Amazon USA announced on July 14 that its inventory performance Indicator score (IPI) had been revised to 500. From August 16, 2020, solstice sellers with scores below 500 will be subject to storage restrictions by the end of this year.

Some sellers speculate that Europe could not follow in the footsteps of America soon. Unexpectedly, on July 24, amazon announced that the European and Japanese stations have also made the same adjustment, the time limit from September 2020 1 solstice at the end of this year. 

The specific content of policy adjustment:

1. The inventory performance index score was raised to 500

In order to ensure that all goods have available storage space during peak season, three sites in the United States, Europe and Japan have adjusted the IPI value to 500, and sellers with a score below 500 will be subject to storage restrictions.

The us stations will be adjusted from August 16, 2020 to solstice by the end of this year, and the European and Japanese stations from September 1, 2020 to solstice by the end of this year.

2. Quantity limits of ASIN class are applied to goods

To ensure that customers have as many options as possible during peak season, all three sites will impose ASIN level quantity limits on FBA items. Most items will have enough storage space to sell for more than three months.

The seller can check the quantity limit on the replenishment page and replenishment report on the seller platform. Amazon will continue to review this, and sellers need to keep an eye on it, and if possible, the platform will increase the number of items they can store.

3. Amazon's "free remove" promotion

To help sellers avoid storage charges for long-unsold goods and add storage space for better-selling items, limited-time "free removal" promotions will be offered at stations in the United States, Europe and Japan. If a seller submits a removal order for inventory stored in Amazon's operations center, Amazon will waive the seller's removal fee.

Date: July 14, 2020 in the US, July 24, 2020 in Europe, and July 22, 2020 in Japan.

The seller can log in the seller platform > inventory > inventory planning > library age > on the far right of the button > drop down menu and select "create remove order".

4. Charge for over-storage

Amazon will also charge over storage charges starting July 1 in the US, August 1 in Europe and September 1 in Japan. To avoid this charge, the seller is advised to check inventory and reduce inventory that is older than 365 days and will incur long-term storage charges.

If the seller wants to keep the inventory performance index score above 500 points, it needs to start with inventory management.

Provide management advice for adjustment:

1. Check your inventory status regularly

The seller needs to have a detailed understanding of the status of all inventories, such as the number of items shipped (including those that have not been picked up/have not arrived in the destination country), the number of items in various states, such as under sale, not available, prohibited display, and the age of the inventory.

The purpose of this work is to solve the problem of inventory accumulation. For the unsold or old inventory, the seller has to find ways to promote it at a low price, or remove the order directly, so as to avoid excessive storage costs.

2. Use replenishment tool to replenish goods in time

Timely replenishment is to avoid running out of inventory. Too long waiting for replenishment will leave a bad impression on Amazon platform and thus affect the store operation. Sellers can make use of FBA replenishment formula: purchase cycle + days of arrival + days of stocking goods * average daily sales volume -FBA inventory. Amazon platform can customize the setting according to the actual sales situation. The platform will provide dynamic and real-time replenishment guide, and sellers can directly carry out replenishment according to the guide.

3. Improve IPI of inventory performance index and improve inventory health

The four factors that affect IPI are: percentage of redundant inventory, amazon logistics sales rate, amazon logistics inventory percentage that is not in sale, and Amazon Logistics inventory rate. These four areas are where you need to start to improve IPI.

The solution to the percentage of redundant inventory and the selling rate of Amazon logistics is to increase the selling rate and reduce the excess inventory. If the seller wants to get results in a short period of time, they can do so by testing.

Now that Amazon India will host Prime Day on Aug. 6-7, the European and U.S. sites may be pushed back to October, with Black Friday in November and Christmas in December, so to speak, this year's peak sales season is all concentrated in the last three months.