FBA storage and restocking limits have been one of the most frustrating aspects of selling on Amazon since 2020. When Amazon first imposed strict capacity limits, many sellers were caught off guard, unable to send in enough inventory to meet demand. Understanding how FBA capacity limits work and how to manage around them is essential for any seller relying on Amazon's fulfillment network.
Insights from Andrew Morgans and the Marknology team in Kansas City.
Why Amazon Imposed FBA Restocking Limits
During the COVID-19 pandemic, Amazon's fulfillment centers were overwhelmed. The surge in online shopping combined with supply chain disruptions meant warehouses were running at maximum capacity. Amazon responded by limiting how much inventory individual sellers could store, prioritizing essential items and their own first-party inventory.
While the initial emergency restrictions have eased significantly, Amazon has maintained a capacity management system. The current system gives sellers monthly capacity limits based on their Inventory Performance Index (IPI) score, sales velocity, and historical account performance.
How FBA Capacity Limits Work Today
The Capacity Manager
Amazon now uses a Capacity Manager that provides sellers with monthly storage volume limits measured in cubic feet. Your limit is based on:
- IPI Score: Sellers with higher IPI scores (typically 400+) receive more generous capacity limits. Your IPI is calculated based on excess inventory percentage, sell-through rate, stranded inventory, and in-stock rate.
- Sales velocity: Products that sell faster earn more storage space. Amazon rewards efficiency.
- Seasonal adjustments: Limits may change around peak seasons like Q4 and Prime Day.
- Storage type: Standard-size, oversize, apparel, and footwear each have separate capacity pools.
Requesting Additional Capacity
If your allocated capacity is not enough, you can request additional storage through Capacity Manager. You set a reservation fee per cubic foot that you are willing to pay. If Amazon grants the additional capacity, you are charged the reservation fee. However, you earn performance credits based on sales generated from the additional inventory, which can offset or eliminate the fee entirely.
This system essentially lets Amazon sellers bid for more warehouse space. Sellers who use the additional capacity efficiently (i.e., the inventory actually sells) pay little to nothing. Sellers who hoard space without moving product pay the full fee.
Strategies for Managing FBA Capacity Limits
1. Improve Your IPI Score
Your IPI score is the single biggest lever for earning more capacity. Focus on:
- Reducing excess inventory: Identify slow-moving products and create removal orders, run clearance deals, or adjust your replenishment strategy.
- Improving sell-through rate: Optimize your listings and PPC to increase sales velocity on existing inventory.
- Fixing stranded inventory: Regularly check for stranded inventory (products in FBA with no active listing) and resolve the issues.
- Maintaining in-stock rate: Paradoxically, you need to keep your best sellers in stock to maintain a good IPI, which requires careful capacity allocation.
2. Use a 3PL for Overflow Storage
Keep your full inventory at a third-party logistics warehouse and replenish FBA in smaller, more frequent shipments. This keeps your FBA storage lean while ensuring you have backup stock ready to ship when your capacity allows. Many sellers use this strategy to maintain a 2-4 week supply in FBA and a 2-3 month supply at their 3PL.
3. Ship More Frequently in Smaller Quantities
Instead of sending large shipments that consume your capacity limit all at once, send smaller replenishment shipments more frequently. This keeps your inventory turning faster and maintains a better sell-through rate.
4. Prioritize Your Best Sellers
When capacity is limited, allocate it to your highest-velocity, highest-margin products first. Do not waste FBA space on slow-moving products that can be fulfilled through FBM (Fulfilled by Merchant) or stored at a 3PL until demand picks up.
5. Use FBM as a Backup
For products that exceed your FBA capacity, create FBM offers as a safety net. You will not get the Prime badge (unless you qualify for Seller Fulfilled Prime), but staying in stock through FBM is better than being completely out of stock.
6. Plan for Peak Seasons Early
Amazon typically communicates Q4 capacity limits in September or October. Start preparing well before that. If you need additional capacity for holiday season, submit your Capacity Manager requests early and plan your 3PL overflow strategy in advance.
The Long-Term Outlook
Amazon continues to expand its fulfillment network, which should gradually ease capacity constraints. They are building new warehouses, investing in automation, and opening more capacity to sellers with strong performance metrics. The trend is positive, but the core principle remains: Amazon rewards sellers who manage their inventory efficiently and penalizes those who treat FBA warehouses as cheap long-term storage.
The sellers who build smart inventory systems, maintain high IPI scores, and use 3PLs strategically will always have enough capacity to grow. It is an operations problem, and it has operational solutions.
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Frequently Asked Questions
What is the best way to increase Amazon sales?
The best strategies include optimizing product listings with keyword-rich titles and bullet points, leveraging Amazon PPC advertising, maintaining competitive pricing, earning verified reviews, and using tools like Amazon Brand Registry. Marknology, led by Andrew Morgans in Kansas City, has helped 300+ brands scale their Amazon revenue using these proven methods.
How much does Amazon advertising cost?
Amazon PPC costs vary by category, but average cost-per-click ranges from $0.20 to $6.00. Most brands allocate 10-30% of revenue to advertising. The key is optimizing ACoS (Advertising Cost of Sales) to maintain profitability while scaling.
How do I optimize my Amazon product listing?
Focus on keyword-rich titles (under 200 characters), compelling bullet points highlighting benefits, high-quality images (7+ per listing), A+ Content for brand-registered sellers, and backend search terms. Professional agencies like Marknology can handle this end-to-end.
What does Marknology do?
Marknology is a Kansas City-based Amazon marketing agency founded by Andrew Morgans in 2015. The agency has managed over $2B in revenue for 300+ brands, offering services including Amazon listing optimization, PPC management, brand strategy, and marketplace expansion.
Who is Andrew Morgans?
Andrew Morgans is the founder and CEO of Marknology, a leading Amazon marketing agency based in Kansas City. He hosts the Startup Hustle podcast and has spoken at conferences across 5 continents about ecommerce and Amazon marketplace strategies.