Amazon is putting in new inventory restrictions for FBA retailers.
Effects of COVID-19
You can check out the Note to Sellers here. Due to lack of inventory stability in the past months because of COVID-19, Amazon is attempting to steady things for the high demand holiday season. The new restrictions will favor retailers with IPI’s of 500 or higher. For retailers using FBA, their IPI or Inventory Performance Index measures inventory management over time, including how well you balance inventory levels and sales, fix listing problems that make your inventory unavailable for purchase, and keep popular products in stock.
What does this mean for retailers?
This means they need to be on top of things like keeping inventory in stock, selling popular items, and quickly fixing fulfillment and inventory issues. Due to shipping unreliability during the recent pandemic many retailers are finding themselves in a rock and a hard place when it comes to using FBA. Retailers have found that they are unable to control the shipping estimates or many suppliers, especially those overseas. FBA does not favor this type of behavior and will ding retailers IPI, even if issues are beyond their control.
How to tackle this problem?
One solution some retailers have come up with is warehousing their own goods rather than shipping directly to FBA facilities. This can have some drawbacks of course and high costs.
Keep IPI Scores High
With the holiday season fast approaching, it is important to keep IPI scores as high as possible. This means regularly checking your IPI through Seller Central. This also means addressing any issues that come up as quickly as possible.
The good news is that Amazon has said even with the new restrictions there will be enough space for most products for most retailers. If a retailer sells out they can send more inventory.