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Amazon IPI Score is designed to help sellers visualize their inventory more visually, and it will be used to measure your sales, inventory levels, and expenses to reflect overall inventory performance. Effective January 1, 2022, the Inventory Performance Indicator (IPI) score threshold for Warehousing Restrictions has been adjusted from 450 to 400.
Higher Amazon IPI Score indicates that a seller is managing inventory more efficiently. At the same time, IPI can reflect a seller’s sales volume, helping sellers better plan inventory, forecast demand, and accelerate turnover.
Factors Affecting Amazon IPI Score
There are 4 indicators that affect the IPI score of inventory performance: percentage of redundant inventory, sold-out rate, percentage of inventory without on-sale information, and in-stock rate. The system calculates your Amazon IPI score based on these four metrics.
If the Amazon IPI score is greater than or equal to 400, you can get unlimited inventory;
If the Amazon IPI score is less than 400, the storage capacity will be limited, and the inventory exceeding the limited storage capacity will be charged with storage overage fee on a monthly basis.
IPI Assessment Time
Amazon will assess the seller’s IPI score twice in the 6th week before the end of each quarter and in the last full week of the quarter, and only if the IPI score is greater than or equal to 400 on one of the occasions, the seller will be able to obtain unlimited storage space.
How to Improve Your Amazon IPI Score?
Reduce “Redundant Inventory”
Sellers are advised to promote sales and clear idle stock in two steps, so as to release more storage capacity.
Promote sales
Dealing with inventory backlog and seasonal inventory clearance is an important part of inventory management. Sellers are advised to carry out promotional activities (Outlet Deal), improve keywords, advertisements, customized SKU settings, etc. to increase the flow of merchandise in order to clear inventory.
Clear Idle
Inventory management tools provided by Amazon Logistics (FBA) can be utilized to clear idle inventory in a timely manner.
- Amazon Logistics Bulk Requisition Program
- Remove inventory from Amazon Operations Center
- Abandonment (only unsaleable items are considered for abandonment)
- Automatic Inventory Removal
- Amazon Logistics Removal Order Fee
Increasing the “Sell Rate”
To increase the “Sell Rate”, you can use ads/coupons/spike sales to drive traffic to accelerate inventory turnover or optimize listings to increase conversion rate.
Repairing no-sale information inventory
In the seller’s platform, you can check the products with no selling information and the reasons for it, and according to the business situation, you can fix the products with no selling information by repairing the related ASIN information, removing the inventory, etc. in order to make sure that the inventory is available for purchase.
Controlling Inventory Levels
We know that when the inventory rate is too high, it often means that the inventory turnover days are high and the risk of inventory backlog is high, which can lead to an increase in warehousing costs. When the inventory rate is too low, it generally means that there are problems in the supply chain, out-of-stock issues arise, there are opportunities to sell but not seized, and what should be earned is not earned.
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