Understanding the Real Cost of a Poor IPI Score

Managing an Amazon FBA business requires balancing inventory replenishment with storage efficiency. Amazon tracks your operational efficiency through the Inventory Performance Index (IPI) score, a critical metric ranging from 0 to 1,000. Fall below Amazon’s threshold—typically set between 400 and 450—and your account faces strict storage limits and costly storage surcharge fees. High storage fees consume profit margins, while stock limits restrict your ability to ship top-selling products into FBA fulfillment centers. Improving your IPI score requires strategic inventory management that addresses sell-through rates, stranded inventory, excess stock, and in-stock management.

Rapidly Clear Excess Inventory

Excess inventory is the single largest contributor to a declining IPI score. Amazon considers unit counts excess if you hold more than 90 days of supply based on forecasted demand. Leaving slow-moving stock in fulfillment centers triggers aged inventory surcharges and degrades your overall health score.

To eliminate excess stock efficiently, implement a tiered liquidation approach:

• Run aggressive Amazon Outlet deals or temporary price drops for SKUs near the 90-day mark.
• Utilize Sponsored Products campaigns targeted specifically at clearance keywords to increase velocity.
• Create bundle offers pairing slow-moving items with high-velocity complementary products using Amazon Virtual Bundles.
• Initiate Amazon Liquidations or removal orders before aged inventory fees hit at 180 days.

Optimize Your 90-Day Rolling Sell-Through Rate

Your FBA sell-through rate is calculated by dividing your total units sold and shipped over the past 90 days by the average number of units stored in fulfillment centers during that same timeframe. A low sell-through rate signals to Amazon that your goods occupy valuable warehouse space without generating high transaction volume.

To elevate this metric without tanking product margins, focus on traffic and conversion optimization. Re-optimize product listings with high-volume search terms, run targeted Sponsored Display retargeting ads, and evaluate price points relative to main competitors. If specific variations—such as uncommon sizes or colors—have negligible demand, stop replenishing them and focus catalog space strictly on proven revenue drivers.

Fix Stranded Inventory Immediately

Stranded inventory consists of products stored in Amazon warehouses that lack an active listing, preventing customers from purchasing them. Because these products accumulate storage charges while generating zero sales, Amazon heavily penalizes your IPI score for unresolved stranded stock.

Common causes of stranded inventory include missing listing attributes, listing suppressions, brand approval issues, or price errors. Check your Fix Stranded Inventory dashboard weekly. Configure automatic actions within Seller Central to automatically relist stranded items or return them if listing errors cannot be resolved within 30 days.

Maintain Optimal In-Stock Rates for Top Sellers

While holding too much inventory hurts your score, running out of stock on your best-selling items also negatively impacts your performance indicators and damages your product ranking. When a top-performing SKU goes out of stock, your sales velocity drops to zero, hurting your overall operational metrics and losing buy-box positioning.

Establish precise reorder lead times by factoring in manufacturer production times, shipping durations, and customs processing. Use third-party logistics (3PL) warehouses as buffer storage. Holding backup inventory in a local 3PL allows you to send small, fast shipments to FBA, maintaining optimal inventory levels without overstocking Amazon’s warehouses.

Sustaining Long-Term Inventory Efficiency

Maintaining an IPI score well above 500 requires a continuous operational routine. By conducting weekly audits of excess inventory, fixing stranded listings within 48 hours, and relying on a 3PL buffer strategy, you protect your business from costly storage surcharges and ensure uncapped FBA storage capacity year-round.

Want help with this for your own business? Talk to EFerz about Amazon FBA services — or contact us for a free strategy session.