An employee searches for items in one of the corridors of an Amazon warehouse.
Carlos Jasso | Reuters
Amazon is putting new inventory restrictions in place at its warehouses to prepare for the upcoming Christmas shopping rush.
In a note to sellers on Monday, the company said it is setting stricter quantity limits for all third-party merchants who store products in its U.S. warehouses.
All product categories are affected by the change, with quantities varying by product. The new policy, which was first reported by CNET, goes into effect today.
“Given the unprecedented challenges that the Covid-19 pandemic has imposed on all of us, we are preparing early to deliver a great Christmas season for our customers and sales partners, building capacity as quickly as possible so that we can deliver the products that customers need and want right at your doorstep and help you continue to grow your business, “the note said.
An Amazon spokesperson told CNBC that quantity limits “will help ensure that all sellers using Fulfillment by Amazon have room for their products.” FBA is Amazon’s program that allows individual sellers to send their products to an Amazon warehouse, and then Amazon sends the product to customers for a cut of each sale.
Even with the new limits, most products will have enough space available for more than three months of sales. If merchants sell all of their stock, they can ship new inventory at any time, Amazon said.
Amazon is also exempting inventory removal fees at its warehouses starting July 14, according to the note. Amazon generally charges sellers a storage fee for products that are not sold in their warehouses. By waiving the fee, it will allow sellers to more easily remove stagnant inventory and free up space on FBA premises.
The changes show how Amazon is gearing up for this year’s Christmas shopping season, which is probably more challenging than before given the Covid-19 pandemic.
Between March and May, Amazon endured a series of supply chain constraints and delays in deliveries to its warehouses as a result of an increase in online shopping orders. The company prioritized shipments of essential goods to make sure buyers could access items on demand, such as hand sanitizer and toilet paper.
Since then, delivery speeds have largely returned to normal, but as Covid-19 outbreaks continue to appear in parts of the U.S., Amazon has taken steps to prepare for the possibility of further restrictions. Demand, including delay of your annual Prime Day event purchases. Prime Day is expected to take place in the fall, with a goal for the first week of October.
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