Amazon sellers frequently face a frustrating scenario: abundant storage capacity in the morning suddenly disappears by afternoon. The platform's frequent adjustments to storage limits leave sellers walking on thin ice when managing inventory replenishment. This article examines Amazon's AWD (Amazon Warehousing & Distribution) solution and FBA storage expansion strategies to help sellers maintain optimal inventory levels.
Understanding Replenishment Limits vs. Storage Limits
Amazon's warehouse management system operates with two distinct capacity restrictions:
- Replenishment Limits: Control how much inventory sellers can send to FBA warehouses within specific time periods, directly impacting restocking frequency and quantities.
- Storage Capacity Limits: Govern the total volume of inventory sellers can maintain in FBA warehouses, affecting product variety and quantities.
Amazon provides different solutions for each limitation:
- For replenishment limits: Consider using AWD warehouses as supplemental inventory solutions.
- For storage limits: Apply for FBA capacity expansion to increase available storage space.
AWD Warehousing: A Strategic Solution for Replenishment Challenges
Amazon recently introduced AWD (Amazon Warehousing & Distribution) to help U.S. marketplace sellers address replenishment difficulties. This service provides additional storage space to prevent stockouts and maintain sales continuity.
Key Features of AWD Warehouses
- All U.S. marketplace sellers can apply for AWD service through Seller Central.
- AWD warehouses synchronize inventory data with FBA warehouses in real-time.
- Unlike FBA warehouses, AWD facilities don't fulfill customer orders directly but serve as replenishment sources for FBA locations.
- AWD warehouses operate without replenishment limits, offering flexible inventory management with pay-as-you-go pricing.
Essentially, AWD warehouses function as large-scale "transfer hubs." When FBA inventory runs low, the system automatically transfers products from AWD to FBA warehouses for customer fulfillment. While this may extend delivery times slightly, it effectively prevents stockouts.
Shipping to AWD Warehouses
The shipping process to AWD warehouses resembles FBA shipments, with the primary difference being the destination address. For urgent replenishment needs, sellers can consider:
- Coordinating with third-party logistics providers to deliver goods to AWD locations
- Utilizing Amazon's AGL (Amazon Global Logistics) service for reliable delivery
Important Considerations for AWD Usage
- Transferring inventory from AWD to FBA warehouses incurs additional transportation fees calculated by cubic foot.
- Products cannot transfer from AWD to FBA warehouses if the destination facility lacks available capacity.
- FBA's overstock inventory cannot be directly transferred to AWD warehouses.
AWD warehouses offer unlimited replenishment potential (subject to storage fees), making them particularly valuable for sellers anticipating seasonal demand surges.
FBA Capacity Expansion: Increasing Storage Space Directly
Sellers needing more FBA storage capacity can apply through Amazon's "Storage Limit Manager." Key considerations include:
- Allow 7-10 days for application processing, as rushed timelines may result in expired requests.
- Reserve fee bids significantly influence approval priority. Reference historical bid prices and use Amazon's calculator for accurate estimates.
- Amazon evaluates applications based on historical sales performance and projected demand.
Third-Party Warehouses: Flexible Alternative Solutions
Beyond AWD and FBA options, third-party overseas warehouses offer additional benefits:
- Greater inventory management flexibility
- Potentially lower storage costs compared to FBA
- Faster fulfillment times in some regions
- Value-added services like relabeling and repackaging
Strategic Recommendations for Sellers
Effective inventory management requires tailored approaches:
- AWD Warehouses: Ideal for sellers needing substantial inventory buffers with limited FBA capacity.
- FBA Capacity Expansion: Best for established sellers requiring consistent, long-term storage space.
- Third-Party Warehouses: Suitable for sellers prioritizing cost efficiency and operational flexibility.
Proactive planning and strategic inventory distribution enable sellers to navigate Amazon's capacity fluctuations successfully, particularly during peak seasons.