If you're working as a regular Amazon seller, the inventory control and supply chain management aspects are already giving you a headache, as Amazon imposes inventory limits to push retailers to sell items quickly.

Even if your items don't move, you still have to pay storage fees, which can be scary. So a proper understanding of Amazon inventory limits will be of great help to your business.

What are Amazon FBA Inventory limits

Amazon FBA Inventory limits refer to the restrictions placed by Amazon on the amount of inventory a seller can store in its fulfillment centers.

Perhaps you're struggling to understand why Amazon has so many distribution centres around the world and has to limit sellers' inventory?It's because they need to reserve inventory for quality sellers and to prevent some seller pins from having too much backlogged inventory due to low sales.

Working Principle

Inventory Performance Index (IPI)

Amazon uses the IPI score to assess how well sellers manage their inventory. This score is based on factors like excess inventory, sell-through rate, stranded inventory, and in-stock inventory.

Sellers with higher IPI scores generally receive more generous storage limits, while those with lower scores may face restrictions.

Storage Type Limits

Inventory limits are typically categorized by storage type, such as standard-size, oversize, apparel, footwear, and flammable storage.

Each category may have different limits based on the seller's IPI score and historical sales performance.

Quarterly Assessments

Amazon reviews and adjusts inventory limits on a quarterly basis. Sellers are notified of their limits and any changes through their Seller Central dashboard.

Limit Adjustments

Sellers can potentially increase their inventory limits by improving their IPI score through better inventory management practices, such as reducing excess and stranded inventory and maintaining a healthy sell-through rate.

Impact of Limits

Inventory limits can affect a seller’s ability to restock products, especially during peak seasons like holidays. Effective inventory planning and management are crucial to avoid stockouts or excess inventory.

How to Request Limit Increases

Individual Sellers are limited to a 500-unit restocking limit for Standard Size Storage products and a 100-unit restocking limit for Oversize Storage products.In contrast, professional sellers' replenishment limits may be more flexible and higher, and will increase over time based on their performance and adherence to Amazon's policies.

If you consistently maintain a high IPI score and demonstrate strong sales performance, you may request an increase in your storage limits through Seller Central.

How to avoid exceeding your Amazon FBA inventory limits

Optimize Inventory Levels: Conduct regular inventory audits to identify slow-moving or excess stock. Implement strategies to clear out these items, such as discounts or promotions.

Improve Sell-Through Rate: Enhance your product listings with better images, descriptions, and keywords to increase sales. Consider using Amazon’s advertising tools to boost visibility.

Plan for Seasonal Fluctuations: Anticipate peak seasons and adjust your inventory levels accordingly. Start planning several months in advance to ensure you can meet increased demand without exceeding limits.

Use Third-Party Warehousing: Consider using third-party logistics providers to store excess inventory, for example, linktrans logistics. This can help you manage overflow and keep your Amazon warehouse stock within limits.

Leverage Multi-Channel Fulfillment: If you sell on multiple platforms, use Amazon’s Multi-Channel Fulfillment (MCF) to fulfill orders from other sales channels, optimizing your inventory turnover.

FBA storage limits FAQs

What happens if I exceed my storage limits?

If you exceed your storage limits, Amazon may charge overage fees. Or even suspend your Amazon account.

How can I check my current storage limits?

You can check your current storage limits by visiting the Inventory Performance Dashboard in Amazon Seller Central. This dashboard provides detailed information about your IPI score and current storage usage.

Can I request an increase in my storage limits?

Yes, sellers with a consistently high IPI score and strong sales performance can request an increase in storage limits through Amazon Seller Central. However, approval is not guaranteed and depends on Amazon's assessment.

How often are storage limits updated?

Amazon typically updates storage limits quarterly, but they may adjust limits more frequently based on changes in your IPI score or sales performance.

What strategies can help me stay within my storage limits?

To stay within your storage limits, monitor your IPI score regularly, optimize inventory levels, improve sell-through rates, manage stranded inventory, and forecast demand accurately. Additionally, consider using third-party warehousing for excess inventory.

What is the impact of seasonal changes on storage limits?

During peak seasons, such as holidays, demand for storage space can increase. Sellers should plan inventory levels carefully to avoid exceeding limits during these times.