As the holiday shopping season approaches, Amazon sellers are preparing for the Black Friday and Cyber Monday frenzy. However, what was anticipated to be a lucrative period has turned into a logistical nightmare, with warehouse capacity cuts and severe congestion creating major obstacles for merchants.
Why the Sudden Setback During Peak Season?
Amazon has officially announced the dates for this year's Black Friday and Cyber Monday events:
- Europe: November 18 - November 28
- United States: November 24 - November 28
- Japan: November 25 - December 1
With the World Cup, Thanksgiving, Christmas, and New Year's all converging, the U.S. market presents the most promising opportunity for international sellers. According to Webloyalty's 2022 Black Friday Report, American consumers are expected to increase their online spending by 25% on Black Friday and 14% on Cyber Monday compared to last year.
However, Amazon has delivered a devastating blow to sellers by significantly reducing warehouse storage capacity while simultaneously facing severe congestion issues. This unexpected move has disrupted seasonal preparation plans and dramatically squeezed profit margins.
Storage Crisis: Liquidate Inventory or Pay Hefty Fees?
Amazon's adjustments to storage capacity aren't new—the company began frequently modifying its policies in 2020. Since August this year, some sellers have already experienced capacity reductions. However, the recent pre-holiday cuts have been unprecedented in both scale and impact.
Many sellers woke up to find their storage capacity reduced by at least 11%, with some experiencing cuts of 50% or more. The implications are severe:
- Restricted inventory: Sellers cannot replenish stock in time, missing crucial sales opportunities.
- Excess inventory: Last year's unsold products remain stuck in warehouses while facing overage fees.
- Rising costs: Slow-moving inventory occupies valuable space while incurring peak season storage fees that are 3-5 times higher than normal rates.
Since May 15, Amazon has implemented additional long-term storage fees: items stored for 271-365 days incur extra charges, while products stored beyond 365 days face fees up to 13 times the standard rate based on volume or quantity.
Warehouse Gridlock: Difficult Receiving, Impossible Restocking
If storage limits represent one challenge, warehouse congestion presents another. Amazon has canceled or closed 66 U.S. warehouses this year across 28 states, totaling 24.6 million square feet of space. Additional complications include workforce reductions, warehouse worker strikes, and port congestion.
The consequences of this congestion include:
- Appointment shortages: Popular warehouses have no available slots.
- Processing delays: Inventory takes months to be received and listed.
- Lost shipments: Overcrowded warehouses lead to misplaced products.
- Rejection risks: Facilities enforce stricter size and packaging requirements.
Survival Strategies for Sellers
Facing these dual challenges, sellers must implement creative solutions to navigate the holiday season successfully.
1. Utilize the Storage Limit Manager
Amazon's new Storage Limit Manager allows U.S. sellers to request additional FBA capacity. Approved requests generate performance credits that can offset storage fees without incurring reservation charges.
2. Leverage Amazon Warehousing & Distribution (AWD)
AWD, now available for U.S. sellers, enables inventory storage in Amazon-affiliated warehouses near FBA facilities. The system automatically replenishes FBA stock as needed, bypassing capacity restrictions. However, sellers should consider:
- Longer fulfillment timelines
- Additional transfer fees between warehouses
- Continued dependence on FBA capacity availability
- Inability to transfer excess FBA inventory to AWD
3. Optimize Inventory Management
Sellers should combine bulk ocean freight shipments with faster replenishment methods like air express or expedited ocean services based on real-time sales data.
4. Diversify Sales Channels
Expanding to platforms like Walmart and eBay, or developing independent storefronts, can reduce reliance on Amazon alone.
5. Enhance Product Listings
With limited inventory, maximizing conversion rates through optimized titles, keywords, images, and descriptions becomes critical.
6. Prioritize Customer Service
Responsive support and positive shopping experiences drive customer loyalty and repeat purchases.
7. Monitor Policy Changes
Amazon frequently updates its policies—sellers must stay informed to adapt their strategies accordingly.
This holiday season presents a rigorous test for Amazon sellers. Those who implement strategic solutions and remain adaptable will be best positioned to succeed despite the challenging conditions.