Amazon’s new policy! You can no longer use FBA from July 1st?

As Amazon's one-stop sales and delivery service

How popular is FBA?

From the rising costs and

This can be seen from the fact that there are several liquidations every year.

Frequent liquidation and rising fees

The seller is already tired

Amazon recently introduced a new policy

This is a further blow to sellers using FBA.

The following is the original text of the new FBA policy

On July 1, 2018,

the new FBA inventory storage limits will take effect. Storage limits will be based on your Inventory Performance Index.
The storage limits will be set by volume (measured in cubic feet) and will apply to six storage types. Visit the Inventory Performance Dashboard to see if you have unlimited storage or potential storage limits for the next quarter. See the New FBA Inventory Storage Limits page for details on the limits and storage types.

Alice briefly explains this policy for everyone

From July 1, 2018

New FBA inventory limits take effect

Inventory Limits (by Volume, Cubic Feet)

It will depend on the seller’s actual inventory performance (6 levels)

In the inventory performance table, you can view your next quarter

Whether it is restricted or has potential risk of restriction.

In short, sellers with underperforming inventory

The available FBA inventory will be limited!

From which aspects will this inventory performance be measured?

From the inventory performance table provided by the system

Inventory performance has the following four indicators

1. Redundant inventory ratio

Due to the existence of storage fees and custody costs,

Too much storage will reduce the corresponding benefits

Reduce excess inventory to optimize this indicator

2. FBA Sell-through Rate

To put it simply, this indicator is sales.

The calculation method is the past 90 days

The number of units sold through FBA divided by

The average number of items available for sale during the period

This indicator is low, we need to see

Why can't the product be sold?

3. Proportion of inventory without sales information

This indicator literally means

There is stock but no relevant sales information

This kind of inventory that cannot be sold will also incur additional storage costs

Fixing the relevant product information can optimize this indicator

4. FBA spot rate

The calculation method is the replenishable Amazon Logistics ASIN

The percentage of time in the past 30 days that the product was in stock,

By the number of units sold per SKU in the last 60 days

To compare and determine whether the inventory is sufficient.

These four indicators will be presented using the following color bars:

Comprehensive performance of the above four aspects

The platform will calculate the final Inventory Performance Index (IPI)

An IPI above 550 indicates excellent inventory management

If the IPI is below 450, measures need to be taken to optimize the index

For sellers with a price below 350, Amazon will

Restricting their use of FBA

Sellers who exceed storage capacity limits

The platform will prohibit them from creating new shipments to Amazon

And there will be an additional charge for inventory exceeding the limit.

After the implementation of this policy

The road for small and medium-sized sellers will become more difficult

If the product doesn't sell well, it will have to bear the cost pressure.

Now the sales are not good, resulting in poor inventory performance

The platform is also limited to the upper limit of inventory

In serious cases, you may no longer be able to use FBA

I can't help but miss the days when Amazon was

The sky was blue at that time

As long as the product is on the shelf, it can be ordered

Now, FBA listings can get extra

More traffic and exposure support

Amazon customers are also more inclined to buy FBA products

Even half of customers refuse to buy non-FBA products

With so many supports, more and more sellers are pouring in

It makes it difficult to place an order for a non-FBA product.

So even if your product is not suitable for FBA

For example, the unit price is too low, the size is too large or too heavy, etc.

Some sellers still choose FBA

Because you don’t use FBA, your competitors do.

Then he can do it even if his product operation is inferior to yours

Grab the order that belongs to you

Amazon’s current policy

No FBA means no money

The sellers on the platform have not yet recovered from the bloody review deletions.

We will continue to face inventory performance pressure

If the performance is not good, the inventory will be restricted.

In serious cases, you may even be banned from using FBA

what to do?

Digest inventory and optimize performance