Inventory Placement Service — usually abbreviated IPS — is a paid Amazon FBA option that lets a seller send an entire inbound shipment to a single fulfillment center instead of accepting Amazon’s default multi-FC split. Amazon then redistributes the units internally at its own cost, saving the seller inbound freight complexity in exchange for a per-unit fee.
How Inventory Placement Service Works
- In Seller Central, open Settings → Fulfillment by Amazon → Inbound Settings → Inventory Placement Option.
- Toggle from “Distributed Inventory Placement” (default, free) to “Inventory Placement Service” (paid).
- When you build the next shipment plan, Amazon assigns a single destination FC — usually the one closest to your ship-from address.
- Amazon charges the IPS fee per unit at check-in; the fee varies by size tier and unit dimensions.
- Amazon transfers units internally to other FCs based on forecasted demand — you see them as “reserved” in inventory reports during transit.
Distributed vs. Inventory Placement
| Attribute | Distributed (default) | Inventory Placement Service |
|---|---|---|
| Number of destination FCs per shipment | 2-5 (Amazon-assigned) | 1 |
| Inbound freight complexity | Multiple pickups or split truckload | Single destination |
| Amazon fee | Free | Per-unit IPS fee |
| Time to sellable | Slower (all FCs must check in) | Faster to first FC; slower to full national coverage |
| Best for | Sellers with efficient LTL / freight networks | Sellers shipping small parcel, direct-from-manufacturer, or drop-shipping into FBA |
When IPS Pays Off
- Small-parcel shipments — one UPS/FedEx label instead of 3-5 usually saves more than the IPS fee.
- First-time shipments of a new SKU — you don’t yet know which FCs need it; let Amazon distribute.
- Direct-from-manufacturer — supplier ships one pallet to one address; IPS avoids trucking split loads.
- Small sellers without freight brokers — split shipments require LTL relationships most 1-2 person operations do not have.
When IPS Loses
- High-cube LTL shipments — the IPS per-unit fee typically exceeds LTL freight savings.
- Large seller with regional PL warehouses — you already ship close to each FC’s local hub.
- Slow-moving SKU — the internal transfer to other FCs can take 2-4 weeks, delaying national Prime coverage.
How SellerSonar Helps
- Retail Issues Alerts surface receiving delays, stranded units, and reconciliation issues that can hit either placement method.
- The Buy Box Tracker helps detect regional Buy Box loss caused by slow multi-FC distribution after an IPS shipment.
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Related Terms
- Fulfillment Center — the destination(s) IPS collapses down to one
- Amazon FBA — the program IPS is an option inside
- IPI (Inventory Performance Index) — the score placement decisions ultimately roll up into