Starts March 1st, 2023, Fulfillment by Amazon Capacity Management System - for Seller Central Sellers
Amazon recently announced a new auction-based FBA capacity management system that will go into effect on March 1, 2023. With this new system, FBA will be an "auction-style" system where sellers bid for additional storage space.
Starting March 1st, 2023 – Amazon is moving toward an auction-based storage system.
Capacity limits will be monthly rather than weekly
Estimated Capacity Limits to influence Sellers to plan 3 Months in Advance
https://sell.amazon.com/blog/announcements/fba-capacity
So how do you prepare? And what does this mean for sellers?
Sellers who sell small, light items, have higher MSRP products, and fit into poly mailers, will likely benefit most from these changes.
Brands selling more oversized items, like furniture, consumer electronics, etc., will have to be more careful about inventory turnover rates and selection on Amazon – especially if they sell those through FBA.
My analysis:
Brands that understand their consumer demand on each platform, and use this data for inventory selection – will be the biggest winners as Amazon moves toward an auction-based storage system for sellers in March 2023.
Staying Ready, so you don’t have to get ready:
Start using Inventory Performance Index Now. Check your IPI Score weekly for metrics.
Sell-through: As Amazon moves from a warehouse space for sellers to an auction-based storage capacity – the inventory turnover rate will be crucial to profitability.
Excess Inventory: Stagnant inventory costs significant money and lags your sales. Remove excess inventory, create promotions and deals to sell through, and base your inventory shipment on data
Stranded Inventory: Resolve or return inventory that is stranded
Sell-Through: This is a top metric to determine success on Amazon Seller Central. Since Amazon operates on Net 14, the smoother your inventory turnover and sell-through rate, the higher levels of profitability you can reach within this window.
In-Stock Inventory: Keeping the proper inventory in stock is essential to growing those SKUs and gathering more reviews and sales. You want to monitor your in-stock rate and send in items to ensure you don’t run out while at the same time maintaining a smooth turnover ratio based on current consumer demand.
There will be more to come in the next few weeks, as Fulfillment by Amazon transitions to these new changes and updates. Brands that prepare now, will be in the best position to start off Q2 and 2023 - with inventory placement and channel sales.
