US Inventory Performance Index (IPI) Threshold Change for 2020 and Free Removals Promotion
Hello from Fulfillment by Amazon (FBA),
Since we announced expansion of one-day deliveries, we have made Prime Free One Day available to members with no minimum purchase amount on more than ten million products, coast to coast. The customer response has been remarkable, and FBA sellers have benefited. To make Prime Free One Day delivery possible, we invested hundreds of millions of dollars in our fulfillment and transportation network on behalf of sellers in Q2 2019 alone. We continue to upgrade our network to further speed up deliveries and invest in infrastructure, tools, services, people, and programs that benefit FBA sellers.
While investing in our network, we need to manage our storage space so that we can continue delighting customers with products they love at faster delivery speeds. Effective January 1, 2020, we are changing the IPI threshold for storage limits to 400 (previously 350). Storage limits will continue to be evaluated on a quarterly cycle. For example, if your IPI score is less than 400 during the week of November 11, 2019, you will be notified of your potential storage limits for Q1 2020. You will then have 6 weeks to improve your IPI score. If your IPI score is still below 400 during the week of December 23, 2019, storage limits will apply for Q1 2020. Sellers who maintain an IPI score of 400 or greater will have unlimited storage for standard size and oversize items (monthly storage fees and long-term storage fees still apply).
You can track your IPI on the Inventory Performance Dashboard, where we also provide you with ways you can improve your performance:
- Reduce excess inventory: Take action on the Manage Excess Inventory page to reduce your storage fees and carrying costs
- Improve sell-through: Take action on the Inventory Age page to increase your FBA sell-through rate on low‑traffic and low-conversion products
- Fix listings: Take action on the Fix Stranded Inventory page to ensure your inventory is available for purchase
Free Inventory Removal Promotion
To provide a head start on improving inventory health, we are offering a limited-time, free inventory removal promotion for all sellers with an IPI score of 350 or above at any point in October 2019. Sellers without an IPI score are not eligible for this promotion.
If you qualify, beginning October 14, 2019, we will waive your removal fees for any removal order that you submit for inventory in our US fulfillment centers. This promotion ends at 11:59PM (PST) on October 31, 2019. We will notify you if we end this promotion earlier. To take advantage of this offer, you must submit a removal order before the promotion ends. Go to Inventory Age and choose “Create removal order” from the menu next to any FBA item in your inventory.
You will not be able to send us more units of any ASINs you remove during the promotion until: 1) January 31, 2020, when this restriction expires, OR 2) your inventory level for the removed ASINs falls below your sales over the last 90 days for the removed ASINs.
Thank you,
The Fulfillment by Amazon team
Seller_nstkdGWZl0SW0
Yet again,
We still have no idea how the IPI score is created nor how to increase it.
This is another in a long line of decisions with insufficient information to comply with the policy.
Seller_fuQ0WYsz311Af
this is madness
Seller_manlnewNfvJKl
Typical Amazon. Let’s wait till holiday season, change the rules, and tell people that don’t comply they can create removal orders now (if they want them free) and NOT be able to send in additional inventory until AFTER the holiday.
LOL!!! Oh my, I need a bigger box of popcorn… And they did this right after sending out a new poll in Seller Central…
Seller_laAHKrNBhSU8A
excellent news!
Seller_66UM0dPH1Sh3J
This metric is killing us as we build inventory for our biggest quarter. They need to account for seasonality.
Seller_G6mXz6ob7xnsc
IPI score is another “one of the worst Amazon initiatives”. Just to give you an example of how it works:
Short story long: Discontinued a low-profit item. After it sold-out, next week my IPI went - (minus) 200 points. Yes, minus 200 points! Although I was not occupying even a single square inch with this product. So calling this “Inventory Performance Index” makes no sense. It should be called “Amazon’s Profit Index” instead.
I discontinued the product because it made very little profit and the ROI was not worth it at all. Tried to increase the price but due to competition, increasing the price affected the sales. So I kept the price low. The product sold well at that low price until went out of stock and I closed the listing. So after one week I got hit with the -200 in IPI. Thank you Amazon
Seller_wseUmJGXguPGn
This is a terrible policy. Especially when Amazon refuses to provide the Equation for what you use to calculate the IPI. There are specific numbers that are used to come up with an IPI score of 350 or 400. What are those numbers. Without providing this specific calculations, there is NO Reason Amazon should hold Sellers accountable for having a minimum IPI score of 400, 350, or any other number. What is the EQUATION? What numbers added, subtracted, divided = IPI. PLEASE do not give a vague answer about how well you drive sales. This means absolutely nothing.
Seller_eKF1L3i4LxO1i
For example, if your IPI score is less than 400 during the week of November 11, 2019, you will be notified of your potential storage limits for Q1 2020. You will then have 6 weeks to improve your IPI score. If your IPI score is still below 400 during the week of December 23, 2019, storage limits will apply for Q1 2020.
The announcement is confusing, but from the example given it looks like the new 400 threshold applies for IPI scores THIS November/December which affect Q1 2020 limits.
Seller_eKF1L3i4LxO1i
@SEAmod
Someone needs to clarify when this takes effect. The announcement and example given seem contradictory. (The announcement says the change happens in 2020, the example uses November/December 2019 dates).
If our November/December 2019 scores need to be 400+ to avoid limits in Q1 of 2020, I respectfully suggest rewording the announcement to:
Effective IMMEDIATELY, we are changing the IPI threshold for storage limits to 400 (previously 350) .
Seller_oahPyJgVEZB9P
IPI is a nightmare for seasonal items. Seasonal items are items that have peaks only for a week or two in a year and flat for the rest the year. By “peak” I mean the sales can go up by 100 times during the “peak”.
