Amazon Logistics uses the Inventory Performance Index (IPI) to help sellers monitor inventory health. According to the requirements of Amazon Logistics's storage restriction policy, once the IPI score is met, you can enjoy unlimited storage. If the IPI score falls below the standard value, the seller's storage capacity may be limited. For more details on IPI, check the link at the end of the article.

Previously, Amazon made a series of policy adjustments to better cope with the impact of the COVID-19 pandemic, protect our employees, and prioritize the delivery of products that people urgently need at this time. As mentioned in the previously released policy adjustments, Amazon will fully consider the impact these changes may have on sellers' Amazon Logistics Inventory Performance Index Score (IPI) and storage limit limits for the next quarter, and formulate corresponding countermeasures. The IPI design itself takes into account both the seller's immediate and long-term inventory performance. The seller's IPI score will be based on the time period in which the higher score was obtained.

If your recent inventory performance is low, then your Inventory Performance Index score will be based on your long-term inventory performance to ensure that the impact of policy changes on your inventory performance since COVID-19 is minimized. Additionally, after review, we have provided unlimited storage capacity or increased storage limits in the third quarter for sellers whose IPI scores were severely affected due to the following circumstances. If you have questions about potential storage limits for the third quarter, you can contact the Amazon Seller Support team for help. This section of sellers includes:

• Most inventory is stored in Amazon fulfillment centers in France
• Sellers affected by policy adjustments to the “Amazon Logistics Notice Concerning Suspension of Accepting Orders from Non-essential Consumers in Italy and France” issued on March 21
• Affected by the European site's “suspension of acceptance and processing of shipments over 15 kg” policy adjustments, the majority of sellable products are European sellers who are overweight and oversized

In order to ensure that we have sufficient capacity to continue to receive, replenish, and deliver products that people currently urgently need, Amazon Logistics has adjusted its storage restriction policy. Starting today, Amazon's IPI inventory performance index for Europe and Japan sites has been raised to 400 points (previously 350 points).

As before, before the end of each quarter, Amazon will check your IPI score 2 times (6 weeks before the end of each quarter and the last full week). You only need to keep your IPI score up to date during any of these checks to get unlimited storage for the next quarter. IPI scores for this quarter will be assessed this week and the week of June 21, respectively. Amazon has been sending emails to sellers with an IPI score below 400 to inform them of potential storage restrictions one after another, and suggest corresponding measures to improve them. You have 6 weeks to improve your IPI score. If your IPI score is still below 400 for the week of June 21, you will be subject to the storage restrictions announced in the previous email for the third quarter (July 1 to September 30).
You can check your current and potential future storage limits by logging into Seller Central and going to the “Storage Monitor” on the “Inventory > Inventory Planning > Inventory Performance” page or the “Inventory > Manage Amazon Shipments > Shipment Processing Progress” page.

Welcome to Seller Central and refer to the “Amazon Logistics Inventory Performance Index (IPI) FAQ” help page for more details.
America, Europe, Japan

Amazon Logistics Overage Fee: Only for sellers with an IPI score below 400, have storage capacity limits, and existing inventory exceeds the storage capacity limit. For the excess portion, Amazon will charge a storage overage fee in addition to the monthly storage fee and long-term storage fee (if applicable).

This fee previously only applied to FBA sellers on Amazon's US site. Amazon Europe will charge a monthly storage overage fee of €320 per cubic metre (or £7.8 per cubic foot) from August 1, 2020. Amazon Japan will charge a monthly storage overage fee of 31,727 yen per cubic meter starting September 1, 2020.
If you store inventory in Amazon fulfillment centers and exceed your storage limit on any day of the month, you will be charged an overstorage fee. This charge will occur even if your inventory was subsequently reduced to a level below your storage limits allocated for that month. The amount of the storage overage fee depends on the number of days the storage limit has been exceeded.

Monthly storage overage fee = current overage value x monthly cost per cubic meter
or average daily overage x monthly cost per cubic meter
or current overage value × average daily overage fee × number of billing days in the month
• Current Excess Value = Current Usage - Current Limit
• Average daily overage = current overvalue/current number of overage days
• Average daily overage rate = cost per cubic meter/number of days in the month

Assuming that the IPI score for small flowers is below 400, the storage limit for standard-sized products starting July 1 is:
1,000 cubic feet

► Case 1:
Inventory space occupied by standard-sized products for small flowers in August:
1,050 cubic feet
The storage excess values are:
1050-1000=50 cubic feet
The storage overage fee is:
50 x 7.8 = £390

► Case 2:
Assuming that Xiaohua is from August 1 to August 4 (4 days in total), the storage excess value is 100 cubic feet
On August 5, Little Flower created a removal order to remove 80 cubic feet of inventory
From August 5 to August 31 (27 days in total), the excess storage value for small flowers was 20 cubic feet
The storage excess values are:
100×4+20×27=940 cubic feet
So, the average daily overstorage value for small flowers in August is:
940/31 days = 30.3 cubic feet/day
The August storage overage fee is:
30.3 x 7.8 = £236

For sellers at risk of potential storage restrictions, we strongly recommend that you use the remaining 6 weeks of this quarter to improve IPI and take steps to reduce inventory, keep your inventory within the storage capacity limit, and avoid excessive storage fees before the corresponding site's storage overage fee collection date (US July 1, Europe August 1, Japan September 1).

Please log in to Seller Central and refer to the “Amazon Logistics Inventory Storage Overage Fee” help page for details.
America, Europe, Japan

Amazon takes into account both your recent and long-term inventory performance when calculating your Inventory Performance Index score, so recent changes in customer demand won't affect your long-term inventory performance. We recommend monitoring for signs of changes in buyer demand when making inventory planning decisions.

❓ My Inventory Performance Index score is below 400. How can I improve my score before the storage limit goes into effect?

We recommend keeping popular products in stock while reducing inbound shipments of low-volume or inefficient products. Please visit the Amazon Logistics Inventory Age page (Seller Central > Inventory > Inventory Planning > Inventory Aging) to take appropriate action on your overage inventory. Please prioritize inventory that is older than 365 days and will incur long-term storage fees. Reducing this inventory can help increase your IPI while reducing costs.

❓ How does the Amazon Logistics Inventory Availability Rate affect my inventory performance metrics?

The Amazon Logistics Inventory Ratio indicates how much value you can get from ensuring that an ASIN is in stock that can be restocked. For example, if you go out of stock on a popular product, your lost sales represent a missed opportunity to increase your IPI. However, a short delay in restocking restocable ASINs will not cause inventory performance index scores to be deducted due to lack of stock. Over the long term, if you don't restock your best-selling products, your remaining inventory is low, or if your inventory isn't making a profit, your Inventory Performance Index score will be affected.

❓ When will Amazon charge me storage overage fees?

You'll be charged applicable inventory storage overage fees after the end of the month in which the fees were incurred. For example, let’s say that you exceeded your storage limit on August 1 and removed inventory to a level below your limit by August 5. On September 1, you would be charged for the four days that you were over the limit in August.

❓ Which sellers will be affected by the storage overage fee?

Generally, this fee only affects a small percentage of FBA sellers. Sellers whose inventory usage exceeds their quarterly storage limit are affected.

❓ Do I have to pay storage overage fees if my removal order is suspended or delayed?

Inventory for which you created a removal order will not be subject to an overage fee, even if the removal is paused or delayed. Amazon expects the removal operation to resume normal operation by July 2020.

❓ How do I determine which SKUs are currently taking up storage space for a specific storage type?

The current usage of storage limits is real-time data derived from subtracting all inventory to be removed from existing inventory. The Amazon Logistics Warehouse Age page provides a list of all Amazon Logistics products sold, indicating the storage type of the product (standard size, oversize, clothing, footwear, flammables, or aerosols) and the amount of space the ASIN takes up (number of products being sold x volume of each product = cubic meters). You can also obtain this information through the Inventory Age Report.

Although using inventory age data is a good way to estimate current usage, the estimate may differ from the current usage shown on the storage monitor for a number of reasons. e.g.
• Current usage is a real-time data source, and the inventory age report data may be delayed up to 72 hours due to data processing time.
• Current usage includes unsellable inventory and does not include any items awaiting removal. These values are not included on the Inventory Age page and the associated report.
• Inventory with no active products may count towards current usage (such as Amazon inventory with no active sales information).

Amazon has made various adjustments to its fulfillment center facilities to protect our employees and ensure priority delivery of the products people need most today. We appreciate your patience in the meantime.

US station:
To ensure that Amazon fulfillment centers can receive, replenish, and ship your product's inventory to customers, we need to continue to delay processing removal orders. As a result, Amazon has decided to waive the long-term storage fee that will be incurred on May 15.