How to Earn a Good Amazon Seller Performance Measurement
Updated: Sep 5, 2019
Amazon’s desire to maintain the trust of its millions of customers world wide means that measuring Sellers for their performance on the site is a crucial part of its business.
Amazon insists that all seller should work towards, and maintain, a level of customer service that is clearly set out on its own website, and which they say gives buyers a sense of safety and security about their third-party marketplace transactions.
Thompson and Holt managing partner Craig Gedey is vastly experienced in Amazon’s working practises and explains the targets they set Sellers and how to make sure you continue to meet them.
“Amazon clearly sets out its markers in three main categories for Sellers to aspire to,” Gedey says.
“They are having an order defect rate of less than 1%, having a pre-fulfilment cancel rate of less than 2.5% and a late shipment rate of 4%. If you don't hit those targets then your selling privileges can start to be removed, and ultimately you could become suspended.
“It’s important to understand why Amazon have their Seller Performance Measurement. They state that a Seller who maintains a low percentage of negative feedback ‘reflects our customer-centric philosophy’. Amazon considers one and two star ratings are to be negative.
“Other important details to note include the fact that Amazon measures your claims rate using the percentage of all orders, of any status, that involved a claim. When a buyer disputes a purchase charged to their credit card with their bank, it's referred to as a service chargeback request.
“Sellers are also required to provide valid tracking numbers for 95% of shipments. Amazon says that failure to meet the required tracking rate can result in the loss of seller-fulfilled selling privileges within the respective category. They add that this may also affect your eligibility to participate in Premium Shipping Options.”
So how do you keep your Amazon Performance Measurements under those specified targets? Thompson and Holt’s Gedey outlines how the three main categories are monitored.
“The first is order defect rate (ODR), which needs to be less than 1%,” Gedey explains. “That is the percentage of your orders that you received negative feedback for, an A-to-z Guarantee claim, or a service credit card chargeback. Grouping those three together allows Amazon to measure overall performance with a single metric.
“Amazon point out that a seller who works proactively with customers to resolve order problems will avoid most A-to-z Guarantee claims.
“The second is pre-fulfillment cancellation rate, which Amazon states must be under 2.5%. Amazon explains that this is the number of Seller-fulfilled orders cancelled by a Seller prior to ship-confirmation, divided by the number of Seller-fulfilled orders in the relevant time period. In calculating this, Amazon considers all order cancellations initiated by the Seller for any reason.
“The final category is late shipment rate, which needs to be under 4%. This is the number of Seller-fulfilled orders with shipments that are not confirmed by the expected ship date, divided by the total number of seller-fulfilled orders in the relevant time period. Orders that are ship-confirmed late might lead to increased customer contacts and negatively impact customer experience.
“The key now is monitoring how your Amazon business is performing in these categories regularly, to make sure that you do not fall below those targets. Amazon itself regularly reviews the performance of all sellers and notify them when they are off-target; a process which is designed is designed to give you time to improve your performance.
“Amazon contact sellers with poor performance to ask for improvement within 60 days of the first warning. Occasionally, sellers with very poor performance are immediately suspended or blocked.
“We advise you do your own monitoring of your Amazon business’ performance, using Customer Metrics. It is a tool that provides data on all of the performance metrics so you can easily see if you are meeting our targets.
“For detailed information about each performance metrics and how to use the Customer Metric tool, look at Amazon’s ‘Monitor your Performance Metrics’ and Account Health Dashboard FAQ.
If your Seller account has been suspended because of falling below Amazon’s Seller Metric targets, you may be eligible for reinstatement, and the quickest and most effective way to appeal that is by contacting Thompson and Holt so get in touch.If your situation requires immediate assistance please follow this link and speak to an Amazon Appeal Expert or alternately visit Thompson and Holt.