New US company formation
Get in touch →
About Us
About Us Client Work Free Tools
Services
Shopify Store Management Amazon FBA & Account Google Ads Management Meta Ads Management TikTok Ads & Shop Local SEO + Maps SEO Services Brand Identity & Branding Web Design & Development Social Media Management AI + WhatsApp + CRM Exports & US Company
Pricing Industries
Textile manufacturing Perfumery & cosmetics Furniture & joinery Dental clinics E-commerce software Custom manufacturing → All industries
Case Studies
BarberSets The Barber Supplier KısaKollu Goodman Mod Tasarım Beauty Bien → All clients
Get in touch
Glossary · Amazon

What is Inventory Performance Index (IPI)?

The inventory performance index is Amazon's score measuring how efficiently FBA inventory is managed. Excess inventory ratio, sellable but unsold inventory, stockout rate and sales volume are its components; if the score falls below the threshold, warehouse shipment capacity is restricted.

Detail

The penalty attached to the score stops growth directly: when the number of boxes you can send is capped, you cannot load stock ahead of a season. The fastest improvement lever is removing long-unsold inventory from the warehouse through markdowns or a disposal or removal request. The second lever is not running out of stock on items that sell, because a stockout costs both sales and score. The score is reviewed by period rather than weekly; since the penalty is applied at the end of the period, intervening in the final week is usually too late.

Example

If a quarter of the inventory in the warehouse has not sold for six months, the excess inventory component drags the score down and the shipment limit narrows for the next period.
FAQ

Common questions on this topic.

How is Inventory Performance Index (IPI) calculated?

The penalty attached to the score stops growth directly: when the number of boxes you can send is capped, you cannot load stock ahead of a season. The fastest improvement lever is removing long-unsold inventory from the warehouse through markdowns or a disposal or removal request. The second lever is not running out of stock on items that sell, because a stockout costs both sales and score. The score is reviewed by period rather than weekly; since the penalty is applied at the end of the period, intervening in the final week is usually too late.

Why does Inventory Performance Index (IPI) matter?

The penalty attached to the score stops growth directly: when the number of boxes you can send is capped, you cannot load stock ahead of a season. The fastest improvement lever is removing long-unsold inventory from the warehouse through markdowns or a disposal or removal request. The second lever is not running out of…

Related pages

Continue from here.

Let us improve your Inventory Performance Index (IPI) together.

Knowing the term is not enough; you need to know which lever to pull. In a free 30-minute call we look at your store's actual numbers.

Get a free analysis