Through the IPI indicator. How is overstock inventory measured, reduced, and discounted on Amazon?
Being present in a Marketplace like Amazon allows you to have sales availability 24 hours a day. Involving control of stock levels, sales turnover and even inventory measurement in metrics to keep units available in Amazon logistics (FBA),, ensuring the shipment of the product in 1-3 days, through Prime that attracts many customers to buy online and be satisfied.
Inventory is one of the main indicators that support Amazon’s value promise, focused on customer satisfaction, on-time delivery and tracking of shipments agreed at the time of purchase. Just as they position the Seller in compliance and management within the platform.
What are those metrics that measure FBA inventory?
The IPI is the main indicator (KPI) that controls the inventory level within Seller Central, with an optimal score of 500 points and is calculated by the algorithm using the following parameters:
- Previous sales and future sales projection
- Assorted inventory
- In-stock inventory available
- Inventory age
- Inventory not available for sale
These parameters are weighted and yield a signalized score available to consult after 60 days of stock in FBA through the central Seller dashboard.
The benefits of having a good IPI level are evident in higher positioning, lower storage costs and benefits on the products. As well as access coupons, flash offers or Top offers that allow the receipt of larger units or inventory.
This metric and control can be consulted at any time and place using the Seller App with updated information instantly.
What to do when I have excess inventory or a very high IPI?
Excess inventory is one of the problems that has the greatest weight when calculating the IPI. Its importance can be caused by the low turnover of units, a low demand from users and a high time of the units in the warehouses. The first step is to identify what is generating this high inventory rate, detecting where these units are located, if they are in a state of sale or if it is unfit inventory, as well as the days of each unit within the logistics centers. Once this is identified, it is possible to generate surplus inventory liquidation by volume, a discount percentage or even an amount in value on certain dates. As well as recommendations of suitable products and recommended prices are generated for the output of the product in less time and within the frame of reference of the category.
Esta función ha sido habilitada recientemente y permite la carga de estos descuentos hasta con 250 referencias en simultáneo.
This new tool allows you to view excess inventory and offer a price discount, supporting the reduction of storage costs within logistics centers. Found via all inventory management → page features
Secondly, the return of the inventory can be scheduled assuming the cost of returning these units to the address set in the central seller configuration. For more than assuming a withdrawal value, settlements or loss values greater than the value of the product are not generated.
In the last option you can assume the cost of amazon logistics liquidation, where sellers are allowed to obtain a remnant or liquidation action assuming the inventory removal, return and storage fees, processed for these surplus products.
You can consult the values here, it is important to verify that the product may NOT be valid to settle if:
- It is expired
- It is a product returned for defective
- It is previously withdrawn inventory
- It is dangerous goods or hazardous materials.
- Items damaged in warehouse.
If you still have questions about IPI and excess inventory, or how to manage how to sell productos en Amazon, Década has a specialized marketplace team ready to advise you throughout the process. In addition, to help you solve all your doubts about how to get the most out of the tools and new releases to boost your online business on Amazon.