The way Amazon has gone against its core principles of market efficiency by introducing the radical new auction system for FBA storage has baffled and outraged many sellers alike.
Rather than Amazon's traditional blue-sky pricing, the Amazon storage auction system pits sellers against one another in order to compete for the limited space offered. Such a system not only goes against Amazon’s known principles of allocating resources in a fair and efficient manner but also makes finding warehousing space for sellers much more difficult and expensive.
In the auction system, sellers are pitted against one another not only for storage space but for prices as well. Amazon has stated that the aim of the auctions is to increase access to FBA storage space and make them more affordable. What Amazon has overlooked, however, is the detrimental effect the auction system is having on the market.

In the storage auction system, sellers bid on the storage space they need, with the lowest bidder winning the space. This leads to sellers outbidding each other by fractions of a penny, and it puts minority sellers at a distinct disadvantage. Without enough capital to continuously bid for space, many minority sellers are left without a way to enter the FBA market and ship their products in, leading to an uneven playing field for those without sufficient funds.

To make matters worse, the auction system does not appear to be encouraging more competition or efficiency, as Amazon had claimed. Instead, it has resulted in merchants being unable to acquire the space they need, leaving them unable to compete in the FBA market.

The auctions are also criticized for their lack of transparency. Questions remain as to how much storage space is available in the auctions, making it impossible to plan ahead. Furthermore, there have been reports that Amazon is rigging the bidding in favor of certain sellers, adding to the inequity of the system

All in all, Amazon’s storage auction system has resulted in confusion and outrage among sellers, and it has contradicted the principles of fairness and efficiency that Amazon has long been known for. Unfortunately, at this time, it appears as though the auction system will not be going away anytime soon.

00:00 Starting on March 1, 2023, you have to bid for your FBA storage on Amazon.
00:16 New Capacity Manager showing new FBA capacity limit
00:58 Storage Capacity Increase Request
01:15 Bidding System is broken
02:58 Expiration of the date of request
03:26 Amazon came out with IPI; if you have a bad IPI then you have no unlimited storage
03:40 Restock limits came after the pandemic hits
04:29 Amazon is completely understaffed
05:06 Restock Limits sucks so bad
05:17 Steven cannot believe that he has to bid every month on his total capacity limits

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