Amazon IPI explained: What sellers need to know

Amazon's FBA Inventory Performance Index (IPI) is a critical metric that determines your storage limits and affects your ability to sell effectively. In this guide, you'll learn what IPI is, why it matters in 2026, how to evaluate your score, common pitfalls to avoid, and actionable strategies to improve your IPI and optimize your FBA operations.

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

Amazon's FBA Inventory Performance Index (IPI) is a metric that measures how well you manage your FBA inventory. It affects your storage limits and can impact your ability to ship products to Amazon's fulfillment centers. As of 2026, Amazon continues to use IPI to enforce storage quotas, and sellers with low scores may face overage fees or be blocked from creating new shipments.

For cross-border e-commerce sellers, especially those using FBA, a good IPI score is essential for maintaining smooth operations. A low score can disrupt your supply chain, leading to stockouts or excess inventory, both of which hurt sales and profitability. Understanding IPI is not just about avoiding penalties; it's about optimizing your inventory to maximize sales and minimize costs.

• Storage limits: IPI determines your FBA storage space for standard and oversize items.
• Overage fees: If you exceed your limit, you'll incur additional charges.
• Shipment creation: Sellers with low IPI may be restricted from sending new inventory.
• Long-term health: A good IPI indicates efficient inventory management, which can lead to better buy box placement and seller reputation.

Key Components of the IPI Score

Amazon calculates your IPI score based on four main factors: excess inventory, sell-through rate, stranded inventory, and in-stock rate. As of 2026, these components remain the core of the IPI calculation, though Amazon occasionally adjusts the weighting. Here's what each means:

Excess inventory: The amount of inventory that has been stored for more than 90 days and is unlikely to sell in the near future. High excess inventory drags down your IPI.

Sell-through rate: The number of units sold divided by the average number of units in stock over a given period. A higher sell-through rate indicates better demand and faster sales.

Stranded inventory: Inventory that is listed but not buyable due to listing issues, such as missing images or incorrect pricing. This counts against you because it occupies storage space without generating sales.

In-stock rate: The percentage of time that your popular products are in stock. Consistently being out of stock can hurt your IPI because it suggests you're not managing inventory well.

• Excess inventory threshold: Typically, items with more than 90 days of supply are considered excess.
• Sell-through rate benchmark: Aim for a sell-through rate of at least 8% per month, though this can vary by category.
• Stranded inventory resolution: Regularly check your stranded inventory report and fix listing issues within 24 hours.
• In-stock rate target: For best sellers, maintain a 90%+ in-stock rate to avoid negative impact.

How to Evaluate Your IPI: Criteria and Trade-offs

To evaluate your IPI, log into Seller Central and navigate to the Inventory Performance dashboard. Your score ranges from 0 to 1000, with 400 being the current threshold for unlimited storage (as of 2026). However, a score above 400 doesn't guarantee unlimited storage; it just means you're not restricted. Aim for a score above 500 to have a safety margin.

When evaluating your IPI, consider these trade-offs:

Maintaining high in-stock rates may require safety stock, which can increase storage costs. Balance the cost of holding extra inventory against the risk of stockouts.

Reducing excess inventory might involve discounting or removing products, which can hurt profit margins. Use removal orders or liquidation to clear slow-moving items, but weigh the fees.

Improving sell-through may require better demand forecasting and marketing, which takes time and effort. Invest in tools to predict sales more accurately.

• Check your IPI score weekly to spot trends early.
• Use the 'Inventory Health' report to identify underperformers.
• Set a target IPI above 500 to account for fluctuations.
• Analyze your top-selling SKUs to ensure you maintain in-stock rates without overstocking.

Common Pitfalls When Dealing with IPI

Many sellers make avoidable mistakes that lower their IPI. Here are the most common pitfalls:

Ignoring stranded inventory: Even if you have great sales, a few stranded ASINs can pull your score down. Regularly audit your inventory for listing errors.

Overstocking bestsellers: While you want to avoid stockouts, ordering too much can lead to excess inventory. Use historical sales data and seasonal trends to forecast accurately.

Not using removal orders: If you have slow-moving inventory, don't wait until it's considered excess. Proactively create removal orders to free up space and improve IPI.

Forgetting about seasonality: Failing to adjust inventory levels for peaks and troughs can cause excess inventory after the season ends. Plan your purchases with a calendar.

• Set a monthly reminder to check your stranded inventory report.
• Use Amazon's 'Restock Inventory' tool to get recommendations based on your sales velocity.
• Create a removal order for items that have been in storage for 90+ days with no sales trend.
• Analyze your sales by season and adjust your inventory purchasing accordingly.

Practical Recommendations and Next Steps

To improve and maintain a healthy IPI score, implement these strategies:

First, regularly review your inventory performance dashboard. Identify which factors are dragging your score down and address them promptly.

Second, use Amazon's FBA inventory tools, such as the 'Manage Excess Inventory' page, to get recommendations on how to reduce excess inventory. Consider running promotions or increasing advertising for slow movers.

Third, optimize your listing quality to prevent stranded inventory. Ensure all images, titles, and prices are accurate and up-to-date.

For cross-border sellers, factor in longer shipping times when planning inventory. Use air freight for fast-moving items and ocean freight for slower, bulky items to balance cost and speed.

Finally, consider using third-party inventory management software to track metrics and automate reorder points. Tools like Helium 10 or SellerApp can provide deeper insights.

• Set a goal to reach an IPI of 500+ within 3 months.
• Create a weekly action plan based on your IPI dashboard.
• Implement a demand forecasting system using at least 6 months of sales data.
• Review your pricing strategy to improve sell-through without sacrificing profit.
• Monitor your IPI after any major inventory changes to ensure you're on track.

Key Takeaways

In summary, your IPI score is a direct reflection of your inventory management efficiency. By focusing on reducing excess inventory, improving sell-through, clearing stranded inventory, and maintaining healthy in-stock rates, you can achieve a score above 500 and avoid storage restrictions. Next steps: log into Seller Central, check your current IPI, identify the lowest-performing component, and implement the targeted improvements outlined above. Regularly monitor your progress and adjust your strategies as needed.

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.