IPI frequently asked questions

This page provides answers to common questions regarding the Inventory Performance Index (IPI).

How is IPI calculated?

IPI score measures how efficient and productive you are in managing your FBA inventory. Multiple factors can influence your IPI score, but it’s important to do the following:

• Maintain a balanced inventory level between sold and in-stock inventory while avoiding excess inventory (overstock).
• Avoid long-term storage fees.
• Fix listing problems.

Your IPI score is designed to represent your overall inventory performance. When you take actions to improve your inventory efficiency, they can take time to result an improved IPI score.

What’s the best way to improve my IPI score, and what should I prioritize first?

While everyone’s business is different, we recommend the following general guidelines to manage your inventory performance:

• Improve your 90-day rolling sell-through by maintaining a sell-through that places you in the green (or “good”) range throughout the year. Go to Inventory age for recommendations. Filter by inventory age ranges or sort the FBA sell-through column to view products with the lowest sell-through. You can improve your sell-through by: 1) improving the balance of your sold and in-stock inventory by increasing your sales or 2) removing inventory that is not selling.
• Reduce your excess (overstock) inventory. By maintaining enough inventory to cover 30 to 60 days of your expected sales, you can avoid overstocking inventory. Go to Manage excess inventory for recommended actions on products that are overstocked.
• Reduce or avoid long-term storage fees by removing inventory before it reaches 365 days. You can set up your account to automatically remove aged inventory.
• Fix listing problems promptly by regularly checking your stranded inventory. Stranded inventory means that you have sellable products in an Amazon fulfilment centre that have no active listing, and therefore cannot be sold. Inventory that incurs fees without the possibility of sales can reduce your IPI score.

Do new ASINs affect my IPI score?

New ASINs in their first 90 days don’t affect your IPI score.

Are removals included in IPI?

Once a removal order request is placed, the inventory no longer affects your IPI score. Remember that actions taken today, such a removal order, will take time to be reflected in your IPI score.

Why is my product showing as excess after being recently sent to a fulfilment centre if I plan to sell it over the next 100 days?

In calculating IPI, we consider an item excess or overstock if it has over 90 days of supply based on the forecasted demand.

How can I improve my sell-through rate?

You can improve your sell-through by increasing sales in relation to your in-stock inventory or removing inventory that is not selling. To improve sales, review your pricing and consider one or more of these options:

• Creating sales
• Improving keywords
• Promoting your listings with advertising such as Sponsored Products

If you ship a lot of inventory to Amazon over a certain period, your sell-through could be affected if your sales don’t keep pace with your shipments.

How is the FBA sell-through rate calculated?

Sell-through rate is updated daily based on the past 90 days of shipped units and average inventory over that same period. We encourage you to try to maintain a sell-through rate in the green (or “good” rating) year round.

Your FBA sell-through rate is your sold and shipped units over the past 90 days divided by the average number of units in stock in our fulfilment centres during that period. We calculate your available average units by taking a snapshot of your inventory levels today and 30, 60, and 90 days ago. For example: Let’s say that you shipped 120 units in the past 90 days and had an average of 80 units available during that period. Your sell-through rate would be 120 divided by 80, which equals 1.5, as shown below.

Average available inventory = (50 + 40 + 150 + 80) / 4 = 80 units

Sell-through rate = 120/80 = 1.5

Why don’t I have an IPI score?

An IPI score is available only if you have a Professional selling plan, inventory at a fulfilment centre, and recent account activity. If you are new to FBA or have not been active in the past 13 weeks, you may not have an IPI score until more data becomes available.

I sell in marketplaces where in-stock rate is an influencing factor. Is in-stock rate included as one of the influencing factors in Canada?

In-stock rate is not included as one of the influencing factors. This rate indicates in general how well you replenish your inventory to meet customer demand. A low in-stock rate does not affect your IPI score unless your most popular products consistently go out of stock and the products that remain in stock have low sales, are aged, or are overstocked.

Why do I have a low sell-through rate when I don’t have any excess inventory?

To be considered excess inventory, a product must have at least one unit over 90 days old or more than 90 days of supply. It’s possible that your inventory is not yet old enough to be considered excess but that you have sent in enough inventory to affect your sell-through rate.