Amazon Announces New Warehouse Limits Due To Virus Surge

Amazon will be restricting its storage capacities in warehouses as the coronavirus continues to surge and the holidays are still ahead, a company blog post states.

The company says it has put new limits in place on IPI minimum threshold requirements, stating that sellers below 500 IPI will have new limits.

The company says that might not impact some sellers — most sellers below 500 will actually have more space this year, Amazon claims.

Amazon additionally announced it would be putting in place new ASIN-level quantity limits for products in FBA.

Also, Amazon has offered a free removal fee protection for the time being, hoping to aid sellers that might otherwise face problems with fees for products that haven’t been selling particularly well, the blog post says. Those protections will include removing fees for any removal orders submitted for inventory in Amazon fulfillment centers beginning on July 14.

The blog post touts Amazon’s commitment to other, smaller businesses, saying the company has “already reduced our own Retail product ordering to accommodate more of your products and help you continue to see sales growth.”

The shift to digital commerce, spurred by the pandemic, has created a vast new demand for warehouse space. PYMNTS reported that the U.S. will require 1 billion additional feet of space by 2025 due to the sheer amount of new demand for the products. The need for fulfillment centers is causing more industrial transactions now — it was around 35 percent of industrial sales in 2019 and sits at 50 percent now, according to data from real estate consultancy JLL.

JLL said U.S. eCommerce sales were likely to grow 20 percent this year from last year’s number of $602 billion.

The fear of contracting the virus, dying from it or spreading it to others has fundamentally altered the way many Americans shop — many have reported for months now that they intend to continue utilizing the digital means long after the pandemic’s worst months are over.