Amazon.com, Inc. (“Amazon”) recently announced changes to the FBA storage limits for Amazon.com Professional sellers. Merchants are encouraged to improve their inventory management processes.
Inventory Performance Index
Amazon will use the Inventory Performance Index to establish a baseline for inventory performance. Amazon sellers can track this metric on the Inventory Performance Dashboard, which also provides customized recommendations for FBA sales growth and cost reduction. This score is updated weekly based on a merchant’s ongoing inventory management.
Starting July 1, 2018, Amazon may limit access to storage for those with an Inventory Performance Index below 350. Sellers who keep their score at 350 or above will have unlimited FBA storage for standard and oversize items. (Note that monthly storage fees and long-term storage fees will still apply.)
New Storage Limits
Also beginning July 1, 2018, storage limits will be evaluated every three months. Merchants who have an Inventory Performance Index of less than 350 six weeks prior to the new quarter will be alerted to their potential storage limits; if the index score is still below 350 at the end of that time period, the limits will apply to the next quarter.
With the FBA inventory storage limits policy, sellers cannot create new shipments to Amazon until their current inventory level drops below their storage limits. If existing inventory exceeds those storage limits for a given month, merchants will be charged an Inventory Storage Overage Fee for the inventory that exceeds storage limits. This fee will be based on cubic foot of storage; Amazon is updating their tools to reflect this change as it is currently based on number of units.
Hazmat storage limits will be handled separately from this policy. You can learn more about hazmat storage here.
Monthly Inventory Storage Fees
Beginning April 1, 2018, monthly inventory storage fees will increase by 5 cents per cubic foot for standard and oversize items. On August 15, 2018, a minimum long-term storage fee of 50 cents per unit per month will be added for items in fulfillment centers for 365 days or more. Long-term storage fees will begin to be assessed monthly (instead of twice a year) starting on September 15, 2018.
Monthly inventory storage fees increase on April 1, 2018
Inventory Performance Index minimum score 350 begins July 1, 2018
Storage limits begin to be evaluated quarterly July 1, 2018
Minimum long-term storage fee for items in fulfillment centers for 365 days or more begins August 15, 2018.
Long-term storage fees will start to be assessed monthly on September 15, 2018.
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