Amazon introduced a new metric to help sellers who use its FBA fulfillment services avoid a new fee that will go into effect in the New Year. The new “low inventory fee” will apply if a product’s inventory levels relative to historical demand is below 28 days. The new metric announced this week is designed to help sellers better manage their inventory to help them avoid the low inventory fee.
In Tuesday’s announcement, Amazon wrote in part:
“We’ve launched a new Minimum Inventory Level metric to help FBA sellers plan inventory levels more effectively, improve delivery speeds, and help them to avoid the recently announced low-inventory-level fee.
“We leverage advanced machine learning models to analyze demand forecasts and replenishment settings and recommend the minimum number of units per product that you should have on hand in our fulfillment centers.
“Maintaining inventory above the Minimum Inventory Level helps you meet customer demand and offer faster delivery speeds as products can be distributed across local fulfillment centers closer to customers. Sellers who maintain units above the Minimum Inventory Level see a 15% increase in sales over a four-week period on average, though actual results may vary.”
In the announcement, Amazon also reminded sellers of other metrics that can help them manage inventory, including Historical days of supply; Inventory Performance Index (IPI); Capacity limits; and Restock recommendations.
The announcement on Amazon Seller Central garnered many comments from sellers who remain concerned about the impact of the new fee on their business.
