FBA Inventory Performance Index (IPI)


#19

Thank you for the updates.

2 quick questions:

  1. Does the “Manage Excess Inventory” page list all of the excess inventory that is negatively impacting our IPI?

  2. Assuming the answer to #1 is ‘Yes’, why is the # of excess units metric and the corresponding percentage always wrong? Is it using data from xx days ago?

Metric said ~380 for weeks, even though actual number of excess units was ~120.
Metric finally updated to ~180, which was still much too high.
Metric stuck at ~180, even though actual number further reduced to ~75.
Metric just updated to ~150, still approximately double the actual number.

(Note: The number of excess SKUs seems to update in real-time. But the number of excess units and the corresponding percentage is always off.)


#20

[SEAmod removed post as it was not constructive but was a rant]


#21

Since the In-Stock rate does not directly affect the IPI, I would highly recommend completely removing the In-Stock Rate from the Inventory Performance page. As long as it is there, it is going to cause a lot of confusion.

(This is especially true since it is listed in the box at the top as one of the four “Top Influencing Factors.”)


#22

That’s exactly what I want to know, since much of inventory (kid’s jewelry) doesn’t take up much space, so it’s always been less expensive to leave it there than it was to remove it.

Funky


#23

Thank you for providing this information@SEAmod.

You are mentioning this is based on SKUs. This seems it will create quite the issue for sellers offering products with expiration dates, and using new SKUs to ensure fresh stock is sold after older stock (Amazon doesn’t employ FIFO). The only way to maintain fresh stock is to have multiple SKUs for one ASIN and retire the old SKU once sold out.

Has there been consideration of tying IPI to the ASIN and not to the SKU? If not, what is Amazon’s suggestion for handling multiple SKUs for product with expiration dates?

We have also seen receiving times increase to three weeks on average (this is from delivery to the FC!). This has required us to send in additional inventory to cover these intake times…


#24

The limits will be in terms of cubic feet.

The overage fee will be charged monthly at $10.00 per cubic foot, based on the daily average volume of inventory that exceeded your storage limits throughout the month. We will be updating our tools to reflect cubic feet of storage instead of the number of units that we currently show.


#25

That may change with the new minimum LTS fee of 0.50 per item.


#26

Yeah, I figured as much.

But, it costs me $.50 to remove, and $.50 to return them under the Preferred Placement Service.

Funky


#27

OakWallet, I understand this as the long term storage fees will be calculated based on the volume/cubic feet, as it is now. BUT right now we (sellers in handmade category) have unit limits. I don’t know if other category sellers have unit or volume limits OR if these will change.


#28

You brought up an interesting point.

I was “grandfathered” in before there were storage limits, so I have no current limitations. Wonder how that will affect me going forward?

Funky


#29

Susan,

Since you closed all the other threads, are we supposed to reopen all those unanswered questions?

Please advise.

Funky


#31

From the announcements, professional sellers will have no limits if their IPI is over 350, and limits if their IPI is below 350.


#32

I feel confident that this clarification and the Announced free removals are not a coincidence.

Consider strongly what your inventory management strategy will need to be.


#33

Hello @FunkyMonkey,

I have recorded DDS’s question and I will note that you are also interested in an answer.

Susan


#34

The in-stock rate is intended to show you how to keep the front-end (number of units sold) going. The sell through can be misleading at times due to things like new inventory.

Although it isn’t included in the overall metric, the in-stock rate could also easily be used as part of the calculation for storage limits. I think it is just trying to coach people into how to trickle in inventory that big data thinks will immediately sell. Hopefully it is a touch more accurate than previous incarnations of the selling coach.

It will cost you $.50 a month with the new LTSF.

The cheapest way would be to use the free removal, and start trickling them back in after August. If it is a bunch of different sku (rather than simply too many of one) you should consider FBM. These new rules seem designed to prevent the loopholes that have been allowing FBA longtail despite obvious attempts to limit it.


#35

You do not need to reopen a question unless you feel it is still unanswered.

Susan


#36

I have several questions, some of which will apply to other sellers as well and I would sincerely appreciate any information you can give us:

  1. Do the four “influencing factors” directly effect the IPI Score or are they merely suggestions as to what we can do in order to possibly improve our overall score? For example, if we improve our Excess Inventory Percentage and/or our FBA In-Stock Rate does that have a direct effect on the IPI Score or is it merely a suggestion to improve our overall inventory health which then in turn is “likely” to improve our IPI Score?

  2. Is it possible to have all four “influencing factors” in the red while still maintaining an IPI score over 350? I guess that kind of relates to question #1.

  3. I know they won’t give out the secret IPI Formula but can you find out if they will at least disclose if the IPI is calculated based on volume or number of units or a combination of both? I have a theory that it may be based on volume of space used by FBA sellers. If that’s true, it would help us properly plan our inventory and help to focus on SKU’s which may be preferred by those in charge. If we know that volume is an factor then as sellers we focus on SKU’s which take up less space.

  4. I’m assuming there is no grandfathering in for other sellers as others have mentioned but if there is please let us know. The grandfathering is with respect to those of us who currently have no limits on our FBA inventory.

@SEAmod thank you for taking the time to provide what information you can.


#37

I’ll have to go back and copy them over.

Funky


#38

Hi, Susan. Lee here. Has Amazon considered incentivizing us on selling items over 1yr old with temporary lower fulfillment fees instead of charging $.50/unit per month L/T fee this fall? I mean, Amazon probably makes alot more money by fulfilling all those orders if we blow out stock at a lower price via 50% fee discount, or even by expanding the “add on” program item (super cheap shipping as a “rider”, than a single item shipped, and super low fees for us). The alternative for every seller on here to blowing the older inventory out at discounted fees is sending them ALL back home, at “dead weight” shipping cost to us and Amazon. I personally would rather lower prices, and SELL OUT of those “aged” skus I have excess of, than send them back. IF we had a substantial “aged inventory fee sale week” or something it would incentivize us to drop prices and move those items quick. Or even if they said, "Hey, we know you dont want to pay storage fees all year, and neither do we, so IF and ONLY IF you drop your price below “x” threshold, we will cut that fee in half on items over 11mos old, for 1 month to help you move it FAST. They already have “fee discounts” on some items based on trending prices, but I am referring to a larger discount, based on age dates, where we drop aged inventory we have already paid substantial storage on, to a certain price threshold, that will help us move it on out, and fees won’t be so high that we won’t have any proceeds.

Example, I have 2 or 3 Media skus that I sell for $9.99 range, that FBA total fees are literally $7.00 per unit. I only net $2.99 proceeds after fees, which is already below my break-even. So if they either put the items in the “Add on” program, where fees for the above $9.99 item example drop from $7 to $4, OR just discounted the fees to the “add on” rates, temporarily on SKUs over 11mos old, I could drop price to $7 price, and sell through, quickly, at same $3 margin. Obviously when sellers ship these lower price items to FBA, our HOPE is ALWAYS that prices go to a profitable range, but for some skus, it doesn’t happen due to competition. Unless they expand the “add on item” program which has lower fees, or do a substantial temporary fee discount for aged items, my choices are to liquidate at $7, (the exact cost of fees meaning ZERO proceeds, giving our items out for free), or just send them home until price goes up. Amazon may be able to make up for the price diff. via volume, by selling units that have sat in their warehouses for a year, taking up space. It clears warehouse space, AND generates Revenue for Amazon AND us! A wise man once said you can catch alot more bees with honey than with vinegar, or in our case, EXTRA storage fees. LOL!

Also, as stated on another IPI thread, they could help us on the front end (how much Q we send in), by consolidating our shipments to all one warehouse on small quantity items as they do with larger quantities. This will incentivize us to ship smaller quantities rather than large quantities to get the bulk shipping discount. Some sellers have been very helpful by mentioning the Inventory Placement Program, but that doesn’t fit with the larger quantity skus I ship along with the lower quantity ones. Larger bulk shipments tend to go to one place anyway because of the bulk quantity, and that extra placement svc fee on a large quantity of 50 units or more would eat up the savings. I have MANY skus I would like to ship just 3 or 4 of, that WILL sell in 3 months. I don’t want to just drop those ALL those skus entirely, but if I ship them in small quantities, they end up getting split up to 3 different warehouses, at a profit killing cost of $3-5 per item vs $.25-.30 per unit shipped all in one box. So shipping ALL quantities to 1 warehouse (whether 1 unit or 100 units) incentivizes us to ship those small “test” quantities that don’t take up warehouse space that I believe Amazon wants on slow moving items. Inventory placement has it’s place, but with the mixed volume I and many other sellers do of 3 to 100 units per sku, that’s hard to do. Any thoughts on that, ma’am?


#39

BTW, OakWallet & DDS, they fixed my sell-through rating glitch after I contacted customer svc last night. IT went from 113 units sold back up to 1337 items sold in 90 days! Did they fix yours?