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Amazon Seller Metrics: How to Measure Your Account’s Health

By IT May 1, 2019
Amazon Business Metrics: Which Numbers Do You Need to Track?

Amazon Seller Performance Metrics: How to Understand Reports, Improve Account Health, and Avoid a Suspension

It is no secret that Amazon places a significant emphasis on maintaining consumer trust and providing positive end-to-end consumer experiences across their website. One specific layer of that commitment to consumer experience is the extension to sellers and the standards they are held to: Amazon seller accounts have specific performance targets to hit in order to ensure that consumers shop confidently and safely on the platform.

Outlined below are three Amazon business metrics that you — as a third-party seller on Amazon — should track regularly, along with their corresponding seller performance targets. In this post, we will provide an introduction to these core Amazon seller performance measurement metrics and how maintaining excellent standards will help optimize not only your account health but your inventory position, pricing strategy, sales velocity, and overall customer satisfaction.

Minimal Seller Performance Requirements

  • Order defect rate: < 1%
  • Pre-fulfillment cancellation rate: < 2.5%
  • Late shipment rate: < 4%

If you fail to meet these targets, you may have your selling privileges suspended by Amazon. Maintaining a low percentage of negative feedback and working proactively with customers to resolve order problems in a timely manner to avoid A-to-Z Guarantee Claims will also be beneficial to your overall account health.

1. Order Defect Rate (ODR)

The Order Defect Rate is a combination of three different metrics: the Negative Feedback Rate, the A-to-Z Guarantee Claim Rate, and the Service Chargeback Rate. Amazon adds these three numbers together to work out the percentage of the defective orders, grouping these orders into two categories — “Short Term” orders placed between one and two months ago and “Long Term” orders placed between one and four months ago. Orders placed in the last 17 days are disregarded, as not enough time has passed to gather enough customer complaints.

While the score only has a medium-level impact on the Buy Box algorithm, sellers with more than a 1% ODR are significantly penalized. Ideally, this number should be kept below 1% to have a serious chance of maintaining or increasing Buy Box share.

The Order Defect Rate differs from the Customer Service Dissatisfaction Rate, which is the percentage of customers who are not satisfied with your responses in Buyer-Seller Messaging. When you respond to a buyer message about an order, Amazon includes a survey immediately below your response asking “Did this solve your problem?” and buyers can respond only “Yes” or “No.” The rate calculation is the number of “No” votes divided by the total number of survey responses expressed as a percentage.

2. Pre-Fulfillment Cancellation Rate

This is the number of orders canceled by a seller prior to fulfillment and ship confirmation divided by the number of orders in the relevant time period. To calculate this metric, Amazon considers all order cancellations initiated by the seller for any reason. While a positive score does not have a strong impact on the Buy Box share, a Pre-Fulfillment Cancellation Rate greater than 2.5% will have a strong negative effect.

3. Late Shipment Rate

This metric is the number of orders with shipments that are not confirmed by the expected ship date divided by the number of orders in the relevant time period. The expected ship date is calculated based on the handling time you set in Seller Central and if you do not set one, the default is one to two business days.

Orders that are confirmed to be shipped late might lead to an increase in the number of customer inquiries, which can negatively impact the overall customer experience. Ideally, this number should be kept before 4% in order to positively impact one’s chances of winning the Buy Box and is grouped according to the last seven days and 30 days.

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Penalties for Missing Seller Performance Requirements

Amazon regularly monitors your customer performance metrics and will notify you when you start trending toward the negative and are off-target in order to allow you time to make any adjustments or optimizations. Typically, Amazon will contact you if you are experiencing poor performance and will ask for measurable improvement within 60 days of the initial warning.

Occasionally, sellers with low performance are immediately suspended or blocked. If this is the case for you, you may be eligible to have your account reinstated and can appeal Amazon’s decision by providing the seller performance team with a detailed plan of action for reinstatement.

How Feedvisor Can Help

At Feedvisor, our AI-powered platform displays all of your relevant Amazon data in one place, preventing you from having a muddled tech stack and needing to operate across multiple systems. By having all of your metrics in housed in one location — across pricing, advertising, inventory health and replenishment, content, and more — you can more effectively track your performance in your category and against the competition, take any necessary steps to improve or optimize, and solidify best practices that inform and enable your overall Amazon strategy.

Learn what Feedvisor can do for your business.

When you partner with Feedvisor, you automatically receive access to our true, AI-driven technology and hands-on team of e-commerce experts. Contact one of our team members today to learn more about our end-to-end solution for brands and large sellers on Amazon, Walmart, and e-marketplaces.

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