US Inventory Performance Index (IPI) Threshold Change for 2020 and Free Removals Promotion


#62

Yes, we reached out to 1 Day Prime rep that asked us to participate. As we increase the inventory required at Amazon for 1 Day Prime, naturally your “days in inventory” moves up and your “turns” decreases. With that happening, we have zero SKUs with excess inventory and over 99% in stock rate. We follow Amazon’s Restock Inventory recommendations. Yet since we started participating in storage fee promotion for 1 Day Prime since last June, our IPI has dropped over 75 points. We have pointed this out to Amazon that their IPI algorithm is not in sync with their 1 Day Prime requests. No help received. Very frustrating when you try to comply with programs Amazon wants you to participate in, but it can end up hurting another one of the metrics we try to maintain.


#63

Anyone know what a storage limit might be set at if my score drops to 250 and I’m currently holding 350 cu ft of stock?


#64

i meant another product line. to just reach ipi? we can just… sell at cost. to keep ipi high i guess… maybe thats the intent of this policy…


#65

Can I get some advice on IPI?

We have 1 SKU that Amazon flagged “Restock today” and they want us to send over 4,000 units. But when I look at the SKU it is yellow flagged as “Inventory levels are too high, does not qualify for discount, and may affect for IPI score”.

Anything over 2,000 puts it in the yellow zone. We have a months worth of inventory now (Which is yellow zoned), but if we send 4,000 units as Amazon is suggests it will put us in the “Red Zone”.

Either way if we don’t restock we will be dinged with “In Stock rate” or if we do we get dinged with “Sell through rate”.

Any advice?


#66

According to Amazon, the In-Stock rate does not have a direct effect on your IPI. Being out of stock is not supposed to lower your IPI.

In-stock is True or False. If you have 1 unit or 1000 units at FBA, then the item is in stock.

I would do whatever is best to maintain sales.


#67

OakWallet is correct. The Amazon recommendations depend a great deal on things like future sales forecasting, trend extrapolations, and somewhat expecting you to dominate the market price-wise.

It is extremely likely that you understand the demand for your product at your price point better than Amazon cares to.


#68

Awesome thanks for the information!


#69

Very true! Thanks for your input!


#70

SO if our IPI is less than 400 before Jan 1st, will we have storage limits or does this restriction start on Jan 1st?


#71

Where does it state this? In the beginning we had cases open and each time it escalated to a new “team” we were informed that YES in stock/out of stock will directly effect out IPI score. All our other metrics are SPOT on green and the only thing not currently is our out of stock while we wait on a shipment…each week we have dropped points. So if everything else is in the dark green % and the out of stock/ in stock is not where it should be, and we are dropping points it would seem that it does effect our score…unless they are just giving and taking points at random with no real rhyme or reason lol, which is not unheard of.


#72

Click ‘Learn More’ on your Inventory Performance page. An information bar should show up on the right side of the screen. Scroll down to the FAQ and you will see:

How does my FBA in-stock rate affect my IPI?

Your FBA in-stock rate indicates how much value you’re getting out your products by staying in stock on replenishable ASINs. For example, if you go out of stock on a popular product, your lost sales represent a missed opportunity to increase your IPI. However, IPI points are not deducted for running out of stock nor for the type of inventory you offer.


#73

Then WTH is causing us to lose points lol. This IPI thing is a serious joke.


#74

When the IPI first came out, the instock rate had a direct effect. After some supposed tweaking, it was posted on the forums, and later updated in the help file, that in stock would not affect your IPI.
I’m not fully convinced that the programming team ever got the memo.

And yes, it is a joke. What else can you say about a metric that actually encourages people to do things that are bad for their business (ie, sending low or no-profit items to sell quickly) in order to prop up a metric that does not apply well to many business models. (doubly true when it seems that one out of 5 orders goes into “Stranded” as “inventory error” for a few hours before they ship it).


#75

Maybe these sellers have to adjust their business model to amazon model ?

Not sure this is corrects because the IPI takes into account the ratio between quantity in stock and quantity sold. This can be achieved also by small quantity in FBA and not so fast selling items.


#76

My point was that someone selling clothing will have a different model than someone selling iPhone cases; and both are different from someone selling used books (where every item is it’s own ASIN).

My IPI dropped over the summer because I found a LOT of great books that I can reasonably expect to sell within 6 months or less on average (so IMO, suitable for FBA). However, I did not find many books that I would expect to sell within a few weeks, unless I went to books that would make me only a dollar or two. Had I not sent in a lot of $40-$200 books that will mostly sell in a moderate time frame, my IPI would have stayed up; but I (and Amazon) would make less money over the long run.
Thankfully, for me, even dropping 50 points, it’s still not anything that is a problem.


#77

In amazon eyes the magic number is 90 days, not 6 months…after that the inventory becomes excess inventory. This is my todays IPI
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#78

As i say, different business models/product mixes have very different measures of what is good business. If I can turn $1 into $50 in 6 months, that is far more profitable than turning $5 into $8 in one month.
And as for “excess inventory”, I have none. The only metric less than perfect is “Sell Through”, which tends to be about 0.5; a terrible score for someone selling Chinese trinkets, but a very reasonable rate for a book seller.
Note also that storing that book that will likely sell for $50 for 6 months will cost me less than 50 cents (depending on the season). So from a business point of view, very reasonable.

So as I stated, the IPI simply doesn’t fit all business models; even those that are in the main business that Amazon started out in!


#79

Could be, but we have to follow amazons ideas.

Also could be true, but profitable to the seller or to our boss, amazon ?


#80

The main announcement cleared everything up. 400 IPI is required for THIS QUARTER in order to avoid limits in Q1 of 2020.


#81

You do the math. Does Amazon make more in commissions on a $50 sale, or a handful of $8 sales.
Can actually work out pretty close; yet one gets a great IPI score, the other is much lower.

As I stated, it can encourage people to make bad business decisions.

Oh, and Amazon is NOT my boss (nor yours). If anything, they are my employee. I don’t pay my boss to do things for me.