FBA capacity is not unlimited and it is not the same for every seller. Amazon allocates it, and the Inventory Performance Index is the main input to that allocation. The score is a composite of how well you turn inventory into sales without tying up space — and because it is a rolling measure, the time to fix it is always earlier than the moment you notice it.
What IPI measures
Amazon has adjusted the exact composition over time, but the components have consistently reflected four behaviours:
Two of the four components pull in opposite directions. Cutting inventory to clear excess will eventually hurt in-stock rate. The goal is not minimum inventory; it is the right inventory, which is a forecasting problem before it is a storage problem.
How capacity is set
Capacity is managed in cubic feet rather than unit counts, which means bulky, slow-moving products cost you far more room than their revenue justifies. Amazon exposes the allocation and any overage in the capacity tooling in Seller Central, and it may offer a mechanism to request additional space at a cost.
Two practical implications. First, the product mix decides the ceiling — one oversized slow mover can consume the space of dozens of small fast movers. Second, paying for extra capacity is a legitimate tool for a genuine seasonal spike, but it is an expensive substitute for forecasting, and it does not improve the underlying score.
The five levers that actually move the score
1Fix stranded inventory this week
Filter for stranded units in inventory management and resolve every one. Each is a listing problem — suppressed image, missing compliance field, pricing error — and each is holding space you are paying for while earning nothing. This is the fastest available improvement.
2Cut the tail
Rank ASINs by units sold over the last 90 days. The bottom of that list, in cubic feet, is where your excess lives. Decide per ASIN: discount to clear, remove to a 3PL, or liquidate. Indecision is the expensive option.
3Restock to velocity, not to comfort
Shipping six months of cover into FBA for a product selling ten units a week is a capacity decision disguised as a purchasing decision. Hold the depth at your own warehouse or a 3PL and send in four to eight weeks at a time.
4Protect in-stock on the top decile
Your best ASINs should never run out. Set restock alerts on them specifically, and treat a stockout on a top seller as an incident — it costs rank as well as sales.
5Right-size the packaging
Capacity is volumetric. Reducing packaged dimensions improves capacity usage and can lower your size tier fees at the same time. It is the only lever here that improves two numbers at once.
Clearing excess without torching margin
The instinct is to fire-sale everything. A more profitable sequence:
| Step | Action | When to use it |
|---|---|---|
| 1 | Coupon or small price cut plus PPC push | Product is healthy, just over-stocked |
| 2 | Bundle with a fast mover | Slow unit has genuine complementary value |
| 3 | Outlet or deal placement | Mid-tier units, seasonal tail |
| 4 | Remove to a 3PL | Product sells fine but does not deserve FBA space |
| 5 | Liquidate or dispose | Storage cost exceeds any realistic recovery |
Work down the list in order. Sellers who start at step five give away margin on inventory that step one would have cleared.
Planning capacity for Q4
The mistake is universal: brands act on capacity in October for a holiday period whose allocation was influenced by their behaviour over the preceding months. Build backwards from your peak instead. If you need the space in November, your excess has to be gone by September and your sell-through has to look healthy through the autumn.
Rule of thumb: whatever you plan to do about capacity, do it a full quarter before you need the room. Our Q4 playbook works to the same calendar for the same reason.
The monthly check that prevents all of this
Fifteen minutes, once a month: open inventory health, note the score and its direction, clear stranded units, list any ASIN with more than 90 days of cover, and decide one action for each. Brands that do this never have a capacity emergency. Brands that do not have one every year, at the worst possible time.
Frequently asked questions
What is a good IPI score?
Amazon sets and occasionally revises the threshold that affects capacity, so the safe operating answer is to stay comfortably above the current published threshold rather than to hit a specific number. A score drifting downward month over month matters more than the absolute value in any single week.
How often does Amazon check IPI?
The score updates continuously and is read at defined points ahead of each capacity period. That is why a Q4 fix in late October is usually too late — the measurement window that sets your holiday capacity has already passed.
Does removing inventory improve IPI immediately?
Not instantly. Removals reduce excess and improve sell-through over the following weeks, so they help the trend rather than the same-day number. Plan removals six to eight weeks ahead of the period you need capacity for.
Keep your capacity out of the danger zone
Inventory health, restock planning and removals are part of our flat-fee Amazon management — reviewed monthly, not in a Q4 panic.
See what we manage →