Amazon has a reputation to live up to. And it makes sure that whosoever sells on Amazon plays the game by the rules and keeps the customers happy. What are these rules? These are termed as Amazon seller metrics that must be followed in order to maintain the health of the account and continue selling on Amazon.
But what exactly are the Amazon account health metrics? Let’s find out…
1. Order Defect Rate (ODR)
As the name implies, the Order Defect Rate (ODR) determines how good your products are to the end customers. It is calculated as the ratio between the number of faulty orders and the total orders during a 60-day time period.
The premise is to keep the customers happy but if the order has failed to meet the expectations, it will be counted as a defective order.
Amazon order is marked defective in the following scenarios:
- Negative customer feedback
- An A-to-Z guarantee claim is filed
- Service credit card chargebacks
Ideal CDR: less than 1%. If it breaches the mark, your Amazon account may get suspended.
2. Cancellation Rate ( CR)
This determines the percentage of orders cancelled by the seller before the fulfilment. This happens possibly when you’ve run out of stock or the product is found to be faulty before dispatching.
It is calculated as the proportion of the seller-cancelled orders and total orders placed in 7-days.
Though your problem can be genuine and unavoidable, Amazon sellers must focus on reducing the incidence rate of cancellations. Also, this can be seen as a lost opportunity to generate sales revenue.
Note: Your Cancellation Rate (CR) will not be affected if the customer cancels the order.
Ideal CR: less than 2.5%.
3. Late Dispatch Rate (LDR)
Delayed dispatch does no good to Amazon sellers’ performance. This not just upsets the customers as the order will be delivered late but puts Amazon in a tight spot. Toe the line and keep the LDR in check lest your account may be served with a warning or deactivation from Amazon.
It is calculated as the ratio between the number of orders dispatched after the expected shipping time and the number of orders over 10 or 30 days.
Ideal LDR: less than 4%
4. Valid Tracking Rate ( VTR)
Amazon customers track their placed orders to determine the tentative date of delivery. It is calculated as the ratio between the total number of orders with a valid tracking number and the number of Amazon orders over a 30-day period.
Keeping your customers updated of the current location of the orders is of utmost importance and value.
Ideal VTR: more than 95%
5. On-Time Delivery Rate (OTDR)
Amazon customers are promised timely delivery. Any unforeseen delay on the part of the sellers puts a question mark on Amazon too.
On-Time Delivery Rate (OTDR) can be referred to as the percentage of the number of orders that are delivered within the anticipated time.
The sooner the better is an unsaid rule for Amazon delivery. This makes your customers happy with the quick delivery service.
Ideal ITDR: more than 97%
6. Return Dissatisfaction Rate ( RDR)
How satisfied are Amazon customers even after returning the product? That speaks of the way returns are addressed by the company.
As per Amazon, “The Return Dissatisfaction Rate is the percentage of valid return requests that were not answered within 48 hours, were incorrectly rejected, or received negative customer feedback.”
Ideal RDR: less than 10%.
And it continues to drop if you:
- Receive negative feedback from the customers,
- Failed to respond within 24 hours of the the return request generated, or
- outright refuse to accept the return request.
All these metrics are important to improve the health of your Amazon. Whether you’re new or an old seller on Amazon, stay at par with the expected performance. Find and fix the problems in your products to stay on the right track to enjoy success on Amazon.
What would happen if I fail to meet the Amazon sellers health metrics?
Amazon sellers are supposed to adhere to the policies to maintain the health of the account. However, for those who are new to selling on Amazon, it can be hard to attain the target values on all the health metrics.
If you have failed to score well in one or two metrics, there is nothing to worry as you can recover your account’s health with concerned efforts such as forwarding a plan of action (POA).
This primarily lists
- Potential causes of the poor health of the Amazon account
- Workable steps to improve the health metrics
- Remedial action to prevent similar issues in future.
Ensure that you submit a well thought out POA within 2 days of the day when the performance issues are flagged by Amazon. Any delay or callous behaviour to respond to the company’s warning results in account deactivation.
How to check Amazon account health?
FBA sellers must ensure that all the Amazon policies are adhered to enjoy unhindered access to the platform.
Make it a point to examine your account health by following the steps:
- Visit the Seller Central homepage.
- Under Performance, click Account Health.
Get a closer look into your account’s performance and work on to close in the gap against the standard performance values. Also, Amazon reserves the right to take a suitable course of action. You may be warned or even the account can be deactivated.
Amazon keeps a close tab on the health of all accounts and time to time notify the sellers if they are failing to meet the performance targets. The crux of the matter is Amazon wants its customers to get nothing short of the best and expects the sellers to do their part to deliver quality performance.
In the worst case scenario if your account is suspended, you can recover it in most cases with your prompt response and responsible actions.
What more can Amazon sellers do to maintain good health of their account?
As an Amazon seller, keeping your account’s health in check should be your biggest concern. Some of the expert recommendations include
- Timely responding to product-related queries or customer feedback.
- Stay informed: Just because you have opened the account on Amazon, the job is not finished. Keep yourself apprised of what’s happening in the market. Find credible resources and do not forget visiting the company website for the latest on Amazon sellers.
The bottom line
It may look like a herculean task to maintain the Amazon seller account health but is very much doable if you have the right set of software tools to help you make the right decisions.
Sign up today and get access to Amazon seller tools to streamline product searching, profit analyzing, optimizing listings, repricing their listings, managing ads, improving their feedback, and many more.
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