Your Inventory Performance Index (IPI) is an important Amazon metric. RestockPro can help you keep it high.
Your Inventory Performance Index (IPI) is a number between zero (worst) and 1000 (best) that Amazon uses to score the health of your FBA inventory.
Amazon sets a threshold IPI score that sellers should achieve in order to avoid storage limits and long-term storage fees. This threshold will change depending on the market and how much inventory Amazon needs to move through their warehouses at the time. Check the Seller Central news headlines and the eComEngine Insider newsletter regularly for IPI threshold updates. Check the Inventory Performance Dashboard in Seller Central to find your own IPI score.
The IPI score is made up of four different factors: excess inventory, sell-through rate, in-stock rate, and stranded inventory. RestockPro helps you with the first three numbers, keeping your IPI score high and your business healthy.
Excess inventory: Amazon calculates the amount of inventory you are likely to sell in 90 days, and considers any inventory in their fulfillment centers beyond that number to be excess inventory. It's better to have a low excess inventory rate. RestockPro provides accurate restock suggestions so that you can send in just enough inventory at the right time and avoid excess inventory.
- On the Restock Rules page, set your maximum Target Quantity On Hand to 90 days or less.
- Set accurate lead times for each supplier.
Sell-through rate: This is similar to inventory turnover; it's the percentage of your FBA units that were sold in the last 90 days. It's better to have a high sell-through rate, but not quite 100%, because that would mean you ran out of stock. RestockPro's accurate restock suggestions based on previous sales help you restock just enough inventory without running out.
- On the Restock Rules page, set your Sales Velocity Estimation Rule to include the last 90 days.
- Check the Inventory Turn Report regularly to understand whether a specific product is driving your sell-through rate down.
In-stock rate: It's important to stay in stock to keep your sales and rankings high. RestockPro helps you stay in stock by keeping track of your lead times and flagging inventory that's running low in time for you to ship more to Amazon.
- Reorder products that have a red or yellow flag on the Restock Suggestions page before they run out of stock.
- Set accurate lead times for each supplier.
Further Resources
- Blog: Improve Your IPI Score
- Resource: IPI Checklist