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Amazon Inventory Performance Index (IPI) is a number between 0-1000. This number measures FBA inventory health. Amazon IPI captures low inventory and excess inventory levels of your FBA SKUs. Amazon’s IPI can benefit both you and Amazon. Amazon’s inventory performance index score combines the preceding three months of sales, inventory levels, and expenses into a unique rolling metric updated each week.
Why is an IPI important for FBA Sellers?
An IPI is essential for Amazon FBA merchants. It measures overall inventory management. IPI includes how well you balance inventory levels and sales. Sellers must fix listing problems that make inventory unavailable for purchase and keep popular products in stock.
The Inventory Performance Index (IPI) measures:
- Inventory management over time.
- The overall balance of inventory levels and sales.
- Ability to fix listing problems to prevent inventory unavailable for purchase.
- Ability to keep popular merchandise in stock.
Four significant factors that influence your Amazon IPI:
- Excess inventory percentage – reducing excess inventory can help increase profitability.
- FBA sell-through rates – increase helps move stock off the shelves.
- Stranded inventory percentage – fixing listings guarantees inventory in FBA warehouses is buyable.
- FBA in-stock inventory – keep popular items in stock.
What is a good score to maintain?
An average Amazon IPI can range anywhere from 400-800. Conversely, a score under 350 can limit FBA storage and cause overage fees. Make sure to maintain the inventory performance index above the minimum threshold. Particularly at the quarter’s end or six weeks prior. Keep at least a month to two months’ worth of stock on hand. Similarly, fix any stranded inventory you may have.
- The minimal IPI score is 350
- Scores above 450 indicate good performance
- Lastly, scores above 500 are upper performers.
What is Amazon IPI based on and what does it affect?
Your Inventory Performance Index score reflects how well you maintain healthy inventory levels, how you fix listing problems and drive sales. Amazon calculates your IPI score each quarter and six weeks before the end of the quarter.
Your score does NOT affect:
- ASIN limits
- New products do not hurt your score.
- You can not instantly improve scores by having large amounts of inventory.
- Marking items as non-replenishable does not affect Amazon IPI.
How to Improve your Amazon IPI?
- Increase your sell-through rate:
- The number of products you sell with stock on hand.
- Avoid overstocking.
- Improve the in-stock quality for popular items.
- Fix all stranded inventory.
- Manage excess inventory.
- Monitor your shipment status daily.
- Additionally, create shipments in advance if you think you will fall below 400
Low Inventory Performance Index Consequences
If you have a low IPI score, Amazon can restrict inventory storage and assign higher storage fees. Restrictions placed on your account will also affect the ability to create inbound shipments.
There are two score check weeks that Amazon announces. This is where they evaluate and determine storage volume limits. Consequently, make sure you reach the required IPI threshold during either of those weeks. Thus, you will be cleared from storage volume limits for the following week’s check.
Inventory Performance Index scores are available for sellers with a professional plan and inventory at a fulfillment center. If you sell on Amazon FBA and need to ensure all inventory is present and account for, contact Refund Retriever. To summarize, we will monitor the entire lifecycle of your FBA inventory.