When sellers choose to ship internationally
with FBA, they automatically gain access to Amazon’s machine learning-based inventory management system. This system uses inputs like cost of goods sold, shipment time, and Amazon data to forecast customer demand and set optimum inventory levels. The performance of inventory management and replenishment is measured by a metric called the Inventory Performance Index
(IPI), which determines how efficiently FBA inventory can be managed.
Your IPI score is based on how well you:
Replenish popular products
Maintain healthy inventory levels
Fix listing problems
Exporters with a high inventory score are required to pay less than 1% of the storage fee as a percentage of revenue. A high IPI score will help to lower the storage cost and give you additional storage capacity in Amazon fulfilment centres. This will also help to reduce your operational costs and generate more sales.