New FBA Capacity Limits: 4 Key Changes You Need to Know About
Amazon Announces New FBA Capacity Limits: 4 Key Changes
Amazon has announced FBA Capacity Limits, a new system to help sellers manage their Fulfilled by Amazon (FBA) inventory capacity. The streamlined system offers new capacity management tools and resources, and will go into effect March 1, 2023.
New FBA Capacity Management Features
1. FBA capacity limits will offer a single monthly limit, instead of utilizing weekly restock and storage limits.
2. Estimated capacity limits to help sellers plan three months in advance.
3. The opportunity to request a higher capcity limit based on a reservation fee.
4. FBA capacity limits in volume (cubic feet instead of number of units) to better reflect capacity usage.
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I’ve broken down Amazon’s new bidding scheme for warehouse storage so you don’t have to...
1. If a seller wants additional storage, they “reserve” it
2. They say how much they will pay for it - “max reservation fee”
3. Amazon grants requests starting with the highest reservation fee.*
4. Performance credits are granted to offset reservation fees when inventory sells.
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We need to talk about return rates on Amazon more as a means of improving profitability. It is easy to toggle advertising spend, create bundles to improve FBA efficiencies, but more brands, especially apparel, needs to be actively tracking their return rates on Amazon to protect their bottom line.
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