Amazon Brings Back Restock Limits to Prepare for the Holiday Rush

🚨 After not having capacity restrictions for the better part of 2022, on August 29th, sellers woke up to just that with an announcement from Amazon that they are, in fact, bringing back restock limits to prepare for Q4!

With this update, all sellers will be allowed at least four (4) months of inventory in FBA, which completely contradicts recent moves they’ve been making to entice eCommerce sellers that are not even selling on the Amazon platform to use FBA Prime fulfillment services – all signs pointing to Amazon not being worried about running out of space after nearly doubling their fulfillment network during the pandemic. 😓

The announcement also came after the launch of Amazon Warehousing & Distribution (AWD), a low-cost upstream storage and distribution program that could rival independent 3PLs. 

One of the selling points of this new service is that you can send inventory to an AWD facility without any storage limits. Interesting timing… 🤔

They also boast lower storage and transportation costs, making it an attractive logistics option for sellers who may want to bypass the current inventory restrictions without leaving the Amazon fulfillment network, and possibly to keep costs down amid rising FBA fees.

So, coinciding the return of restock limits with the launch of AWD seems like a deliberate move by Amazon to:

• Make sellers more reliant on their storage, distribution, and fulfillment network. Otherwise, if sticking with your 3PL, you’ll be dealing with low restock limits leading to stockouts. You may have to run flash sales to sell through your slow-moving inventory that’s clogging your storage limits, pay hefty removal fees to get rid of extremely slow sellers, or cancel your FBA shipping plans to make room for products within your restock limits.

• Take more customers from Shopify and other 3PLs. In April 2022, Amazon rolled out Buy with Prime to offer fulfillment services to non-Amazon sellers, taking direct aim at Shopify. The Canadian eComm giant then fought back by acquiring Deliverr in order to offer 1- to 2-day shipping to marketplace sellers, going toe-to-toe with Amazon’s Prime services.

But if everything works out in Amazon’s favor, they will be able to generate more revenue for their fulfillment business arm, which recently grappled with excess capacity and massive financial obligations associated with maintaining facilities they no longer need as economies reopen.

It’s unfortunate (but not surprising) that the cost of Amazon’s over-expansion is, more and more, trickling down to sellers. While AWD can be a good way to avoid restock limits, it is still in its early stages and may not be as seamless as one could hope. We saw how Amazon handled its logistics last year!

Handing over months’ worth of inventory to Amazon may be risky given that they’re not exactly immune to shipping delays and mistakes, especially during congestion times.

So, proceed with caution, weigh your options carefully, and don’t ever let anyone have all your stuff! Especially not Amazon. Be sure to check out Amazon Restock Limits Tips and Updates for more information and sign up to get notified when new restock updates drop!