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Inventory - Inventory Planning

cost

If the score is below 350, you will be charged $10 for each cubic foot above the inventory level.

Influencing factors

1. Sell-through rate (the most important factor at present)

2. In-stock rate

3. Excess inventory percentage

4. Stranded inventory percentage (the ratio of inventory stranded in the warehouse due to listing problems)

Function

1. When the seller's IPI score reaches 350 points, the seller will obtain unlimited storage rights for standard-size products, large-size products, and clothing and footwear products.

2. The seller's IPI score is cleared every quarter. Within 6 weeks before the end of the quarter, sellers with an IPI score below 350 will receive an official reminder from Amazon and may face storage restrictions. If the score is still below 350 one week before the end of the quarter, the seller's storage will be restricted in the next quarter.

3. Benefits for new sellers: There are no storage restrictions before obtaining an IPI score, until Amazon officially collects enough data and rates the seller's IPI.

as a result of

The IPI index score ranges from 0-1000. A score over 400 means the index is excellent. If it is below 350, it means there is a problem and the seller should take action to improve the score.

Starting from July 1, 2018, sellers who fail to maintain an inventory performance index score of 350 or above will be subject to storage restrictions every three months on a quarterly basis. If the index score is still below 350, Amazon will impose storage restrictions on the seller in the next quarter.

How to improve your IPI score

1. Clear out excess inventory and reduce storage fees and logistics costs;

2. Restocking to increase the spot ratio;

3. Deal with stranded inventory and ensure consumers can purchase it.

Seller Operation Suggestions

1. You can use the method of low-price clearance, buy product A, and give a high discount on product B, or buy A and get B free. This is the most common, safest and effective method;

2. Remove products. Remove all backlogged goods from FBA. Products with high value can be moved to third-party overseas warehouses for relabeling and restart sales.

3. Merge products, merge the backlog of similar products and products with good sales, and clear the inventory for a period of time. It is worth mentioning that at present, merging listings may be warned for illegal operations. If they are not the same type of products, have different attributes, etc., it is not recommended.

develop

Starting from January 1, 2020, Amazon will implement new Inventory Performance Index (IPI) regulations, with the threshold increased from 350 points to 400 points. In other words, starting from January 1, 2020, if your IPI score is lower than 400 points, your inventory will be restricted by Amazon.

On July 13, 2020, Amazon issued a policy stating that sellers with an inventory performance score below 500 will have restricted shipments from August 16, 2020 to the end of the year.

References

• 1. Amazon's Inventory Performance Index (IPI) has changed dramatically, and your inventory may be restricted: Blue Ocean Official Website [reference date 2019-10-06T16:00:00.000Z]