Maximize Amazon FBA Storage Capacity with the New Capacity Manager

Table of Contents:

1. What is Amazon FBA Storage Capacity?

2. Capacity Limitations? The Storage Capacity Manager is Here to Help!

3. Hands-On Practice: Quick and Easy Setup!

4. Frequently Asked Questions

 

In early 2023, Amazon introduced a new storage capacity management policy for the U.S. and European sites—Amazon FBA Storage Capacity Manager. This tool helps sellers better predict and manage their inventory, reducing the risks of unexpected storage demand surges. It ensures Amazon's fulfillment network runs smoothly and that your products reach buyers more efficiently.

 

On August 21, the Amazon FBA Storage Capacity Manager officially launched in Japan! Need detailed instructions? Facing policy questions? Dealing with capacity overages? This article has you covered!

 

 

What is Amazon FBA Storage Capacity?

 

Amazon FBA storage capacity is determined based on factors like your Inventory Performance Index (IPI) score, projected sales, shipping time to the warehouse, FBA storage capacity, and more. Capacity limits are announced in the fourth week of each month, with updates provided monthly. New professional selling accounts (less than 39 weeks active on FBA) are not subject to storage capacity limits.

 

 

Activated Sites

 

 

Four Major Advantages for Stable Inventory Management:

1. No Additional Restock Limits—Simpler and More Efficient! (Applicable to U.S. sites)

   The experience is simplified by combining restock limits and storage limits into a single Amazon FBA storage capacity. A single limit per storage type now determines how much inventory sellers can send and store at Amazon fulfillment centers.

 

2. IPI Evaluation Once a Month—Enhanced Storage Flexibility!

   The IPI evaluation now occurs monthly, with corresponding limits updated each month. Each capacity allocation is valid for one month.

 

3. Three-Month Storage Capacity Forecast—Visibility on Storage Capacity!

   In addition to the confirmed storage capacity for the next month, Amazon also provides estimated storage capacity for the following two months. Sellers can categorize storage capacity by inventory status and source (initial capacity or additional requested capacity).

 

4. Apply for Extra Storage Capacity to Boost Sales Performance!

   If your storage capacity is insufficient, you can request additional storage space via the Storage Capacity Manager. Sellers can submit up to five applications per month.

 

Capacity Limitations? The Storage Capacity Manager is Here to Help!

 

Your monthly storage capacity consists of two parts:

• The storage capacity Amazon allocates to you each month.
• Additional storage you request through the Storage Capacity Manager.

 

 

You can monitor your capacity limits and usage in the Capacity Monitor at the bottom of the FBA Dashboard, Inventory Performance Dashboard, Shipment Creation Flow, and Send to Amazon (STA) pages.

 

How is Storage Capacity Determined?

Amazon determines your storage capacity based on the duration of your logistics activity on the account.

 

1. New Professional Selling Accounts (FBA active time < 39 weeks):  

   Not subject to Amazon FBA storage capacity limits. New sellers can build their FBA sales history without restrictions, and Amazon will determine your storage needs based on your business growth.

   Note: The storage limit for individual seller accounts is 0.42 cubic meters; this limit does not change.

 

2. Existing Professional Selling Accounts (FBA active time > 39 weeks):  

   Storage capacity is allocated based on your IPI score and sales performance. Sellers with consistently high IPI scores receive higher storage allocations, adjusted based on sales and available capacity. The FBA storage capacity is calculated by combining your on-hand and in-transit inventory at Amazon, measured in cubic meters.

 

How to Request Additional Storage Space?

If your inventory exceeds your storage capacity limit, you won't be able to create new shipments. In this situation, if you want to increase storage space for incoming products and believe these products will sell well, you can request additional storage space to secure strong sales during peak seasons. The Amazon Storage Capacity Manager is a valuable tool for requesting extra FBA space for high-demand products, potentially earning performance credits to offset storage fees.

 

The process of using the Amazon Storage Capacity Manager is straightforward—just follow these four steps!

 

1. Request Additional Storage Capacity:  

   Sellers request the desired inventory space and specify the reservation fee they’re willing to pay. You can submit up to five requests per month, but note that the total requested cannot exceed 70.8 cubic meters (2,500 cubic feet) or 25% above the base limit, whichever is greater.

 

   The reservation fee is the maximum amount you’re willing to pay for the additional space, but you don’t need to prepay, and you may not pay anything at all. Amazon may approve your request at your specified fee or a lower fee.

 

2. Check If Your Request is Approved:  

   Amazon evaluates available storage capacity regularly (typically twice a week). Requests with the highest reservation fees are approved first, followed by lower bids, until all capacity is allocated. For all approved requests within the same week, Amazon charges the lowest approved reservation fee. If your request is approved, your storage limit increases during the designated period, and the extra capacity is available as early as one month before the request period starts.

 

3. Earn Performance Credits Through Extra Sales:  

   For sales made using the additional space, you’ll earn performance credits at a rate of 15%. For every 100 yen in sales, you’ll receive 15 performance credits, which can offset the reservation fee.

 

 

4. Use Performance Credits to Offset Reservation Fees:  

   You can use your accumulated performance credits to offset the reservation fees. If your additional sales generate enough credits, you can fully offset the fee. At the end of the designated period, Amazon will charge your account for the difference between the total reservation fee and the performance credits earned, if any.

 

Hands-On Practice: Quick and Easy Setup!

 

Now that you’re familiar with the Storage Capacity Manager, let’s explore how it works with a practical example!

 

1. Requesting Additional Storage Space:  

On October 22, two Japanese sellers, Wang and Li, both submitted storage space requests:

• Both sellers were subject to a 10-cubic-meter storage limit for standard-size items.
• Through the Storage Capacity Manager, they requested an additional 5 cubic meters, increasing their total storage limit to 15 cubic meters.
• Wang submitted his request on October 17 with a reservation fee of 5,000 yen per cubic meter, totaling 25,000 yen. Li submitted his request on October 21 with a reservation fee of 4,000 yen per cubic meter, totaling 20,000 yen.

Both requests were approved, but because Li’s bid was the lowest among all approved requests for that week, the reservation fee for both Wang and Li was set at 4,000 yen per cubic meter, totaling 20,000 yen.

 

2. Earning Performance Credits Through Extra Sales:  

During the designated period, Wang's total sales for standard-size items amounted to 420,000 yen, while Li's total sales were 350,000 yen. Based on these sales:

 

 

• Wang earned enough performance credits to fully cover the reservation fee, so he didn’t need to pay anything for the additional 5 cubic meters of storage space.
• Li earned enough credits to offset 17,500 yen of the reservation fee, so he needed to pay only 2,500 yen for the extra storage space.

Using the Capacity Manager Calculator, Wang and Li calculated their reservation fees and the performance credits they could earn.

 

 

Frequently Asked Questions

 

Q1: What are the types of storage?  

Amazon FBA storage capacity is based on storage type: standard-size, oversized, apparel or footwear, and extra-large items. Each product is categorized by Amazon according to its weight and dimensions, and sellers cannot change the storage type. To check your product's storage type and volume, visit the [Amazon FBA Inventory] page.

 

Q2: Can I exchange unused standard-size capacity for another storage type?  

No. The storage capacity allocated for each type cannot be exchanged.

 

Q3: Does Multi-Channel Fulfillment (MCF) affect storage capacity limits?  

Yes, MCF orders are included when calculating your past and projected sales, which are used to determine your storage capacity. You can view the capacity attributed to MCF sales in the Capacity Monitor.

 

Q4: How can I optimize my storage capacity and inventory management?  

To maximize your storage capacity, Amazon recommends:

• Cancel shipments you don’t plan to send: Created shipments count toward your total capacity usage, so close them if you no longer intend to send these items.
• Increase your FBA inventory turnover: Selling and clearing inventory makes room for new products. Amazon has summarized a four-step inventory sales and clearance process to help you improve inventory turnover.
• Follow restocking recommendations: Amazon provides restocking recommendations on the inventory restock page, ensuring you don’t send more inventory than recommended.

 

Q5: Are reservation fees an open bidding process?  

No. Unlike bidding:

1. Amazon charges the lowest approved reservation fee across all sellers for the same week, meaning the fee could be lower than what you originally set.

2. Amazon includes a performance credit system; every 100 yen in sales from the extra capacity earns you 15 performance credits, allowing you to offset the reservation fee entirely if you efficiently use the additional storage.

 

Besides solving inventory challenges, improving inbound efficiency is also a key strategy for enhancing store operations and sales performance. For prioritized inbound shipments, don't miss out on Amazon SEND!

 

Quick Overview of Amazon SEND  

Amazon SEND is Amazon's cross-border carrier program, featuring third-party logistics partners selected by Amazon. These partners ship sellers' inventory from China to Amazon warehouses in the destination country, providing a one-stop FBA freight service. Forest Shipping is preparing to join the Amazon SEND program, and we expect to officially become an Amazon SEND carrier in the near future.

 

Amazon SEND is currently available for Amazon U.S. (air and sea freight), Germany (air freight), the U.K. (air freight), Japan (air freight), Australia (air freight), and the Middle East (air freight).

 

Five Key Advantages of Amazon SEND for Cross-Border Freight Logistics:

 

1. Stable Fulfillment:  

   No need to fill in delivery time slots or tracking numbers, helping you meet inbound defect rate assessments. U.S. sellers using SEND sea and air freight can avoid low stock fees caused by shipping delays.

 

2. Flexible and Efficient:  

   Low minimum shipping volume with multiple service time options. When comparing similar service types, Amazon SEND is faster. For example, in Japan, the average delivery time in 2024 was just 4.48 days, with an on-time delivery rate of 98.9%.

   Note: Data sourced from 2024 Amazon SEND official statistics.

 

3. Priority Inbound:  

   The U.K. and Germany offer expedited inbound services, streamlining the process and ensuring stable delivery times.

 

4. Cost Advantage:  

   Sellers benefit from Amazon’s negotiated rates, which are lower than comparable services. Flexible split-pickup fees can help reduce costs.

 

5. Simplified Operations:  

   Partner carriers provide door-to-door service and professional customs clearance, reducing operational costs, with full tracking available on the seller platform.

 

Choosing the right freight forwarding partner is crucial for the success of your Amazon FBA business. At Forest Shipping, we pride ourselves on offering a seamless connection between your business and the world's most prominent online marketplaces. Whether you're shipping to Europe, the United States, Japan, Australia, or Canada, our extensive network ensures that your products reach their destination efficiently and on time. With a wide range of shipping channels and customized logistics solutions, Forest Shipping is here to meet your unique needs. Trust us to handle your FBA freight shipping, so you can focus on what matters most—growing your business. Welcome to Forest Shipping, where your logistics challenges find their perfect solution.