E-Commerce Strategies
Amazon's Inventory Performance Index (IPI) directly affects your ability to store and sell products through FBA. Scores below 400 trigger penalties like storage limits and $10 per cubic foot fees. Falling under 350 can block inbound shipments entirely. The good news? Fixing your IPI score is achievable with focused actions.
Here’s what you need to do:
Fix Stranded Inventory: Address inactive listings for a quick 15–25 point boost within 24–48 hours.
Clear Excess Stock: Use removal orders, discounts, or Lightning Deals to improve your score by 15–20 points in a week.
Run Promotions: Target slow-moving products with discounts or Outlet Deals to improve sell-through rates.
Adjust Restock Quantities: Ship smaller, more frequent batches to avoid overstock penalties.
Conduct Inventory Audits: Regularly review stock to maintain healthy metrics and prevent issues.
Use Demand Forecasting: Predict sales to balance stock levels and avoid excess or stockouts.
Maintain In-Stock Rates: Keep top-selling items available to prevent missed sales and score drops.
These steps tackle Amazon’s key IPI metrics - stranded inventory, excess stock, sell-through rate, and in-stock rate. Focus on consistent monitoring and quick fixes to stay above 500 and avoid costly penalties.
Amazon IPI Score Components and Impact Breakdown
Amazon Inventory: 5 Steps to Boost Your IPI Score FAST!
1. Fix Stranded Inventory Right Away
Stranded inventory refers to FBA stock sitting in Amazon's warehouses without an active listing. This means customers can't buy it, but you're still racking up storage fees. Here's the kicker: stranded inventory accounts for about 25% of your total IPI score, making it the quickest way to recover from a low score.
Addressing stranded units can give your IPI a boost of 15 to 25 points, with results showing up in as little as 24 to 48 hours. Dillon Carter, Co-Founder and COO at Aura, explains it well:
"Stranded inventory percentage is the fastest-moving IPI metric. Fix a batch of stranded units and you'll see the needle move on the next weekly update."
Why It Matters for Your IPI Score
Stranded inventory affects your score as much as your sell-through rate but is much easier to fix. Even small improvements can keep your account above the critical 400-point threshold. Falling below that mark could mean hefty overage fees of $10 per cubic foot each month and restrictions on storage. If you're close to that danger zone, this is the first issue you should tackle.
How to Fix It
Check the "Fix Stranded Inventory" page in Seller Central every day. Within a week, you should take one of these steps:
Relist items by resolving pricing or policy issues.
Submit a removal order (costing around $0.50–$1.00 per unit).
Recreate listings to link them back to the original ASIN.
Common problems include pricing flagged by Amazon's automation, suppressed images, or accidental listing deletions. These are usually quick fixes that just require some administrative updates. Once you've handled stranded inventory, you can shift focus to clearing out excess stock.
Why It's a Cost-Effective Strategy
Most of the time, fixing stranded inventory costs you nothing. It simply makes your products available for sale again, avoiding the need for price cuts or additional ad spend. Even if you have to issue removal orders, the costs are small compared to the storage fees and aged inventory surcharges (which can exceed $6.90 per cubic foot after 365 days).
2. Clear Excess Inventory Using Targeted Methods
Excess inventory makes up a hefty 40–45% of your IPI score. Amazon considers stock "excess" when it exceeds a 90-day supply. The longer it sits, the more it drags down your score and racks up storage fees - fees that can double or even triple during Q4 (October through December). Tackling this issue quickly can make a big difference in improving your IPI.
Impact on IPI Score and Time to Implement
Clearing out excess inventory can lead to fast results. For example, using removal orders can increase your IPI by 15–20 points in just one week. Alternatively, offering 20–30% coupon promotions or running Lightning Deals may improve your score by 10–15 points within 2–4 weeks. To focus on the biggest problem areas, use the "Manage Excess Inventory" report in Seller Central. Sort the report by estimated storage costs to identify the most expensive items weighing down your score.
"I had a 420 IPI stuck for months. Sold off all inventory over 180 days old at a loss via lightning deals and coupons. IPI jumped to 490 in two weeks."
FBA Seller, r/FulfillmentByAmazon
Cost-Effectiveness
Removal orders are a cost-effective way to clear inventory, especially when compared to paying months' worth of storage fees. After 271 days, aged inventory surcharges can climb to over $6.90 per cubic foot. If a product is still sellable, running a Lightning Deal or listing it through Amazon Outlet (which is free to set up) can recover more value than liquidation, which typically returns just 5% to 10% of the average selling price. While taking a small loss isn’t ideal, it’s often better than facing steep storage fees and overage charges, especially if your IPI drops below 400.
Once you've dealt with excess inventory, you’ll be ready to focus on increasing sales velocity with targeted promotions.
3. Run Promotions on Slow-Moving Products
Once you've addressed stranded and excess inventory, it's time to focus on increasing sales for slow-moving products with targeted promotions. These promotions directly impact two key metrics that heavily influence your IPI score: excess inventory percentage (which carries about 40–45% weight) and sell-through rate (around 30–35% weight). Combined, these metrics make up roughly 70–80% of your total IPI score. By improving sales velocity, you can reduce the number of units Amazon classifies as "excess" (typically items with over 90 days of supply), leading to measurable improvements in your score.
Impact on IPI Score and Timing
Targeted promotions can increase your IPI score by 10–15 points within 2–4 weeks. While sales may pick up almost immediately, remember that IPI scores update weekly. The excess inventory percentage metric often shows progress within 2–4 weeks, but the sell-through rate usually takes 6–8 weeks to reflect changes fully.
Cost-Effectiveness
Offering a discount of 10–30% can be a smart cost-saving move, often outweighing the expense of rising storage fees. Even a small markdown can help you retain more value compared to removal order fees, which generally range from $0.50 to $1.00 per unit. With this in mind, setting up promotions becomes a practical way to protect your bottom line while boosting sales.
Ease of Execution
Setting up promotions through Seller Central is simple and effective. Here are a few options to consider:
Coupons: Offer 20–30% off to improve search visibility and attract buyers.
Amazon Outlet Deals: Use these for overstock items to clear inventory.
Lightning Deals: Drive rapid sales for a quick inventory turnover.
Pair these strategies with PPC campaigns to further accelerate sales of high-excess products. To stay on top of your efforts, regularly check your "Manage Excess Inventory" report - ideally every Wednesday. Sort the report by storage cost and focus on your top 10 problem ASINs. Apply discounts or increase ad spend on these items to see faster results.
If you're looking for more in-depth assistance, you might want to work with eStore Factory, a consulting agency that specializes in Amazon seller solutions and can help you implement these strategies effectively.
4. Adjust Restock Quantities to Match Demand
Fine-tuning your inventory shipments can directly improve your IPI score. This strategy impacts three major components of the IPI: excess inventory percentage (40–45% weight), sell-through rate (30–35% weight), and in-stock rate (10–15% weight). Together, these factors make up about 80–95% of your total score, making restock adjustments a key step for noticeable improvement. Let’s break down how this approach affects your score, the time it takes to implement, and its overall cost efficiency.
Impact on IPI Score
Swap out large, infrequent shipments for smaller, more frequent ones. Instead of sending 60–90 days' worth of supply at once, aim for 30–45 days. This reduces the risk of Amazon marking your stock as "excess" (items expected to take over 90 days to sell) and helps maintain a healthy sell-through rate. A sell-through rate above 3.0 can significantly boost your score by cutting down on excess inventory.
Time to Implement
Dedicate 15–30 minutes every Thursday to check your Restock Inventory page and prepare shipments for high-demand ASINs that are close to a 14-day stockout. While improvements in your in-stock rate can be seen in 2–4 weeks, sell-through rate changes take longer - typically 6–8 weeks due to Amazon’s 90-day rolling window. With consistent effort, many sellers stabilize their IPI above 500 within 6–9 weeks.
Cost-Effectiveness
Optimizing your shipments not only boosts your IPI score but also helps you save on storage fees. Falling below a 400 IPI score triggers monthly storage costs of $10 per cubic foot and long-term surcharges exceeding $6.90 per cubic foot for items stored over 365 days. Although sending more frequent shipments may slightly increase inbound shipping costs, these expenses are far lower than the penalties for excess storage or removal fees, which can range from $0.50 to $1.00 per unit.
Ease of Execution
Amazon’s Restock Inventory tool simplifies the process of aligning shipments with actual sales trends. Use it weekly to review suggested restock dates and mark discontinued products as "non-replenishable" to safeguard your in-stock rate. Also, adjust reorder calculations to account for seasonal shifts, avoiding overstock during slower periods. This method ties seamlessly into earlier strategies to maintain balanced inventory levels.
"The reason you have excess inventory is that you sent too much. Adjust your restock approach."
5. Conduct Regular Inventory Audits
Regular inventory audits are more than just a routine check - they’re a proactive way to safeguard your Inventory Performance Index (IPI) score. These audits can significantly reduce penalties tied to stranded (25%) and excess inventory (30%) while improving sell-through rates and keeping stock levels healthy. Catching issues early not only saves money but also helps maintain a score above 400.
Impact on IPI Score
Fixing stranded and excess inventory is one thing, but regular audits ensure those improvements stick. Stranded inventory, when caught early, can boost your IPI by 15 to 25 points within just 24 to 48 hours - making it one of the quickest ways to recover a declining score. Audits also help you spot excess inventory (anything with over 90 days of supply) before Amazon flags it, protecting your score from taking a hit. Plus, by regularly reviewing ASINs, you can maintain a sell-through rate between 3.0 and 7.0, which is key to a strong performance.
Time to Implement
A solid audit schedule doesn’t have to be time-consuming. Set aside:
25–30 minutes weekly for quick checks
30 minutes monthly for a deeper dive
1 hour quarterly for a comprehensive review
Additionally, spend just 2 minutes daily checking for stranded inventory to catch quick fixes that can make a big difference.
Cost-Effectiveness
Audits are a cost-efficient way to avoid expensive mistakes. Sellers with an IPI score under 400 face hefty fees, including monthly surcharges and long-term storage penalties. For inventory sitting over 365 days, surcharges can climb to $6.90 or more per cubic foot. In contrast, removing problematic stock early costs as little as $0.50 to $1.00 per unit - far cheaper than letting penalties pile up.
"The 400 floor is exactly that, a floor, not a goal. Operating at 401 means every seasonal swing can drop you right back into penalty territory."
Ease of Execution
Amazon makes audits simple with built-in tools like the Inventory Performance Dashboard, Fix Stranded Inventory tool, and Manage Inventory Health report. These resources provide all the insights you need, no extra software required. Start by focusing on the slowest 20% of your catalog - these items often have the greatest impact on excess inventory penalties and sell-through rates.
6. Use Demand Forecasting to Improve Sell-Through
Demand forecasting can have a massive impact on three major Inventory Performance Index (IPI) metrics. By accurately predicting what you’ll sell, you can significantly improve your Excess Inventory Percentage (~30% weight), Sell-through Rate (~25% weight), and In-stock Rate (~20% weight). Combined, that’s about 75% of your total IPI score influenced by this one strategy.
Impact on IPI Score
Forecasting works hand-in-hand with your inventory to boost your IPI score. When you predict demand accurately, you avoid stocking more than 90 days of supply, maintain a sell-through rate between 3.0 and 7.0, and keep in-stock rates high. A good rule of thumb is to aim for 30 to 60 days of expected sales on hand. This balance minimizes overstock while ensuring you’re ready to meet customer demand.
"Forecasted demand beats reactive restocking every time, and a rolling forecasted demand model will catch seasonal swings your gut would miss." - Dillon Carter, Co-Founder, Aura
Time to Implement
Demand forecasting builds on restocking adjustments by aligning your orders with actual sales trends. While you can tweak restock quantities right away, the full impact on your IPI score may take 6 to 8 weeks to reflect because Amazon uses rolling 90-day data. Spend just 10 minutes per week reviewing the Restock Inventory report to align shipments with a 30- to 45-day supply target, and you’ll likely see improvements within two months.
Cost-Effectiveness
Proper forecasting saves you from costly mistakes. For example, it prevents aged inventory and storage fees, which can cost $10 per cubic foot or over $6.90 per cubic foot, respectively. Instead, by maintaining 15 to 45 days of safety stock, you can avoid these fees. And if you need to remove dead stock, it’s far cheaper - just $0.50 to $1.00 per unit. Don’t forget to factor in lead times (manufacturing, freight, customs, and FBA check-in often take 60 to 120 days) to avoid last-minute rush orders or penalties.
Ease of Execution
Amazon’s "View Forecast" tool in the Restock Inventory section makes this process straightforward. It’s included with your Professional selling plan, so there’s no extra cost. The tool provides demand estimates for up to 40 weeks, showing both "Mean" (expected demand) and "Optimistic" (demand expected to be at or lower 90% of the time) levels. To protect your in-stock rate, manually mark SKUs you don’t plan to restock as non-replenishable. By weaving this forecasting method into your current inventory practices, you can stabilize your IPI score even further.
7. Keep In-Stock Rates at Recommended Levels
While you're tackling stranded and excess inventory, don’t overlook the importance of keeping your in-stock rates high. This metric plays a big role in maintaining your IPI score, accounting for about 20% of the total score. It measures how consistently your replenishable products are available over the past 30 days, factoring in sales from the previous 60 days. And here's the catch: stockouts on your best-sellers hurt far more than running out of items that barely move.
Impact on IPI Score
Keeping your in-stock rate above 90% not only protects your IPI score but also ensures steady revenue. Running out of top-selling items leads to missed opportunities, which Amazon tracks as "Estimated FBA lost sales", and it directly lowers your IPI. The good news? Restocking those out-of-stock items can improve your IPI by 5 to 10 points within 2 to 3 weeks. To see the biggest improvement, focus on your top 20% of best-selling ASINs - these have the most significant influence on your score.
"Too little inventory on your top sellers is just as damaging to IPI as too much dead stock elsewhere. Both signal that you're mismanaging supply against demand." - Dillon Carter, Co-Founder, Aura
Time to Implement
The sooner you start restocking, the better. However, it takes 2 to 4 weeks for changes to reflect in your IPI score because Amazon uses a 30-day look-back window for in-stock rates and a 60-day window for sales weighting. Spend 15–30 minutes each week reviewing your Inventory Performance dashboard, particularly the "Restock today" button, to identify SKUs with supply dipping below your lead time. If you have seasonal or discontinued items, mark them as non-replenishable using the "Hide recommendation" option - a quick 2-minute fix that prevents them from dragging down your in-stock rate.
Cost-Effectiveness
Staying stocked up can save you from a costly cycle: stockouts lower your organic ranking, which reduces sales and further impacts your IPI. While frequent shipments might slightly increase inbound costs, they’re worth it to avoid falling below the 400 IPI threshold and incurring hefty storage overage fees - $10 per cubic foot per month. To stay ahead, calculate reorder points by combining your sales velocity with lead times. For example, if you sell one unit per week and your lead time is seven weeks, reorder when you have 7 to 8 units left.
Ease of Execution
Amazon provides tools and full-service account management to make stock management easier. The Restock Inventory report, included with your Professional selling plan, highlights SKUs needing attention. For discontinued products, close the listings before they hit zero stock. Why? An active listing with zero stock counts as a stockout, but a closed listing doesn’t. Simple actions like these can go a long way in keeping your IPI score healthy.
Conclusion
Taking consistent steps can significantly improve your IPI score. The strategies outlined here directly address Amazon's key IPI metrics. Focus on fixing stranded listings, clearing out excess inventory with targeted liquidation or removal orders, running promotions for slow-moving items, adjusting restock quantities to align with actual demand, and conducting weekly audits. Using demand forecasting can help you stay ahead of trends, while maintaining strong in-stock levels for replenishable products ensures steady performance.
Regular monitoring is essential to avoid costly penalties. With weekly updates, even small improvements can lead to noticeable progress over time. Remember, an IPI score below 400 triggers storage limits and penalties that can last for weeks if not resolved. As Dillon Carter, Co-Founder and COO at Aura, advises:
"The 400 floor is exactly that, a floor, not a goal. Operating at 401 means every seasonal swing can drop you right back into penalty territory."
To safeguard your business, aim for a score of 550 or higher. This creates a buffer against Q4 inventory planning for demand spikes or sudden threshold adjustments.
Dedicate just 30 minutes each week to review your Inventory Performance Dashboard and Capacity Monitor. This simple routine can help you anticipate and prevent costly issues. Keeping your IPI in the healthy range of 500–800 unlocks the full advantages of FBA. Sellers with scores above 800 may even qualify for unlimited storage during peak times like Prime Day.
If managing your inventory feels overwhelming or you're struggling to escape penalty territory, eStore Factory can step in to help. Our team specializes in Amazon account management, inventory optimization, and FBA strategies to keep your IPI score on track while you focus on growing your business. From pricing adjustments to restock planning, we handle the complexities so you don’t have to. Visit estorefactory.com to see how we can support your success on Amazon.
FAQs
How do I know which IPI metric is hurting me most?
To figure out which IPI metric is affecting your performance the most, take a close look at factors like excess inventory, sell-through rate, stranded inventory, and stock availability. Pay special attention to metrics such as aged inventory or stockouts of your top-selling items, as these tend to have the biggest influence on your overall score.
Make it a habit to monitor these metrics regularly. Start by addressing stranded inventory - it usually offers the fastest improvement. Next, focus on boosting sell-through rates and cutting down on excess stock to see quicker progress.
What should I do first if my IPI drops below 400?
If your IPI score falls below 400, your first priority should be dealing with stranded inventory. Why? This step can have a fast effect, often boosting your score in as little as 48 hours. Plus, resolving stranded inventory improves how efficiently you manage your stock overall, which plays a big role in increasing your IPI score.
How can I restock without creating excess inventory?
To keep your restocking process smooth and avoid piling up excess inventory, start with accurate demand forecasting. This helps you predict what you'll need and when. Next, establish optimal reorder points - these are the stock levels that trigger a restock, ensuring you don’t run out or over-order. Don’t forget to calculate safety stock, which acts as a buffer against unexpected demand or delays.
Leverage automated inventory management tools to track stock levels in real-time. These tools can save you time and reduce errors. Additionally, keep an eye on your suppliers. Regularly review their performance and lead times to ensure your replenishment aligns with actual demand. By doing this, you’ll restock only when it’s necessary, keeping overstock to a minimum.
