Amazon Inventory Performance Index (IPI) is a metric that measures an Amazon FBA seller’s ability to manage their inventory effectively. It is a score that ranges from 0 to 1,000, with higher scores indicating better inventory management. The IPI score is based on several factors, including excess inventory, stranded inventory, and in-stock inventory.
Amazon uses the IPI score to determine a seller’s eligibility to use certain programs and services, such as FBA (Fulfillment by Amazon). A high IPI score can lead to increased visibility and sales, while a low score can result in restrictions and limitations on a seller’s account.
What is a good Amazon IPI score?
Amazon sets a minimum IPI score of 450 before they increase your vendors storage fees and limit storage space. Score is calculated each Monday based on past 3 months inventory
If your score rate is above 450 for 2 weeks straight you will have access to unlimited Amazon storage space.
What factors that impacts your Amazon IPI score?
While Amazon doesn’t specifically give out the formula how the IPI score is calculated it does give general indicators how IPI is calculated.
One of the most critical factors that affect the IPI score is excess inventory. Excess inventory refers to inventory that is not selling as quickly as expected or has been sitting in a warehouse for an extended period. When a seller has excess inventory, it ties up capital and takes up valuable storage space, which can impact profitability and the IPI score.
Another factor that can negatively impact the IPI score is stranded inventory. Stranded inventory refers to products that are listed for sale but are not available for purchase due to issues such as an incorrect product listing or a lack of inventory in a fulfillment center. Amazon encourages sellers to monitor their stranded inventory regularly and take action to address any issues that arise.
In-stock inventory is another critical factor that affects the IPI score. Maintaining a healthy level of in-stock inventory ensures that customers can purchase products when they need them, which leads to increased sales and improved IPI scores. Amazon recommends that sellers aim for a minimum in-stock rate of 90% to maintain a healthy IPI score.
Sellers can monitor their IPI score in the “Inventory Performance” section of their Amazon Seller Central account. Amazon updates the score every quarter and notifies sellers if their score falls below 450. If a seller’s IPI score falls below 450, they may face limitations on their account, such as restrictions on FBA storage limits or additional fees.
How do I improve my IPI score?
Sellers can take several steps, including reducing excess inventory, optimizing their listings to avoid stranded inventory, and ensuring a healthy level of in-stock inventory. By monitoring their IPI score regularly and taking steps to improve it, sellers can increase their visibility and sales on Amazon, ultimately leading to a more profitable business.