing performance and the seller might be deprived of shipping privileges, but Amazon generally would not charge an operation fee for this. This reply can be used as a reference.

Before this disclosure, the long-distance warehouse and short-distance delivery had been around for a long time. Shenzhen freight forwarder Chen Feng told Ennet that the long-distance warehouse and short-distance delivery had been around for three or four years, and it became more rampant last year. The companies that do the tail-end delivery are mainly in Shenzhen, and they have approached him many times to discuss cooperation and proposed the long-distance warehouse and short-distance delivery plan.

"Since last year, logistics has become more and more competitive, and more and more people are doing it. In the past, there was profit to be made, but the market price has been lowered, and all kinds of speculative operations have increased. For example, the whole container direct consolidation in the market is also a routine. Your freight forwarder simply cannot receive so much goods." Chen Feng said. As a result, operations such as long-distance warehouse delivery, mixed delivery, and contract overlap have increased.

Haipai escorts the entire journey, and there is basically no problem of delivering goods from a distant warehouse to a nearby warehouse. This kind of problem occurs with Kapai. Among the sellers, small and medium-sized sellers mainly use Haipai and pay attention to safety; large sellers focus on cost and use Kapai more often. Kapai can save 2 yuan in costs compared to Haipai.

Regarding the inconsistency between the registered warehouse and the seller's delivery warehouse shown in the background, some people believe that it is an internal warehouse transfer or a system error in Amazon. Li Hang believes that this possibility exists, but the possibility is small.  

How to distinguish between long-distance delivery and internal warehouse transfer in Amazon?

Far warehouse to near warehouse delivery means that the goods are first delivered to other warehouses and then transferred to the seller's destination warehouse; in contrast, internal distribution means that when Amazon's warehouse is full, the goods are first delivered to the destination warehouse and then transferred to other warehouses. Sellers can basically determine whether the goods were intentionally delivered to the wrong warehouse or transferred internally by looking at the specific warehouse information in the "registered" area.

As for Amazon system errors, Li Hang said that the appointment record before delivery will show warehouse information, and the POD document when unloading will also show the delivery time, delivery number, etc., and there will be handwritten information from Amazon people. The probability of Amazon system errors is small.

At present, sellers have generally begun to verify whether there were any errors in previous deliveries, and companies that conduct more of such operations will also face a wave of rights protection.

Chen Feng said: "Cross-border logistics will be reshuffled, and some people may go bankrupt. Logistics companies, like sellers, are developing rapidly, but they actually have very little working capital. If their customers come to claim compensation and their cash flow is blocked, there will be problems. For example, those who engage in price wars, such as those who charge 2.8 yuan or 3 yuan for sea freight, are just using this kind of trick. They may have been losing money in the first place, and then they slowly ran away."

For these companies, they must first survive this maintenance period before they can talk about future development. After the profit margin of long-distance warehouse and short-distance delivery disappears, the price of US-bound card delivery may rise slightly, and the phenomenon of low-price cargo collection will also decrease.

As one seller said, returning to the essence, what kind of price corresponds to what kind of service. Blindly reducing costs from the unit price without considering cost reduction and efficiency improvement from the perspective of the entire supply chain will inevitably lead to a pitfall.

Amazon

Storage capacity

FBA