Inventory Performance Index—IPI

What is IPI?

IPI (Inventory Performance Index) refers to the inventory performance index, which is an inventory performance standard set by Amazon to better utilize warehouse space and encourage sellers to improve inventory management. It is mainly based on three criteria: inventory rate, excess inventory percentage, and stranded inventory percentage. The index is 1-1000 points and was implemented on July 1, 2018.

What are the key dates for IPI assessments?

1. IPI assessment starts from mid-quarter, which is around November 19, February 19, May 19 and August 19. If your IPI score is below 350 now, you will receive the first warning notice.

2. The IPI evaluation will continue until the end of the quarter, which is the last day of December, March, June and September. If your IPI score is still below 350 on the last day of the quarter, you will receive an inventory restriction notification.

3. Inventory restrictions will be implemented on the second day after the announcement, which is the first day of the new quarter (January 1, April 1, July 1 and October 1), and the restrictions will not be lifted until the next quarter, which is 3 months later.

4. Once you receive an inventory warning notification, you will have about 6 weeks to resolve the issue. Because the IPI score is calculated over a 90-day period, it is still possible to avoid inventory restrictions if you act quickly.

Regarding IPI, suggestions for sellers:

1. Clean up the category catalog. In order to clean up some poorly performing or slow-selling products and help improve the experience provided by sellers, sellers can use some tools to clean up the category catalog that may be expired. For example, you can use the method of low-price clearance, buy product A, and give a high discount on product B, or buy A and get B free. This is the most commonly used, safest and effective method.

2. Prioritize minimizing inventory. If the seller's inventory exceeds the limit, before Amazon calculates the excess fee, the seller can remove the product and remove all the backlog of goods from FBA. For products with high value, they can be moved to a third-party overseas warehouse for relabeling and restart sales.

3. Merge products, merge the backlog of similar products and products with good sales, and clear the inventory for a period of time. It is worth mentioning that at present, merging listings may be warned for illegal operations. If they are not the same type of products, have different attributes, etc., it is not recommended.

4. Determine new inventory limits. Amazon will allocate separate storage space for apparel, standard sizes, and oversized products. If the seller's catalog spans multiple categories, then placing products in separate warehouses for these categories can at least relieve some of the storage pressure for some sellers.

This is all the knowledge about IPI in this issue. If you want to get more information about IPI, please pay attention and we will continue to answer your questions.