Effective March 1, 2023, the new Capacity Limits system will replace the weekly updates with one single monthly limit for each storage type. Amazon will assess and announce the estimated inventory limit on the third Monday of each month via the Capacity Monitor in Seller Central and an email notification.
In addition to a capacity limit for the upcoming month, Amazon will provide estimated limits for the following two months to help merchants plan their procurements and shipments.
The FBA Capacity Limits of sellers’ inventory usage will consider sellers’ on-hand inventory and open shipments on the way to Amazon fulfillment centers, calculated in cubic feet.
Factors Influencing Sellers’ Storage Capacity:
- seller’s IPI score
- historical sales volume
- seasonal and peak selling periods
- sales forecasts for the ASINs
- deals scheduled
- fulfillment center capacity
- shipment lead times
Inventory limits are also dependent upon the account type:
Individual selling accounts have a capacity limit of 15 cubic feet. This limit doesn’t change and is not eligible to be increased.
New professional selling accounts (active in FBA for less than 39 weeks) don’t receive FBA capacity limits. This allows merchants to establish their FBA sales record without limits so that Amazon can determine how much capacity their FBA businesses need as they grow.
Professional selling accounts (active in FBA for more than 39 weeks) receive capacity limits based on IPI score and sales performance. Sellers with consistently higher IPI scores receive higher capacity limits, adjusted for sales volume and available capacity.
Does the New Storage System Impose Fees?
Much to our regret, yes. The new program introduces a number of new FBA fees including inventory storage overage fees and reservation fees.
Overage Fees
If a seller’s on-hand inventory in Amazon’s fulfillment centers (not including open shipments) exceeds their capacity limit, overage fees will be imposed. They are calculated based on the highest estimated or confirmed limit provided by Amazon for the given period. Overage fees help prevent excessive inventory levels and shouldn’t impact sellers who maintain healthy inventory levels.
Reservation Fees
The new storage management system will also allow sellers to bid for additional space using the Capacity Manager tool.
To bid for additional space sellers should:
- Tell Amazon how much additional capacity they want for the specified period.
- Set the maximum reservation fee they are willing to pay for the extra capacity.
The reservation fee can be offset with performance credits that sellers earn from sales generated from the extra capacity. Merchants are rewarded with a 15% “performance credit” ($0.15 per $1 in sales) for sell-through units. Performance credits are designed to offset up to 100% of the reservation fee, so sellers don’t pay for the additional capacity as long as they use the extra capacity efficiently.
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