Inventory management can make or break sellers. Great stock administration is known to lessen costs, increment benefits, and further develop business development for FBA vendors. Healthy inventory management can also help you receive your product and deliver it to customers faster and more effectively. This is essential for your Amazon business to boom and gets going on the right track.
What Is Amazon IPI?
According to Amazon, the Inventory Performance Index (IPI) measures inventory management over time, including how much your balance inventory levels and sales, solves listing issues that affect yours do not keep inventory available for purchase and keep popular products in stock. Amazon set the first limits for managing inventory as a result of the COVID effects in March this year and is now reintroducing the limits to help manage inventory in peak season. Read more about Amazon IPI at olifantdigital.com.
Why Care About The IPI?
The IPI score is directly related to Amazon’s storage space for FBA sellers in its warehouses. On January 1, 2021, Amazon stated in its Sales Guidelines that it could begin implementing storage limits for professional sellers with an IPI of less than 450 (individual sellers have the same amount of storage. There is a limit that cannot be increased or decreased).
As long as the IPI is not above 450, the seller will have unlimited stock in FBA warehouses. However, if the IPI goes below 450, sellers may receive an email from Amazon six weeks before the end of the quarter informing them of possible storage limits. If the score does not rise above 450 by the end of the quarter, limits will be applied for the next quarter.
Amazon is serious about using its FBA fulfillment centers as fulfillment centers, not long-term storage solutions for FBA vendors. If a seller gets into the habit of sending inventory that doesn’t sell fast, Amazon will find a way to encourage the seller to remove the inventory from their warehouses, regardless of storage limits or storage fees.
Amazon Updates IPI Threshold [2021]
Last year, Amazon changed the Inventory Performance Index “IPI” edge necessity to 500 and presented an ASIN-level amount limit on items at the FBA. This requirement was reversed in early 2021.
Sellers with less than 450 will now be subject to effective inventory limits. The majority of sellers will not be affected by this change and most sellers have less storage space than the previous year, less than 450. According to experts and a reliable PPC agency, a possible increase in COVID-19 cases could hinder Amazon’s ability to quantify inventory. Going forward, according to our experts, the FBA and FBM’s diversified completion strategy is the key to reducing risk in 2021.
How Is IPI Calculated?
Amazon has not specified how the IPI is calculated. For professional sellers who have been selling IPs for a long time, you should see a score below on your sellers’ main homepage. If you do not see your IPI automatically, you may need to extend the widget for inventory planning. The score depends on a size of 0 to 1000. Amazon says in seller emails that most sellers have an IPI of between 400 and 800.
Excessive inventory percentage is the result of carrying too much inventory. It lowers profits due to storage fees and operating costs, so you should make sure that you are regularly tracking your additional inventory percentage to maximize profits.
The FBA’s sales rate calculates the rate at which your units have been sold and shipped in the last 90 days, and divides this number by the average number of centers that meet the number. You can improve sales by creating or adjusting your advertising strategy, creating sales, auditing product details pages, eliminating some of your inventory, or hiring an Amazon agency to take care of these things.
Percentage of Standard Inventory that is not available for purchase due to a listing problem resulting in inventory being without an associated active offer. Amazon offers a “fixed listing” option that goes into detailing the exact reason you’re stuck in inventory and provides you with steps to resolve the issue.
The stock rate in FBA is the percentage of your repayable FBA ASIN remaining in stock for the last 30 days, based on the number of units sold for each SQ in the previous 60 days. Weighs When an ASIN is out of stock, you should flag it to indicate that the ASIN bread filling machine is capable of filling.
On the off chance that you click on the new “Execution” tab on your stock dashboard, you can see a mistake in your score for every one of these four subcategories. The subcategory scores are both shown as scores in digits and as a sliding scale with green, yellow and red zones to indicate whether the score is healthy or in need of improvement.
How to Improve Your IPI?
- Never ignore your IPI! Avoid extra storage fees and better manage your inventory. Monitor your IPI performance weekly.
- Avoid storing slow-moving inventory or too much inventory. This is a balance between not having enough inventory to promote and sell stale inventory.
- Clear your inventory every month. Also, plan for upcoming ups and downs such as the holiday season or increased demand. Review your listing regularly and remove excess inventory to keep it healthy.
- Manage your stock inventory and solve any problems that may cause trouble. Amazon provides 30 days to resolve stuck inventory issues.
- Keep in mind that your actions do not immediately appear in your IPI score. They will show next month.
- Work on your keywords, and refine them, pay attention to your product settings, lower your value if necessary!
Monitoring your inventory performance index helps you manage your inventory levels and stay healthy! An excellent IPI score will help you avoid any potential lost sales. Also, try to follow the recommendations provided by Amazon to get a full IPI score. However, Amazon has updated its feature to help you sell more products and sell more.
