The all-important Amazon seller metrics are the result of the marketplace’s customer-centric approach to business. Sellers must ensure a positive relationship with shoppers to remain relevant in the competitive Amazon arena. It’s no secret that the e-commerce behemoth pushes its sellers to hit the highest performance targets.
What many sellers don’t know is that these are not just rules they should follow to sell on Amazon.
Understanding them will show you how to optimize inventory, pricing, and sales to increase revenue – all while remaining in the good graces of the retail giant.
Amazon Seller Metrics
Account metrics on Amazon are more than numbers that show sales performance. They are part of how Amazon ranks sellers, both in the search itself and for Buy Box control. They also govern who gets to sell in gated categories and at certain times of the year — not to mention overall selling rights.
Ever been suspended?
You need to maintain a low percentage of negative feedback and work at resolving customer issues fast to avoid A-to-Z Guarantee Claims and ensure good account health.
How you track data depends on your account type. If you’re an individual seller, you have access to Seller Performance metrics, Payment, Returns, and Tax Document Library reports only.
Professional sellers, on the other hand, have access to additional Business and Inventory reports, which are important for tracking traffic, stock status, and sales.
If you sell less than 40 items a month, we wouldn’t recommend a Professional Amazon seller account. It’s worth a bit of thought, however, for these benefits as well as Buy Box eligibility.
How to Use Amazon Seller Metrics for Success in 2020
Stop guessing how you can improve customer engagement and acquisition efforts to improve your performance scores. This guide will show you the most important factors to look at and how to use them to crush Amazon selling starting this year.
And it’s all with just the reports that are readily available on your Seller Central account.
Order Defect Rate
The requirement for this metric is less than 1%. This means that no more than 1% of your products should be reported defective.
This computation takes into account three factors:
- Negative Feedback Rate,
- A-to-Z Guarantee Claim Rate, and
- Service Chargeback Rate
Orders that were placed within the last 17 days are not included in the percentage rating, however, because Amazon is still waiting to see if customers will file complaints.
The Order Defect Rate is not the most significant factor in Buy Box share. However, it can go down or disappear if you fail to meet Amazon’s standards.
Note: The Refund Rate does not have a minimum requirement. However, if customers complain about the condition or quality of the items you’ve sent them, Amazon will check your Refund Rate.
Don’t confuse the Order Defect Rate with the Customer Service Dissatisfaction Rate. This latter metric measures the percentage of customers who were dissatisfied with your responses in Buyer-Seller Messaging.
Only their last “Yes” or “No” vote counts and the number of negative responses to whether you provided a satisfactory response should remain under 25%.
You must be aware of your Contact Response Time as well.
Buyer-Seller Messaging gives you 24 hours to respond to each message. This is a good general response time under any circumstances.
However, you will not be penalized by Amazon as long as less than 10% of your replies are no more than forty-eight hours later than the time the customer messaged you.
Pre-Fulfillment Cancellation Rate
The requirement for this metric is less than 2.5%. If you cancel more than 2.5% of your orders, before being fulfilled or confirmed as shipped, your account can be suspended. Any order cancellation from your end factors into this percentage, no matter the reason.
Your Buy Box share will not improve significantly if you maintain the standard <2.5% Pre-Fulfillment Cancellation Rate. A poor score, however, is a great danger to it.
Late Shipment Rate
The requirement for this metric is less than 4%; if more than 4% of your orders are not confirmed by the expected ship date, your selling metrics can go downhill.
This date is set two business days after the order placement — as long as you hadn’t entered a different handling time in your Seller Central account.
Late shipment leads to customer frustration, which is reflected in bad reviews. Your chances of winning the Buy Box are therefore higher if you meet the standard.
This metric is calculated every 7 and 30 days, so you need to be vigilant to maintain a good score. This is why Amazon FBA is your best bet.
Note: You’ll receive a notification from Amazon when your ratings are nearing the minimum mark. Heed these warnings. They are there to give you time to recover your numbers so you don’t get penalized. Amazon will require you to show measurable improvement, usually within 60 days before they even consider reinstatement.
In the worst-case scenario, you’ll get suspended or blocked without warning. It’s important to check your metrics and implement improvements immediately before appealing for account reinstatement. Amazon will always look at these metrics and the trend when deciding whether or not you are eligible. They also tend to refuse reinstatement to sellers who do not have a plan of action to improve their performance.
Valid Tracking Rate
The requirement for this metric is less than 5%. Amazon could cancel your account if more than 5% of your confirmed shipments don’t have valid tracking numbers.
Amazon considers a tracking number as “valid” once it has been scanned by a courier. Any tracking number that has never been scanned – for example, a canceled order – will affect this score.
Simply, make sure that any seller-fulfilled orders have valid tracking numbers entered on or before the Expected Delivery Date to avoid getting flagged.
It can be difficult to track your Valid Tracking rate because the numbers don’t always add up to 100%.
This is because some categories can overlap, and orders can be counted again for Order Defect Rate, for example. A good baseline is to target a Valid Tracking Rate of 96% along with the standard minimum rates for Order Defect, Pre-Fulfillment Cancellation, and Late Shipment.
Product Policy Compliance
Another metric that came out recently is Product Policy Compliance. This is just more proof of how much Amazon likes to change things up. They are continually developing more and better ways to gauge seller performance to keep their customers happy. It’s well worth your time to look at this metric on your Account Health page under Performance on your Seller Central dashboard.
Under Product Policy Compliance, you will see the following information:
- Listing Policy Violations
- Number of complaints you get for Intellectual Property, Product Authenticity, Product Condition, and Product Safety
You’ll notice here that Amazon is looking at complaints from other sellers rather than customers.
Succeed with Amazon Seller Metrics
By tracking these six metrics – or at least the first three – you can get a lot of insight into what you need to improve to succeed on Amazon in 2020. If you determine to take serious action to improve these scores, you will notice a significant positive impact on visibility and customer ratings, which will definitely boost your sales and revenue.