Published by Admin
Posted on February 09, 2021
Every brand wants to have roaring sales each day. They wish to expand their business across the globe. Fortunately, there are several ways a brand can sell the products online through eCommerce channels like Amazon, Walmart, or eBay.
These eCommerce channels have plenty of unique features to make your listing look just flawless. These cool features include unlimited media storage, same-day or two-day shipping, inventory management, early access to special elements, and many more.
When we talk about Amazon, it has one special functionality related to its inventory known as Inventory Performance Index (IPI). Well, this is quite a foreign term to many. But in simple terms, the Inventory Performance Index (IPI) is a vital score bar to compute how well brands can manage their inventory on Amazon.
The inventory health score allotment is between 0 to 1000. The IPI has rolled out as an effective measure for brands as well as Amazon.
IPI factor assists in optimizing inventory, reducing inventory operating costs, and recovering lost sales. Brands can know the right quantity, right products, and right information about the same. Any brand on Amazon that scores 500 or above indicates that they are excelling well on Amazon whereas brands with a score below 500 indicate they need to focus on their inventory well. How to calculate IPI on Amazon is still unknown due to confidential protocols.
Factors that affect the Inventory Performance Index are as follows:
Now it is a bit natural to think your Amazon product listing is your capital asset as it can make or break a brand. If a brand has a lower IPI score, it is a bit uncomfortable. However, it can take proper action on the basis of the following points:
|Sell-through rate = Actual units sold till date / Actual Stock-in-Hand (Note it)|
Amazon likes when a brand gains a higher sell-through rate because that means goods are leaving their fulfillment centers really quickly.
Moreover, a brand can increase its sell-through rate by selling products in a bundle, offering attractive discounts and promo codes (if available), removing extra stock from fulfillment centers if not necessary at present, promoting all the products frequently to increase their sales.
It’s pretty easy to compute annual overstock wastage cost with its formula:
|Cost of inventory in hand x (multiply by) excess inventory stored = Annual overstock wastage expenses/cost|
However, this can also be avoided by making a robust pricing strategy, automating reorders for all the products, forecasting demands, constant market research, and adopting the latest trends.
In order to tactfully manage your inventory on Amazon for a fruitful return, connect with 99 YRS, 360 degrees performance-based global eCommerce marketing agency today on email@example.com.
We help you in forecasting the demand of your products, bundling products to increase sales, manage your entire inventory on Amazon and other eCommerce channels, create a custom pricing strategy, easily transfer stock to FBA centers, automate shipping orders, and marketing the same efficiently.