Amazon FBA IPI Questions, Answered Simply

This guide answers common questions about Amazon FBA's Inventory Performance Index (IPI) in 2026. You will learn why IPI matters, how it is calculated, how to evaluate your score, common pitfalls to avoid, and practical steps to improve—whether you are a seller or a buyer seeking reliable products.

Why Amazon FBA Inventory Performance Index (IPI) Matters in 2026

Amazon FBA sellers in 2026 face tighter storage limits and higher fees. Your Inventory Performance Index (IPI) is a score from 0 to 1000 that Amazon uses to gauge how well you manage your FBA inventory. A score above 400 (the typical threshold) often means unlimited storage for standard-size items, while lower scores can trigger quantity limits and additional surcharges.

For buyers and sellers in cross-border e-commerce, a low IPI can lead to stockouts, lost sales, and increased logistics costs. Understanding IPI is not just about avoiding penalties—it's about optimizing your supply chain to align with demand. This guide breaks down the basics, criteria, and practical steps to maintain a healthy IPI in the current marketplace.

Key Components of Your IPI Score

Amazon calculates your IPI based on four main factors. Each factor contributes to the overall score, and none is weighted more than the others in public documentation—but all are critical.

The four components are: excess inventory percentage, sell-through rate, stranded inventory percentage, and in-stock rate. Excess inventory refers to items stored for over 90 days without sales. Sell-through rate is the number of units sold compared to units shipped to Amazon over a 90-day period. Stranded inventory is stock that has a listing issue and cannot be sold. In-stock rate measures how often you have inventory available for your top-selling products.

Typical thresholds: a sell-through rate above 7% is considered healthy, while below 5% may hurt your score. Excess inventory should be under 10% of total units. In-stock rate should be above 80% for popular items. These are indicative figures; Amazon may adjust criteria over time.

How to Evaluate Your IPI: Criteria and Trade-offs

To check your IPI, go to the Inventory Performance dashboard in Seller Central. Your score is updated weekly, but it reflects the past 90 days of activity. A score of 400-500 is generally safe, while above 500 is strong. Below 400 may lead to storage limits.

Evaluating your IPI involves balancing inventory turnover with availability. High sell-through rates are good, but if you keep too little stock, you risk stockouts and lost sales. Conversely, overstocking to avoid stockouts can increase excess inventory and lower your score.

A trade-off exists between maintaining high in-stock rates and avoiding excess. For seasonal products, you might accept a temporarily lower in-stock rate to avoid overstocking after the season. The key is to forecast demand accurately and adjust restock quantities accordingly.

• Monitor your IPI weekly, but focus on trends over 90 days.
• Use Amazon's restock recommendations as a baseline, not a final answer.
• Analyze your inventory turnover ratio per SKU to identify slow movers.
• Consider using third-party tools for deeper analytics.

Common Pitfalls When Managing Your IPI

Many sellers inadvertently lower their IPI by ignoring stranded inventory. A listing error or a missing detail can render your inventory unsellable, dragging down your score. Regularly check the Stranded Inventory report and fix issues immediately.

Another mistake is shipping in too much stock before a holiday or promotion, only to have excess after the event. Overestimating demand is a frequent issue, especially in cross-border e-commerce where lead times are long. Use historical data and conservative projections.

Some sellers also neglect to remove or dispose of unsellable inventory. Keeping inventory that has no sales for 180+ days incurs long-term storage fees and hurts your IPI. Create a removal order or use Amazon's liquidation options to clear slow-moving stock.

• Set aside time weekly to review stranded inventory reports.
• Use the Sell-by date feature to prioritize older stock.
• Avoid panic restocking; use reorder point formulas.
• For slow movers, consider creating a removal order before the next IPI evaluation.

Practical Recommendations and Next Steps

To maintain a healthy IPI, implement a routine: check your IPI dashboard every Monday, review excess reports monthly, and run a demand forecast every quarter. Use Amazon's FBA Inventory tool to see recommended restock quantities, but adjust based on your actual sales trends.

If your IPI falls below 400, take immediate action: create a removal order for excess inventory older than 90 days, fix stranded listings, and increase sell-through by running promotions or lowering prices. Within 2-4 weeks, you should see improvement, though Amazon may take up to 6 weeks to reflect changes.

For product selection, avoid seasonal items with high volatility unless you have a strong track record. Focus on evergreen products with steady demand. Also, consider using FBA for top sellers and FBM (Fulfillment by Merchant) for slower items to keep your IPI stable.

• Set a calendar reminder to check IPI every Monday.
• Download and review the Excess Inventory report monthly.
• Use Amazon's Restock Inventory tool to plan shipments.
• If you are new to FBA, start with a small number of SKUs to learn the dynamics.
• Keep an eye on Amazon's official policy updates, as thresholds can change.

Key Takeaways

In summary, your Amazon FBA IPI is a critical metric that affects storage limits and fees. By understanding its components and actively managing excess inventory, stranded stock, and sell-through rates, you can maintain a score above 400 and avoid disruptions. Start by checking your current IPI, fixing any issues, and adopting a weekly review routine. Stay informed about policy changes to adapt your strategy.

This article is compiled by kuajing168.cn for reference only. Please refer to the official announcements of each platform for the latest policies and rates.