IPI and aged inventory need different actions

IPI and aged inventory are related, but they are not the same operating problem. IPI is a broad health signal. Aged inventory is a SKU-level economics problem. Treating both with one generic "reduce inventory" project causes poor decisions.

Split the review

The IPI review should look at stranded inventory, excess inventory, sell-through, and in-stock rate. It asks whether the account is using FBA capacity efficiently.

The aged inventory review asks a sharper question: which units are approaching a fee or margin threshold, and what is the least bad action?

Choose actions by SKU economics

For each aging SKU, calculate contribution margin, expected storage cost, removal cost, recoverable resale value, and replacement cost. Then choose:

• discount or coupon if velocity responds
• remove if storage cost will exceed resale upside
• dispose if recovery value is lower than handling cost
• hold if seasonality justifies waiting
• stop replenishment if the root cause is demand

Avoid vanity sell-through

Clearing units at a loss can improve a dashboard while damaging cash. The decision should be based on expected future margin, not a desire to make the IPI page look cleaner.

Make aging visible before it is urgent

Review 30, 60, 90, and 180 day bands weekly. The best aged-inventory action is often taken before the fee date: smaller replenishment, earlier promotion, or canceling a PO.

IPI is the weather report. Aged inventory is the work order. Keep them connected, but do not confuse them.

Use IPI as a capacity warning

IPI should trigger a broader capacity conversation. If the account is trending down, review whether stranded inventory, excess units, low sell-through, or stockouts are driving the pressure. Each driver has a different fix. Removing inventory may help excess pressure, but it will not fix listing suppression or poor in-stock rate.

That distinction protects the team from overcorrecting. Some sellers respond to IPI pressure by cutting replenishment too aggressively, then create stockout and low-inventory problems on profitable SKUs. The IPI review should therefore separate account health from SKU-level economics.

Give aging inventory a deadline

Aged inventory needs a decision date before it becomes urgent. For each SKU, set the date when the team will choose a promotion, removal, liquidation, or hold strategy. Waiting until the fee appears reduces the options. Earlier action gives the seller time to test price, adjust ads, bundle units, or move inventory to another channel.

Record the chosen action and review outcome. If discounting did not move the SKU, the next review should not repeat the same discount without a new reason. The aged-inventory process should learn from each attempt.

Separate account goals from SKU goals

An account may need better IPI, while a specific SKU may need a margin-first decision that does not improve IPI quickly. For example, holding seasonal inventory may be rational even if it temporarily hurts sell-through. Removing a low-value bulky SKU may help capacity but recover little cash. The review should make both goals visible.

This prevents one dashboard metric from dominating every decision. The team can decide to protect IPI, protect cash, protect future demand, or accept a tradeoff. What matters is that the tradeoff is written down and reviewed before the next fee date.

Push lessons into purchasing

Aged inventory often starts at the buy. Supplier minimums, optimistic demand forecasts, late listing changes, or promotional assumptions can all create future storage exposure. After each aged-inventory action, update the next purchase rule. Otherwise the team will clear old stock and then buy its way back into the same problem. That feedback loop is what turns inventory cleanup into better buying. Without it, IPI work becomes a recurring cleanup project instead of an operating improvement.