Amazon IPI Score: Why is it so important to FBA sellers?

The Amazon IPI (Inventory Performance Index) score is important to FBA (Fulfillment by Amazon) sellers because it directly affects their ability to manage inventory effectively and avoid potential fees. The IPI score is a metric introduced by Amazon to measure a seller’s inventory performance based on factors such as excess inventory, sell-through rates, stranded inventory and in-stock rate.  

The IPI score is essential in determining how your business is performing by how well you manage inventory levels, sales momentum, and overall product listing quality. 

Here are a few reasons why the IPI score is crucial to FBA sellers: 

1. Storage Limits: Amazon sets storage limits for FBA sellers based on their IPI scores. A higher IPI score usually results in higher storage limits, allowing sellers to store more inventory in Amazon’s fulfillment centers. On the other hand, a low IPI score may result in storage limits being imposed, restricting the amount of inventory a seller can send to Amazon. An IPI score below 400 is the threshold where Amazon starts to impose limits on storage.  
2. Avoiding Long-Term Storage Fees: Amazon charges long-term storage fees for inventory that remains unsold in their fulfillment centers for an extended period. The IPI score plays a role in determining whether sellers will incur these fees. A higher IPI score indicates better inventory management and reduces the likelihood of incurring long-term storage fees. Inventory aging beyond 90 days will negatively impact your IPI score.  
3. Inventory Performance Notifications: Amazon provides sellers with Inventory Performance Notifications to keep them informed about their IPI scores and any necessary improvements. Sellers with low IPI scores may receive alerts and recommendations to optimize their inventory management practices, preventing potential issues. Performance is generally calculated quarterly with notifications being sent out six weeks prior to the end of the quarter to allow sellers enough time to address their issues.  
4. Buy Box Eligibility: The Buy Box is a highly sought-after placement on Amazon product detail pages that significantly increases the chances of making a sale. A higher IPI score can improve a seller’s chances of winning the Buy Box. Amazon considers factors like IPI score, seller rating, and fulfillment performance when determining Buy Box eligibility. 

Overall, maintaining a good IPI score is important for FBA sellers to maximize their storage capacity, avoid additional fees, increase visibility through the Buy Box, and receive valuable insights from Amazon for inventory management improvement.