Introduced to streamline inventory management and ensure efficient usage of Amazon’s fulfillment network, the Amazon IPI score reflects a seller’s ability to optimize storage, reduce costs, and maintain high fulfillment standards.

For sellers operating in a highly competitive environment, maintaining a strong Amazon inventory performance index is the standard. It’s vital.  

What is the Inventory Performance Index Score?

The Amazon Inventory Performance Index (IPI) Score is a critical metric that measures how effectively sellers manage their FBA (Fulfillment by Amazon) inventory. 

This score, ranging from 0 to 1,000, evaluates key aspects of inventory health, such as excess inventory levels, sell-through rates, and stranded inventory.

A score of 400 is the current threshold, meaning sellers need to achieve at least this value to avoid storage capacity restrictions. 

Falling below this threshold can limit your ability to send inventory to Amazon warehouses, impacting sales potential during peak seasons.  

Benefits of the IPI Score for Amazon Sellers

The Amazon IPI score provides several benefits for sellers, making it an essential component of successful FBA operations. 

A high IPI score can lead to better access to storage capacity, allowing you to stock a wider range of products and prepare adequately for high-demand periods. 

Efficient inventory management minimizes excess storage fees and prevents financial losses due to unsold or stranded items. 

Additionally, Amazon uses the Amazon performance rating to allocate storage resources effectively, ensuring that high-performing sellers are rewarded with the flexibility needed to scale their businesses. 

Sellers with strong IPI scores also gain a competitive edge, as they can maintain higher inventory levels without restrictions, providing better fulfillment rates and customer satisfaction. 

What Impacts Your Amazon IPI Score?

Several factors directly affect the Amazon İPİ score: 

1. Excess Inventory: Overstocked items that remain unsold for extended periods can lower your score. Managing inventory levels to match demand is important. 
2. Stranded Inventory: Items that are not active due to listing issues or other errors negatively impact the IPI score. Regularly addressing these problems is necessary. 
3. Sell-Through Rates: The speed at which inventory sellers within a specified time frame is a critical determinant. Faster sell-through rates indicate efficient inventory turnover. 
4. In-Stock Inventory: Ensuring that your top-performing products are consistently available prevents lost sales and improves your IPI score. 
5. Aging Inventory: Older inventory that sits idle for months can lower your score. Regularly clearing out aging stock is important.

How Does the IPI Score Impact Amazon Sellers?

The IPI score has far-reaching implications for sellers. A score below 400 results in storage limitations, reducing the quantity of inventory that can be sent to Amazon warehouses. This can significantly impact sellers during peak seasons, such as holidays, when demand surges and inventory flexibility is important. 

Moreover, a low IPI score leads to increased storage fees for excess inventory, cutting into profit margins. Sellers may also experience delays in fulfilling orders due to limited inventory levels, affecting customer satisfaction and overall business reputation. 

On the other hand, a high IPI score offers flexibility, allowing sellers to maintain optimal inventory levels and capitalize on market opportunities without constraints. It also reduces the financial burden of storage fees leading to better overall profitability. 

How to Improve Your IPI Score Step-by-Step

Use Amazon’s tools to track product performance and adjust pricing or promotions to boost sales velocity. 

Regularly review inventory reports to identify and resolve listing issues. Correct inactive listings promptly to make products available for purchase. 

Avoid overstocking by analyzing sales trends and forecasting demand accurately. Use the IPI score calculator to simulate inventory adjustments. 

Offer discounts, run clearance sales, or bundle slow-moving items to reduce long-term storage costs and improve sell-through rates. 

Focus on restocking high-performing items to maintain consistent sales while avoiding overloading your storage with low-demand products. 

Use reports to gain insights into excess and aging inventory, stranded items, and overall performance metrics.

Amazon IPI Score FAQ

How to Check Amazon’s IPI score?

To check your IPI score, log in to Amazon Seller Central and head to the Inventory Performance section under the Performance tab. This dashboard provides an overview of your current IPI score, along with insights into factors affecting it. Sellers can use this information to identify areas for improvement and take corrective action promptly. 

What is a Good IPI Score on Amazon?

A good IPI score is generally above 400, as this is the threshold to avoid storage limitations. However, a score of 600 or higher is considered excellent, providing sellers with greater flexibility and reduced storage fees. 

Maintaining a strong score ensures smooth operations and better inventory management. 

What Happens When Your IPI Score Goes Below the Threshold

If your IPI score falls under 400, Amazon imposes storage limitations, restricting the amount of inventory you can send to its fulfillment centers. 

This can lead to stockouts, missed sales opportunities, and increased storage fees for excess inventory. 

Sellers need to act quickly to identify and address issues impacting their scores to avoid these penalties.