{"id":7325,"date":"2022-10-05T14:43:52","date_gmt":"2022-10-05T12:43:52","guid":{"rendered":"https:\/\/dragonflip.com\/?p=7325"},"modified":"2025-01-13T13:05:07","modified_gmt":"2025-01-13T12:05:07","slug":"how-to-improve-your-ipi-score-on-amazon","status":"publish","type":"post","link":"https:\/\/dragonflip.com\/en\/how-to-improve-your-ipi-score-on-amazon\/","title":{"rendered":"How to Improve Your IPI Score on Amazon"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7325\" class=\"elementor elementor-7325\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2049528 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2049528\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a4ea1de\" data-id=\"a4ea1de\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-3b09457 elementor-widget elementor-widget-text-editor\" data-id=\"3b09457\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Boasting a high Inventory Performance Index (IPI) score makes your Amazon FBA business more attractive to buyers. It indicates a supply chain with solid foundations and reassures new owners that your business is stable, easy to manage, and an asset worth taking over.<\/span><\/p><p><span style=\"font-weight: 400;\">Business valuation benefits aside, effective Amazon inventory management practices also help cut unnecessary storage costs, improve the bottom line, and avoid account suspensions.<\/span><\/p><p><span style=\"font-weight: 400;\">So, how to improve your IPI score on Amazon?<\/span><\/p><p><span style=\"font-weight: 400;\">This post seeks to answer that question by discussing in detail:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">What is a good IPI score?<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Four factors that affect your IPI score<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Six ways to improve IPI score on Amazon<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How important is IPI?<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">After reading this blog, you\u2019ll be equipped with the necessary information to improve your Amazon inventory performance score and sell your store at a higher value.<\/span><\/p><p><span style=\"font-weight: 400;\">What is an IPI Score, and How Is It Calculated?<\/span><\/p><p><b>Amazon IPI <\/b><b><i>(short for Inventory Performance Index)<\/i><\/b><b> is a metric used to determine how well sellers manage their inventory over time. It ranges from 0-1000<\/b><span style=\"font-weight: 400;\"> and aims to reinforce the following goals:<\/span><\/p><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strict monitoring of the inventory levels to avoid going out of stock<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Abstaining from practices that could incur long-term storage fees<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Focusing on creating high-quality and error-free product listings<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Avoiding excess and aged inventory and maintaining a balance between on-hand and sold inventory<\/span><\/li><\/ol><h2><span style=\"font-weight: 400;\">What is a Good Amazon IPI Score?<\/span><\/h2><p><b>A good Amazon IPI score is anything above 500; the closer to 1000, the better.<\/b><span style=\"font-weight: 400;\"> You can strive to keep your IPI score above 500 by removing unavailable items from your product catalog, reducing excess inventory, and maintaining healthy stock levels for popular SKUs (Stock Keeping Units.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Your IPI score will fall if you have excess inventory sitting in fulfillment centers for more extended periods or delayed shipments due to late product arrivals or other logistical issues.\u00a0<\/span><\/p><p><b>Note: <\/b><i><span style=\"font-weight: 400;\">Amazon limits the number of inventory you can ship and store to the fulfillment center if your IPI score falls below the recommended IPI score threshold (set at 400 for 2022). Furthermore, you\u2019re imposed a $10\/cu. ft. fine on any excess stock. This penalty comes into effect at the end of every quarter.<\/span><\/i><\/p><h2><span style=\"font-weight: 400;\">4 Factors that Affect IPI Score on Amazon<\/span><\/h2><p><span style=\"font-weight: 400;\">There are many factors included in your IPI score which can affect your FBA storage limits. These include:<\/span><\/p><h3><span style=\"font-weight: 400;\">I) In-Stock Rate<\/span><\/h3><p><span style=\"font-weight: 400;\">The first factor is known as the FBA in-stock rate and, as the name implies, calculates how often your products are in stock during the last 30 days. In particular, the inventory performance of high-sale products is given special consideration and is tracked over 60 days.<\/span><\/p><p><span style=\"font-weight: 400;\">Although the in-stock rate doesn\u2019t harm or bring down your IPI score, it has the potential to improve it.<\/span><\/p><p><b>Note: <\/b><i><span style=\"font-weight: 400;\">When selling one-off or limited edition products, mark them as \u201cnon-replenishable\u201d in the Restock Inventory section to safeguard your IPI score.<\/span><\/i><\/p><h3><span style=\"font-weight: 400;\">II) Overstock Inventory<\/span><\/h3><p><span style=\"font-weight: 400;\">Despite operating more than 100 fulfillment centers across the U.S, Amazon doesn\u2019t want sellers to get complacent and would rather have products quickly move in and out of its storage facilities. As a result, inventory that lays idle for prolonged periods is classified as overstock inventory.<\/span><\/p><p><span style=\"font-weight: 400;\">Overstock or excess inventory is triggered when you have more than 90 days\u2019 worth of stock in FBA fulfillment centers based on forecasted demand. Failing to take corrective action negatively impacts your Inventory Performance Index score.<\/span><\/p><p><span style=\"font-weight: 400;\">Amazon\u2019s Seller Central <\/span><b>Manage Excess Inventory<\/b><span style=\"font-weight: 400;\"> tab allows sellers to take necessary action and avoid getting hit by unnecessary storage fees.<\/span><\/p><p><span style=\"font-weight: 400;\">A proactive approach to avoid overstocking is maintaining roughly 30-60 days&#8217; worth of supply.\u00a0<\/span><\/p><p><b>Note: <\/b><i><span style=\"font-weight: 400;\">Overstocked items significantly affect profitability and may subject you to overage fees if your items are older than 365 days.<\/span><\/i><\/p><h3><span style=\"font-weight: 400;\">III) Sell-Through Rate<\/span><\/h3><p><span style=\"font-weight: 400;\">The sell-through rate accounts for the number of units sold during the last 90 days divided by the average number of units available during that period. It exists because Amazon wants to help sellers manage their inventory better and increase sales. This is a win-win situation as sellers escape extra storage costs, and Amazon earns bigger commissions from third-party sales.<\/span><\/p><p><span style=\"font-weight: 400;\">If your sell-through rate falls below a specific limit, Amazon will recommend steps you can take to improve by clicking on the <\/span><b>Improve sell-through <\/b><span style=\"font-weight: 400;\">option.\u00a0<\/span><\/p><h3><span style=\"font-weight: 400;\">IV) Stranded Inventory<\/span><\/h3><p><span style=\"font-weight: 400;\">Stranded inventory refers to items that customers cannot search for or purchase due to listing problems,\u00a0resulting in lost sales, increased storage fees, and reduced IPI scores.<\/span><\/p><p><span style=\"font-weight: 400;\">The stranded inventory percentage bar reveals the amount of inventory that\u2019s disconnected from your listings as compared to the total number of products in Amazon\u2019s warehouses. This metric increases storage space efficiency and allows sellers to reclaim stranded stock.<\/span><\/p><p><span style=\"font-weight: 400;\">The main reasons behind increased stranded inventory include inactive or deleted listings, ASIN restrictions, brand qualification, bulk upload template errors, or expired ASINs. Fortunately, most of these are easy to resolve, as Amazon will suggest the steps you need to take to get your inventory back on its virtual shelves.<\/span><\/p><h2><span style=\"font-weight: 400;\">6 Ways to Improve Your Amazon IPI Score<\/span><\/h2><p><span style=\"font-weight: 400;\">Now that you know the factors that affect your sell-through rate let\u2019s discuss some actionable points you can implement today to improve your Inventory Performance Score on Amazon.<\/span><\/p><h3><span style=\"font-weight: 400;\">I) Improve Your Sell-Through Rate<\/span><\/h3><p><span style=\"font-weight: 400;\">As mentioned earlier, your sell-through rate is the rate at which a specific number of units are sold over 90 days.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">You must balance your sales and inventory figures to stay in the green and maintain a high IPI score. So the first step is to inspect underperforming SKUs and identify the root cause \u2013 perhaps the product is seasonal, or probably the demand has decreased.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Once you identify the problem, work towards better managing your inventory and improving business operations. Possible solutions for improving your sell-through rate include:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve your product listing copy<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Add images<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Incorporate relevant keywords<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Run effective PPC ad campaigns<\/span><\/li><\/ul><h3><span style=\"font-weight: 400;\">II) Reduce Excess Inventory<\/span><\/h3><p><span style=\"font-weight: 400;\">Amazon doesn\u2019t prefer to keep products that don\u2019t sell well <\/span><i><span style=\"font-weight: 400;\">(or sell at all)<\/span><\/i><span style=\"font-weight: 400;\"> inside its storage facilities because they occupy space that would otherwise go to store high-sale items, resulting in lost revenues.<\/span><\/p><p><span style=\"font-weight: 400;\">Removing excess inventory helps cut down costs and bump up your IPI score. If you suffer from overstocking, consider offering products at high discounts or <\/span><a href=\"https:\/\/sellercentral.amazon.com\/help\/hub\/reference\/external\/GYVCG5Q3BEJ6MLMF\"><span style=\"font-weight: 400;\">liquidating extra FBA inventory<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p><h3><span style=\"font-weight: 400;\">III) Avoid Long-Term Storage Fees<\/span><\/h3><p><span style=\"font-weight: 400;\">Sellers whose inventory sits inside fulfillment centers for more than 365 days are liable to pay long-term storage fees.<\/span><\/p><p><span style=\"font-weight: 400;\">In addition to the standard monthly storage fees, such sellers must pay $0.83 per cubic foot\u2014the value can increase or decrease depending on the product tier size and the time of year.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Amazon will notify you timely if your inventory is about to be classified as long-term. Possible solutions include inventory liquidation <\/span><i><span style=\"font-weight: 400;\">(similar to the previous point)<\/span><\/i><span style=\"font-weight: 400;\"> or shifting it to a third-party fulfillment center <\/span><i><span style=\"font-weight: 400;\">(only if it\u2019s cheaper than paying Amazon long-term storage costs)<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/p><p><b>Note: <\/b><i><span style=\"font-weight: 400;\">Q4 is extremely busy for fulfillment centers because of the holiday season. During this time, Amazon will charge higher fees than usual<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/p><h3><span style=\"font-weight: 400;\">IV) Promptly Fix Listing Issues<\/span><\/h3><p><span style=\"font-weight: 400;\">Fixing pending product listing issues can significantly improve your IPI score.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Listing issues such as returns, unnecessarily high fulfillment fees, out-of-stock, and stranded inventory can cause discrepancies. To maintain and improve your IPI, you should fix any issue using the Amazon Seller Central<\/span><b> Manage Inventory Health Tool<\/b><span style=\"font-weight: 400;\"> to spot problems and their solutions early on.<\/span><\/p><h3><span style=\"font-weight: 400;\">V) Prevent Stranded Inventory<\/span><\/h3><p><span style=\"font-weight: 400;\">Stranded inventory is problematic because specific items within Amazon\u2019s warehouse aren\u2019t connected to an active listing and incur a monthly storage fee. Such products exist but aren\u2019t available for purchase &#8211; hence the name stranded.<\/span><\/p><p><span style=\"font-weight: 400;\">Amazon alerts sellers if an SKU is stranded and recommends swift action.<\/span><\/p><p><span style=\"font-weight: 400;\">Prevent your IPI from dropping due to this issue by creating a new listing for the product, a removal order, or simply scheduling an auto removal if you\u2019re unsure of your next step or need more time to move the inventory elsewhere.<\/span><\/p><h3><span style=\"font-weight: 400;\">VI) Avoid Going Out of Stock<\/span><\/h3><p><span style=\"font-weight: 400;\">Going out of stock <\/span><i><span style=\"font-weight: 400;\">(OOS)<\/span><\/i><span style=\"font-weight: 400;\"> is one issue sellers should try their best to avoid due to its harmful effects.<\/span><\/p><p><span style=\"font-weight: 400;\">Not having enough inventory to meet demand impacts both your revenue and your IPI <\/span><i><span style=\"font-weight: 400;\">(and eventually your restock limits)<\/span><\/i><span style=\"font-weight: 400;\"> and, in general, limits ranking efforts as Amazon prefers to promote listings that are consistently in stock and available for buyers.<\/span><\/p><p><span style=\"font-weight: 400;\">Prevent OOS situations by studying demand trends and ordering your inventory accordingly.<\/span><\/p><p><span style=\"font-weight: 400;\">However, if you\u2019re currently low on stock and are waiting for the next shipment to arrive, try slowing down your sales. You can do this by increasing the listing price, but don\u2019t increase it too much, or it can reduce conversions.<\/span><\/p><p><span style=\"font-weight: 400;\">This strategy will buy you enough time until the next inventory batch arrives while retaining sales. It may lower your revenue but will save you from further complications in the long run.<\/span><\/p><h2><span style=\"font-weight: 400;\">How Important is IPI on Amazon?<\/span><\/h2><p><span style=\"font-weight: 400;\">Your FBA IPI score is a crucial business health metric and a way to measure the strength of your business.\u00a0It reflects how well you manage inventory levels, your sales velocity, and overall product listing quality.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Proper inventory management skills also contribute to reduced storage fees, inventory costs, and faster sales velocity, resulting in increased profitability and business valuation.<\/span><\/p><p><span style=\"font-weight: 400;\">If an IPI score falls below the acceptable threshold, buyers will attribute it to inventory mismanagement, reducing the number of offers you receive. \u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Implement the steps mentioned previously to sell your FBA store at the highest possible price.<\/span><\/p><h2><span style=\"font-weight: 400;\">Improving IPI Score on Amazon \u2013 FAQs<\/span><\/h2><p><span style=\"font-weight: 400;\">We\u2019ve gone through the basics. Now, let\u2019s answer some commonly asked questions regarding Amazon\u2019s IPI score.<\/span><\/p><h3><span style=\"font-weight: 400;\">Does Closing a Listing Helps IPI?<\/span><\/h3><p><span style=\"font-weight: 400;\">Closing listings or marking your SKUs as non-replenishable won\u2019t affect your IPI. Amazon no longer considers those ASINs as an in-stock metric. The sell-through rate is a significant factor that drives IPI. If you have underperforming products, removing those ASINs from your Amazon seller central dashboard is the best decision.<\/span><\/p><p><span style=\"font-weight: 400;\">But be careful; abruptly closing listings can cause remaining inventory to be stranded. Instead, eliminate such items by liquidating them or offering them at heavily discounted prices.<\/span><\/p><h3><span style=\"font-weight: 400;\">How Often Does IPI Score Update?<\/span><\/h3><p><b>The four subcategories of the IPI score are updated daily, while your overall IPI score is automatically updated weekly<\/b><span style=\"font-weight: 400;\">. Amazon also reviews your inventory performance every three months, at the start of each quarter and approximately six weeks before the quarter ends, to decide your potential storage limits.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The eComm giant sends sellers a notification if they have an IPI score below 400. After that, they have an extended grace period of six weeks to improve their score before the quarter ends and avoid inventory limits.<\/span><\/p><p><span style=\"font-weight: 400;\">If you raise your IPI score to acceptable levels, you&#8217;ll have unlimited storage space for each storage type <\/span><i><span style=\"font-weight: 400;\">(standard-size, oversize, footwear, apparel, aerosol, flammable).<\/span><\/i><\/p><h3><span style=\"font-weight: 400;\">What is a Bad IPI Score on Amazon?<\/span><\/h3><p><b>A score below 400 is considered below average as it limits your storage space and brings about overage fees<\/b><span style=\"font-weight: 400;\">. Furthermore, Amazon will restrict the amount of inventory you can send and charge you higher if there is excess inventory in their facilities.<\/span><\/p><h3><span style=\"font-weight: 400;\">How Do I Find My IPI Score on Amazon?<\/span><\/h3><p><span style=\"font-weight: 400;\">There are two ways to find out your IPI score on Amazon. The first is to look for it right on your Seller Central homepage.\u00a0<\/span><\/p><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Log in to your Seller Central.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Looking at the top right corner, you will see \u201cIPI\u201d mentioned next to the \u201cTotal Balance\u201d box.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">When you hover on the dropdown, you can see your score for each marketplace.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Click on the hyperlinked number, which will take you to your Inventory Performance Dashboard to view further details.<\/span><\/li><\/ol><p><span style=\"font-weight: 400;\">The second option is to navigate to the Inventory performance dashboard. It is a feature within Amazon Seller Central that allows sellers to track and provide insights into your Inventory Health.\u00a0<\/span><\/p><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Log in to Amazon Seller Central.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">From the homepage, select the \u201cInventory\u201d Tab on the navigation bar at the top of the page or scroll right to the bottom and find the \u201cInventory\u201d heading from the List.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the dropdown menu, click on \u201cDashboard\u201d under the \u201cFulfillment by Amazon (FBA)\u201d heading, which will open your FBA dashboard.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">On your FBA Dashboard, hover over the \u201cInventory\u201d tab.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Select \u201cInventory Performance\u201d from the dropdown menu and head to your Inventory performance dashboard.<\/span><\/li><\/ol><p><span style=\"font-weight: 400;\">When assessing inventory metrics on this page, it becomes easier to spot any bottlenecks or need for adjustments in business practices, such as reducing excess inventory or adjusting settings to meet the IPI score threshold.<\/span><\/p><h2><span style=\"font-weight: 400;\">Conclusion<\/span><\/h2><p><span style=\"font-weight: 400;\">This all-inclusive IPI score guide discussed how Amazon FBA business sellers could improve their IPI score and the importance of maintaining a healthy seller central account.<\/span><\/p><p><span style=\"font-weight: 400;\">Put the knowledge you gained from this blog into practice and <\/span><a href=\"https:\/\/dragonflip.com\/en\/verkaeuferberatung\/\"><span style=\"font-weight: 400;\">work alongside a reliable Amazon business broker<\/span><\/a><span style=\"font-weight: 400;\"> to sell your store at the right price!<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a91a8c2 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a91a8c2\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a620144\" data-id=\"a620144\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap\">\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A high Inventory Performance Index (IPI) score is a key indicator of a healthy Amazon FBA business. Learn how to boost your IPI score in this comprehensive guide. <\/p>\n","protected":false},"author":13,"featured_media":7328,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-7325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-english-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Improve Your IPI Score on Amazon - Dragonflip | Buy and Sell an Online Business<\/title>\n<meta name=\"description\" content=\"A high Inventory Performance Index (IPI) score is a key indicator of a healthy Amazon FBA business. 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