Logistics & Forecasting
Mastering Seller Performance
Seller Performance Metrics for Customer Satisfaction
Order Defects
Late Shipments
Cancelled Orders
On-Time Deliveries
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Seller Performance to Ensure Customer Satisfaction
Seller Performance to Ensure Customer Satisfaction
Online marketplaces like Amazon, Walmart, and others are open to many sellers. Each seller contributes listing details, fulfills orders, and provides customer support.
The marketplaces need to protect customers by setting encouraging seller behavior through performance expectations. Hitting these targets ensures customers are having a positive, expected experience when shopping on the marketplace.
If sellers are unable to hit performance targets, their privilege to sell on the marketplace can be suspended. It is important to manage your seller account with diligence to ensure performance expectations are met and avoid sales interruptions. Hitting the targets is also just a good business practice for any account serious about growth. Brandwoven is well versed in these marketplace targets and is able to implement strategies to improve seller scores.
Seller Performance Targets
Seller Performance Targets
Amazon and other marketplaces measure three key areas to score Seller Performance. The categories include customer service, policy compliance, and shipping performance. Each category is composed of multiple measures. Here is a detailed breakdown of the targets:
Customer Service Performance – measured to ensure that there is a very low frequency of customers with a negative experience. More precisely, this category is measured by the order defect rate. Negative customer reviews, A-Z guarantee claims, and chargeback claims all go against the order defect rate.
Order Defect Rate (ODR) is tracked to measure the percentage of orders that do not satisfy customers. Instances of negative reviews, A-Z guarantee claims, and chargeback claims over a trailing 60-day time period all work against the ODR. Sellers need to stay under a 1% ODR. This ensures 99% of customers are having a positive experience.
- Negative feedback – customer ratings below 3 stars are considered defective and will count against the ODR.
- A-to-Z Guarantee Claims – customers are guaranteed that any order fulfilled by the seller will meet expectations. If it does not, a claim can be filed. Claims where Amazon determines the seller is at fault will go against the ODR.
- Chargeback Claims – credit card purchases disputed by the customer trigger payment failure, known as a chargeback. An investigation is completed by Amazon and if the chargeback is fraudulent it will not count against the seller’s ODR. If the chargeback is service-related due to the item not arriving, being damaged, or some other valid reason, it will work against the seller’s ODR.
Policy Compliance – Amazon policies are in place to protect the marketplace and customers. Zero ongoing policy violations are tolerated by Amazon. Policies protect intellectual property, ensure listings have consistent quality, require listing details accurately represent the product, and restrict dangerous products. All policies and guidelines should be studied and followed by sellers knowing there is zero room for ongoing violations.
Shipping Performance applies to sellers fulfilling their own orders. Most sellers choose to use Fulfilled by Amazon (FBA) to avoid the responsibility of hitting the demanding shipping performance targets.
Late Shipment Rate shipments are required to be sent by a certain date to allow for on-time delivery. Less than 4% can be sent beyond their late shipment date.
Pre-fulfillment Cancel Rate – Less than 2.5% of customer orders can be cancelled.
Valid Tracking Rate – 95% of shipments are required to have shipment tracking details available.
On-Time Delivery Rate – over 90% of shipments need to be delivered to the customer by the expected delivery date.
Tactics to Exceed Seller Performance Scores
Tactics to Exceed Seller Performance Scores
Ensuring our clients earn good seller performance scores to stay active on marketplaces is foundational to our work. Our team manages and deploys tactics to constantly maintain good scores in negative review rates, A-to-Z compliance claim rates, policy compliance, and shipping performance.
Negative reviews need to be proactively avoided and then swiftly responded to when they occur. Inappropriate reviews can be disputed for removal. Valid reviews can be responded to in buyer messages to find a solution for the customer. Emails can be sent post-purchase with a custom note to encourage positive reviews or conversation.
A-to-Z and chargeback claims can be avoided by making sure listings convey accurate information to correctly set customer expectations.
To adhere to policies, it is critical to become familiar with their current versions prior to selling on Amazon. Be prepared to prove your own intellectual property, and build listings and products according to the guidelines.
Shipping requirements are challenging to meet. It is often most appropriate for sellers to use the marketplace’s fulfillment network. Using FBA will lift the pressure of Amazon’s shipment performance requirements as well as provide other benefits. Brandwoven manages FBA for the majority of our clients.
There are reasons to fulfill customer orders as a seller directly. When there is reason, it is advised to use a 3PL or have an agency like Brandwoven consult your warehouse operations teams.
With expert guidance and by diligently adhering to Amazon policies, seller performance requirements can benefit you as a quality seller. Other sellers, unable to meet seller performance targets, will be unable to compete. Reach out to Brandwoven for more detailed tactics or support to address any seller performance issues you may be facing.
Frequently Asked Questions
What is Amazon Seller Performance?
Amazon Seller Performance is based on a set of metrics that are defined by Amazon to evaluate the reliability of sellers. Some of the key metrics included in the scoring are order defect rate (ODR), late shipment rate, pre-fulfillment cancel rate, valid tracking rate, and on-time delivery rate.
What is the Order Defect Rate (ODR)?
Order Defect Rate (ODR) measures the percentage of orders that receive negative feedback, an A-to-Z Guarantee claim, or a credit card chargeback. Maintaining an ODR below 1% is a requirement to avoid account suspension.
How is the Late Shipment Rate (LSR) calculated?
Late Shipment Rate (LSR) is the percentage of seller-fulfilled orders with a ship confirmation date that is after the expected ship date, calculated over a 10 or 30-day period. Scoring above 4% may result in account deactivation.
Why is Pre-Fulfillment Cancel Rate important?
Pre-Fulfillment Cancel Rate measures the percentage of seller-fulfilled orders that are canceled by the seller before shipment. Staying below 2.5% is required to maintain a good standing on Amazon and will help ensure a positive customer experience.
What is the Valid Tracking Rate (VTR)?
Valid Tracking Rate (VTR) is the percentage of seller-fulfilled orders with valid tracking numbers. Amazon requires a VTR of at least 95% to give customers the ability to track their orders. A high VTR also reduced the risk of claims and negative feedback.
What happens if a seller’s performance metrics are below Amazon’s standards?
Falling below Amazon’s performance standards can lead to account suspensions, reduced visibility, and loss of selling privileges.
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