Amazon's new capacity management system lets sellers bid for … – Supply Chain Dive


Maximizing productivity has become even more important for Amazon as it works to reduce billions in added costs, much of which is connected to its warehouse operations. CFO Brian Olsavsky told analysts in October that the company has been operating with “very high” inventory levels primarily connected to Prime sales events, making productivity improvements more challenging. 
“There’s a lot of extra work when you have space constraints,” Olsavsky said.
Since the new reservation feature is auction-based, the cost of additional capacity will likely vary based on the time of year, said Kiri Masters, head of retail marketplace strategy at Acadia, in a LinkedIn post. It will benefit brands who need more inventory space to support new product launches or marketing campaigns, she added.
“This has not been possible in the past,” Masters said. “Many brands would be willing to pay to guarantee space for such events, and now they have the opportunity.”
The new capacity management system will also provide sellers a monthly capacity limit for how much they can send to and store at Amazon, according to Mehta. This replaces the weekly restock limit and quarterly storage limit, which sellers have said can make it difficult to plan how much inventory to procure and manufacture.
“Like restock limits today, capacity limits consider inventory on-hand in Amazon’s fulfillment centers and shipments sellers have created that have not yet arrived,” Mehta said.
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Interest in a peak season program signals delivery providers are willing to ramp up capacity, despite concerns that some may sit out Black Friday.
Four maritime shipping observers share their thoughts on what’s changing in the logistics environment as demand and inventory trends shift.
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