Not sure how much inventory you should send to Amazon? Here's a quick guide to how to determine your warehouse numbers.
Amazon FBA Calculator: How Many Items Can I Send to Amazon?
September 18, 2021
First of all - it’s important to understand that the answer to this question is different for everybody.
Amazon’s FBA Warehouses have different limitations depending on which kind of account you have with them, how long you have been Amazon sellers, how fast you rotate products, and what your rating is.
Additionally, your ideal inventory stock will look different depending on the size/weight of your product, and your current and projected sales for the foreseeable future.
The number of products you should be sending to Amazon will vary from account to account, and from season to season.
Understanding FBA Warehouse Limitations
Amazon categorizes products into a few categories for the sake of their warehouse limitations. This category is pre-determined by your product.
- Standard Size
For all of these categories, the basic measurement for FBA limitations is cubic feet.
If you have an Individual Seller Account, your storage limit is 10 cubic feet. That means how much product you send to Amazon is entirely dependent on the size of your product. The bigger the item you’re selling, the less of that item you can store.
If you have a Professional Seller Account, your limit will start at a minimum of 25 cubic feet, and vary depending on a few factors.
You may not have to deal with any storage limitations if:
- You’re a new seller (your store is under 26 weeks old) or you haven’t obtained an IPI yet
- You consistently maintain a high IPI (Inventory Performance Index)
You may have less than 25 cubic feet of storage if your item falls into the aerosol or flammable categories.
While Amazon doesn’t give us all the specifics about how they determine storage limits, typically this is determined by your number of sales, your IPI number, and the capacity of fulfillment centers. The more you sell, and the higher your IPI, the more storage you get.
What Is The IPI?
Amazon uses the IPI (Inventory Performance Index) to score stores based on how well they manage their inventory. This score is given on a scale from 0 to 1,000. New sellers do not have an IPI, and will generally obtain one within 15 weeks of FBA receiving their first product.
Amazon uses this to reward sellers who consistently manage their stock well. Space is money - so the faster you get your product out of their warehouse, the better. You might get a referral fee or fulfillment fee if you maintain your inventory properly. Stores that consistently leave products in warehouses will see a dip in their IPI.
We aren’t privy to the exact calculations Amazon uses to determine this number. We do know that to see this ranking go up, you need to work on these 3 things.
- Increasing your sales
- Creating marketable, high conversion listings
- Avoiding excess inventory at all costs
You can see your IPI in your Seller Central Account - along with tips for improving and what you’re doing right.
In 2021, you generally will not have storage limits if your IPI is above 450. This number shot up to 500 during the pandemic - which brings us to our next point.
Special Circumstances Change Things
Until the unprecedented events of 2020, there weren’t many limits on FBA sellers and their inventory. However, the e-commerce industry has boomed within the past 2 years beyond what was already anticipated, and storage for inventory has been in high demand.
Already, inventory and storage limits change during the holiday season. Although fulfillment costs are not bank-breaking, Amazon charges more for storage during the holidays when almost every seller is experiencing a high volume of traffic.
It’s critical to maintain an understanding that the rules could change at any time as things adjust, and you need to stay up to date. Frequently visit the FBA and IPI sections of your Seller Central Account to ensure you know what your limits are at any given time.
Stock Up, But Don’t Overstock
Popular items won’t be popular forever. Just because your item is flying off the shelves this year, doesn’t mean it will be flying off the shelves next year. To avoid purchasing inventory that you don’t end up selling, FBA fulfillment fees, or monthly inventory storage fees you want to revisit your inventory quantities every month.
Ideally, you should have one month of inventory stocked in the warehouse at all times to ensure that you don’t run out of items (this majorly negatively impacts your store ranking). However, stocking yourself up 4, 6, or more months in advance can end up doing you more damage than good.
A huge part of your calculations for Amazon FBA fees or a monthly storage fee depends on what you’re selling on a monthly basis and the rate at which your sales are increasing steadily. In conjunction with your warehouse limitations, these numbers are the essentials to deciding how many units you need in your inventory.
Monitoring Your FBA Storage Limits
The good news is, Amazon makes it easy to see when you’re maxing out on storage space.
Every month, Amazon evaluates sellers. If your account has storage limitations, you will see this marked on your account, as well as an update about what percentage of those limitations you’ve already utilized.
They do this through a stop-light, color-coded system.
Calculating Your Ideal FBA Inventory
The number of items you can send to Amazon is unique for every individual. You need to understand what storage limits you have to abide by (if any), the capacity of your fulfillment center, and your own sales projections, as discussed above. What kind of product you sell and what size that product is will also affect this number.
In general, the following equation will give you a good start - but be mindful, this isn’t one size fits all. All of the aforementioned factors must be taken into consideration alongside this to deduce your final inventory number.
Last Month’s Number of Sales in Units x Average of Last 3 Months Sales Growth = How Much Product You Should Have in Storage on a Monthly Basis
For example, if in the last month you sold 50 products and in the past 3 months, you’ve seen an average of 10% growth in sales monthly, your equation for how much to send to your Amazon fulfillment center this month might be…
50 x 1.1 = 55. Once you get this number, it can’t hurt to pad it by a few - so let’s say 60 just to be on the safe side.
Again - this equation is a starting point and needs to be used in conjunction with your storage limits and the size of your product. There may be times in fulfillment by Amazon where you experience sudden and unexpected growth, and you’ll have to take care to restock inventory quickly. There may be times your sales will slow, and you’ll need to lower how many products you send to Amazon to avoid negatively affecting your IPI.
There is no easy way to determine how many products you should be sending to your FBA fulfillment center. You need to be aware of all the limitations Amazon places on your store, the shipping cost, referral fees, the current capacity of warehouses, and your own sales projections. Monitoring these three elements correctly will help you to keep yourself stocked at the proper level.
Julia Grant is a copywriter specializing in e-commerce and small business, helping businesses expand their reach with copy that clearly communicates their message and converts. She is a certified translator and interpreter and prides herself on providing culturally relevant content in both English and Spanish.See more posts from this author