Updates about Amazon IPI (Inventory Performance Index)
Since July of last year, the Amazon Inventory Performance Index (IPI) has become a routine part of conversations among sellers using Amazon FBA. The IPI score measures how well a brand or seller manages its FBA inventory. This score impacts the inventory quantities allowed by Amazon Fulfillment Centers.
January 14, 2021 - By HINGE COMMERCE
The latest update on IPI thresholds is that by December 7, 2020, if a seller’s IPI score is 450 or above (down from the threshold of 500 set last July), the seller will not be subject to FBA storage volume limits. However, sellers with IPIs below 450 will continue to have restrictions in their in-bound inventory quantities accepted by Amazon FBA.
Some factors that impact sellers’ IPI scores:
- Maintaining balanced inventory levels between sold and on-hand inventory and avoiding excess inventory (overstock),
- Avoiding long term storage fees,
- Fixing listing problems, and
- Keeping the most popular products in-stock at the right levels.
The four ways to improve your IPI are:
- Reduce excess (overstock) inventory. Excess overstock means that the product has over 90 days of supply based on the forecasted demand.
- Improve your 90-day rolling sell-through by maintaining the right balance of inventory over the same time period. The 90-day FBA sell-through rate is the number of units sold over the past 90 days divided by the average number of units on-hand in Amazon fulfillment centers during that time period.
- Fix stranded listings to ensure that all your listings are buy-able. Stranded listings are when a listing problems results in product not being able to be sold even if there is inventory on-hand.
- Reduce out-of-stock occurrences for your most popular items. Out-of-stocks are your active SKUs without on-hand inventory.
All of these steps speak to the mission-critical nature of e-commerce managed services. Accurate demand planning, regular tracking/fixing stranded listings, and continuous monitoring of warehouse quantities and in-bound shipment quantities are all crucial for success on Amazon or any other marketplace. HINGE COMMERCE has an army of e-commerce experts to help you. Reach out to learn more.