Amazon IPI: Understand & Improve Your Inventory Performance

Inventory Performance Index, or IPI, is the most recently introduced metric by Amazon, and it’s a hot topic in the global community of businesses that sell on Amazon.

It works by aggregating data from sales, inventory, and costs on Amazon to measure the overall growth and efficiency of an FBA business. In other words, it’s used to determine how well Amazon sellers are managing inventory. The higher your score, the better your performance.

For years now, the debate has raged on as to whether selling on Amazon is beneficial or detrimental to business success.

On the one hand, being an Amazon seller opens you up to a huge potential customer base on a high-traffic sales channel. In fact,  according to research firm Survata, 49% of online shoppers visit Amazon first when searching for products.

Not only that, but selling on Amazon also gives you access to its Fulfillment by Amazon (FBA) service, which can mean faster shipping, more warehousing options, and hassle-free logistics. Sellers who use Amazon FBA have their products stored in Amazon's fulfillment centers, and every time a purchase goes through, Amazon picks, packs, ships, and even provides customer service for the order.

In this eBook, we’ll go over what we know about Amazon’s Inventory Performance Index so far, how it’s measured, and why Amazon FBA sellers should care about the introduction of the IPI. We’ll also walk you through what you can do to maximize your IPI score through smart inventory management practices.