Amazon lowered one of its performance metrics for sellers who use its FBA fulfillment service, but some sellers were puzzled over basic elements of the announcement and some also debated how fair those metrics were.
On Monday, Amazon announced it was lowering the Inventory Performance Index (IPI) threshold to 450:
- If your IPI is 450 or above in week 51 of 2020, starting January 1, 2021, you will not be subject to storage volume limits.
- If your IPI is below 450 in week 51 of 2020, you will continue to be subject to storage volume limits. We will notify you of your next period limits, which will go into effect on February 1, 2021.
(What is week 51, some sellers asked.)
Some sellers took note of the fact that they were still subject to restock quantity limits on a product level and asked when Amazon would lift those limits.
Each seller has to deal with the storage limit and the restock limit. “So, let’s say you need to ship 200 of some item, but your storage limit is already full with other items, you have first to free space in your storage limit until you get enough volume to ship the 200 you need,” one seller wrote.
And, the seller continued, “the storage limit also varies by category, so you might have some amount for apparel, other for standard size products, other for above-average size products.”
“It is complicated and Amazon doesn’t help sellers to understand,” the seller said.
Another seller said the restock limits that Amazon put in place at the beginning of the fourth quarter were doable, but called the new limits that went into effect around the second week of December draconian. “You just can’t stay in stock with the current restrictive restock limits and the amount of time Amazon is taking to receive inventory and make it available.”
Complaints around inbound shipments to Amazon Fulfillment Centers are chronic and, according to CNBC, were worse this year.
One seller pointed out that sellers had different ideas on how Amazon should have handled space restrictions, depending on if they were selling seasonal goods or launching new products, for example. “I have yet to see anyone post a solution to the holiday crunch that would have worked for everyone.”
The seller also theorized that the Covid-era IPI calculation was based mostly on $ sold / cubic foot. “If you sell relatively large / relatively inexpensive items, you will have a low IPI regardless of other metrics. If the formula goes back to normal, Sell-through seems to be the most important factor.”
But another seller said if the metric was about giving space for more $ and not really about inventory performance. then “why isnt it called profitability index?”
One seller said they’d rather see Amazon address shipping delays. “I would prefer that after 20 years of internet retail that they provide some guidance in how to respond to the world’s rudest customer base regarding our responsibility in the most colossal mismanagement ever within the United States Postal Service.”