Streamlining Inventory Management: A Seller's Guide to Amazon's IXD Program

For sellers on Amazon India, efficient inventory management and cost-effective logistics are crucial for maintaining profitability and scaling operations. To satisfy a firm’s product availability requirements where consumers want it to be present, there is a need for proper inventory placement solutions. For these reasons, Amazon India launched the Inventory Placement (Ship Cross Dock or IXD) Program for sellers in the FBA program.

This blog also offers a detailed insight into the workings of the IXD program, outlining the advantages of joining, how it works, and the criteria for participating while also detailing how Indian sellers can use it to enhance their performance.

What does the IXD Program mean for Amazon?

The Amazon Inventory Placement (IXD) Program is one of the facilities provided by Amazon to its sellers that enable them to easily shift the inventory within multiple FCs of Amazon located in various regions of India. Unlike what they have to pay for individual shipments of their stocks to many FCs to sell, the IXD program enables them to transport their products to a single location; the Receive Centre. Amazon then reorganizes the inventory by other destination FCs depending on the customers’ demand and whether the seller is registered.

It simplifies the logistics, eliminates expenses, and delivers better stock positioning in the entire country. Sellers also get an opportunity to concentrate more with their main selling responsibilities courtesy of the IXD programme by leaving the work of delivering inventories to Amazon.

Benefits of the IXD Program

Enrolling in the IXD program offers sellers a range of significant benefits that can optimize their operations:

1. Simplified Shipment Creation

In the absence of the IXD program, sellers have to set up more than one shipment to move stocks to various FCs. IXD program does away with this kind of headache, sellers are now free to send all their stocks to the particular Receive Centre. It not only saves much time but also minimizes the opportunities for mistakes when comparing shipments in their creation.

2. Streamlined Appointment Process

Having many facilities can complicate the task of scheduling appointments at different FCs. In IXD programme, sellers need to avail only one appointment at their convenience at the Receive Centre making it very convenient.

3. Lower Freight and Operational Costs

By centralizing inventory submission, the IXD programme reduces transportation costs. Customers have no additional charges for ordering products from different sellers or local, regional or national FCs; sellers pay a standard fixed charge known as the Shipping Fee which applies across the country.

4. Increased Reach and Faster Deliveries

Since inventory is dispersed throughout Amazon’s FCs, sellers can cover more consumers and minimize delivery times. Shorter delivery times result in increased satisfaction amongst the customers and overall, better sales.

5. Reduced Administrative Burden

Amazon takes responsibility for redirecting inventory from the Receive Centre to other FCs, which makes it easier for the sellers to manage different locations.

6. Transparent Inventory Tracking

Sellers can have more control on their inventory through the flow and positioning within Amazon which can help them to have a proper forecasting on the stock replenishment.

How the IXD Program Works

The IXD program operates as a collaboration between sellers and Amazon’s logistics network. Here’s how it works:

Here’s how it works:

• Inventory Submission to Receive Centres: Sellers send their inventory to their nearest Amazon Receive Centre. For example, a seller based in Haryana would ship their stock to the DED3 Receive Centre.

• Amazon’s Redistribution: After receiving the inventory, Amazon redistributes it to other Fulfillment Centres nationwide based on customer demand and the seller’s GST registration in those states.

• Availability During Redistribution: During the redistribution process, inventory remains available for customers to purchase. These items are marked as “reserved” in the seller’s account.

• Customer Order Fulfillment: After being moved in the supply chain, the product is shipped from the FC nearest to the retailer to help reduce the shopper's delivery time.

Eligibility Criteria for IXD Participation

To enroll in the IXD programme, sellers must meet certain requirements:

1. GST and APOB Registration

• Sellers must register the state of their nearest Receive Centre as an Additional Place of Business (APOB) under applicable GST regulations.

• GST registration is also required for the seller’s home state and at least two additional states where destination FCs are located.

2. FBA Usage

• As we indicated earlier, the IXD program is available exclusively to sellers who use Amazon’s Fulfillment by Amazon (FBA) service.

3. Compliance with Programme Terms

The sellers are bound by the IXD programme rules and regulations as well as the general Amazon Services Business Solutions Agreement.

How to Enroll in the IXD Program

To join the IXD program, sellers should follow these steps:

1. Verify Compliance with GST and APOB Requirements: Ensure you update your GST and APOB registrations for the nearest Receive Centre and necessary destination FCs.

2. Ship Inventory to the Receive Centre: Following Amazon's packaging and shipping guidelines, prepare and send your inventory to the closest Receive Centre (e.g., DED3, BOM6, BLR4).

3. Monitor Inventory Movement: After registration, they can use features of the Seller Central tool, such as the Restock Inventory Dashboard to monitor the definite amount of products and properly plan the restocking process.

4. Leverage Redistribution by Amazon: Amazon will handle the redistribution of your inventory to other FCs, allowing you to focus on growing your business.

Operational Considerations for Sellers

Eligible Products

Not all products qualify for the IXD program. The following categories are excluded:

• Heavy-Bulky (H&B) or fragile items.

• Products exceeding 70 cm x 70 cm x 45 cm or weighing more than 18 kg.

• Food products require updated FSSAI licenses for all relevant FCs and Receive Centres.

Storage Space Management

Amazon sets an inventory storage limit for sellers at each FC to ensure efficient use of storage space. For example:

• Default space for standard inventory at Receive Centres like BLR4, DED3, and BOM6 is capped at 50,000 units.

• This limit may increase based on the seller’s sales performance over the past four weeks.

Returns and Removals in the IXD Program

Customer Returns

• Returns are sent to the point of invoicing or the nearest return consolidation centre.

• Sellers participating in the Return Consolidation Programme benefit from streamlined return handling.

Inventory Removals

• Sellers must create removal orders for inventory located in specific FCs.

• Removal requests can be initiated through Seller Central.

Reports and Inventory Visibility

Amazon provides several reporting tools to help sellers monitor inventory placement and movement:

1. Stock Transfer Reports

• These reports detail inventory movements between FCs and are available for specific date ranges or every month.

2. Reserved Inventory Report

• This report helps sellers track inventory in transit or awaiting placement at destination FCs.

3. GST Reporting

• Amazon provides ready-to-file GST reports for sellers to streamline tax compliance.

Frequently Asked Questions

1. Can Sellers Choose Any Receive Centre?

Yes, sellers can send inventory to alternative Receive Centres if their nearest one has space constraints. States without a Receive Centre can send inventory to the most accessible location.

2. Are Sellers Charged for IXD Enrolment?

No, enrollment in the IXD programme is free for eligible sellers.

3. How Are In-Transit Damages Handled?

Amazon takes full responsibility for in-transit damages under its reimbursement policies.

4. Can Sellers Stop Redistribution to Specific FCs?

To stop transshipments, sellers must disenroll from the IXD programme and create removal orders for existing inventory at undesired FCs.

Conclusion -

Amazon's Inventory Placement Program (IXD) offers a valuable set of tools and benefits for sellers looking to streamline their operations and save on costs. By simplifying the shipping process, optimizing appointments, and providing cost-effective solutions, IXD empowers sellers to focus on growing their businesses rather than managing logistics.

As we've explored in this guide, enrolling in the program involves meeting specific criteria, including APOB and GST registrations. Once enrolled, sellers can take advantage of the program's benefits, such as reduced transportation expenses, efficient inventory management, and simplified appointment scheduling.

Whether you're a seasoned seller or just starting out on your e-commerce journey, Amazon's IXD program can make a significant difference in your overall profitability and operational efficiency. So, consider exploring the program, meeting the requirements, and embracing the advantages it offers to take your Amazon business to the next level. By leveraging the IXD program, you can enhance your seller experience and provide an even better shopping experience for Amazon customers.

Additional Reading

For more insights into optimizing your Amazon business, check out:

• FBA vs FBM: Which is Better?

• Tips and Trikcs to Increase Sales on Amazon

• Amazon Lightning Deals: A Complete Guide

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Inventory Placement During Redistribution

While inventory is in transit between FCs, it remains available for sale to customers. Sellers can track these items under the “reserved” status in their accounts.

Cost and Fee Structure

The IXD programme provides significant cost benefits to sellers:

• No Redistribution Charges:

  Sellers are not charged for inventory redistribution from Receive Centres to other FCs.

• Flat Shipping Fee:

  Customer orders fulfilled from any FC are charged a flat Shipping Fee, calculated based on product weight rather than location. This transparency simplifies cost planning.

• Protection Against In-Transit Damages:

  Amazon assumes responsibility for any damages to inventory during transit between FCs, offering reimbursements under its FBA- FC Damaged Inventory Reimbursement Policy.

• GST Invoice Generation:

  GST invoices for inter-FC transfers are automatically generated in Seller Central. Sellers can declare product values during shipment creation to ensure compliance.