A friend who sells home storage bins called me in early October last year, voice half gone. His August numbers looked great, so he tripled his FBA inbound shipment. September traffic dipped, his IPI slid from the 520s to 350, and then the message every seller dreads popped up in Seller Central: storage capacity restricted. His holiday inventory plan was ready. His freight was sitting in a 3PL warehouse in Ontario, California. He just couldn't get it into Amazon's buildings. "Lao Mi," he said, "I'm watching peak season walk past my window."
I hear some version of this story a dozen times a year. Nobody looks at their IPI until the day it bites them, and by then it's already expensive.
IPI — the Inventory Performance Index — runs 0 to 1,000. Drop below Amazon's published threshold and your FBA storage capacity gets limited. Public sources have long cited 400; it was 500 during the pandemic and 350 when the program launched in 2018. Amazon can change that threshold and the evaluation cadence at any time, so verify the current numbers in Seller Central before you act. What follows is the part that doesn't change: what the score actually punishes, and how to climb back out.
What the score is really punishing
Amazon confirms four factors but not their weights. Anyone who's run FBA for a few years knows the first two do the real damage.
Excess inventory is the big one. Dead stock sitting on Amazon's shelves is, from their point of view, a product blocking a faster product. High excess inventory tanks your score faster than anything else. The worst case I ever saw: an account sliding from the 600s into the low 300s, and the root cause was a batch of Christmas string lights from 2022 — thousands of units still sitting there two years later. The seller's logic was "I'm already paying storage, might as well leave it." What he didn't realize was that those lights were deducting from his IPI every single day.
Sell-through rate is about velocity. A low rate means your replenishment rhythm is divorced from real demand. The classic trap: one good month convinces you to double your next shipment, then the slow season arrives and everything lands in your lap. I tell sellers to do the opposite — plan replenishment on a rolling 90-day sales average, never on a single peak month. A stockout hurts for a week. Excess inventory hurts your IPI, and your IPI determines whether you can ship at all during Q4.
Stranded inventory is pure management failure and should cost you exactly zero dollars. Listings get suppressed, pricing errors happen, policy flags appear — and the units sit in the warehouse, unsellable, still occupying capacity and still dragging the score. I check the "Fix stranded inventory" page in Seller Central weekly. Either fix the listing or create a removal order that day. Stranded stock is the most insulting kind of inventory: you own it, you pay rent on it, you can't sell it, and it lowers your grade.
In-stock rate pulls the other direction. The first three factors tell you to stop hoarding; this one tells you not to run dry on your winners. The score is a balancing act, so don't overcorrect. I've watched sellers yank their best sellers out of FBA to boost IPI, which is robbing Peter to pay Paul.
The score dropped. Here's the sequence.
Recovery runs in three phases. Don't expect a one-week turnaround — IPI is a rolling evaluation, and actions typically take weeks to a few months to show up.
Week one: stop the bleeding. Zero out stranded inventory first. Fix the listing if you can; if you can't, file a removal order immediately — back to your 3PL or straight to disposal. Then pull your excess inventory report and list every SKU untouched for 90+ days, and make a decision on each: mark down, run an off-Amazon promotion, or remove. One rule: removal orders cost money too, billed in weight tiers, so heavy goods go to local liquidation channels first. My home-storage friend removed over two thousand dead units in week one. The removal fees alone ran close to a thousand dollars. It hurt. His IPI stopped falling the following week.
Month one: fix the rhythm. Switch to small, frequent replenishment. Stop sending three months of FBA stock at once; send three to four weeks at a time and hedge transit risk with a sea-plus-express mix. Meanwhile, guard your winners' in-stock rate — don't create stockouts on your heroes while you're clearing the losers. The score will start creeping up. Resist the urge to ship big: capacity limits are granted per evaluation cycle, so stage freight at your 3PL and push it into FBA the moment the restriction lifts.
Quarter one: build the machine. IPI problems are never one-day problems; they're no-mechanism problems. My three non-negotiables for sellers: review the excess inventory report at the start of every month, and any SKU idle over 60 days goes on the clearance list automatically. Keep 30 to 45 days of cover in FBA per SKU, with overflow parked at a 3PL as buffer. Do a quarterly SKU cull — anything in the bottom of the sell-through ranking for two straight quarters gets discontinued. Follow those three and it's genuinely hard to fall below 400.
One last honest note. Amazon has revised this program several times — thresholds, evaluation cycles, fee structures all move. Verify every specific number against the current Seller Central policy. But one thing never changes: Amazon rewards exactly one kind of seller — the one whose inventory flows fast and doesn't take more than it gives. Run your stock like a river, not a museum, and the score takes care of itself.
Action checklist:
- Check your IPI and all four factors weekly; act the moment the score nears the threshold, not after the restriction lands
- Handle stranded inventory same-day: fix the listing or file a removal order, never overnight
- Force a monthly decision on any SKU idle 90+ days: mark down, promote, or remove
- Keep 30–45 days of cover in FBA, replenish small and often, park overflow at a 3PL
- Never stock out your winners while clearing losers — watch hero SKU in-stock rates separately
- Stage freight at your 3PL during restrictions so you can push into FBA the day limits lift
