Amazon FBA Updates 2025 have brought significant changes for sellers especially those gearing up for Prime Day. New FBA capacity limits for JuneJuly 2025, shifting inventory policies, and fee updates are creating volatility in fulfillment. In this post, we break down the latest Amazon FBA changes, explain their implications, and offer actionable tips. Whether youre an Amazon seller facing tighter limits or exploring third-party options, this guide will help you adapt and highlight how a 3PL like lite prepcenter can support your FBA Prep needs during uncertain times.

Jump right in: Amazon FBA Updates 2025

• Prime Day Alert: Tighter FBA Capacity Limits in JuneJuly 2025
• 2025 Policy Changes: IPI Scores, Fees, and Amazon Warehousing (AWD)
• Strategies for Sellers: Adapting to Capacity Limits & Leveraging 3PL Support
• Summary & Key Takeaways

Prime Day Alert: Tighter FBA Capacity Limits in JuneJuly 2025

Amazon has tightened FBA storage capacity limits for June and July 2025 a crucial period as sellers stock up for Prime Day. The key update is a reduction of storage allowance from roughly 6 months of forecasted sales to 5 months, which began in May. Many sellers saw sudden capacity cuts (some as steep as 75%) and will continue to face these restricted limits into July. The implications are serious: less inventory can be sent to FBA, making it harder to build up stock for big events like Prime Day.

1. Account-Wide Capacity Caps:

For JuneJuly, Amazon is capping FBA inventory to about 5 months of sales volume, down from the previous 6-month allowance. This five-month window means you can only send what youre expected to sell in the next five months any extra may be denied. Sellers used to larger stock levels must now adjust quickly.

2. ASIN-Level Restock Limits Return:

Along with account-wide cuts, Amazon has reinstated product-level restock limits for individual SKUs. In other words, even if you have overall space, there may be caps on how many units of a particular ASIN you can send. This reverses the more flexible policy earlier in 2025 and adds another layer of planning complexity.

3. Performance-Based Allocation:

Capacity isnt equal for everyone. Amazon continues to tie your allowed space to performance metrics like your Inventory Performance Index (IPI) score, sales velocity, and how efficiently you manage stock. Slow-moving or excess inventory will hurt your usable capacity if youre sitting on aging stock, it can block your ability to send in best-sellers. High performers with strong IPI and sell-through might get a bit more room, whereas those with low scores could be pinched further.

4. No Overage Fees (But Hard Limits):

The good news Amazon eliminated automatic over-capacity fees back in mid-2024, so you wont be charged extra just for exceeding limits. The bad news if you hit your limit, Amazon simply wont let you create new FBA shipments. In practice, thats even more restrictive: you cant send inventory in at all if youre over the cap, potentially causing stockouts on fast sellers if not managed.

5. Prime Day Cutoff Dates:

Amazon set strict inbound cutoffs for Prime Day 2025. June 9, 2025 was the deadline for using the minimum shipment splits option (fewer fulfillment centers), and June 18 for the Amazon-optimized distribution option. Sellers needed to have shipments created and carrier appointments scheduled about a week before those dates. Missing these deadlines could mean your inventory arrives too late for Prime Day promotions. In short, June is a make-or-break window to get inventory into FBA under the new limits.

Why is Amazon doing this now? The official line is that Amazon observed higher than usual inventory levels this spring sellers sending far more stock than needed. By tightening capacity, Amazon aims to prevent overcrowding and ensure healthy stock turns across its fulfillment centers. From Amazons perspective, too much idle inventory clogs warehouses. For sellers, however, this sudden change is challenging: it requires leaner inventory planning during one of the years busiest sales seasons.

2025 Policy Changes: IPI Scores, Fees, and Amazon Warehousing (AWD)

Amazons fulfillment policies in 2025 reflect a broader theme: reward efficient inventory management and penalize extremes. Sellers need to keep an eye on multiple policy changes that rolled out in 2025, beyond just capacity limits.

Heres an overview of the major FBA updates so far this year and how they compare to previous practices:

Inventory Performance Index (IPI) Threshold:

Amazons IPI score remains a central metric for storage eligibility. The minimum IPI to avoid storage limits is currently 400, unchanged from late 2021 onward. (During the pandemic, Amazon temporarily raised this to 500, but it reverted to 400.) In 2025, keeping your IPI above 400 is as critical as ever dropping below means Amazon might severely cap your storage capacity for the next period. IPI is a rolling score based on excess units, sell-through rate, stranded inventory, and in-stock rate. Focus especially on reducing excess inventory and boosting sell-through, since those factors weigh most heavily on IPI. High IPI not only helps avoid limits but can indirectly grant you more breathing room under the new capacity system.

Amazons Inventory Performance Dashboard (IPI score 417 shown above) monitors four factors: excess units, sell-through, stranded inventory, and in-stock rate. Sellers should keep IPI well above the 400 threshold to maintain sufficient FBA capacity.

Holding Too Much? Amazon’s Charging You Now

Good news:

• FBA storage and fulfillment fees stayed flat for 2025.

• No across-the-board hikes (finally).

But heres the catch:

• As of April 1, 2025, Amazon introduced a Storage Utilization Surcharge.

• If you hold more than 26 weeks worth of inventory in FBA? Youre getting dinged.

• Its Amazons way of saying: Stop using our warehouse as your long-term storage.

It gets worse:

• Long-term storage fees now kick in at 271 days, not 365.

• Thats a 3-month penalty jump compared to last year.

• Got slow movers collecting dust? Theyll cost you more, and faster.

Quick tip: Trim down your old SKUs before they start bleeding fees. Amazons making it expensive to procrastinate.

Not Enough Stock? Thatll Cost You Too

Surprise twist: Amazons charging sellers who run too lean, too.

Introducing: Low-Inventory Level Fee

• Rolled out in April 2024

• Triggers if your 30- and 90-day inventory levels fall below 28 days worth of supply

• Amazon calls it encouraging balance. Sellers call it annoying.

Why it matters:

• Its a per-unit fee that quietly eats into your margins

• Youre being nudged toward just-right inventory not too much, not too little

Sweet spot: Keep 12 months of stock on hand for key SKUs to avoid overage and low-stock fees.

FBA Inbound & Prep: Less Wiggle Room, More Rules

Amazon tweaked the fulfillment process in ways that give you fewer options and cost more if youre not careful.

Placement fees:

• Reduced by ~$0.58/unit for large or bulky products (nice for sellers of big stuff)

BUT

• As of February 2025, Amazon removed partial shipment splits for standard-size items

• That means you must:

  • Ship exactly how Amazon says (multi-warehouse)

  • OR pay extra for their placement service

  • No more middle ground

Prep fees:

• Went up in 2025 if Amazon polybags or stickers your stuff, itll cost you more

• Its now cheaper to use a 3PL for prep (and way less stressful)

What this means for you:
If youre sending unprepped items to Amazon, youre gambling with delays and your wallet.

AWD: Amazons Overflow Storage (But Premium-Priced)

What it is:

• Amazon Warehousing & Distribution (AWD) = off-site storage for excess inventory

• Replenishes FBA automatically when youre running low

Big perk:

• AWD inventory doesnt count against your FBA storage limit

• Great for Prime Day, Q4, or backup stock

Fee structure:

• No inbound fees from AWD to FBA (theyre baked in)

• But storage rates rose to $0.38/cu ft per month in 2025

• Peak season? It spikes.

Compared to a 3PL?

• Many 3PLs (like us) have flat, year-round rates

• AWD gives automation; 3PLs give flexibility and control

Pro move: Use AWD for niche or seasonal SKUs keep best-sellers with FBA, and handle the rest through a 3PL that knows the drill.

In summary, compared to early 2025 (and certainly to 2024), Amazons fulfillment landscape now demands tighter inventory control. Sellers must juggle keeping IPI scores high, avoiding new storage fees by not over- or under-stocking, adapting to stricter capacity rules, and possibly leveraging AWD. The overall approach from Amazon is clear: encourage sellers to send the right amount of inventory at the right time. Those who cant adapt may face stock limitations or higher costs, whereas those who plan well could actually save on fees (since base fulfillment fees stayed flat)

Strategies for Sellers: Adapting to Capacity Limits & Leveraging 3PL Support

With Amazon constantly moving the goalposts, sellers need to be quick on their feet. Whether its prepping for Prime Day or just trying to get products into FBA without breaking the bank, flexibility is the name of the game. Heres how to roll with the changes and how a good 3PL can make the ride a lot smoother.

1. Cut the Dead Weight: Audit Your Inventory

Slow movers? Overstocked SKUs?
Its time for a cleanup.

What to do:

• Identify stale or underperforming products

• Use Amazons Inventory Performance Dashboard to spot IPI killers

• Create removal orders or discount them to clear space

• Fix stranded inventory thats taking up room but not selling

Why it matters:
Freeing up space helps your IPI score and opens room for top sellers which Amazon is more likely to reward with better capacity.

Quick reminder: Low sell-through and excess units are the biggest IPI killers. Focus there first.

2. Forecast Like Its Your Job (Because It Is)

With FBA capacity set to just 5 months worth of inventory, guessing is a luxury you cant afford anymore.

To stay on track:

• Know exactly how much youll sell between now and Prime Day

• Skip the just-in-case extras theyll clog your limit

• Plan inventory to arrive by Amazons June 9 or June 18 Prime Day cutoffs

• Book shipment appointments at least 7 days ahead

Pro tip: Ship your high-turnover SKUs early so theyre checked in and ready to go when traffic spikes.

3. Ask for More Room with Capacity Manager

Youre not stuck with your limit Amazon lets you request more space.

Heres how it works:

• Use the Capacity Manager tool in Seller Central

• Amazon announces next months limits on the 3rd Monday of the current month

• If you need more space, submit a request immediately

• If approved, you can often ship early using your future allocation

Early release example:
Got approved for August capacity? Amazon may let you ship it in July great for stocking up ahead of Prime Day or Q4.

4. Dont Rely on Amazon Alone Use AWD or a 3PL

AWD (Amazon Warehousing & Distribution) is Amazons off-site inventory buffer it wont eat up your FBA limit, and it auto-replenishes as you sell.

But AWD isnt always the best bet.

Why some sellers prefer a 3PL like lite prepcenter:

• Flat storage fees (no Q4 spike surprises)

• Inventory held off-Amazon ready to ship in when space opens

• On-demand replenishment to FBA without tying up your capacity

• Freedom to work across channels (not just Amazon)

AWD is best used for:

• Amazon-only sellers

• Products with moderate to low sales velocity

• Sellers who want to stay fully within Amazons ecosystem

• Those okay with higher Q4 costs and less control

3PLs (like lite prepcenter) are better for:

• • Fast-moving products that need consistent FBA replenishment

  • Daily prep and compliance (labels, kitting, polybagging, etc.)

  • Long-term storage (especially if seasonal or Q4 heavy)

  • Multi-channel sellers (e.g., selling on Amazon, Shopify, Walmart, etc.)

  • Sellers who want more cost predictability and personal support

5. Get FBA Prep Off Your Plate (and Save Some Money)

Amazons prep fees went up again in 2025. If your items don’t meet Amazon FBA Requirements labeled, bagged, or bundled right, theyll charge you to fix it and its not cheap.

Heres where a 3PL pays off:

• Labeling, bagging, bundling all done before your items hit FBA

• Zero risk of unplanned service fees

• Faster check-in times and fewer delays

• More control, lower cost

TL;DR: A good 3PL does it right the first time and saves you the surprise charges.

6. Stay Agile and Plan for the Plot Twists

Amazon changes things. Constantly. Thats just the reality.

What to watch:

• Monthly capacity updates (even confirmed limits can shift)

• Changes to IPI thresholds

• Surprise fees (remember the low-inventory penalty?)

• Any talk of overage fees returning

Stay prepared by:

• Setting Seller Central alerts

• Reviewing your Capacity Monitor every month

• Having backup plans:

  • Use FBM if FBA gets too tight

  • Shift overflow to a 3PL

  • Pause new stock orders when necessary

Build flexibility into your operations now, so youre not scrambling later.