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Merchants Worry That Amazon Stocking Restrictions Will Chill Holiday Sales

Amazon third-party sellers are worried that they won’t be able to meet holiday demand because of restrictions on the amount of inventory the eCommerce giant can store in its warehouses, according to CNBC.

In August, Amazon instituted tighter quantity limits on third-party sellers that use its Fulfillments by Amazon, or FBA, service to ship packages. Although the limits apply to all product categories, they vary on a per-item basis.

On Tuesday (Dec. 8), merchants voiced concerns to CNBC that they won’t be able to meet holiday demand, especially for hot-selling items. They said that once Amazon determines an inventory limit for a product, the seller can’t ask for the limit to be raised. The merchants are also worried that their search listings will drop if the Amazon algorithm detects that they’re running low on inventory.

When the inventory limits were put into place in August, Amazon said it would help ensure that all FBA merchants would have space for their products. Amazon was also looking to avoid the delivery delays and supply chain problems seen last spring during the pandemic lockdown, especially during the critical holiday shopping season, CNBC noted.

In January, Amazon reported that its Prime program had reached 150 million subscribers.

The holiday shopping season has been projected to be a massive one for online retail, with U.S. online sales for November and December expected to jump 33 percent this year to reach $189 billion, the news outlet added.

Large retailers are reportedly also concerned about meeting demand, with Target and Walmart encouraging curbside pickup. Meanwhile, retailers Sephora, Macy’s and Estee Lauder have turned to delivery services such as Postmates, DoorDash and Instacart to ensure timely delivery.

Also weighing on merchants are reports that UPS has imposed restrictions on large retailers such as Gap, L.L.Bean and Macy’s in order to speed up shipping amid an unprecedented demand for online ordering.

Amazon’s stock issues come amid concerns that retailers may run short of products due to an unexpected surge in consumer demand. In September, the Financial Times reported that shortages of popular items like clothing, electronics and other products were likely to cause trouble for U.S. retailers during the holiday shopping season.

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