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ASIN quantity limits – my open letter to Amazon

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It’s the best time of the year right now: March Madness!  Of course, I happen to be a Michigan State fan, which is a major bummer… but I digress.

Amazon has apparently taken the March Madness mantra to heart, given their recent implementation of the ASIN quantity limits into the book-selling world.

If you’re not up to speed with these new developments, take a quick gander at any of the Facebook forums to see the reactions from Amazon sellers.  It’s stealing all of the headlines right now, and it looks a little something like this:

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Of course that’s an over-reaction, but these recent changes ARE causing quite a stir.  Let’s take a closer look at what’s happening right now.

What we know:  Amazon has introduced and enforced a plethora of ASIN Quantity Limits.  These have existed for several years now, but as recently as a week or two ago, they’ve become prevalent in the book category.  In short, here’s how Amazon describes these limits:

“For a select group of ASINs, FBA may limit the maximum unit quantity that you can ship to our fulfillment centers. These limits are intended to help you avoid sending products that already have high overall inventory levels but low customer demand.”

At surface level, this may seem like Amazon has the interests of its third party sellers in mind by restricting slow-moving products from being sent to Amazon’s fulfillment centers.  For example, if a book with a rank of 10 million that had sold a single copy in the past 12 months already had a dozen FBA copies in stock that were selling for under $6.00, it would make sense for Amazon to limit any more copies of that particular title from being sent to the warehouse.

Here’s the problem: Amazon isn’t only restricting super long-tail books from being sent into FBA – they are reportedly rejecting anywhere between 10-30% of ALL books from being sold via FBA!  I tried submitting a shipment of 150 books on Saturday afternoon, and 30 of the individual titles were rejected with a message that the ASIN Quantity Limit was in place for those particular ASINs.  I sent the exact same ASINs to my buddy to see if he could upload them to his account – but no dice.  The same limitations appear to be in place for all sellers, regardless of size or performance metrics.  (Note: there appears to be a loophole in place for sellers using 3rd party software to upload their books, such as InventoryLab or ScanPower.  It’s unclear yet if these limited ASINs will be placed into Stranded Inventory once they are received at Amazon’s warehouses, however.)

Here’s what doesn’t make sense: Of the ASINs which were rejected, many of them had excellent Sales Ranks (well under a million, in most cases).  Furthermore, some of these limited ASINs had no FBA offers in stock at all.  Amazon has worked hard to build up their base of loyal Prime subscribers, so it wouldn’t make sense to limit their access to Prime products, would it?  These changes don’t seem to be protecting sellers, they seem to be protecting Amazon.  Here’s why:

The likely explanation for these changes is that Amazon’s warehouses are stuffed to the gills right now.  Even with long-term storage fees in effect, there are so many sellers flocking to Amazon’s FBA program right now that the online retailer simply can’t keep up with the growth.  In response, they are playing around with their algorithms for the ASIN quantity limits to see if they can alleviate their storage burden.

My concerns with these limitations:  Amazon doesn’t really care about my feelings – much like March Madness doesn’t care that a 15 seed isn’t supposed to beat a 2 seed in the first round – but here are my concerns with these recent changes:

  1. The lack of communication from Amazon to their sellers is my biggest concern.  There was no warning that these changes were going to be implemented.  Amazon simply enforced them as they saw fit.  For a company that prides itself on customer service, this is a major oversight with a group of sellers that represents a rather large source of Amazon’s revenue.
  2. The lack of a free market solution to remedy this problem also irks me.  If the challenge right now is that Amazon is rapidly running out of storage space, they ought to consider raising their long-term storage fees to force customers to remove slow-selling items.  Amazon could also remove the single-item exemption that currently exists with long-term storage fees to further incentivize sellers to not sit on their inventory for so long.  Instead of allowing sellers to make decisions on their own (i.e. letting the free market work itself out), Amazon is simply making the decisions for us.  Uncool.
  3. The lack of any API support to identify these specific ASINs is my final concern.  Right now, there is no way to know which ASINs will be accepted and which ones will be rejected until AFTER you’ve purchased an item, listed it, and created your shipping plan.  If I knew about the limitations BEFORE purchasing a particular book, that would make these changes much more palatable.  Instead, I’m faced with the decision on roughly 10-30% of my inventory to sell it Merchant Fulfilled (no thanks), sit on it and wait for these changes to (maybe) blow over, or donate it back to Goodwill and take the tax write off.  Any of these options will harm my cashflow and ultimately my margins.

My reaction to all this madness:  I’ll admit it – I was extremely frustrated with these changes at first.  How could Amazon do something like this and wreak havoc on so many of their third party sellers?  But then common sense got the best of me and I calmed down and chose to treat the current situation as an opportunity instead of a problem.  I started by drafting a letter to Amazon’s customer support team (you can read that letter at the end of this post), choosing to let my voice be heard by Amazon’s leadership team, merely than just ranting about my frustrations on social media.

On Monday, I took a road trip with my wife into the mountains and we hit up a half dozen thrift shops along the way, filling the back of our car with books.  Will we be able to list all of these books via FBA?  The way it looks right now, probably not.  But the margins are good enough in books that I can manage a handful of duds and still turn a profit.  If these changes are here to stay, it’s actually good news for those of us who are willing to adapt and overcome.  Bottlenecks in this business are nothing more than an opportunity to thrive while others fail to adapt and drop out of the business altogether.  After all, if selling books were too easy, everyone would be doing it.  Bring on the changes, Amazon!

Final thoughts:  Personally, I think these changes are NOT here to stay.  Amazon is likely tweaking some new algorithms or playing around with some shiny new inventory management software, and will restore order to the chaos in the next few weeks.  There’s a rumor going around that Amazon will remove all of these ASIN Quantity Limits for books by Wednesday, March 23rd.  I’ll believe that when I see it, but I’m choosing to remain optimistic.

Either way, this serves as a potent reminder to not put all of your eggs in one basket.  If your entire business exists solely on Amazon, it’s not really YOUR business – it’s Amazon’s business.  You’re just playing in their sandbox.  Amazon is still the best game in town right now, but take notice of these changes as a reminder to diversify your income streams.  If you’re too reliant on one channel for the success of your business, it could all evaporate overnight.  Spend some time learning about another sales channel and make plans to earn income apart from Amazon – and perhaps apart from the online world altogether!

My letter to Amazon:  For those interested, here’s the entire email I sent to Amazon’s customer service department.  Feel free to modify it to fit your own situation and let your voice be heard by dropping Amazon a line!

Good afternoon,

I’d like to share a few comments regarding a recently-implemented change which limits the number of ASINs that can be sent into Amazon’s fulfillment centers. As a bookseller who relies on Amazon sales to provide for my family, I am deeply troubled by the changes to the ASIN limits that were introduced and enforced without advance notice.

I went to upload a shipment this afternoon and found that 30 books out of 145 were denied due to these new limitations. Unfortunately, there was no way for me to know that these limits were in place for these specific ASINs until AFTER I had purchased the books, listed them, and attempted to build a shipping plan to send them to the Amazon fulfillment centers.

From conversations with other Amazon sellers, I’ve discovered that these limitations apply to everyone attempting to sell via FBA. While I understand that the fulfillment centers are getting overcrowded, and recognize that Amazon needs to do something to alleviate the storage of too many items, I am frustrated with the way this “solution” has been implemented.

First off, there appears to be no rhyme or reason as to which ASINs are being limited. Some of them have great Sales Ranks in the book category, many of them with a rank well under one million. Some of the restricted ASINs only have a handful of offers currently on Amazon, and some of them have zero FBA offers. While I understand the need to limit certain items that are selling, say, 5 copies a year on average and they have 40 FBA offers currently in stock, I do not understand limiting ASINs that have no FBA offers in stock. If Amazon prides themselves on being the “Everything Store” and has invested so much money into building their Prime program and recruiting new customers year over year, it does not make good business sense to restrict FBA sellers from putting products into the marketplace that may well find a customer who would buy it Prime but would refuse to buy it from a Merchant Fulfilled seller.

Secondly, there was no advance notice of these ASIN restrictions prior to them being implemented. Amazon has first class customer service and is widely recognized for that service! But when it comes to another group of your customers – namely, those third party sellers who provide products for sale on your website and provide an enormous amount of income for Amazon each year – your customer service is completely absent in this case. If these ASIN limitations are here to stay, then you owe it to your customers to let us know what is happening so we can adequately prepare for its impact on our businesses. If these ASIN limitations are merely a test, then please accept this feedback as confirmation that this test is NOT a good way to keep your third party sellers happily using your platform to sell their products.

Here are my specific recommendations and requests regarding this situation:
1. Remove these ASIN restrictions at once to allow third party sellers to continue providing products that Prime buyers are increasingly demanding.
2. Instead of limiting these ASINs through strict enforcement and not allowing sellers to send them to your fulfillment centers, consider other free market methods of slimming down the inventory in your fulfillment centers. Raise the monthly storage fees or find another way to encourage sellers to not allow so much inventory to collect dust in your warehouses. This approach would also be met with resistance from sellers, but would allow us to make our own decisions about sourcing inventory rather than having that decision be made for us by Amazon. By limiting the ASINs that you will receive, you will be limiting the items that are for sale and if sellers who currently have these products in stock are smart, they will immediately raise their prices because they do not have the threat of competitive prices to keep their products affordable for Amazon’s eventual customers. By enforcing these restrictions, you are in essence limiting the free market that exists on Amazon.
3. If you won’t remove these ASIN restrictions, please provide a list of these restricted products on a daily or weekly basis and provide access to them through the MWS and/or Product Advertising API. As sellers, we need to know BEFORE we purchase items whether or not we can sell them via the Fulfillment By Amazon program, otherwise we will be wasting our inventory dollars and harming our profitability. The attraction as sellers to the book category is that it is an ungated category, and is the perfect way for a new seller to learn the ropes on Amazon before branching out into other categories. By restricting some ASINs within the book category, you are effectively rendering the entire category as restricted.

All of the above being considered, I am still grateful to be able to “play in Amazon’s sandbox” and sell products in your marketplace. I’ve built a sizable business over the past year and a half that has proven profitable for both me and Amazon. Please consider my feedback carefully, and know that I speak not only for myself but also on behalf of the several thousand other booksellers who sell primarily using the Fulfillment By Amazon program.

I would be delighted to have the opportunity to speak to one of your project managers regarding my concerns at how these ASIN limitations are being implemented and to share how they are adversely impacting my business. I can be reached at the call-back number below.

Thanks for your time and consideration.
-Caleb Roth

20 Comments

  1. Hoping this is not permanent as well. It is very hard to believe Amazon cares about sellers when these kinds of policy changes take place. Thanks for the post!

  2. Very well written article. Worse case scenario is that I will Merchant Fulfill the ones that get rejected. It will definitely change things, but it’s not necessarily a deal breaker.

    • Simple solution if you’re buying books that are selling for more than a penny MF. You’ll leave some money on the table selling MF vs. FBA in many cases, but at least you can recoup some of your costs!

  3. JMO but I think Amazon is concentrating on the newer sellers. I have been selling since 2007 and have not had any rejected.

    There seems to be a philosophy out there that is popular that if you just flood the FC with huge number of books you can make a living. If some dont ever sell, well, then Oh, no biggie. It doesnt cost much to store. The problem is, though, that it is a biggie to AZ. 1,000,000 square feet warehouses are not cheap and they are way too expensive to store yet another copy of a “what to do when you are pregnant” book that will never sell.

    Even though I have not been yet affected and I actually do think wednesday they will back off a bit but this is not over, AZ will keep on until they get the right mixture of solutions to fix these problems. If your business model is to send mounds of junk in you are in for some tough days.

    These are some of my thoughts
    1) Amazon owns the river. They just let you float in it.

    2) You dont have to have an inventory of tens of thousands to make money on AZ.

    3) Dont send in more inventory than you can properly manage

    4) There is a lot of talk on the forums about getting books to send in the front door of the FC and very little talk of how to get them through them back door by sales or having them destroyed or sent back. If you dont act, Amazon will.

    5) Learn your craft. Buying a scanner doesn’t make you an expert

    The only thing I disagree with Caleb a little bit is the free market solutions. I believe in free markets as much as anybody but free market solutions could drive up the cost of business to the extent that it would get prohibitive. I would absolutely agree, though, if AZ could come up with solutions that actually worked without being financially prohibitive that is the way to go. The part of his article I agree with the most is that this is a huge opportunity. Those of us serious about our craft who endeavor to learn and grow every day will probably be finding ourselves with less competition soon.

    My theory is that AZ will start becoming more and more restrictive on new sellers. Maybe even less than 5000 inventory and very difficult to move up in inventory size. I have zero inside info this is just my theory

  4. Great article Caleb! I’m sure this wont last forever unless they want to piss off hundreds of thousands of FBA sellers. All they need to do is FIX THE API so the scanning apps pick up on the restricted ASINS. Seems simple right?

    • Simple fix indeed… if only Amazon cared about their FBA sellers 😉

      • Caleb…

        This ASIN restriction for FBA sellers is a HUGE TELL from Amazon… For the long run… and its not good.

        I agree adaptation is always the answer to business success but even more important is understanding the partner you are working with.

        Will Amazon, our partner, crush anybody or any seller if they feel it is in their best interest… Yes… so one should keep that in mind… always.

        Look at account suspensions since 2015.. some deserved and many undeserved and hard fought and effecting not only employees of large outfits but whole families and communities… for the worse.

        and…

        If Amazon can do this to Diaper.com… why not to 100,000s of third party AZ sellers… ?

        http://www.slate.com/blogs/future_tense/2013/10/10/amazon_book_how_jeff_bezos_went_thermonuclear_on_diapers_com.html

        Know who you are working with… and diversify… that is the proper adaptation.

        CJ…

        • Agreed. They have broken my loyalty completely.

          I have six-figure book sales on Amazon, have been in FBA for 6 years, in the past 4 years have been exclusively Amazon FBA, having removed all my local inventory and closed B&M. This was a serious wake up call. Amazon does not have our backs.

          It’s a poor move on their part because almost all of us sellers are also Amazon customers, and feeling betrayed how many of us are going to keep any Amazon shopping loyalty at all? I know that I’m not.

          Right now I’m not sure what I will do but it’s very clear that Amazon is not a long term solution for any of us, and I’m saying that as a 5-star seller who has made a very good living at FBA bookselling. There is no long term future there for people like us.

          • I’m sorry you feel that way – it’s definitely a wake up call though. It’s not your own business… it’s Amazon’s business and we all just get to play around for now. It stresses the importance of diversifying your income streams. Third party sellers now make up 47% of all units shipped on Amazon, so Amazon needs us, even though they act at times like they don’t.

  5. As a follow up to Billy’s comment let’s focus for a minute on turn rate. If we take a book with 3 FBA used copies that is ranked better than 500K and the same book has 50 copies Amazon owns and is selling new, who really has the inventory problem? There are 53 copies in storage and Amazon owns 50 of them. If Amazon restricts FBA sellers from sending in any more copies of that book, then once the three FBA used copies sell, Amazon’s new copies will be the only game in town. That accomplishes two things. It reduces inventory and it is more profitable for Amazon than selling used copies of the book FBA. But that is just my take on it.

    • Sounds like a conspiracy theory 😉 There may be some truth in that, but many of the ASINs that were rejected for me had no Prime offers, including no Amazon offers… I owe you a return phone call too!

  6. It is not just books that are affected. I have had some very low ranked grocery items rejected, others have had items in shoes, clothes and other categories rejected – many with low ranks on fast selling items. There is a rumor going around that Amazon will discontinue the restrictions as of tomorrow. We’ll see.

  7. FBA have been oversold for some time. We got strong signals during December when Amazon started doing their warehouse/FC shuffle at the busiest time of year. In January, their CFO mostly blamed FBA sellers as the source of increased shipping/warehouse expenses. You had to pay attention to all that. Amazon never stands still.

  8. I”ve been looking at your Eflip software for awhile now and I’m wondering how the ASIN blocking has affected those who use Eflip for sourcing although Amazon seems to have backed off somewhat on the blocking

    • Hey John – great question. When the ASIN restrictions were in place, I only had one customer who mentioned that 2 out of his 60 books that week from eFLIP were rejected. Now that the ban has been lifted he was able to send those in. If Amazon brings back the restrictions and properly documents them in their API, we’ll either remove those ISBNs from our database or mark them somehow so our customers know which books to avoid.

  9. Can you tell me if this issue was resolved and what was the outcome? Did you do another blog post follow-up on this since this was back in March?

    Any info would be appreciated—Thanks for all your great blogs!

    • Amazon removed the ASIN quantity limits, and replaced them with a box where you confirm that you understand that they are unlikely to sell quickly and you may have to pay long-term storage fees. It’s a great resolution to the problem!

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