What Is an Amazon IPI Score and Why Is It Important?

Virginia Miller

August 28, 2024

In this article:

Frequently Asked Questions

In the world of selling on Amazon, understanding and optimizing your Amazon IPI Score is crucial for success. This article will delve into the concept of the Amazon IPI Score, its importance, how it is calculated, strategies to improve it, and the consequences of having a low IPI Score.

A Complete Guide to the Amazon Inventory Performance Index (IPI) Score

What is the Amazon IPI Score?

The Amazon Inventory Performance Index (IPI) score is a metric that measures how efficiently sellers manage their inventory. It is displayed as a number between 0 and 1000. The higher your score, the better you are performing when it comes to inventory management best practices.

Why the IPI Score Matters

Your IPI score has a direct impact on your selling privileges and access to programs on Amazon. A higher score can unlock benefits like:

Increased likelihood of winning the Buy Box
Lower long-term storage fees
Eligibility for Amazon Prime
Better visibility in search results

On the other hand, a low IPI score can lead to storage limitations, account suspensions, and other penalties from Amazon.

How the IPI Score is Calculated

Amazon considers four key factors when calculating your IPI score:

Excess inventory - Having too much unsold inventory compared to your sales velocity
Stranded inventory - Inventory that is listed but unavailable for purchase due to errors or fulfillment issues
Sell-through rate - How quickly you sell through your inventory
Age of inventory - How long inventory sits in the Amazon warehouse before being sold

By keeping these metrics optimized, you can maximize your IPI score.

5 Ways to Improve Your IPI Score

Here are some tips to help boost your Amazon IPI score:

1. Set Accurate Replenishment Targets

Use historical sales data and forecasts to determine optimal inventory levels. This prevents overstocking while still meeting customer demand.

2. Review Excess Inventory Regularly

Analyze slow-moving SKUs and consider mark downs, promotions, or removal to increase turnover.

3. Monitor Stranded Inventory Daily

Fix listing errors, resolve fulfillment problems, and process returns quickly to prevent stranded inventory.

4. Analyze Sales Reports Frequently

Identify fast and slow selling items to adjust stock levels and improve inventory age.

5. Leverage Inventory Management Tools

Automate reports, forecasting, and other inventory workflows to efficiently optimize stock levels.

The Impact of IPI Score on Amazon Sellers

Managing your IPI score has never been more critical for Amazon sellers. With increasing competition and rising customer expectations, sellers need to run tight, efficient operations to succeed. An optimized IPI score demonstrates your ability to meet demand and deliver exceptional service - key strengths all top sellers leverage to stand out on Amazon.

Frequently Asked Questions

What is the Amazon IPI score?

The Amazon Inventory Performance Index (IPI) score is a metric between 0-1000 that measures the efficiency of your inventory management processes.

Why is my Amazon IPI score important?

Your IPI score determines your selling privileges and access to programs. A higher score unlocks benefits while a low score can lead to penalties.

What happens if my IPI score is too low?

If your IPI score falls below a threshold, you may face storage limitations, account suspensions, and other restrictions from Amazon.

How often is my Amazon IPI score calculated?

Amazon evaluates your inventory metrics and updates your IPI score on a weekly basis.

What factors influence my IPI score?

Excess inventory, stranded inventory, inventory age, and sell-through rates are the key factors used to calculate your Amazon IPI score.

How can I check my current Amazon IPI score?

Your current IPI score can be found in the Inventory Dashboard in Amazon Seller Central or in performance notifications from Amazon.

What are some tips to improve my Amazon IPI score?

Set accurate replenishment targets, frequently review excess inventory, monitor stranded inventory daily, analyze sales reports, and leverage inventory management tools.

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