I believe that everyone is familiar with Amazon IPI. Today we will introduce the inventory performance index IPI in detail. The article is quite long and the catalog is organized as follows:

●What is Amazon IPI?

●What are the factors affecting IPI?

●How to improve IPI score?

1. What is Amazon IPI?

IPI is an inventory performance indicator, the English full name is "Inventory Performance Index", which is Amazon's score for evaluating sellers' inventory management.

IPI is a numerical indicator to measure the overall status by collecting the sales, inventory and cost data of the seller's store in the past 90 days. In fact, it is an indicator of your inventory turnover efficiency. The higher the score, the better the performance performance.

The score is between 0 and 1000, and Amazon previously announced that it will increase the threshold of IPI to 400 from January 1, 2020, and for sellers who do not meet the threshold, the number of FBA inventory will be limited.

2. What are the factors that affect IPI?

1. Percentage of redundant inventory

At least one of the items in stock has been in storage for more than 90 days, and no action is taken (such as lowering prices to increase sales or removing redundant items); or the item is available for more than 90 days. Reducing the number of redundant items will directly improve your inventory performance metrics. Please note that in the management of redundant product pages, there is a product setting, you can set the product "purchase cost"/"capital cost"/"recovery rate" to help Amazon judge whether your product is redundant.

2. FBA sell-through rate

Sell-through rate should be the biggest factor affecting inventory performance. When the goods are constantly turning over in the Amazon warehouse, it means that the products are more popular, which also tests the seller's selection ability, operation ability and supply chain control ability. Amazon-rated stores are also Amazon's favorite stores. After all, they can bring continuous cash flow to the platform.

3. Inventory percentage with no information on sale

Inventory that buyers can’t buy due to listing issues results in lower sales and storage costs. This inventory is called inventory. "Amazon inventory is not available for sale".

4. Logistics inventory rate

Sellers must ensure that their best-selling products are in stock. This is the easiest way to do it. After all, sellers of products that sell well will take the initiative to replenish.

Note: Inventory Performance Indicator (IPI) scores are designed to help monitor the health of your inventory and will continue to factor into FBA inventory limits for next year. So I suggest you, even if your IPI score is higher than 500, you need to do a good job in inventory management in the second half of the year to maintain a high level of IPI score.

3. How to improve the IPI score?

1. Reducing excess inventory helps improve profitability;

2. Increased sell-through rate helps to remove more inventory;

3. Ensure that all inventory in the FBA warehouse is available for purchase;

4. Keeping hot items in sufficient inventory can increase sales

(The content of this article is organized based on online data. For the purpose of conveying more information, it does not mean that QuanExpress agrees with its views and positions)