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EcommerceBytes-NewsFlash, Number 2576 - June 30, 2011 - ISSN 1539-5065    1 of 5

Amazon Imposes Limits on Sellers Using FBA Fulfillment Service

By Ina Steiner
EcommerceBytes.com
June 30, 2011




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Amazon.com is imposing limits on how much inventory FBA merchants can store in its fulfillment warehouses, citing the popularity and fast growth of the program and its desire to ensure that customers are able to get the products they are most interested in.

The move comes shortly after Amazon instituted a new annual Long-Term Storage Fee for products stored in its fulfillment centers for one year or longer. Amazon is also making changes to the locations FBA customers can send inventory - booksellers recently learned that they must ship all media inventory to a single warehouse in Pennsylvania.

The company sent an email to some of its Fulfillment by Amazon (FBA) customers this week informing them that limits were being placed on their accounts. Inventory Storage Limits are the amount of inventory units that may be maintained within Amazon fulfillment centers by certain FBA sellers.

Two types of sellers are receiving Inventory Storage Limits:

  • New sellers whose first shipment of inventory is received at the fulfillment center after August 2, 2011;

  • Existing FBA sellers who have large quantities of inventory with low overall inventory turnover.

Existing sellers have received an Inventory Storage Limit if they have more than 5,000 Standard-Size Units in inventory (or 500 Oversize Units in inventory) and average more than 26 weeks of cover for that inventory.

Amazon said it would evaluate sellers' performances every six months and adjust who should have an Inventory Storage Limit. It left open the possibility of future category-based restrictions, stating that there would be no category-level Inventory Storage Limits in 2011.

Amazon's email stated, "In order to meet our commitment to providing a world-class shipping and customer service program, as well as ensuring that customers are able to get the products they are most interested in, we have set inventory limits for new FBA sellers and existing FBA sellers who have large quantities of inventory with low overall inventory turnover."

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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