π Overview
Amazon's Inventory Performance Index (IPI) Score and FBA Capacity Limits are two interconnected systems that directly control how much inventory you can store and send to Amazon's fulfillment centers. For FBA sellers, these limits can quietly throttle your ability to restock fast-moving products β costing you sales, rank, and revenue. In this guide, you'll learn how both systems work, how they interact, and the practical steps you can take to protect and expand your storage capacity.
π― Who This Is For
π± Beginner sellers
You're new to FBA and want to understand why Amazon limits how much inventory you can send in.
You've received a notification about capacity limits or IPI and aren't sure what it means.
You want to set up healthy inventory habits from day one to avoid penalties later.
π Advanced sellers
You manage a large catalog and are consistently bumping against capacity ceilings during Q4 or peak seasons.
You're optimizing your IPI Score to unlock more storage for high-velocity ASINs.
You're building a multi-channel fulfillment strategy to reduce FBA dependency and free up capacity.
π Key Concepts You Need to Know
π Inventory Performance Index (IPI) Score
The IPI Score is a metric Amazon uses to evaluate how efficiently you manage your FBA inventory. It's a rolling score, typically ranging from 0 to 1,000, calculated based on four key factors:
Excess inventory percentage β How much of your inventory has more than 90 days of supply on hand.
Sell-through rate β How quickly your inventory sells relative to the average units you have available.
Stranded inventory percentage β Units sitting in Amazon's warehouse with no active, buyable listing.
In-stock rate β How often your popular products are actually available for purchase.
Amazon historically uses a threshold of 400 as the minimum IPI Score to avoid storage restrictions. Scores above 400 give you access to standard or higher capacity. Scores below this threshold can trigger reduced storage limits and added scrutiny.
π¦ FBA Capacity Limits
FBA Capacity Limits are monthly caps (measured in cubic feet) that determine the maximum volume of inventory Amazon will allow you to store across its fulfillment network. These limits are assigned at the account level β not per ASIN β and are updated on a rolling monthly basis, typically announced three weeks before the start of each month.
As of Amazon's current system, capacity is broken down by storage type:
Standard-size
Oversize
Apparel
Footwear
Each category has its own limit, so a seller with high oversize volume and low standard-size volume will see very different constraints than a seller running a mixed catalog.
π How IPI and Capacity Limits Interact
Your IPI Score influences your capacity allocation. Sellers with higher IPI Scores are generally rewarded with larger capacity limits because Amazon trusts they'll turn inventory efficiently. Sellers with lower scores may receive tighter limits, making it harder to send in enough stock β which can ironically cause stockouts that further hurt IPI.
Understanding this feedback loop is critical: poor inventory management leads to a lower IPI, which leads to tighter capacity, which leads to stockouts, which leads to lower in-stock rate, which further depresses IPI.
π° FBA Inventory Storage Fees
Monthly storage fees are charged per cubic foot for inventory stored at Amazon fulfillment centers. These fees increase significantly in Q4 (OctoberβDecember). Additionally, aged inventory surcharges (formerly long-term storage fees) apply to units stored beyond 181 days and again at 271+ days. Excess inventory sitting in your storage allocation doesn't just cost you money β it also drags down your IPI Score.
π¬ Restock Limits vs. Storage Limits
Amazon has shifted over the years between restock limits (controls on how much you can ship in) and storage limits (controls on how much you can hold). The current system primarily uses capacity limits, which govern the maximum inventory you can have stored at any given time. When you hit your limit, your shipments will be rejected or require you to remove existing inventory before sending more in.
ποΈ Step-by-Step Guide: Managing Your IPI Score and FBA Capacity
1οΈβ£ Check Your Current IPI Score and Capacity Limits
Start by understanding where you stand right now.
In Seller Central, navigate to Inventory β Inventory Planning β Inventory Performance.
Review your current IPI Score and the four sub-metrics that drive it.
Go to Inventory β Manage FBA Inventory β Capacity Monitor to see your current utilization and upcoming monthly limits.
Note which storage type categories are closest to their limit β these are your highest-risk bottlenecks.
π‘ Pro Tip: Amazon announces your next month's capacity limits approximately three weeks before the month begins. Mark this date on your calendar each month so you can plan shipments proactively rather than reactively.
2οΈβ£ Identify and Fix Stranded Inventory Immediately
Stranded inventory is one of the fastest ways to hurt your IPI Score because it takes up space without generating any sales. It happens when your FBA units have no active, buyable listing β caused by listing errors, price alerts, or suppressed offers.
Go to Inventory β Manage FBA Inventory β Fix Stranded Inventory.
Review each stranded ASIN and the reason code Amazon provides.
Relist, fix the listing issue, or create a removal order if the product is no longer viable.
Aim to keep your stranded inventory percentage at 0%.
π‘ Pro Tip: Set a weekly calendar reminder to audit stranded inventory. Amazon can strand listings due to policy changes, pricing violations, or category restrictions β often with little notice to the seller.
3οΈβ£ Reduce Excess and Aged Inventory
Excess inventory drags down both your IPI Score and your cash flow. Amazon flags inventory as excess when you have more than 90 days of supply on hand relative to your sales velocity.
In Inventory Planning, sort by Excess Units to identify your worst offenders.
Run a Lightning Deal, Coupon, or Sponsored Products campaign targeted at clearing slow-moving SKUs.
Lower prices strategically to accelerate sell-through before aged inventory surcharges kick in at the 181-day mark.
For unsellable or unprofitable stock, submit a removal or disposal order β paying a small removal fee is almost always cheaper than ongoing storage fees and IPI damage.
π‘ Pro Tip: Use Amazon's Recommended Removal report (found in Inventory Planning) to get a pre-calculated list of units Amazon recommends you remove. This is a fast way to identify the highest-impact removals without manual analysis.
4οΈβ£ Improve Your Sell-Through Rate
Your sell-through rate measures units sold and shipped over the last 90 days divided by the average number of units on hand. A higher sell-through rate tells Amazon your inventory moves efficiently.
Review your Days of Supply metric in Inventory Planning and target a range of 30β60 days for most product categories.
Increase advertising spend on healthy, profitable ASINs to accelerate sales velocity.
Optimize product listings (title, bullets, images, A+ Content) to improve conversion rate, which drives sell-through without requiring additional ad spend.
Avoid the temptation to send in large quantities speculatively β match inbound shipments to realistic demand forecasts.
5οΈβ£ Maintain a Healthy In-Stock Rate on Top ASINs
Your in-stock rate component of IPI focuses on your highest-velocity, highest-revenue products. Amazon wants to see these items consistently available.
Identify your top-performing ASINs by revenue in Business Reports β Sales Dashboard.
Set up restock alerts or use Amazon's built-in Restock Inventory tool to monitor projected days of supply.
Create a restocking cadence aligned to your supplier lead times β if your supplier takes 30 days, your reorder point should trigger at 45β50 days of supply remaining.
For seasonal products, plan ahead: request higher capacity from Amazon (see Step 7) before peak demand periods.
π‘ Pro Tip: Stockouts on your best sellers hurt IPI and organic ranking simultaneously. A single prolonged stockout can take weeks of advertising spend to recover from. Prioritize in-stock health on your top 20% of revenue-generating ASINs above everything else.
6οΈβ£ Implement a 30/60/90 Day Inventory Planning Model
Instead of sending inventory in large, infrequent bulk shipments, shift to a more frequent, demand-aligned replenishment model.
30 days: What you have currently available at Amazon FBA.
60 days: What's currently in transit or at your prep center.
90 days: What's on order from your supplier.
This rolling model keeps your days of supply in the optimal IPI range, reduces excess inventory risk, and ensures you never have more than 90 days sitting static in a fulfillment center.
π‘ Pro Tip: During Q4, compress this model to a 20/45/60 day cycle. Amazon fulfillment centers get congested, receiving times slow down, and you want a tighter feedback loop to avoid both stockouts and excess inventory accumulation.
7οΈβ£ Request a Capacity Limit Increase
Amazon allows sellers to request additional capacity beyond their assigned limit. This is a formal request process within Seller Central.
Navigate to Inventory β Capacity Monitor.
Click Request Increase for the relevant storage type category.
You'll need to demonstrate need β Amazon weighs your IPI Score, recent sales velocity, and account history when evaluating requests.
Requests are typically reviewed and responded to within a few business days.
Note: Additional capacity obtained via a request may come with a reservation fee, which is refunded as a credit based on your sales performance during the period.
π‘ Pro Tip: Submit capacity increase requests at least 4β6 weeks before your anticipated peak demand period. Waiting until you're already constrained leaves you no runway to restock in time if the request is delayed or requires follow-up.
8οΈβ£ Use FBM as a Capacity Relief Valve
Fulfilled by Merchant (FBM) listings allow you to sell products directly from your own warehouse or a third-party logistics provider (3PL), bypassing FBA capacity limits entirely. This is a strategic tool β not just a fallback.
For your highest-demand ASINs during peak periods, create a parallel FBM offer so you can continue selling even if you exhaust your FBA capacity.
Use FBM for slower-moving or oversized products that consume disproportionate FBA capacity relative to their revenue contribution.
A 3PL partner can fulfill orders with Seller Fulfilled Prime (SFP) eligibility if you meet Amazon's SFP performance standards, preserving the Prime badge.
9οΈβ£ Monitor and Respond to IPI Score Changes Weekly
IPI is a rolling metric, not a snapshot. Consistent weekly monitoring prevents small issues from compounding into score-damaging problems.
Set a weekly task to review your four IPI sub-metrics in Inventory Planning.
Track your score trend over time β a declining score over 3β4 weeks is an early warning signal that requires action before capacity limits are affected.
Use Amazon's Inventory Health report (downloadable in the Reports section) to get granular data on excess, stranded, and aged units by ASIN.
π‘ Pro Tip: Your IPI Score updates weekly, but the impact on your next month's capacity is calculated using a snapshot taken at a specific point in the month. Confirm the exact evaluation date in your Seller Central dashboard so you know the deadline for making IPI improvements that will affect your upcoming capacity allocation.
π Real-World Examples
π± Scenario 1: The New Seller Hitting a Capacity Wall
Seller profile: New FBA seller, 6 months in, selling private label home goods.
β The problem: During their first Q4, they sent in a large bulk shipment to capitalize on holiday demand. They hit their FBA capacity limit and Amazon began rejecting inbound shipments on their fastest-selling SKU. They had excess stock on slower SKUs but couldn't get their winners into Amazon in time.
β The action taken: They submitted a removal order for 3 months of slow-moving inventory, freeing up cubic feet. They also submitted a capacity increase request 3 weeks before peak demand and created FBM backup listings for their top two ASINs.
β The result: They recovered 600+ cubic feet of capacity, kept their top ASINs in stock through Black Friday, and finished Q4 with a 94% in-stock rate on their top products. Their IPI Score improved from 390 to 467 within six weeks.
π Scenario 2: The Experienced Seller Optimizing for Scale
Seller profile: Established FBA seller with a 200+ ASIN catalog across standard-size and oversize categories.
β The problem: Their IPI Score was hovering around 420 β above the threshold but low enough that their capacity limits were restricting growth. Their oversize category was nearly full, but most of the space was occupied by 8 slow-moving oversize SKUs representing less than 5% of total revenue.
β The action taken: They conducted an ASIN-level profitability audit. They discontinued 5 of the 8 underperforming oversize SKUs, submitted removal orders, and reallocated that capacity to their top-performing standard-size products. They also ran a targeted PPC campaign to clear the remaining slow-moving oversize units.
β The result: IPI Score climbed from 423 to 611 over 60 days. Their overall capacity allocation increased by 28% in the following month's assignment, giving them the room to scale their best-performing product lines heading into a new season.
β οΈ Scenario 3: The Seller Who Ignored Stranded Inventory
Seller profile: Mid-size seller with 50 ASINs, primarily in apparel.
β The problem: A batch of 12 ASINs became stranded after a category policy change that triggered price alerts on their account. They didn't notice for 6 weeks. During that time, stranded inventory made up 18% of their total FBA units, causing their IPI Score to drop from 510 to 348 β below Amazon's threshold.
β The action taken: They audited stranded inventory immediately, fixed the pricing issue on 9 ASINs, and submitted removal orders for the remaining 3 (which were outdated variations). They also set up a weekly stranded inventory review process.
β The result: IPI recovered to 430 within 8 weeks. Their capacity limits, which had been reduced during the low-IPI period, were restored to normal levels the following month. The total cost of the error β in storage fees, removal fees, and lost sales from restricted capacity β was estimated at over $3,400.
π¨ Common Mistakes to Avoid
β Sending Maximum Inventory "Just in Case"
Why sellers do it: The instinct is to over-stock to prevent running out, especially before a promotion or peak season.
Why it backfires: Sending more than 90 days of supply inflates your excess inventory percentage, directly dragging down your IPI Score. It also increases your storage fee exposure and ties up cash in slow-moving units.
What to do instead: Use a demand forecast based on your last 30β90 days of actual sales data. Send 45β60 days of supply per shipment, then replenish based on actual velocity β not worst-case assumptions.
β οΈ Waiting Until You're Constrained to Request More Capacity
Why sellers do it: Most sellers don't review their Capacity Monitor until they receive a shipment rejection or a warning notification.
Why it backfires: By the time you're at capacity, you've already lost the runway to restock fast-moving products. Capacity increase requests take time, and there's no guarantee of approval.
What to do instead: Review your Capacity Monitor weekly as part of your standard inventory workflow. Submit increase requests 4β6 weeks before any anticipated demand spike β not after it has started.
π« Treating All ASINs Equally When Managing Capacity
Why sellers do it: It's easier to apply blanket restock rules across an entire catalog than to manage each ASIN individually.
Why it backfires: Slow-moving ASINs consume limited capacity that could be occupied by your highest-revenue, highest-margin products. You end up protecting low-performing inventory at the expense of your best sellers.
What to do instead: Tier your catalog by revenue contribution and sell-through velocity. Prioritize FBA capacity for your top 20% of revenue-generating ASINs. Move slow movers to FBM or reduce their FBA quantities to free space for products that earn it.
β Ignoring the IPI Score Until It Drops Below the Threshold
Why sellers do it: IPI feels like an abstract metric until it causes a real consequence like reduced capacity.
Why it backfires: IPI is a lagging indicator. By the time your score drops below 400, the underlying problems β stranded inventory, excess stock, poor sell-through β have already been compounding for weeks. The capacity impact follows shortly after.
What to do instead: Set a personal performance target of maintaining an IPI Score above 500, not just above 400. This buffer gives you room to absorb seasonal fluctuations and supply chain disruptions without ever falling into the restricted zone.
β οΈ Not Accounting for Amazon's Receiving Delays in Your Restock Timeline
Why sellers do it: Sellers plan their restocks assuming Amazon will receive and process inventory within 2β5 business days as advertised.
Why it backfires: During peak periods (especially Q4), Amazon receiving can slow to 7β21 days or more. If you're reordering with tight lead times, your inventory can be "in transit" and not yet available for sale right when demand peaks.
What to do instead: During Q4 and major sale events (Prime Day, Black Friday), add a 14-day buffer to your normal receiving time assumption. Ship earlier than you think you need to, and monitor your shipment status in Seller Central closely.
β Expected Results
When you actively manage your IPI Score and FBA capacity using the strategies in this guide, here's what you can expect:
Higher IPI Score (500+): Consistent inventory hygiene β removing stranded units, clearing excess stock, and maintaining in-stock rates on top ASINs β typically moves a seller's IPI into the 500β700+ range within 60β90 days of deliberate effort.
Larger capacity allocation: A higher IPI Score translates directly into larger monthly capacity limits, giving you the room to scale without artificial constraints on your best-selling products.
Lower storage costs: Reducing excess and aged inventory cuts monthly storage fees and eliminates aged inventory surcharges, which can add up to thousands of dollars annually for mid-size and large sellers.
Fewer stockouts: A proactive replenishment model aligned to actual demand keeps your top ASINs in stock consistently, protecting organic search rank and conversion rate.
Reduced operational risk: Sellers who monitor and maintain IPI proactively are far less likely to face emergency shipment rejections, forced removal orders, or capacity crises during peak selling periods.
Better cash flow: Matching inventory levels to demand reduces the capital tied up in slow-moving stock, freeing liquidity for growth investments like new product launches or advertising.
β FAQs
π€ How often is my IPI Score updated?
Amazon updates your IPI Score on a weekly basis. However, the specific snapshot date that Amazon uses to determine your next month's capacity limits is announced within your Seller Central Capacity Monitor. It's important to know this date because actions you take after the snapshot will not affect your upcoming month's allocation β they'll influence the month after that.
π€ What happens if my IPI Score drops below 400?
If your IPI Score falls below Amazon's minimum threshold (historically 400), Amazon may reduce your FBA storage limits below the standard allocation. This means tighter capacity limits that restrict how much inventory you can hold. You won't be suspended or banned from FBA, but your ability to restock fast-moving products may be significantly curtailed until your score recovers. The best response is immediate action on stranded inventory and excess stock.
π€ Can I increase my FBA capacity limits even if my IPI Score is low?
It's possible to request a capacity increase regardless of your IPI Score, but your approval odds are meaningfully lower when your score is below Amazon's preferred range. Amazon evaluates capacity increase requests holistically, weighing your IPI, recent sales velocity, and account history. A seller with a score of 350 is unlikely to receive a large capacity increase. The most reliable path to sustained higher capacity is improving the underlying IPI sub-metrics.
π€ Does sending smaller, more frequent shipments help my IPI Score?
Yes, indirectly. Smaller, more frequent shipments help because they reduce the risk of accumulating excess inventory (more than 90 days of supply). They also make it easier to respond quickly to changes in demand velocity. However, the direct IPI benefit comes from the outcome β lower excess inventory percentage and better sell-through rate β not from the act of shipping more frequently itself. You'll also want to weigh the trade-off of higher inbound shipping costs with smaller, more frequent sends.
π€ Do FBA capacity limits apply to all Amazon marketplaces?
Capacity limits and IPI Scores are marketplace-specific. Your IPI Score and capacity on Amazon.com (US) are separate from your metrics on Amazon.co.uk, Amazon.de, or other international marketplaces. If you sell across multiple Amazon marketplaces, you need to monitor inventory performance independently in each Seller Central account. Strategies for improvement are the same across marketplaces, but the numbers and thresholds may differ.
