Deep Analysis of Amazon FBA Fees and Inventory Performance Index

Amazon FBA Fulfillment by Amazon is a logistics service provided by Amazon, allowing merchants to store their products in Amazon's warehouses and have them handle shipping and customer service. This model greatly simplifies the operational processes for sellers but also comes with a series of fees and management challenges. This article will delve into the FBA fee structure, analyze the Inventory Performance Index IPI, and explore how to optimize costs and efficiency based on recent relevant reports.

Firstly, FBA fees mainly include storage fees, order processing fees, picking and packaging fees, as well as return handling fees. Among these, storage fees are one of the primary cost sources. According to Amazon’s regulations, storage fees are calculated based on product volume weight, with additional charges for long-term unsold items. For instance, starting from 2025, Amazon increased the threshold for long-term storage fees. For items stored in Amazon warehouses exceeding 180 days, the monthly fee per cubic foot increased by approximately $0.15. This adjustment put significant pressure on many small and medium-sized sellers because it means they need to more precisely control inventory turnover rates.

In addition to storage fees, order processing fees are another crucial component that cannot be overlooked. Different types of orders correspond to different processing standards. For example, the order processing fee for standard-sized items is $1.19 per item, while oversized items could reach up to $3.41. If the product weight exceeds a certain range, additional freight surcharges may apply. Reasonably planning product specifications and weight distribution can effectively reduce overall logistics expenditures.

However, behind this complex fee structure, Amazon introduced an important evaluation metric called the Inventory Performance Index IPI. IPI is a key score measuring a seller's inventory management capabilities, with a full score of 1000 points. Amazon regularly reviews sellers' IPI scores; if they fall below a set threshold for two consecutive quarters such as 400 points in 2025, it may result in inventory capacity restrictions. Once such restrictions are triggered, sellers not only face reduced warehouse space issues but also risk missing out on promotional opportunities. Improving IPI has become an essential task for every FBA seller.

So, how can IPI be enhanced? The first priority is optimizing inventory structure. Amazon recommends maintaining an appropriate amount of high-demand product inventory while reducing stagnant or accumulated products. By regularly clearing inventory lists, sellers can avoid excessive fees due to prolonged storage. Secondly, paying attention to sales forecasting is equally critical. Using data analysis tools, sellers can better judge which products have greater market potential and adjust their procurement plans accordingly. For example, reports indicate that an electronics retailer successfully reduced its overstock rate by 15% through improved algorithm models, significantly enhancing its IPI score.

It should be noted that in recent years, Amazon has placed increasing emphasis on sustainable development. In the 2025 update, the platform clearly stated that it would prioritize supporting sellers who adopt environmental measures. For instance, merchants using recyclable packaging materials or participating in carbon offset projects might receive higher evaluation weights. This indicates that future competition in FBA business will no longer be limited to price and speed but will increasingly focus on social responsibility.

In summary, Amazon FBA fees are complex and dynamically changing, but as long as core rules are grasped and flexibly responded to, sellers can still stand out in fierce market competition. Whether controlling storage costs or improving inventory performance, the key lies in meticulous management and continuous innovation. As industry professionals say the secret to success is always thinking from the buyer's perspective. It is hoped that this article can provide valuable references for sellers and help them achieve steady growth on the Amazon platform.