What Is IPI? Amazon Inventory Performance Index Explained

Most Amazon FBA sellers hear about their Inventory Performance Index for the first time when something already feels wrong. A shipment gets blocked. A storage warning shows up in Seller Central. A restock limit appears on an ASIN that used to ship freely. At that point, IPI stops being an abstract dashboard number and starts feeling like an obstacle, and most sellers go looking for a quick fix rather than an actual explanation of what the score measures and why it moved.

This article is that explanation. IPI is not a punishment mechanic. It is Amazon’s way of measuring whether your inventory is moving efficiently through its fulfillment network or sitting in a way that blocks space for products that would move faster. Slow-moving stock does not just cost you in storage fees, it actively drags this score down, and a lower score means less room to operate the rest of your catalog the way you want to.

What Does Amazon IPI Score Measure?

The Inventory Performance Index is a single number, on a scale of 0 to 1,000, that summarizes how well you are managing your FBA inventory across four underlying signals. Amazon does not publish the exact formula or the weighting between the four components, but it does confirm what they are, and each one maps to something a seller can actually check and act on rather than a black box.

Excess inventory percentage

This measures how much of your FBA inventory Amazon considers overstocked relative to how fast it is selling. A product where the cost of holding it exceeds the cost of discounting or removing it gets flagged as excess. If you are carrying 90 or more days of supply on a slow mover, this is the component that suffers first.

Sell-through rate

Calculated as units sold and shipped over the trailing 90 days, divided by average FBA inventory during that same window. A healthy rate keeps this component strong. A rate that drifts below 1.0, meaning you are accumulating inventory faster than you are selling it, pulls the whole score down.

Stranded inventory percentage

Stranded inventory is stock physically sitting in a fulfillment center with no active, buyable listing attached to it, usually because of a listing error, a suppressed ASIN, or a category restriction. It generates storage fees while contributing nothing to sales, which makes it one of the most damaging and most fixable components on this list.

In-stock rate

This tracks whether your popular, high-demand products stay consistently available rather than running out. A strong in-stock rate on your bestsellers helps offset weaker performance elsewhere in the score, which is part of why concentrating attention on your top movers tends to produce faster overall improvement.

Source: Amazon Seller Central Inventory Performance Index documentation. Amazon updates IPI weekly based on your trailing inventory data, so the score you see today reflects recent behavior, not a static annual review.

How Slow-Moving FBA Inventory Hurts Your IPI Score

A product does not need to be completely unsellable to damage your account performance. A SKU with weak but nonzero velocity is often the most quietly corrosive kind of inventory, because it does not trigger an obvious red flag the way a fully dead listing does, yet it sits there every single day contributing to excess inventory percentage and dragging down sell-through rate at the same time.

Here is the mechanism in practice. A product launches and sells reasonably well for the first few months. Demand softens, but you keep restocking at the old pace because the sales history still looks fine on paper. Within a few months, average inventory on hand climbs faster than units sold, sell-through rate drops, and the same units that were once considered healthy stock now register as excess. None of this requires a single dramatic event. It happens gradually, which is exactly why it tends to go unnoticed until a storage warning forces the issue.

Why IPI Matters for FBA Storage Limits and Restock Capacity

Amazon sets a minimum IPI threshold, currently 400, that determines whether your account has full storage flexibility or faces capacity limits. Sellers above the current threshold generally avoid IPI-based storage restrictions, but capacity can still be affected by sales forecasts, fulfillment-center capacity, and other account-specific factors, so a high IPI score is necessary but not automatically sufficient for unlimited space. Score below the threshold and Amazon caps your total storage capacity in cubic feet, restricts new inbound shipments, and can apply ASIN-level restock limits on individual products, sometimes even your bestsellers, regardless of how well they are actually selling. Amazon first introduced this monthly, cubic-foot-based capacity management system in March 2023, tying storage limits directly to IPI, sales forecasts, and shipment lead time rather than the older quarterly review model.

Amazon’s capacity model has continued to evolve since that 2023 shift. Recent seller reporting and industry coverage suggest tighter buffers in some accounts, including a shorter forecasted-sales window and reactivated ASIN-level restock limits, though Amazon has not published a single consolidated announcement covering every detail sellers report seeing. The practical takeaway is the same regardless of the exact mechanism: verify your current capacity and restock limits directly in Seller Central rather than assuming last year’s allowance still applies, since even sellers comfortably above 400 report operating with less buffer than in prior years.

The opportunity cost here is the part most sellers underweight. Slow stock does not just sit quietly generating storage fees, it occupies capacity that a faster-moving product could otherwise use. If a bestseller you know will sell cannot be restocked at the quantity you want because your account capacity will not accommodate the inbound shipment, that is not a hypothetical, it is a direct, measurable revenue loss caused by inventory that has nothing to do with the product actually being constrained.

IPI score ranges and what they typically mean for your account

Ranges are directional, based on current seller reporting and Amazon guidance, not an official published scale. Amazon reserves the right to adjust the minimum threshold based on network capacity, so verify your current standing directly in the Inventory Planning performance tab in Seller Central.

If your IPI is falling, the problem is usually not the whole catalog, it is often a few SKUs creating excess inventory and low sell-through. Isolating which specific ASINs are dragging the score down is almost always more productive than trying to improve every product at once.

How to Improve IPI Score Without Just Removing Inventory

Removal is one lever, but it is rarely the fastest or most efficient one on its own, and defaulting to it every time a SKU underperforms tends to leave money on the table. Here are the practical levers worth working through first.

Fix stranded listings first

Stranded inventory contributes to your score while providing zero commercial benefit, since the units are sitting in a fulfillment center with no active listing to sell against. Fixing a suppressed listing or resolving a category restriction is usually the fastest, cheapest improvement available, because the inventory does not need to move anywhere, it just needs a working listing attached to it again.

Improve sell-through rate on specific SKUs

Targeted price testing, refreshed images, updated keywords, or a Lightning Deal can restart velocity on a product that has simply lost visibility rather than lost genuine demand. This works best on SKUs that still have organic ranking and review history to draw on.

Reduce excess units through smarter forecasting

Given the tighter five-month forecast window now in effect, review your reorder points and lead times so you are not restocking at a pace built for the old six-month buffer. Overstocking against outdated forecasting assumptions is one of the more avoidable contributors to a rising excess inventory percentage.

Run targeted promotions on aging stock

A discount or coupon aimed specifically at units approaching the aged inventory surcharge threshold can move stock before it becomes a double problem, hurting both your IPI score and generating an additional fee on top of standard storage. For the full breakdown of how that surcharge timeline works, see the aged inventory surcharge tier structure and the earlier article in this series, which walks through why day 150, not day 181, is the real planning deadline.

Recover slow-moving stock through a new sales channel

This is the lever most sellers have not fully explored, and it is worth understanding as distinct from both discounting and removal. Rather than cutting price on Amazon or paying a removal fee to pull inventory out entirely, you can route stagnant FBA units to independent retailers who sell through their own storefronts, with the actual shipping still handled by Amazon.

How Onlihub Helps Improve IPI and Free Up Storage Capacity

Amazon’s own Supply Chain Services integration page for Onlihub describes this mechanism directly. Onlihub connects sellers with a network of independent online stores that sell FBA inventory through their own channels. Every order is still fulfilled by Amazon Multichannel Fulfillment, meaning units never leave Amazon’s warehouses, there are no removal fees, and the seller sets their own recovery amount per SKU. According to Amazon’s documentation, this recovery path can help improve sell-through, support IPI improvement, and free up storage limits, since units that sell through this channel stop counting as excess inventory the same way stagnant, unsold stock does.

The mechanism connects directly back to the score components covered earlier. A SKU moving through an Onlihub-routed sale can help sell-through rate in a similar way to an Amazon.com sale, since a unit sold and shipped counts as a unit sold and shipped regardless of which storefront the order originated from. That improvement in sell-through can, in turn, help reduce the excess inventory percentage on that ASIN, which is the mechanism that eases storage pressure and restock limits across the rest of your catalog. Actual score movement depends on your overall account mix and Amazon’s undisclosed weighting, so treat this as a genuine lever rather than a guaranteed fixed increase.

This is meaningfully different from liquidation, where inventory typically returns a small fraction of retail value in a single lump transaction and then exits your account entirely. Routing inventory through independent retailers keeps units inside the FBA network, generating ongoing sales at a defined recovery amount, while your account benefits from every one of those sales the same way it would from a full-price Amazon order.

A Simple Weekly IPI Check

You do not need a complex process to stay ahead of this. A short, repeatable weekly check catches most problems before they compound into a storage restriction.

Do this weekly

Check your current IPI score and the trend over the last few weeks, not just the single number. Scan the Inventory Age report for SKUs entering the 91 to 180 day range. Review the Stranded Inventory report and fix any listing issues immediately, since these are usually the fastest wins available. Check sell-through rate on your top 10 to 20 SKUs by volume, since these carry the most weight in your overall inventory health. Flag any SKU with declining velocity for a specific next step, whether that is a price test, a promotion, or a recovery channel, rather than leaving it unaddressed for another week.

Identify Which SKUs Are Dragging Down Your IPI Score

IPI is not a mysterious penalty system. It is a direct reflection of how efficiently your inventory is moving, built from four components you can check individually and improve deliberately. The sellers who keep their score comfortably above the 400 threshold are not the ones who got lucky on which products sold. They are the ones who check stranded listings, watch sell-through rate on a schedule, and have a plan for slow movers before those units start dragging the whole account down.

If slow-moving inventory is dragging down your account health, identify which SKUs could move through Onlihub before IPI and storage pressure get worse. Run your numbers with the Onlihub storage fee calculator, or create a free supplier account to see what your specific inventory could recover. No monthly or setup fees, and you only pay when a unit sells.

More in this series

What a “Dead” SKU in FBA Actually Costs You

The 181-Day Rule: When Amazon’s Aged Inventory Surcharge Starts

Read more on the Onlihub blog