Amazon’s fulfilment network is a powerhouse that can propel brands to six‑ and seven‑figure revenue. At the same time it imposes strict rules on sellers so that its warehouses aren’t clogged with slow‑moving products. To help sellers measure how well they manage stock, Amazon created the Inventory Performance Index (IPI).

Your IPI score is like a report card for your Fulfilment by Amazon (FBA) inventory: the higher the score, the more storage space and flexibility you receive. Low scores trigger capacity limits and extra fees. In this guide we’ll explain how the IPI works, why it matters, and most importantly how you can improve your score and keep your business thriving.

What is the Amazon IPI?

Amazon doesn’t reveal the exact formula for the IPI, but it does explain the purpose and the main factors used to calculate the score. The IPI **measures how efficiently and productively you manage your FBA inventory. Scores range from 0 to 1 000, and you need to stay above Amazon’s minimum threshold to avoid storage limits.

Historically the threshold was 350–400, but Amazon increased it to 500 in 2020 for U.S. sellers. Sellers who maintain an index score of 500 or greater get unlimited storage for standard and oversized items. Amazon may change thresholds periodically, so always check your Seller Central dashboard for the current requirement.

Why does the IPI matter?

Your IPI score affects the amount of space Amazon will allocate to you in its fulfilment centres. Falling below the threshold can lead to storage limits, higher long‑term storage fees and restrictions on new stock. A good score means you can send more inventory, avoid penalty fees and take advantage of peak‑season sales without hitting storage caps.

Factors That Influence Your IPI Score

Amazon lists four main factors that influence your IPI. Understanding these metrics is key to improving your score.

1. Excess Inventory & Sell‑Through – Amazon wants a healthy balance between sales and stock on hand. Items become “excess” when you hold more than a 90‑day supply. Amazon recommends keeping a 30–60‑day supply to avoid overstocking. A high sell‑through rate (units sold relative to units stored over the past 90 days) signals healthy demand; a low sell‑through rate indicates you’re sitting on inventory.

2. In‑Stock Inventory – This measures how often your ASINs are in stock. It’s weighted by the number of units sold in the last 60 days. If popular items frequently stock out, Amazon will warn you; but running out of less‑popular products doesn’t hurt your score.

3. Stranded Inventory – Inventory that can’t be sold because of listing problems is called stranded. Stranded inventory occurs when listings are suppressed, a product is missing essential information, or the fulfilment method is wrong. It can quickly damage your score if you don’t fix it.

4. Aged Inventory & Long‑Term Storage Fees – Items stored for more than 365 days incur an aged inventory surcharge. Amazon will penalise you for leaving slow‑moving goods in its warehouses.

Understanding these factors allows you to build a strategy to improve your IPI.

How to Improve Your IPI Score

Improving your IPI score is about **managing inventory health** rather than playing tricks with the algorithm. The following strategies will help you boost each component of your score.

1. Increase Your Sell‑Through Rate

A strong sell‑through rate shows that your products are moving quickly. Amazon expects sellers to maintain a healthy 90‑day sell‑through rate in the “green” zone of their IPI graph.

– Review your sell‑through data regularly.In Seller Central go to FBA Inventory → FBA Dashboard → FBA Sell‑through. Sort your products by lowest sell‑through rate and address these SKUs first.
– Run promotions and advertising.Discounting slow‑moving items, running lightning deals or advertising them can speed up sales. Amazon specifically suggests creating a sale or advertising your products.
-Optimize listing quality.Sharpen your keyword targeting, improve your product images and write compelling copy. An optimized listing increases conversion and therefore sell‑through.
-Increase product reviews.** Social proof improves conversions. Use Amazon’s “Request a Review” feature and follow up with customers (within policy) to ask for feedback.
– Adjust pricing dynamically. Lowering your price temporarily can spark demand. Automated repricing tools can help ensure your products remain competitively priced and support a higher sell‑through.

2. Reduce Excess Inventory

Amazon doesn’t want to be your long‑term storage facility. Keeping too much inventory will drag down your IPI score and rack up fees.

– Use Amazon’s Manage Excess Inventory tool.** This tool identifies SKUs that have more than a 90‑day supply and shows the estimated costs of doing nothing.
– Send smaller, more frequent shipments.Avoid sending a huge batch of units for a product that sells slowly. Aim for a 30–60‑day supply.
-Monitor demand forecasts. Use your sales history, seasonality and product category trends to forecast demand. Adjust reorder quantities accordingly.
– Run Amazon Outlet deals or liquidation. If you have inventory that isn’t selling, create an Amazon Outlet deal to move it quickly. You can also file a removal order or have Amazon liquidate or donate the inventory.
– Bundle or cross‑sell.** Combine slow‑moving SKUs with popular items as bundles. Bundling can increase perceived value and clear old stock.

3. Prevent Long‑Term Storage Fees

Keeping products in FBA warehouses for more than 365 days triggers an aged inventory surcharge. To avoid this:

– Audit inventory age.Check your aged inventory report regularly. Remove or discount items approaching 365 days.
– Create removal orders.If an item won’t sell, create a removal or disposal order before long‑term fees apply. Once removed, you can sell the product elsewhere or donate it.
– Use a third‑party fulfilment centre. If your FBA storage limits are tight, keep excess stock in a third‑party warehouse and drip feed units into FBA. Amazon permits using third‑party logistics (3PL) providers to maintain inventory offsite.

4. Fix Stranded Inventory Immediately

Stranded inventory occurs when there is a listing error, a missing fulfilment method or a suppressed listing, meaning the product is not available for purchase. Fixing stranded inventory quickly is one of the fastest ways to improve your IPI.

– Monitor the Fix Stranded Inventory page.In Seller Central go to Inventory → Manage Inventory → Fix stranded inventory**. Amazon shows why each unit is stranded and provides a button to relist.
– Correct listing data. Make sure each product has an active offer, proper SKU and correct fulfilment channel.
– Archive old listings.Deleting or closing inactive listings won’t directly improve the in‑stock metric, but it is good practice.

5. Keep Popular Products in Stock

Amazon’s in‑stock inventory metric measures how often your ASINs are available, weighted by recent sales. Although stock‑outs of less popular products don’t hurt your score, consistently running out of bestsellers while keeping slow movers in stock can be harmful.

– Follow restock recommendations.Seller Central provides restock suggestions with estimated dates and quantities. Use these recommendations as a baseline and adjust based on your own sales patterns.
– Optimize supply chain. Work with suppliers to reduce lead times and order in smaller batches more frequently. Maintain safety stock to cover unexpected spikes in demand.
– Hide irrelevant recommendations. If you’re intentionally not restocking an item, you can hide Amazon’s restock recommendation to avoid confusion.

6. Optimize Your Listings for Conversion

Strong listing quality indirectly boosts your IPI by improving sell‑through and reducing excess stock. Key areas to optimize:

– Keywords and SEO:Research relevant keywords and include them in your title, bullet points and description.
– High‑quality images: Use multiple high‑resolution images showing the product from different angles. Include infographics or lifestyle images to convey benefits.
– Compelling copy: Highlight features, benefits, sizing and use cases. Use persuasive language to address buyer pain points.
– A+ Content: If eligible, create enhanced brand content to tell your brand story and improve conversion.

7. Use Promotions and Advertising Wisely

Promotions can help you increase sell‑through and clear excess inventory.

– Coupons and Lightning Deals: Short‑term discounts can generate a burst of sales, improve ranking and encourage positive reviews.
– Sponsored Products and Brands:Advertising drives traffic to your listing. Use automatic campaigns to dis

8. Improve Forecasting and Replenishment Planning

Sophisticated forecasting helps you strike the right balance between stock availability and overstock. Consider the following practices:

– Analyse historical sales data. Look at seasonal trends, growth rates and promotional spikes.
– Use inventory management software. Tools like Jungle Scout’s Inventory Manager can predict how much stock you need and when to reorder.
– Monitor lead times. Factor in manufacturing, shipping and Amazon check‑in times when planning restocks.
– Create reorder points. Set reorder thresholds for each SKU based on average daily sales and lead time.
– Account for new product launches.New ASINs don’t affect your IPI for the first 90 days. Use this period to test demand without impacting your score.

9. Manage Pricing and Profitability

Pricing strategies affect both sell‑through and margins.

– Competitive pricing: Monitor competitor prices using repricing tools. Avoid being the highest priced listing unless your product has unique value.
– Margin analysis: Make sure promotional discounts don’t erode profits.
– Liquidation pricing: If an item is about to incur long‑term storage fees, discount it aggressively to convert back to cash.
– Bundling and upselling:Combining complementary products can increase average order value and move slow‑selling stock.

10. Adopt a Continuous Improvement Mind‑Set

Your IPI score is not static it changes weekly based on your inventory health. Adopting a continuous improvement mind‑set will help you maintain a strong score.

– Schedule regular audits.At least once a week, review your IPI dashboard, aged inventory report and stranded inventory notifications.
– Document processes. Create standard operating procedures for listing maintenance, restocking and removal orders so that tasks aren’t missed.
– Educate your team. Ensure everyone involved in your supply chain understands how their actions (e.g., purchasing, marketing, listing updates) influence the IPI.
– Stay informed. Amazon updates policies and thresholds periodically. Subscribe to Amazon’s Seller Central updates and check the “What’s New” section.
– Plan for peak seasons.Place orders earlier, watch inventory levels closely and use third‑party fulfilment if Amazon imposes seasonal restrictions.

Conclusion

The Inventory Performance Index is not a mysterious algorithm but a reflection of how well you manage your FBA inventory. By focusing on sell‑through, rolling excess stock, preventing long‑term storage fees, fixing stranded listings and keeping products in stock, you can maintain a healthy IPI and avoid costly penalties.

Improving your IPI requires ongoing attention to data, demand forecasting and customer experience. Use Amazon’s tools, optimize your listings, run strategic promotions and build solid relationships with suppliers. Treat your IPI score as a key performance indicator review it regularly, act on Amazon’s recommendations and adapt your strategy as your business grows.

With the right approach, the IPI becomes less of a hurdle and more of a roadmap to efficient i inventory management and long‑term success on Amazon.