Sizing Up Amazon’s Storage Capacity Changes
If you’re a brand or seller leveraging Fulfilled by Amazon (FBA), then you’ve probably heard the news: Starting March 1, Amazon will be moving to a single monthly storage cap for FBA sellers.
The new system of inventory management will replace weekly restock limits that Amazon used for calculating FBA storage. According to a recent Amazon blog post, this will “give most sellers greater capacity limits, and provide more predictability and greater control to get more capacity when sellers need it.”
What are some of the things brands need to know before the changes go into effect next week? What is the biggest change? Are there any tools that can help brands navigate what Netrush’s chief supply chain officer, Brian Birch, calls “a logical extension of past Amazon policy—rewarding fast-selling items and penalizing slow-moving ones”?
Birch, Netrush’s senior director of marketplace management, Jeni Malone, and their teams have been digging into Seller Central, wrapping their arms around the new features, and connecting with teams at Amazon for points of clarification and better understanding. Here is how they answered many of the questions brands are sure to ask ...
Q: Is there anything viewable ahead of the March 1 launch date?
A: The Capacity Monitor widget as well as the Capacity Manager landing page are now live in Seller Central and viewable ahead of the launch date. The view can be accessed at the bottom of the IPI break-out page. We encourage brands to take advantage of this chance to review the format and help resources, and compare the new version of reporting that will be impacting the overall approach to monitoring restock limitations.
NOTE: Brands will be able to access the current Inventory dashboard via the Inventory tab until April 3.
Q: What will be displayed in the new Capacity Manager and Capacity Monitor widget?
A: In place of the current method—where restock limits by storage type typically update once a week—the new Capacity Manager and Capacity Monitor widget will display the current month's allocation as well as the anticipated capacity for the next two months. This longer term visibility into capacity should hopefully allow sellers to forecast and fulfill more smoothly compared to the previous format, which provided no predictability as to which direction restock limits would go each week.
Capacity Monitor Widget:
Capacity Manager Landing Page:
Q: What is one of the largest shifts that brands will see?
A: One of the largest shifts is that the reporting will now be done in cubic feet (cf) instead of units. This change requires new reporting, calculation methods, and a mindset shift in the way forecasting and fulfillment teams plan and manage inventory.
Amazon has admitted this has been a common point of feedback and has ensured that units are still visible in several places. Hovering over the Capacity Monitor widget columns reveals the translation into units, and once the tool goes live on March 1 there will be an additional bar for maximum shipment quantity—which will also have a hover feature that shows units as well as cf. For reporting and other reference points, it appears that Amazon is trying to ensure that unit conversion from cf will be available.
Q: Are there any tools to assist with determining how to approach the reservation fee bidding system?
A: There are several. A Capacity Manager calculator is available for download, which assists with determining the appropriate bid based on need. It also allows users to anticipate what potential credits will look like based on sales in the storage type that they submitted their bid in.
Capacity Limit Increase Request with Link to Calculator Tools:
Brands should start by taking a test-and-learn approach to the new bidding system to understand the functionality and the sales and profitability impacts of bids for extra capacity. Having a firm grasp on sales factors such as Buy Box control and confidence in demand will likely be critical, rather than fully relying on the calculator to guide bidding strategies.
Q: Will information on successful historical bids by storage type also be made available?
A: Yes, they’ll be made available, which will allow brands to better gauge successful bid ranges. This, paired with the calculator, is intended to help brands accurately plan and refine their bids in the event that they feel Amazon's capacity assignment is misaligned with their own expectations.
Q: Will the storage type segments (Standard, Apparel, Footwear, Oversize, and Extra Large) remain the same?
A: Yes, but it should be noted that at this time Flammable and Aerosol capacity are not included. The process for requesting additional space for these two categories will remain the same.
Q: How is this a logical extension of past Amazon policy?
A: It’s just a more polished policy, and a step in the evolution of managing FBA capacity that started at the beginning of the pandemic. When online demand spiked, Amazon had to respond and build solutions in a "burning building" environment—favoring fast-moving items amidst major fulfillment network constraints But they were convinced that the process could be refined, so they just kept iterating.
Netrush has been on Amazon since 2007, giving us years of experience over any other integrated ecommerce platform—and a competitive edge when it comes to knowing how to help mission-driven brands succeed on the largest online marketplace in the world. Learn more about how Netrush helps brands maximize their potential, or contact us to get a conversation going.
