Improve your IPI Index Score - Amazon FBA Inventory Management

talk hi guys this is elena from amazonia ppc and today i wanted to share my views on the latest us announcements that amazon did for with regards to the inventory management basically what they said is that the latest ipi score uh threshold is going to be 500 so sellers below threshold 500 will be subject to limits effective august 16 2020 they don't mention what limits will be subject to so they owe us an explanation there then second thing that they mentioned is quantity limits so um on an asian level quantity limits will be introduced for products in fba and um they say most products will have enough space available for over three months of sales and they don't mention which ones won't have it which is crazy and free removals promotion meaning that you can create a removal order without paying any extra fees uh to do that and they will uh allow it starting from july 14th so as you see it's been going on for a couple of days now and um i made a video a couple days ago last week about preparations for q4 and i cannot stress enough how important it is to have your inventory management figured out and in place and make sure you do it right because that's going to be pretty big this year amazon is obviously not giving advantage to sellers who can provide consistency in sales like they always basically did it's not a new thing they just keep pushing it forward more and more so this is going to be a change that doesn't really uh suit smaller sellers the ones that are just starting to do their first pl product for example and all of that and one of the ways how people are going to deal with that is resorting to fpm uh simply because it could possibly be a cheaper option for them um if they don't uh scale they haven't scaled their account too much and it makes more sense for them to just like use fbm instead of fba uh switch to fpm and um yeah one of the other ways how people are going to deal with this is trying to fix their api scores even though that doesn't mean they won't be subject to quantity limits so basically what they're telling you here is that you can still uh be introduced asian level quantity limits on some products from your portfolio even if your ipi score is 500 they basically don't mention any correlation between these two things um so how do you fix your ipi scores it's a thing that will not always depend on you and it will not be always something that's 100 in your control but there are things that you could possibly do to fix it to improve it at least for a couple of points and uh every point will matter in q4 because the greatest sales velocity is there during that time so um i'm just gonna quickly run down all these uh top influencing factors that they mentioned of course excess inventory we have a lot of uh sellers that um whose products weren't super relevant in the lockdown economy so their worst nightmare was that they lost sales and they were forced to either decrease the prices of their products just to get rid of the stock or just play a waiting game to see if uh something will change if they're if the lockdown will be lifted or something like that will happen so people who are dealing with excess inventory for that part of the portfolio that isn't super relevant in the lockdown economy one of the best recommendations we could make is to make a removal order and funnel this uh inventory through some other platforms who possibly are charging you less fees also excess inventory could be solved through trying to target different types of keywords see if your product could possibly be repurposed for something else in the lockdown economy meaning you know if your product was used exclusively indoors you could come up um exclusively outdoors you can come up with different ways how you could use it indoors now in the in the new lockdown economy maybe target different keywords for multiple usages of products then moving forward your product research process one part of it should definitely be trying to figure out is this product going to be usable in the lockdown economy or not whether it even matters or it doesn't so that's something to contemplate when you work with excess inventory now is the time to make removable orders if you have something that's aged that's um that you don't see a huge future and selling through of it just return it home and see uh what you will do with it when it comes to the inventory that does sell but doesn't have a major sell through potential meaning doesn't have a lot of sales velocity then in the sell-through category of the inventory performance index one of the best things you could do is improve conversion rates and there are many many ways um how you can do that uh conversion rates in amazon um performance by ace and reports in the business reports it's called unit session percentage um you can fix unit session percentage or conversion rate through improving the listings quality of course through high quality copywriting through imagery adding video is pretty big for this year in your either in your product images and videos either through your advertising um also sell through could be improved of course through pricing if you lower the price a little bit and you're selling in a category where some of your shoppers are value shoppers so maybe pricing makes a change then decrease the price and then maybe also improve your conversion rates by bidding on your own products through product targeting you target your own products you show up on your own product detail page to make sure that no one else is stealing that market share away from you um also provide a clear branded experience on your listing to make sure that your customers have a become loyal customers in the future if part of your business model is repeat purchases is based on repeat purchases and customer loyalty so there are different ways how you can improve your conversion rate but you need to continuously test and see which thing things work which works what works and what doesn't but um generally when it comes to sell through metric and amazon one of the things that are most important is pricing and um amazon is generally perceived as a marketplace for value shoppers that's how it's been positioned since it began and they're working on improving that uh that stigma around them i guess but right now still if there's a prime day going on or you're in the midst of boxing there hanukkah all these big days and q4 huge majority of customers that are saving up for that period will get let loose on their wallets if you give them a good enough offer just make sure you pack it up wrap it up into something that makes sense right if uh one of your best if you have a best seller that deals with sell with bad sell obviously you're not going to have a best seller that deals with sell-through issues but some of the products that uh are dealing with sell through for some reason they could be introduced that some uh if it's a good product it could be introduced at the top of the funnel meaning you know a product that you give out on a certain discount to introduce your uh products to the new customers for example and make sure that they purchase again from you so sell through is mostly oriented around conversion rates and fixing them on the listing so more work needs to be done on the listing and creating an irresistible offer through copywriting through pricing through perception around your product and its functionalities to make sure it sells through stranded inventory um you fix that by either recreating the listing for those for that inventory that's stranded or creating a removal order so it's an easy thing to fix and most of the sellers aren't failing a stranded inventory it's just something that requires relevancy staying up to date and being uh being diligent about it basically and that's something you can easily fix um in stock inventory is something that um unlike excess inventory if you lack inventory dealing with stockouts especially for your best sellers this could be a serious problem most serious problems are excessively nice documentary and uh when it comes to in stock if you're dealing with stock outs it's just better to either reserve some kind of third-party provider for some small quantities so you can patch up if you stay out of stock it's better to be out of stock for 10 days than for 30 40 days until your huge batch arrives and resells again right um what i mean by that you should be a little bit smarter when it comes to shipments and organizing all of this with your suppliers from whether you're sourcing from china or india it doesn't matter i mean it does matter but it varies um so make sure that you have a plan that's like uh combined between it's a combination between uh smaller batches and bigger batches for smaller batches they should be there in the in your third party provider warehouse somewhere ready to ship out quickly in the usa to the amazon's warehouse where you can like pay some smaller fees for smaller quantities it's not something that every third-party provider will be happy to do but you should produce up your negotiation skills and try to make it happen for you and then bigger batches are the ones that you ship out through ships basically the cheapest way you can and uh bigger batches just start ordering bigger batches because um the sellers school will ensure consistency will be the ones who win on the amazon marketplace and now basically that's what they have confirmed with these changes that they announced and people are complaining about that but the thing is that um you know two years ago ipi index threshold was 350. now it's 500 that means that selling on amazon is going to be a science and at the same time to sum it up that also means that uh people less people will be uh compelled to do it so um the ones that stay will pick up the biggest pieces so that's that's the kind of scenario we're hoping for for everyone and um basically um the the takeaways from this video are to make sure that you at least uh either either keep small stock in 3pl warehouse either make sure you can pay for it for an air airway shipment that will arrive faster but ensure that there is a plan b in the work that will ensure that if you have to stay out of stock that it's not over a longer time period that you don't entirely sacrifice your rankings and um especially for your best sellers so we'll see how this whole thing plays out and um um hopefully that there there's going to be a successful q4 um thank you for watching and let me know if you have any questions i'll be happy to answer that below bye