Many Amazon sellers currently face a pressing challenge: the platform's updated fulfillment program frequently distributes inventory across multiple warehouses, significantly increasing shipping costs and eroding profit margins. This widespread issue particularly impacts new sellers, where small product quantities may be divided among four or five different fulfillment centers.
The Logic Behind Split Shipments: Amazon's Inventory Optimization Strategy
To effectively address warehouse splitting, sellers must first understand Amazon's underlying methodology:
- Facility-Product Matching: Amazon assigns products to warehouses based on specialized storage requirements (temperature control, humidity levels) and product categories to ensure optimal storage conditions.
- Demand Forecasting and Inventory Balancing: The system distributes inventory across multiple fulfillment centers based on regional sales predictions to accelerate delivery times to customers.
- Cost Redistribution: While Amazon previously absorbed some inventory transfer expenses, the current strategy effectively shifts these costs to sellers, reducing Amazon's operational expenditures.
The Case for Inventory Consolidation: Reducing Shipping Costs and Protecting Margins
While Amazon's distribution strategy serves operational efficiency, excessive warehouse splitting creates financial burdens for sellers through increased inbound shipping costs. Many sellers now seek effective consolidation methods to concentrate inventory in fewer warehouses and maintain profitability.
Practical Consolidation Strategies for the New FBA Program
These proven techniques can help minimize split shipments under Amazon's updated system:
- Single-SKU Per Box: Ship each SKU in separate containers. Mixed-SKU shipments frequently trigger the splitting algorithm.
- Standardized Box Sizes: Maintain consistent packaging dimensions, as box specifications significantly influence warehouse assignment calculations.
- Round-Number Shipments: Ship quantities in multiples of 100 (e.g., adjust a planned 210-unit shipment to 200 units).
- Batch Shipment Creation: For 10 identical boxes assigned to three warehouses, create separate single-box shipments sharing one tracking number when destinations align.
- FNSKU Modification: Create new product listings with fresh FNSKUs to test for improved consolidation outcomes.
- Optimal Timing: Early morning or late-night shipment creation appears to yield better consolidation results based on seller experience.
- Persistent Refresh: Regularly check for warehouse assignment changes to capitalize on consolidation opportunities.
Balancing Act: The Strategic Value of Distributed Inventory
While minimizing split shipments remains important, sellers should recognize that geographic inventory distribution prevents regional stockouts that could negatively impact sales conversions. Effective inventory management requires balancing consolidation benefits against the need for product availability across key markets.
Strategic Adaptation for Operational Efficiency
Amazon's revised fulfillment policies present both challenges and optimization opportunities. By understanding the platform's distribution logic, implementing practical consolidation techniques, and maintaining strategic inventory positioning, sellers can effectively reduce operational costs, preserve profit margins, and strengthen their competitive position in the marketplace.