Since the outbreak of the coronavirus pandemic, Amazon has had to make rapid adjustments, initially including the interruption of incoming FBA deliveries, the extension of delivery dates for inventories already in the FBA and the interruption of relocation orders. Things are returning to normal, but the first coronavirus winter is just around the corner and Amazon is only too aware of the impact of the restrictions on your business. All the smart money is, unfortunately, betting that the virus will spread again at a second peak, so a coronavirus winter is a very likely scenario – although the government is against a second national lockdown, local lockdowns will become the norm.
Amazon has already hired more employees and invested billions of dollars in COVID-related initiatives to meet increased customer demand and to protect the health and well-being of employees when selecting, packaging and shipping your products to customers.
Although it’s July, Amazon is preparing early for the holiday season to meet the continued growth in demand across Europe. They say they have already reduced their own orders of retail products to accommodate more of your products and help you continue to grow sales.
To ensure that Amazon is prepared for a coronavirus winter, the following changes will affect your business:
Amazon Coronavirus Winter Preparations
Change in the threshold values of the Inventory Performance Index (IPI)
To ensure that all products have space during peak periods, Amazon is changing the minimum IPI requirement to 500, with the limits applicable from September 1, 2020 until the end of the year for providers under 500.
It was only in May that Amazon raised the minimum requirement for the IPI threshold to 400 (previously 350), so you should be aware of this change.
Amazon says that most providers will not be affected by this change. They add that most providers with IPI values below 500 will have more storage than they used last year.
You can improve your IPI by following the instructions displayed on the Inventory Performance Board to improve sales by or reducing your excess and stranded inventory.
Quantity limits
To maximize customer choice during peak periods, Amazon is introducing ASIN-level quantity limits on products at the FBA. For most products, there will be enough space available for more than three months of sales.
This is an issue for many retailers because it means you have to check line by line how much stock you can send to Amazon. The days are over when you received a shipment from your manufacturer and handed the entire lot over to FBA. This restriction will be even more critical for overseas sellers or those who routinely ship directly from the manufacturer to Amazon stores.
You can view your product quantity limits on the Replenishment Stock page and on the Replenishment Report. We will continually review this and, if possible, make adjustments to allow for more of your products.
Free removals promotion
To help you avoid the cost of storing unsold products and make room for more productive inventory, Amazon offers a free disposal cost promotion for a limited time. Amazon waives its fee for all disposal orders submitted to the FBA for inventory. This promotion is not live, although they have not specified an end date.
To create a disposal order, visit the inventory age page and select “Create Removal Order” from the menu next to each FBA item in your inventory. For more information, see the frequently asked questions on this help page.
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