Amazon has rolled out a significant update for Fulfillment by Merchant (FBM) sellers, particularly those involved in wholesale operations. Starting this week, Amazon will automatically impose a cap on the number of orders FBM sellers can handle daily. This limit is based on your average daily sales over the past 30 days. If you exceed this threshold, Amazon will extend your delivery estimates by one day to mitigate the risk of late shipments.
This change could have far-reaching implications for FBM sellers, especially those who rely heavily on wholesale models. In this article, we’ll break down what this means for you, how it impacts your business, and actionable strategies to stay ahead of the curve.
What’s Changing?
1. Automatic Order Handling Limits
- How It Works : Amazon will calculate your order handling limit weekly based on your average daily sales from the previous 30 days.
- Impact : If you exceed this limit, Amazon will automatically extend your delivery estimates by one day to prevent late shipments.
- Scope : The new policy applies only to Standard and Free Economy Shipping , not Premium Shipping or Seller Fulfilled Prime (SFP) .
2. Weekly Recalculations
- Your order handling limit will be recalculated every week, giving you the opportunity to adjust based on recent performance.
- Consistent performance improvements can lead to higher limits over time.
3. Customizable Limits
- You can manually increase your order handling limit in your Order Handling Settings if you anticipate higher sales volumes.
- However, exceeding your set limit without proper adjustments will still result in extended delivery estimates.
Why Wholesale FBM Sellers Should Be Concerned
Wholesale FBM sellers are particularly vulnerable to this change for several reasons:
1. Buy Box Vulnerability
- Maintaining the Buy Box is crucial for visibility and sales. If your estimated shipping and delivery dates are delayed due to exceeding your order handling limit, you risk losing the Buy Box to competitors.
- Losing the Buy Box translates to fewer sales and reduced revenue.
2. Bulk Orders and Seasonal Spikes
- Wholesale sellers often deal with bulk orders or experience seasonal spikes in demand. Without proper planning, these high-volume periods could push you beyond your handling limit, triggering delivery delays.
3. Reputation Impact
- Late shipments can harm your seller reputation, leading to negative feedback, lower seller ratings, and potential account suspensions.
Actionable Strategies to Adapt
To ensure smooth operations and avoid the pitfalls of this new policy, here are some practical steps you can take:
1. Monitor Your Performance Metrics
- Regularly review your Order Defect Rate (ODR) , Late Shipment Rate (LSR) , and Pre-Fulfillment Cancellation Rate .
- Use Amazon’s Performance Dashboard to track these metrics and identify areas for improvement.
2. Adjust Your Order Handling Limit
- Proactively increase your order handling limit in your Order Handling Settings during peak seasons or when expecting higher sales volumes.
- Ensure your team and logistics partners are prepared to handle the increased workload.
3. Optimize Inventory Management
- Maintain adequate stock levels to meet demand without overextending your resources.
- Use inventory management tools like Jungle Scout , Helium 10 , or Sellbrite to forecast demand and streamline replenishment.
4. Improve Operational Efficiency
- Streamline your fulfillment process by:
- Automating repetitive tasks using tools like ShipStation or ShippingEasy .
- Partnering with reliable third-party logistics (3PL) providers to handle overflow orders.
- Implementing better warehouse management practices to reduce processing times.
5. Communicate Transparently with Customers
- If you anticipate delays, proactively inform customers through Amazon’s messaging system.
- Offer incentives like discounts or free returns to maintain customer satisfaction during challenging periods.
6. Focus on Premium Shipping Options
- Since the new policy doesn’t apply to Premium Shipping or Seller Fulfilled Prime (SFP) , consider offering these options to attract customers who prioritize faster delivery.
- Ensure you meet the strict performance requirements for SFP to qualify.
Practical Example: How to Handle a Sales Spike
Imagine you’re a wholesale FBM seller specializing in home decor products. During the holiday season, you expect a 50% increase in daily sales. Here’s how you can prepare:
- Analyze Past Data : Review your sales data from the last 30 days to estimate your expected order volume.
- Adjust Handling Limits : Increase your order handling limit in your settings to accommodate the anticipated spike.
- Partner with 3PLs : Collaborate with a 3PL provider to handle excess orders without compromising delivery times.
- Promote Premium Shipping : Highlight Premium Shipping options in your listings to attract customers willing to pay for faster delivery.
- Monitor Performance : Track your metrics daily to ensure you’re staying within your limits and maintaining high performance standards.
Key Takeaways
- Stay Informed : Understand the nuances of Amazon’s new policy and how it affects your business.
- Plan Ahead : Anticipate sales spikes and adjust your order handling limits accordingly.
- Optimize Operations : Invest in tools and processes that improve efficiency and scalability.
- Protect Your Buy Box : Avoid delivery delays to maintain your competitive edge.
- Leverage Premium Options : Explore Premium Shipping and SFP to bypass the limitations of Standard and Free Economy Shipping.
Conclusion
Amazon’s new order handling limits for FBM sellers are designed to ensure timely deliveries and improve customer satisfaction. While this change may pose challenges, especially for wholesale sellers, it also presents an opportunity to refine your operations and strengthen your business.
By staying proactive, monitoring your performance, and implementing the strategies outlined above, you can navigate this update successfully and continue to thrive as an Amazon FBM seller. Remember, adaptability and preparation are key to overcoming any challenge in the ever-evolving world of e-commerce.
