FBA Capacity Planner – Amazon Update!February 20, 2023
FBA Capacity Planner Updates Coming Soon!
If you’ve ever been frustrated by FBA capacity limits, we have good news for you!
What: Weekly restock limits and quarterly storage limits are transitioning to an easier to manage monthly capacity.
When: Starting March 1st, 2023
What this means for you: Knowing capacity limits 3 months in advance helps fulfillment teams estimate inventory needed for this marketplace. No more holding additional inventory that’s unsellable in your own network due to the uncertainties of Amazon, having this feature relieves a lot of guess work associated with stocking Amazon.
Bonus: You are able to request higher capacity limits at any time through Capacity Manager. This comes with caveats. Requesting capacity increases is based on a bidding structure, similar to CPC. The highest reservation fee per cubic foot is granted, until all available space has been allocated. That sounds like a money grab, but Amazon states that these reservation fees are ‘offset’ by performance credits that you earn from the sales you generate using the extra capacity.’ These are designed to offset 100% of the reservation fee, which begs the question…
WHY HAVE THEM IN THE FIRST PLACE?
Just like any business holding inventory, the faster you can turn that inventory, the lower your cost of sale. Amazon wants to maximize the flow of products going in and out of their fulfillment network to maximize their revenue per sqft.
What can brands do to ensure they’re not dinged on these fees?
Understanding the performance of your catalog is key here. Pairing that understanding with upcoming promotions, seasonality, and demand driving advertising to accurately forecast sell-through rate on Amazon is the path to success.
Need help formulating a profitable plan with your fulfillment capabilities? Contact us right away!