The most recent couple of weeks, Amazon has been shrewdly dropping some “game-changing” refreshes through its Seller Central News channel. A week ago the enormous news had to do with a venders’s very own data being conceivably presented to all purchasers.
Today, you may have seen an apparently irrelevant news story title on the channel that said; “Changes as we get ready for an effective pinnacle.”
A couple of weeks ago, many sellers have been seeing significant delays to their replenishment shipments being checked in, especially in some of the Texas and California distribution centers. Items that were delivered weeks ago still have not gone into inventory.
For a Project 5K product, look at this shipment that was created on June 18, and delivered on June 23.
Normally, it would go into inventory by the next day (or day after). However, look at the history of it in Shipment events:
Above all else, they show that it didn’t get conveyed until July 1 for reasons unknown. However, past that, it despite everything has not gotten checked in now 3 weeks after it truly conveyed! Not to mention got, and put into dynamic stock. Different merchants are indicating comparable things, even from bigger direct shipments from China.
The theory has been that Amazon doesn’t have the ability to manage the entirety of the stock that individuals have been sending in of late because of expanded online deals. The present news declaration may loan some confidence to this hypothesis.
“Even though it’s July, we’re preparing early for the holiday season to meet sustained increased demand, and have already reduced our own Retail product ordering to accommodate more of your products and help you continue to see sales growth.”
In their statement, Amazon themselves say there is increased demand, and have scaled back on their own products they purchase to sell to accommodate more third party sellers.
“We are working to manage inventory performance to ensure all products have space available during peak. To enable this, we are changing the IPI minimum threshold requirement to 500. Sellers below 500 will be subject to limits effective August 16, 2020 through the end of the year.”
Here is the primary ball to drop. You have to keep your IPI at 500 or better. That is your Inventory Performance list. This used to be on your principle merchant focal Dashboard, yet now the best approach to see it is by clicking here, or by setting off to the menu bar in vender focal, hitting Inventory, at that point hitting Inventory Planning.
Elements that influence this record are having overabundance stock, your sell-through rate, the measure of abandoned stock you have, and your FBA In stock rate. Here is the one from Project X which is low because of casket rack being unavailable.
Here’s the part that is going to affect more sellers
“To maximize selection for customers during peak, we are introducing ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales.”
This is like what was going on during the pinnacle of coronavirus and affected a great deal of merchants. This is particularly going to influence the individuals who send all their stock straightforwardly to Amazon from China, just as any merchants propelling new items. “You can see amount limits for your items on the Restock Inventory page and the Restock report. We will consistently audit this and, whenever the situation allows, make changes in accordance with take into account a greater amount of your items.”
The above is for the egg tray. It says our maximum is 770 units to send in. That’s pretty decent. I actually usually do not have more than 300 in at any time anyway since I store these in my own warehouse so I can maintain good control on the inventory.
Let’s take a look at the coffin shelf that has been out of stock for a month.
Again, I do not send more than 1000 at any time on these so this should be no problem as well. But based on this, and the others I tested, I tried to see if I could reverse engineer the formula that Amazon is using to determine the amount. I could not come up with an exact formula, however for items that have been consistently in stock, it seems to be around 3.4-3.6X your last 30 day sales.
However, that’s only on a few accounts with an IPI score of less than 650. On an account that has a 750 IPI score, the amounts we could replenish was 5-12X what the last 30 days were. Another one that only had a 500 score, still had maximum inventory of 10X of their previous 30 day’s sales. Whatever formula that Amazon is using, it is obviously based on a lot more factors than just your sales velocity or your IPI.
Regardless, even if it’s a mature product that is selling well, you need to check your restock report, to make sure that you can send the quantity you want to Amazon if you are one who orders the product to ship directly. If what you have to order is more than your maximum storage capacity, you will have to consider sending some of your order to a 3PL Warehouse.
Where this REALLY affects sellers is on new products, slow selling products, or dormant products. It seems like for these, there is now a standard 200 QTY limit. This is the case on newer accounts, and established accounts that we tested.
If you add a new item to your account, you will not see it right away in the “Restock Report.” However, if you try to manually do a replenishment order, you will see that it limits you.
Here is how it looks if it’s a dormant product that has not had sales in the last few months:
Keep this in mind if you are trying to launch a product in Q3 or Q4. Very few manufacturers will allow you to have a MOQ of only 200, so you have to plan on splitting up your shipments, or biting the bullet and getting a 3PL to house the rest of your inventory.
As you start going through your first 200, the theory is that your limits will increase, but it would be EXTREMELY difficult and expensive to try to send your inventory 200 at a time via Ocean from your manufacturer in China. You would be running out of stock frequently.
For Helium 10 users out there, would it help if we put your maximum order quantity in an easier to find place inside your Helium 10 dashboard? As with any change Amazon makes, sometimes it will cause us some difficulties in the short term, but remember that this move is not the end of the world. You STILL will be able to launch new products, you just might have to be a little bit more creative with your supply chain.