Returns and inventory management can be a daunting task, especially when you have a large number of orders to fulfill. That’s where Amazon FBA Returns and FBA Inventory Performance come in. These tools are designed to help you streamline your returns process, manage your inventory efficiently, and ultimately improve your overall business performance. With Amazon FBA Returns, you can easily manage returns and refunds, track your inventory, and ensure that your customers are satisfied with their purchases. And with FBA Inventory Performance, you can monitor your inventory levels, identify slow-moving products, and take action to prevent stockouts and overstocking.
What is Amazon’s FBA inventory performance?
According to Amazon, the Inventory Performance Index measures your inventory health and profits. It also takes into consideration how well you fix your product listing problems such as keeping popular products in stock. and remove unavailable products from your listings.
You’re probably wondering how to find your Amazon IPI score. You can see it on the Inventory Performance page as well as on your home screen in Seller Central. The higher your score, the better your FBA inventory is performing. Alerts on your Inventory Performance page will give you tips for reducing Amazon storage fees. Also, will notify you regarding carrying costs when it’s time to restock as well. You may need to reduce excess inventory, fix stranded inventory, increase your FBA in-stock rate, or take other actions to improve your IPI score.
Why Amazon IPI Matters
The Amazon IPI is a metric used to determine how your FBA business is performing over time. If your Amazon IPI score drops too low, you risk being subjected to limited storage and incurring overage fees. Amazon updates the IPI target depending on available space in FBA warehouses. So it’s important to keep a close eye on your metrics to stay in the top-performing range.
What happens when your IPI score goes below the threshold
If your Amazon IPI score drops below the minimum threshold of 450, you will be subject to inventory storage limits. You will be able to find your store and new restock limits by navigating to “Inventory performance” or “Manage FBA shipments.” If your Inventory Performance Index is below 350, 6 weeks before or during the end of the quarter. Then Amazon restricts you to stock more inventory and imposes a $10/cu ft fine on any excess units stored in your inventory.
The penalties are usually severe and may incur hefty storage fees and lead to lost Amazon sales, hence, it is crucial for you to monitor your inventory performance index (IPI) frequently.
How to Improve Your Amazon IPI Score
Improving your FBA inventory performance and practices will boost your IPI score. You need to understand your lead times and processing times, including how long it takes to order, repackage and label your products. Be as efficient as possible to stay in stock. Here are tips for improving each of the four metrics used to calculate your score. Even though Amazon does not declare the formula for commuting IPI score, it does tell us the factors that influence your IPI score and what you can do about it. Currently, four factors influence your IPI score –
- Excess inventory % provides you insights into your excess stock unit proportion.
- Stranded inventory % refers to the number of units that are not actively listed on Amazon, this further leads to excess storage costs.
- FBA sell-through rate refers to the number of units sold that are in stock.
- FBA in-stock rate indicates how well you manage your in-stock replenish able items.
Excess Inventory Rate
If you are overstocked with too much inventory at Amazon’s fulfillment centers, you need to sell or remove that excess inventory. Excess inventory is calculated based on what Amazon thinks you need to restock over 90 days. Anything over that is considered excess inventory. You could try lowering the price, liquidating, advertising more aggressively, or a combination of the three tactics to sell this inventory. Another option is to create a removal or disposal order so you’re not racking up storage fees.
Improve Your Sell-through Rate
FBA sell-through rate is also a 90-day metric. This is determined based on the number of units you’ve sold divided by what you had in FBA storage over that 90-day period. You don’t want your sell-through rate to be 0 (meaning you didn’t sell anything) or 100 (meaning you sold out). Instead, you want your sell-through rate to be as high as you can comfortably get it without the risk of running out of stock.
Fix Stranded Inventory
Inventory can be stranded for a variety of reasons. Maybe there was a listing error, or you might have deleted a listing but left inventory at FBA. Amazon will let you know the issue for each stranded ASIN in Seller Central. Be sure to check for stranded inventory regularly and fix any issues as soon as possible. If you’re able to stay in stock and sell your products, you’ll naturally have a good IPI score. Accurate and timely inventory forecasting is the key to maintaining a good IPI score and keeping your Amazon business running smoothly.
In-Stock Inventory
Amazon looks at the number of days you were in stock at FBA over the past 30 days to determine your FBA in-stock rate. This only applies to replenishable products. If you don’t plan to replenish, mark the product as non-replenishable in Seller Central.
Overview Of “Amazon FBA Returns”
If you’re a brand new seller there’s something that all e-commerce businesses have to deal with—processing customer returns. It’s always a little frustrating and disheartening when you see a return request come in. It’s not just that you’ll lose money on that sale—it means your customer was unsatisfied with their purchase of your product.
Returns are just a part of life as an e-commerce seller, and there’s no reason to panic if and when you face one. In this video, we’ll go over Amazon’s return policy, what has changed, and how it affects sellers. Then, we’ll show you how to understand and reduce your return rate so you can earn more happy customers.
What are FBA Returns on Amazon
When customers request to return a product they bought via FBA, Amazon immediately takes the return funds from your upcoming disbursement. Usually gives the customer a shipping label to return the item to the proper warehouse. Customers are on the honor system to return the item they no longer want within 45 days. And this procedure is called Amazon FBA Returns.
This is a big update because it shows sellers their top returned ASINs along with the top return reason. Depending on the reason, this information can help sellers improve their listing content or even the product quality.
Amazon FBA Return Policy
With FBA (Fulfillment by Amazon), Amazon handles fulfillment and customer service on behalf of sellers, which includes customer returns processing. Amazon operates by its customer return policy when determining if the item in question is eligible for a return. As a seller, you have no control over whether a product is accepted as a return, even if it is clearly the buyers’ fault that the product is damaged or defective.
In most cases, customers can request returns within 30 days of receiving their order. But Amazon can (and does) make case-by-case exceptions and accept returns beyond that 30-day limit.
If any buyer requests a return and sends back the item, Amazon emails the seller for notifying. If they have initiated a return, Amazon deducted the cost of the order from the seller’s account balance.
Amazon FBA Item Returned to Amazon Warehouse
After Amazon receives the customer’s return, they evaluate the condition of the product to determine if it is sellable or not. If the item was unused and still in the new condition, Amazon will return that product to your inventory, to be included in a future order.
If the item is damaged or in an unsellable condition, Amazon determines who caused the damage (either Amazon itself, during fulfillment, or the customer). If Amazon caused the damage to the product, you’re reimbursed for the product return.
However, if the customer (or shipping carrier) caused the damage to the product, Amazon will not reimburse you, and the product will be marked “Unsellable.” Some items can be categorized as “Defective” or “Customer Damaged” on Amazon. In that case, sellers must submit a removal order within 30 days after the returned item arrives at the fulfillment center. You can also request that Amazon returns or disposes of your unsellable inventory automatically in Seller Central.
When Customers Don’t Reply
If the customer does not return the product to an Amazon fulfillment center within 45 days of initially receiving it. Amazon will recharge the customer if they were already refunded, and will reimburse the seller for the item. Typically, Amazon automatically reimburses you after 45 days. In some rare cases, you’ll have to open a support case to get your reimbursement.
Extended Returns TimeFrame
Amazon allows customers to return eligible FBA items in the Baby category in new, unopened condition within 90 days. Products that have been opened or used are not eligible for returns in the extended time frame. Amazon will pay for the return shipping at no cost to the seller.
Conclusion:
Amazon FBA Returns and FBA Inventory Performance are indispensable tools for Amazon sellers who want to streamline their returns process, manage their inventory efficiently, and improve their overall business performance. These tools are designed to help you keep your customers satisfied, reduce the risk of stockouts and overstocking, and ultimately grow your business.
With Amazon FBA Returns, you can easily manage returns and refunds, track your inventory, and ensure that your customers are satisfied with their purchases. And with FBA Inventory Performance, you can monitor your inventory levels, identify slow-moving products, and take action to prevent stockouts and overstocking.
By utilizing these powerful tools, you can save time and money, increase your sales, and improve your customer satisfaction. As an Amazon seller, staying ahead of the competition is essential, and Amazon FBA Returns and FBA Inventory Performance can give you the edge you need to succeed.
