As the company is preparing for the holiday season, Amazon announced on July 13 that it will be limiting quantities for product shipment from third-party sellers that use its warehouses.
The company has instituted a system to determine the restrictions, but all product categories will have restrictions.
In a letter to suppliers the company pointed out that it has been building out capacity as quickly as they can including investing more than $30 billion to “build tools, services and programs for sellers, as well as to hire more people. “
Amazon said it’s on track to open 33 new fulfillment centers in the U.S. this year, increasing peak fulfillment center standard-sized product storage capacity by nearly 35 million cubic feet more than last year.
The company also pointed out that in order to keep up with demand they have hired 175,000 employees.
“As a result, selling partners have had record sales on Amazon and continue to account for more than 50% of units sold in our store.”
But looking ahead to the holiday season which will involve increased demand they have already reduced its own retail product ordering to accommodate “more of your products and help you continue to see sales growth.”
So in order to manage this the company is changing its inventory performance index threshold. This will cause some changes, but Amazon said that the majority of sellers will be not impacted by this. Quantity limits will be in place as well but most products will have enough space for over three months of sales.
Given the unknown effect of COVID-19 going forward, the company said adjustments will need to be made. “While no one has a perfect playbook for how to respond to COVID-19, our commitment to supporting your business has never been more steadfast. We will continue to make adjustments to best support your business and keep you informed along the way."
