A sudden wave of inventory restrictions is sweeping through Amazon's European marketplace, leaving sellers reeling from drastic reductions in storage capacity. Some sellers report their inventory limits have dropped from tens of thousands to just a few thousand units—or even zero—raising concerns about operational viability. What lies behind Amazon's latest policy shifts, and how will they reshape the seller ecosystem?
Policy Changes: A Sudden Tightening of Inventory Limits
Amazon Europe recently updated its storage policies, with many sellers reporting severe cuts to their inventory capacity. The changes, effective April 16, have drawn sharp criticism from sellers who saw their limits slashed overnight. Amazon claims the adjustments aim to ensure fair distribution of storage space ahead of peak sales periods like Prime Day, as some sellers allegedly occupied more than 60% of available warehouse space in UK and EU logistics centers.
This follows an earlier shift from ASIN-level shipment restrictions to account-wide replenishment limits, which had already frustrated sellers. The latest cuts compound those challenges. Unlike replenishment limits—which cap how much sellers can send to Amazon—inventory capacity determines how much stock they can store. Amazon appears to be prioritizing high-performing products while reducing space for slower-moving inventory to optimize turnover.
Impact on Sellers: A Dual Squeeze on Operations
Sellers now face two restrictive measures: replenishment limits and storage capacity cuts. Some joke that they can't clear stock fast enough to keep up with policy changes. Further complicating matters, Amazon will raise the Inventory Performance Index (IPI) threshold back to 500 on July 1 (after temporarily lowering it to 450 in December). Sellers must maintain an IPI of 500 or higher during evaluation periods in mid-May and late June to avoid storage restrictions and excess fees.
While sellers with strong IPI scores retain unlimited standard and oversized storage, all remain subject to shipment limits and standard storage fees. The policy mirrors restrictions imposed last July.
Seller Strategies: Navigating the Constraints
Faced with these hurdles, sellers are exploring workarounds:
- Multiple Storefronts: Distributing operations across multiple accounts, though this increases overhead.
- Third-Party Services: Outsourcing fulfillment, but with risks of high costs and unreliable providers.
- Overseas Warehousing: Staging inventory in third-party warehouses before replenishing FBA stock, despite higher logistics expenses.
Amazon's Broader Strategy: Tighter Controls on New Sellers
Amazon is also tightening registration for new sellers. Reports indicate requirements include a two-month ban on reselling (even one's own products) and mandatory FBA usage—signaling a push toward new product development and FBA adoption.
Prime Day Preparations: Stocking Challenges
Sellers who shipped Prime Day inventory early need not worry about existing shipments. However, with the event date unannounced, last-minute restocks may require alternative fulfillment methods.
Future Outlook: Adapting to Uncertainty
While some hope restrictions ease post-Prime Day, Amazon's long-term plans remain unclear. Sellers must stay agile to survive in an increasingly competitive marketplace.
Expert Recommendations: Boosting IPI and Inventory Efficiency
To mitigate policy impacts, experts advise:
- Increasing sales velocity through listing optimizations and ads.
- Reducing slow-moving stock while expanding fast-selling products.
- Improving demand forecasting to avoid overstocking.
- Leveraging promotions to clear excess inventory.
- Monitoring policy updates for timely adjustments.
In a landscape of shifting rules, proactive adaptation remains key to sustaining Amazon businesses.