Amazon Sales - Change in Inventory Limits 2021

Fulfillment by Amazon (FBA) sellers must adhere to the inventory limits set in the warehouses of this e-commerce giant. In May 2021, it was announced that a new maximum ceiling of 500 inventory performance index points would be introduced. This relates to the inventory performance index and aims to help manage stock efficiently.

What is the inventory performance index?

This index, known in English as the IPI (Inventory Performance Index), and in German as LBI (Lagerbestandindex), was introduced so that only well-rotating goods are stored in warehouses. Amazon wants to avoid situations where sellers in the FBA model send products that have been sitting there for months. How can you check the current limits on your seller account? Go to Inventory - Inventory Planning - Performance (Lagerbestand > Lagerbestandsplanung > Verkäuferleistung) and check what value between 0 and 1000 this index has for your stock. The IPI is recalculated on a weekly basis. Several factors affect it, including:

Possible excess inventory (Excess inventory/Überbestand) - the amount of unsold goods that will remain there for the next period

The probability of quick sales (Sell-through/durchverkauf)

Listing issues (e.g. inactive, incomplete, blocked listings) (Stranded inventory/Lagerbestand ohne aktive Angebote)

The rate of inventory replenishment (In-stock inventory/Vorrätiger Lagerbestand).

As a result, the longer goods sit on the shelves, the worse the IPI. Then the available storage space may be limited. You should not only focus on turnover but also ensure that each product has a description and images that comply with Amazon's guidelines. Also, avoid delays in shipping to the warehouse.

How to check the IPI and current limits?

The value of this index is available on the Performance page in Inventory.

Fig. 1 Performance

There you can check not only what the IPI is and how it has changed over the week. On this page, you will also find detailed information regarding the four previously discussed factors that significantly impact the assessment of your inventory. Furthermore, at the bottom of the page, there are two expandable tabs:

Restock limits/Auffüllbeschränkungen - here you can find information on the available limits for specific types of goods

Storage volume/Lagervolumen - shows the current usage of storage space.

Fig. 2 Storage limits for various types of goods

In this case, the limits are high, but they can be reached with the next delivery. When you reach the maximum value, you will not be able to make new shipments until some of the goods stored in the Amazon warehouse are sold. Then space will free up for further deliveries.

3 essential steps to increase inventory limits in Amazon FBA

Since 1 July 2021, new rules for setting limits have been in effect. If during the period from 21 May to 21 June your IPI was less than 500, a limit on inventory in FBA valid for a quarter applies from the following month. Amazon has tightened the regulations here, as previously a drop below the threshold of 450 meant that restrictions would be triggered. What can you do to avoid lowering your available space?

Check which products may be contributing to the low IPI - identify those that are inactive due to unavailability or listing errors.

Hold a clearance sale or liquidate non-rotating goods - this will free up space for those that sell well.

Optimize shipments by sending to the warehouses of the giant those stocks that will disappear quickly. For less popular products, reduce their quantity to gain more space.

This is the simplest method to avoid problems with too low an inventory limit. Remember that in the FBA model, Amazon primarily promotes listings that are most popular with customers. These are therefore the most purchased and best-rated products.

Happy selling

Go2Market Crew

Amata Borys-Chudek