Key Takeaways
- IPI Score: Scale of 0-1000, threshold at 400. Falling below 400 triggers storage limits that can severely throttle your growth.
- Four Factors: Excess Inventory %, Sell-Through Rate, Stranded Inventory %, and In-Stock Rate. All four need to be optimized.
- Storage Costs: Off-peak ~$0.87/ft3, peak (Q4) ~$2.40/ft3. Long-term storage (365+ days) costs $6.90/ft3 or $0.15/unit.
- Optimization: Target 60-90 days of inventory. Use removal orders for slow movers and outlet/liquidation for excess stock.
- Seasonal Planning: Stock up early for Q4 to cover Prime Day and Black Friday. Use FBA Capacity Manager for additional capacity.
The Inventory Performance Index (IPI) is one of the most critical metrics for FBA sellers. It determines how much storage space Amazon allocates to you and directly impacts your ability to restock and grow. A low IPI score leads to storage limits that can become a bottleneck during high-revenue periods like Q4.
This guide explains how the IPI is calculated, what levers you have, and how to systematically optimize your inventory management. For information on current FBA fees, check our FBA costs guide for 2026.
The IPI score becomes particularly critical for sellers with broad catalogs. The more ASINs you carry, the harder it becomes to optimally stock every single item. The strategies presented here apply equally to sellers with 10 ASINs and sellers with 10,000.
How the IPI Score Is Calculated
Amazon calculates the IPI score on a scale of 0 to 1,000 and updates it weekly. The critical threshold is 400. If your score drops below this, Amazon restricts your storage capacity. The four factors that feed into the score:
1. Excess Inventory Percentage
The portion of your FBA inventory classified as excess. Amazon defines excess as units whose storage costs exceed expected revenue. Target: below 5%. Use the Excess Inventory Report in Seller Central to identify affected ASINs.
2. Sell-Through Rate
The ratio of units sold to units stored over the past 90 days. A high sell-through rate signals to Amazon that your inventory is being sold efficiently. Target: at least 2.0 (meaning you sell your entire stock every 45 days).
3. Stranded Inventory Percentage
The portion of FBA inventory not linked to an active listing. Common causes include suppressed listings, missing offer creation, and listing errors. Target: 0%. Stranded inventory generates costs with zero revenue opportunity. Check the Stranded Inventory Report regularly and fix listing issues immediately.
4. In-Stock Rate
The percentage of time your top sellers are in stock. Going out of stock hurts not just revenue but also organic ranking. Target: above 95% for your highest-revenue ASINs. Use restock recommendations in Seller Central to reorder on time.
FBA Storage Costs in Detail
Storage costs vary significantly by season and storage duration. Accurate calculation is essential for profitability:
- Standard (January-September): ~$0.87 per cubic foot for standard-size, ~$0.56 for oversize.
- Peak (October-December): ~$2.40 per cubic foot for standard-size. Nearly three times the off-peak rate.
- Long-Term Storage (271-365 days): Additional fee of $3.45/ft3.
- Long-Term Storage (365+ days): $6.90 per cubic foot or $0.15 per unit, whichever is greater.
Long-term storage fees can completely eliminate margins. A product sitting in FBA storage for over a year often costs more in storage fees than it generates in revenue upon sale.
Optimization Strategies
Inventory Target: 60-90 Days
The ideal FBA inventory covers 60 to 90 days of sales. Less risks going out of stock, while more strains your IPI score and storage costs. Calculate your optimal stock per ASIN based on average daily sales rate plus a 20% safety buffer.
Remove Slow Movers
For products with low sell-through rates, you have several options: removal orders back to you or to a 3PL partner, Amazon Outlet (heavily discounted prices but frees up storage), liquidation through Amazon's program, or price reductions and coupons to accelerate sell-through. Find strategies for boosting sales in our Prime Day preparation guide.
Reduce Returns
Every return increases your inventory and hurts the sell-through rate. Invest in better product descriptions, size charts, and packaging to systematically reduce returns.
FBA Capacity Manager and Seasonal Planning
The FBA Capacity Manager allows you to book additional storage capacity beyond your allocated limit. You specify a reservation price per cubic foot. If your bid is accepted, you receive additional storage space. Costs are refunded if you effectively use and sell through the reserved space.
For seasonal planning, follow these benchmarks: begin stocking Q4 inventory from August to have sufficient goods in FBA before peak storage fees kick in (from October). Prime Day (typically July) and Black Friday/Cyber Monday require at least 8-10 weeks of lead time for stocking. Use restock recommendations in Seller Central as a starting point and adjust based on your historical sales data.
Tools and Reports for Inventory Management
Seller Central offers several reports you should use regularly to keep your IPI score on track:
- Inventory Dashboard: Overview of IPI score, current storage limits, and the four contributing factors at a glance.
- Restock Inventory Report: Recommendations on which products to restock, when, and in what quantity.
- Manage Excess Inventory: List of all ASINs with excess stock including recommended actions (reduce price, removal, liquidation).
- Stranded Inventory Report: All units without an active listing. Fix immediately, as these drag down your IPI score and generate costs.
- FBA Inventory Age: Shows how long each ASIN has been in storage. Take action early before long-term storage fees apply.
Set up a weekly routine: check IPI score on Mondays, fix stranded inventory, review excess inventory, and reconcile restock recommendations. These 30 minutes per week can save thousands of euros in unnecessary storage fees.