Understanding the IPI Score on Amazon

If you are an Amazon seller, then you must be aware of how critical your inventory health is for the success of your business. One essential metric that you need to keep an eye on is your Inventory Performance Index (IPI) score. The IPI score is a measure of your inventory efficiency and is a crucial factor in determining your eligibility for FBA. In this article, we will dive deep into what the IPI score is, why it matters, how to check it, tips to improve it, and more.

What is the IPI Score and Why Does It Matter on Amazon?

The IPI score is a metric that measures your inventory performance based on various factors such as excess inventory, out-of-stock items, and stranded inventory. Amazon calculates your IPI score every quarter on a scale of 0 to 1000. The higher your IPI score, the better your inventory health, and the more likely you are to get buy box visibility, access to storage capacity, and fast and cheap shipping rates from Amazon.

The IPI score is essential because it can influence your eligibility for FBA and Amazon’s long-term storage fees. If your IPI score falls below 350, you may be subject to stricter storage limits, higher fees, or even suspension of FBA. Furthermore, if your IPI score is below 350 for two consecutive quarters, you may not be allowed to send new ASINs to FBA until your score improves.

One way to improve your IPI score is to regularly monitor your inventory levels and adjust them accordingly. This means keeping track of your sales velocity and ensuring that you have enough stock to meet demand without overstocking. You can also use Amazon’s inventory management tools to help you optimize your inventory levels and reduce excess inventory.

Another factor that can impact your IPI score is the quality of your listings. If your listings are incomplete, inaccurate, or have low customer engagement, it can lead to higher rates of returns and stranded inventory. To improve your IPI score, make sure your listings are complete, accurate, and optimized for search. This can help you attract more customers, reduce returns, and improve your overall inventory health.

How to Check Your IPI Score on Amazon: A Step-by-Step Guide

Checking your IPI score on Amazon is straightforward. All you have to do is follow these simple steps:

1. Go to your Amazon Seller Central account and click on the Inventory Planning Dashboard.
2. Scroll down to the “IPI Score” section, and you will see your current IPI score, storage utilization, and suggested actions to improve your score.
3. Click on the “View Details” link to get more detailed information about your IPI score factors, including excess inventory, sell-through rate, stranded inventory, and out-of-stock rate.

Remember, you can only check your IPI score during the active scoring period, which is usually the 15th day of the last month of the quarter to the 14th day of the first month of the next quarter.

It is important to note that your IPI score is not the only metric that Amazon uses to evaluate your performance as a seller. Other metrics, such as your order defect rate, late shipment rate, and cancellation rate, also play a significant role in determining your overall performance. Therefore, it is crucial to monitor and improve all of these metrics to maintain a healthy selling account on Amazon.

If you find that your IPI score is low, there are several steps you can take to improve it. These include reducing excess inventory, improving your sell-through rate, resolving stranded inventory, and maintaining a healthy stock level. By taking these actions, you can not only improve your IPI score but also enhance your overall performance as an Amazon seller.

Tips to Improve Your IPI Score on Amazon and Boost Your Sales

Here are some practical tips to help you improve your IPI score and boost your sales on Amazon:

• Reduce excess inventory: Keep only the right amount of inventory in stock to meet customer demand and avoid long-term storage fees.
• Increase sell-through rate: Improve your product listings, offer competitive pricing, and promote your products to increase sales velocity and reduce excess inventory.
• Reduce stranded inventory: Regularly reconcile your inventory and check for issues such as invalid listings, duplicate listings, or incorrect pricing and resolve them promptly.
• Improve shipping performance: Make sure you meet Amazon’s delivery performance standards, including fast and reliable shipping and accurate delivery estimates.

Another important factor to consider when trying to improve your IPI score on Amazon is to maintain a good relationship with your customers. This can be achieved by providing excellent customer service, responding promptly to customer inquiries and complaints, and addressing any issues or concerns they may have. By building a positive reputation with your customers, you can increase customer loyalty and encourage repeat purchases, which can ultimately lead to higher sales and a better IPI score.

Common Mistakes That Can Hurt Your IPI Score on Amazon

Here are some common mistakes to avoid that can hurt your IPI score:

• Ignoring excess inventory: Failure to manage your inventory levels can lead to excess inventory, which can increase storage fees and negatively impact your IPI score.
• Ignoring stranded inventory: Failure to resolve stranded inventory issues such as invalid listings or incorrect pricing can lead to lower IPI scores.
• Poor shipping performance: Late shipments, canceled orders, mishandled items, and other shipping issues can damage your IPI score.

Another common mistake that can hurt your IPI score is failing to maintain accurate product listings. Inaccurate listings can lead to customer complaints, returns, and negative feedback, all of which can negatively impact your IPI score. Make sure to regularly review and update your product listings to ensure they are accurate and up-to-date.

How the IPI Score Impacts Your FBA Inventory and Shipping Performance

If your IPI score is below the required threshold, Amazon may impose stricter storage limits, higher storage fees, or suspension of your FBA privileges. A low IPI score can also lead to poor shipping performance as you may not be able to replenish your inventory fast enough to fulfill customer orders. Additionally, a poor IPI score can result in weaker buy box performance, lower sales, and lower profits.

On the other hand, if your IPI score is high, you may be eligible for benefits such as increased storage limits, lower storage fees, and priority placement in Amazon’s warehouses. This can lead to faster and more efficient fulfillment of customer orders, resulting in higher customer satisfaction and increased sales.

It’s important to note that your IPI score is not only impacted by your inventory levels and sales performance, but also by your ability to manage your inventory effectively. This includes factors such as timely removal of unsellable inventory, accurate product listings, and proper packaging and labeling of your products. By maintaining a high IPI score, you can not only avoid penalties and restrictions, but also improve your overall performance and success on Amazon.

The Relationship Between IPI Score and Long-Term Storage Fees on Amazon

Long-term storage fees are charges that Amazon imposes on FBA sellers for storing inventory in Amazon’s fulfillment centers for more than 365 days. The fees vary based on the size and time duration of storage. A higher IPI score can reduce your long-term storage fees as it reflects better inventory management and reduces excess inventory. On the other hand, a low IPI score can increase your long-term storage fees as it implies poor inventory management and excess inventory.

It is important to note that IPI scores are calculated based on a variety of factors, including inventory levels, sell-through rates, and stranded inventory. Therefore, it is crucial for FBA sellers to regularly monitor their IPI scores and take necessary actions to improve them. This can include optimizing product listings, adjusting pricing strategies, and implementing effective inventory management practices.

In addition to reducing long-term storage fees, maintaining a high IPI score can also lead to other benefits for FBA sellers, such as increased visibility in search results and eligibility for certain promotions and programs. Therefore, it is in the best interest of FBA sellers to prioritize their IPI scores and strive for continuous improvement.

What to Do If Your IPI Score Falls Below the Required Threshold on Amazon

If your IPI score falls below the required threshold, you can take the following actions to improve it:

• Reduce excess inventory and stranded inventory by optimizing your inventory levels and resolving listing issues.
• Increase your sales velocity by improving your product listings, offering competitive prices, and promoting your products.
• Improve your shipping performance by meeting Amazon’s delivery performance standards.
• Monitor your IPI score regularly and take proactive steps to maintain a healthy score.

It is important to note that a low IPI score can also impact your eligibility for certain Amazon programs, such as the FBA New Selection program. If your score falls below the required threshold for these programs, you may not be able to participate until your score improves. Therefore, it is crucial to prioritize maintaining a healthy IPI score to ensure continued access to these valuable programs.

How to Monitor Your IPI Score Over Time and Stay Ahead of the Game

Monitoring your IPI score is essential for maintaining a healthy inventory and staying ahead of the competition. Here are some tips to help you monitor your IPI score:

• Check your IPI score regularly during the active scoring period and take note of the factors that affect your score.
• Use Amazon’s Inventory Planner tool to forecast your inventory demand, optimize your inventory levels, and increase your IPI score.
• Set up alerts and notifications for low IPI scores or other issues that may affect your inventory health.
• Implement best practices for inventory management, shipping performance, and customer service.

It’s important to note that your IPI score can fluctuate based on various factors such as seasonality, changes in demand, and unexpected events like natural disasters. Therefore, it’s crucial to monitor your IPI score regularly and make adjustments to your inventory management strategy accordingly. Additionally, consider seeking guidance from Amazon’s Seller Support team or a third-party consultant to help you optimize your inventory and improve your IPI score.

Expert Insights: Best Practices for Maintaining a Healthy IPI Score on Amazon

As an Amazon seller, you should always strive to maintain a healthy IPI score. Here are some expert insights on best practices for maintaining a healthy IPI score:

• Optimize your inventory levels to reduce excess inventory and avoid long-term storage fees.
• Promote your products and offer competitive pricing to increase your sales velocity and reduce excess inventory.
• Resolve stranded inventory issues promptly to avoid negative impact on your IPI score.
• Meet Amazon’s delivery performance standards and provide excellent customer service to improve your shipping performance and boost your IPI score.

By following these tips and best practices, you can maintain a healthy IPI score, improve your inventory health, and drive your sales on Amazon.