Legacy Logistics provides inventory and warehousing support to Amazon merchants, who are facing new rules-limiting the amount of inventory allowed at Amazon warehouses. Recently, Amazon.com Inc. placed new restrictions on its third-party sellers, causing them to absorb higher costs and rethink how they are holding inventory at Amazon warehouses and fulfillment centers. Amazon is enforcing quantity limits on inventory at Amazon’s U.S. warehouses to ensure space for the fastest-selling goods this holiday season. The change is said to help the company increase storage efficiency.
Why the New Inventory Limit at Amazon Warehouses?
The changes come as a result of COVID-19. Due to a spike in customer demand, Amazon faced supply change challenges and difficulty getting products to customers within the promised time frames. The COVID-19 outbreak closed many brick and mortar locations and sent millions of people online without warning. Even with the company halting non-essential shipments for a period of time, Amazon struggled to keep up with demand. According to data compiled by S&P Global Market Intelligence, the company’s worldwide shipping costs reached $37.95 billion in 2019. Amazon is on pace to surpass that figure, with shipping costs reaching $24.59 billion during the first two quarters of the year already.
As Amazon plans for the future of e-commerce, and the surge of the upcoming holidays, the company has instituted new inventory rules and invested billions of dollars in its logistics network to increase capacity. To better support fast-moving Prime-eligible products, they are slowing down how other products get replenished in the warehouses. Amazon is instituting quantity limits for product shipments from third-party sellers that use its U.S. warehouses. All product categories will have quantity restrictions, reflecting approximately three months of sales.
How Will this New Amazon Warehousing Rule Affect Your Business?
Based on performance and quantity limits, Amazon’s new inventory rules could be particularly detrimental for sellers of goods in non-essential categories. The majority of Amazon merchants ship through the Fulfillment By Amazon program. This program handles packing and shipping for products and makes those goods eligible for Prime one-and two-day shipping options. The rules are forcing merchants to rethink the ways they are receiving and storing products.
How Legacy Logistics’ Amazon Warehousing Support Can Help Your Business
At Legacy, we have seen an increase in the number of storage clients tied to these changing rules. Amazon merchants are using our services to support overflow inventory at our nationwide warehouses. Our state-of-the-art warehouse management system allows merchants to review the inventory available and pull, label and ship directly into Amazon fulfillment centers for restocking purposes, as needed.
Legacy Logistics is a great fit for customers looking to store long or short term. Each warehousing center is climate controlled to protect the integrity of the assets being held, secure, and provides shipping and logistics support. We are able to ship into Amazon warehousing locations nationwide to replenish inventory, anytime. Additionally, our convenient loading docks make it easy for us to accept items of all sizes.
Amazon is currently working with merchants to avoid storage fees for products that have exceeded the space allowed. They are offering a free removal fee promotion for a limited time. If you are an Amazon merchant looking for transportation and warehousing and storage support, contact our team at 484-637-9333. We are ready to support your growing business needs.