Improving your Amazon IPI score requires a focus on inventory efficiency through the four core pillars defined by Amazon: excess inventory, sell-through rate, stranded inventory, and in-stock inventory. The Inventory Performance Index serves as a benchmark for how effectively a seller manages their FBA stock. By targeting these specific areas, you can maintain a higher score, which helps avoid storage limits and reduces long-term storage fees. A consistent approach to cleaning up your catalog is the most reliable way to ensure your metrics remain within healthy ranges.
What is the Amazon Inventory Performance Index?
The IPI score is a metric that tracks your inventory management performance over time. It ranges from 0 to 1,000, and Amazon uses this number to determine if you are using your FBA storage space effectively. When your score drops below the threshold, you may face storage volume limits or incur higher costs for keeping slow-moving items in their warehouses. Understanding that this score is a reflection of your past three months of activity allows you to make informed decisions about your future shipments.
How can you reduce excess inventory levels?
Excess inventory is one of the most common reasons for a low IPI score. Amazon defines excess inventory as stock that has a high cost of carrying relative to the profit it generates. To manage this, you should review your Inventory Health report regularly in Seller Central. If items are sitting stagnant, you might consider running a promotion or adjusting your pricing to stimulate demand. Clearing out aged inventory frees up space and immediately signals to the algorithm that your account is operating with higher efficiency.
Beyond promotions, you have the option to remove units that are not moving. You can create a removal order for aged items to be sent back to your facility or disposed of entirely. While this incurs a cost, the benefit of raising your IPI score often outweighs the expense of paying long-term storage fees. Focus on your top-performing ASINs and prioritize them when allocating your limited storage space.
Why is the sell-through rate important for your score?
Your sell-through rate measures how many units you have sold over the past 90 days relative to the number of units you have held in inventory. A low sell-through rate suggests that you are overstocking items that the market is not currently demanding. To improve this, you need to align your replenishment strategy with actual sales velocity. For example, if you typically sell 100 units a month, avoid sending in a six-month supply at once.
Tracking your velocity helps you avoid the trap of over-ordering during peak seasons. You can use the FBA Inventory dashboard to monitor your current sales trends. If you notice a particular item is slowing down, consider reducing its replenishment frequency. Keeping your stock levels lean is a fundamental rule for maintaining a healthy sell-through rate throughout the year, especially for seasonal products that have a shelf life.
| Metric Category | Management Strategy | Impact Level |
|---|---|---|
| Excess Inventory | Discounts or Removal | High |
| Sell-through | Optimize Replenishment | High |
| Stranded Inventory | Fix Listing Errors | Medium |
How to handle stranded inventory?
Stranded inventory refers to units in the FBA warehouse that are currently unavailable for purchase on the site. This happens when a listing is closed, incomplete, or suppressed. Because these items are taking up space without generating sales, they drag down your IPI score quickly. You must check the Fix Stranded Inventory page in your dashboard at least once a week to identify these issues immediately.
- Update product details if the listing was suppressed by Amazon.
- Reactivate inactive listings if the price or category settings are incorrect.
- Convert merchant-fulfilled listings back to FBA if the fulfillment method was changed accidentally.
- Remove items that have no associated active listing to clear space.
What is the role of in-stock inventory?
Maintaining in-stock levels for your most popular items ensures you do not lose sales due to stockouts. This metric measures the percentage of time your replenishable products are available for purchase. If you frequently go out of stock, you lose the opportunity to earn revenue, and your IPI score suffers because you are not maximizing the potential of your inventory. Use the Restock Inventory report to plan your shipments based on estimated sales trends.
However, do not mistake in-stock goals for a reason to over-order. The challenge is to find the balance between having enough stock to meet demand and having too much that results in excess inventory. If you are uncertain about demand, start with smaller, more frequent shipments rather than one bulk order. This allows you to observe how the market reacts and adjust your orders without overwhelming your storage capacity.
How Alien Road applies inventory optimization
At Alien Road, our team approaches inventory management by auditing your account data before making any changes. For example, in a typical engagement, we begin by reviewing the FBA Inventory dashboard to identify the specific ASINs contributing to low scores. We categorize products by their sell-through speed and advise on which items should be liquidated and which should be replenished. We focus on consistent monitoring rather than one-time fixes.
- Conducting a weekly audit of the Fix Stranded Inventory page.
- Refining replenishment quantities based on current 90-day sales velocity.
- Identifying long-term storage fee risks early to prevent score erosion.
- Setting up automated reports to track inventory health metrics.
Where to start this week
You should begin by clearing your stranded inventory, as this provides the quickest path to a minor score improvement. Spend 30 minutes in your dashboard identifying items that are inactive and resolve the listing errors. Next, review your excess inventory list and decide which items to discount or remove. By addressing these two areas, you will likely see a positive movement in your IPI score within the next cycle. Remember that consistency is better than a massive, one-time cleanup.
Frequently Asked Questions
How often does the IPI score update?
The IPI score is updated on a rolling basis. While you might see daily changes in some metrics, the overall score is typically recalculated weekly. It reflects your performance over the previous three months, so changes made today may take a short period to manifest in your official score. Patience is required when implementing new inventory strategies.
Does removing inventory hurt my score?
No, removing excess inventory does not hurt your score. In fact, it often helps. By removing slow-moving or stranded items, you improve your overall storage efficiency. Removing units that are clogging your storage space is a standard procedure to ensure your high-velocity products can remain in stock and accessible to customers.
Will a low IPI score stop me from selling?
A low IPI score does not necessarily stop you from selling, but it can limit your storage capacity. If your score falls below the required threshold, Amazon may impose storage volume limits. These limits restrict how much inventory you can send to their facilities, which could affect your ability to scale sales during busy periods.
What is considered a good IPI score?
Amazon generally sets a threshold for what constitutes a healthy score. While this threshold can change based on current capacity and policy, aiming for a score above 400 is a standard target for many sellers. Keeping your score well above the required minimum ensures you avoid unnecessary storage limitations and high-cost fees.
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