As the year-end shopping season approaches, Amazon has delivered an unwelcome surprise to its sellers. At a critical time when merchants typically ramp up inventory for peak demand, many report sudden reductions in their storage capacity limits. The move has left sellers scrambling to adapt—raising questions about whether this reflects a strategic shift by Amazon or other underlying factors.
Sudden Storage Cuts Create Operational Challenges
Multiple sellers confirmed in late October 2022 that their storage limits were reduced by 10% to 25%, severely restricting their ability to replenish inventory in Amazon’s fulfillment centers. The abrupt change forced merchants into difficult choices: pay steep removal fees to relocate excess stock or accelerate sales of existing inventory to free up space for low-stock items. The policy shift has significantly increased operational pressure during what is traditionally the busiest sales period.
Amazon’s Warning Falls Short of Reality
Amazon had signaled potential adjustments in an August 2022 email, stating that while all Fulfillment by Amazon (FBA) sellers would be affected, only about 5% with excessively high inventory levels would face replenishment restrictions. However, the actual impact appears far broader, with numerous sellers—including large-scale accounts—reporting substantial limit reductions. The discrepancy suggests Amazon’s initial projections underestimated the policy’s reach.
Shifting Storage Duration Policies
Further complicating matters, Amazon revised its stance on inventory storage timelines. The August email promised sellers at least four months of storage availability without specifying size limits, but an October update clarified that sellers would maintain “at least three months of storage for large items.” While framed as a clarification, the change may indicate tighter restrictions, exacerbating sellers’ inventory management concerns.
The Logic Behind the Restrictions
The move appears counterintuitive given Amazon’s earlier acknowledgment of excess warehouse capacity and an 80% drop in global shipping rates due to reduced demand. Industry analysts speculate that pandemic-driven supply chain disruptions have left many retailers—including major brands like Nike, which reported a 65% inventory surge—with overstocked warehouses. Amazon’s limits may aim to mitigate congestion, though sellers bear the brunt of the adjustment.
Strategies for Sellers
Merchants can employ several tactics to navigate the new constraints:
- Optimize inventory management: Prioritize high-turnover products, liquidate slow-moving items, and use demand forecasting tools to avoid overstocking.
- Boost sales velocity: Enhance product listings, leverage promotions, and utilize Amazon Advertising to accelerate inventory turnover.
- Diversify storage solutions: Explore third-party logistics providers or private warehousing to reduce reliance on FBA.
- Engage Amazon directly: Proactively communicate with support teams to request limit exceptions or policy clarifications.
- Refine operational efficiency: Streamline pricing, logistics, and product assortment to maximize existing capacity.
Looking Ahead
Amazon has not specified when storage limits might ease, though analysts anticipate adjustments after the 2022 holiday season. For sellers, the immediate focus remains adapting to constrained capacity while strengthening long-term supply chain resilience. The episode underscores the precarious balance between marketplace dependence and operational autonomy in e-commerce—a lesson merchants may heed as they prepare for future uncertainties.