Amazon Inventory Performance Index (IPI) measures how efficiently you manage your FBA inventory over time. The performance is represented on a scale of 0 to 1000 points; a higher score means better performance. IPI measures how efficiently sellers balance their sales volume and stock levels, fix stranded or suspended listings, and keep their high-selling products in stock. IPI helps sellers avoid stockouts and heavy overstocking charges. An IPI score below 450 can result in Amazon imposing storage limits on your account. The following are actionable strategies to improve your Amazon Inventory Performance Index score:
- Perform Inventory Audits Regularly: This is crucial for avoiding any mistakes caused by discrepancies and preventing stockouts or overstocking that can damage your Amazon IPI score.
- Automate with Inventory Management Software: Inventory management software allow you to automate the grueling task of tracking stock levels, managing reorders, and forecasting demand. This can help you optimize your sell-through rate and avoid excessive inventory.
- Plan Reordering and Stock Replenishment Proactively: Proactive reordering and restocking are crucial to improving your Amazon IPI score, as they help you avoid stockouts and excess inventory.
- Plan Ahead for Seasonal Demand Surge: Always plan ahead to effectively handle surges in demand due to seasonal events. A lack of proactive planning can lead to stockouts that negatively affect your Amazon Performance Index score.
- Resolve Listing issues Proactively: Stranded inventory doesn’t only damage your Amazon IPI score, it also results in excessive inventory costs without any chance of potential sales.
- Data-Driven Demand Prediction: Predicting demand accurately is a key aspect of inventory management to avoid stockouts and excess inventory. You can analyze historical sales data and seasonal trends to predict future demand and keep your Amazon IPI score healthy.
- Build and Maintain Relationships with Suppliers: Having strong supplier relationships is key to maintaining a stable inventory flow. Apart from offering better product prices and quality, reliable suppliers can provide shorter delivery times which can speed up your restocking process.
Make sure to check the detailed post below, so you don’t miss out on any important point.
FAQ’s
Amazon scores your Inventory Performance Index on a scale of 0-1000. Amazon doesn’t disclose the precise formula behind the IPI scoring, but it specifies the four crucial factors that affect it.
- Excess inventory: It gives insights into your excess stock unit proportion.
- Stranded inventory: This refers to the number of units not listed on your Amazon seller account, leading to excessive storage fees.
- Sell-through rate: This refers to units you’ve shipped in the last 90 days compared to your inventory stock level.
- In-stock rate: This indicates how well you’re keeping up with customer demand by effectively stocking high-selling ASINs.
Reviews are a key factor in Amazon’s A9 algorithm. Positive reviews help improve your product’s search ranking, leading to better visibility and increased sales. Verified purchase reviews have an even greater impact on rankings.
Some strategies include optimizing your product descriptions and images, providing excellent customer service, sending follow-up emails asking for reviews, leveraging your social media following, and engaging with users who review similar products.
Respond to negative reviews thoughtfully and professionally. Address the issue, offer a solution if possible, and demonstrate your commitment to improving your product and customer experience.
The Customer Reviews page in Amazon Seller Central provides a comprehensive way to track and filter reviews, enabling you to engage with customers and resolve issues proactively.
No, fake reviews are strictly prohibited and illegal. Amazon actively monitors and removes fraudulent reviews, and violators risk suspension or permanent ban from the platform.
