Is Your Amazon Seller Performance Measuring Up?
By Tina Marie Bueno | March 22nd, 2016
Just when you think it’s time to start celebrating the 4 or 5 star product reviews and positive Seller ratings; Amazon sends an email notification that there has been a drop in your Account Health rating. From Good to Fair or even Poor; any performance metric decrease can occur virtually overnight yet have consequential staying power. Sellers have 30-60 days to improve their stats. The upside? It’s doable with a clear action plan that Amazon may likely request. The downside? It takes awhile for the improvements to kick-in and if you don’t follow-through with the plan submitted; Amazon can suspend your account.
In my last article, Drive Your Amazon Sales: 3 Reports Every Seller Should Master, I mentioned the importance of every Seller closely monitoring their performance metrics. Now let’s take a deeper look at how well you are doing beyond the scope of dollars and cents for preventative measures.
A Clear and Present Truth
Consumers love Amazon. The proof is Amazon’s solid dominance as the #1 e-tailer. Their brand is built upon the fundamental mantra to provide an excellent customer experience for higher, faster, easier sales conversion. No one feels the pressure following Amazon’s giant footprints than the Sellers who courageously venture into this open market platform.
To keep Amazon happy means making site visitors feel great about purchasing your products and services. Selling in this marketplace, you are automatically enveloped by Amazon’s reputation which they intend to keep alive and flourishing. Making the best impression on consumers is entirely in your hands so be vigilant to what your customers are asking, doing or saying. Prospective customers observe how everyone else feels about you via reviews and ratings. Amazon watches you based on reviews and the story your performance metrics tells. If that gives off an eerie feeling that someone is watching at all times; be assured that is precisely the case.
7 Ways to Measure Up
Seller’s Performance Metrics basically shows customer satisfaction levels in relation to you. It also indicates whether or not Amazon’s expectations (of you) are being met. Gulp. What exactly is Amazon watching like a hawk? There are currently 7 ways used to determine if a Seller is measuring up to their pre-set targeted goals:
- Order Defect Rate (<1% target)
This includes negative feedback, A-to-Z Guarantee claims or any chargeback disputes.
- Pre-fulfillment Cancel Rate (< 2.5% target)
This measures if you keep inventories stocked enough to keep up with the demand.
- Late Shipment Rate (<4% target)
For FBM Sellers, this is about shipping orders exactly within or before the designated time you set when adding products.
- Refund Rate
This metric is connected to the ordering rate during a specific measurement of time. Amazon counts all refunds you initiate no matter the reason. There isn’t a specified target rate because it varies by category.
- Valid Tracking Rate/Delivered on Time (> 97% target)
All FBM orders require that a tracking number be provided to the buyer as soon as the order has been shipped. Whether sent via UPS, FEDEX or USPS, each has a tracking number which enables the customer to check packages in transit and an estimated delivery date. (This does not apply to FBA orders.)
- Customer Service Dissatisfaction Rate (<25% target) (Beta)
FBA Sellers have the advantage of Amazon’s customer service team…in most cases. Sometimes customers would rather talk directly to the Seller. Whether your products are FBA or FBM, pay attention since this metric measures if a customer is satisfied or not with your service.
- Response Time Under 24 Hours (>90% target)
This metric measures messages initiated by customers. It is critical to respond within 24 hours.
At A Glance
For a quick look at performance ratings, the symbols below are used at the top of your Account Health tab. Anything less than “Good” requires attention, assessment, and action.
(Good) means your performance is meeting Amazon’s standards for that metric.
(Fair) is a heads up that your performance does not currently meet Amazon’s standards for that metric. You should take immediate action to improve this rating. Failure to take action will eventually lead to a rating downgrade to Poor. This is when you investigate how you got here and remedy the situation with actionable changes.
(Poor) is a red flag alert that your performance does not currently meet Amazon’s standards for that metric. If you don’t take immediate action to improve this rating, you run the risk of suspension from Amazon. If you want to remain a Seller, this is when serious efforts are necessary that includes being in conversation with Seller Support demonstrating how your action plan has been implemented. You don’t have to throw in the towel quite yet, but this is your last chance to make necessary changes.
Attention. Assessment. Action.
All Sellers should evaluate the following to create their best practices:
Review any claims, negative feedback, or charge-backs for the orders that are affecting your ratings to identify areas requiring performance improvement. These will need to be incorporated into an action plan if Amazon requests one.
- Ship all FBM orders on time and provide valid tracking numbers for all packages.
- Update product listings with good descriptions both in images and words to avoid customers saying “not as described”.
- Respond quickly and with courtesy to all buyer requests and messages as they are an intricate part of good customer service. It also goes along way in reducing or changing negative feedback and claims. Check Amazon emails or the message section on the Seller dashboard as the first and last task of the day. Use your Amazon app when traveling or away from the computer.
- Make sure to pack items well to avoid any damage that might occur during shipping. Following Amazon’s packaging requirements.
- Provide post-transaction support for refunds, returns, and exchanges in a timely manner.
- Keep inventories stocked to meet the demand.
- Take responsibility. Set your ego aside and respond the way that Amazon would.
One Step Ahead
When asked if Amazon will ever change the terms of the seller performance targets, they answered “Yes”. They expect to expand the number of Seller performance metrics. I recommend mastering the current targets now so that any new measurements will seem easy to accomplish.
In case you need another nudge to stay tuned into your performance, know that all of these ratings are also calculated in the Buy Box algorithm.
Tina Marie Bueno is a global citizen with an MBA in Int’l Business plus over 20 years of content marketing experience both in the U.S. and overseas. As iLoveToReview’s Marketing Director, she strives to deliver relevant content to serve Amazon businesses of all sizes.