Amazon Seller Performance Metrics

A lot of attention has been given to the two new seller performance metrics Amazon.com, Inc. (“Amazon”) implemented during the holidays. We thought it would be a good time to review all seller performance metrics and how they can affect your business.

Amazon is a customer-centric company. In fact, customer satisfaction is an all-out obsession for Jeff Bezos and his team. When the Amazon platform was opened to third party sellers, the company wanted to ensure that sellers were held to the same high customer satisfaction standard and created several metrics to measure their performance. Sellers not meeting those standards will have their accounts penalized or suspended. Amazon will not allow poor performing sellers tarnish the shopping-on-Amazon experience.

There are currently nine different seller performance metrics that Amazon uses. Seven of these can affect your account standing with Amazon. The remaining two are in beta. So far, Amazon is not using them to penalize sellers. I will not go into every metric in detail but will highlight best practices for keeping your seller account healthy. More information on each metric can be reviewed on the Amazon help pages.

You should be checking your seller performance metrics daily by clicking on the Performance tab in your Seller Central dashboard. Pay attention to the metrics in yellow and especially red. Some metrics are specific to Fulfilled by Merchant (FBM) orders only. I’ll review those first.

Most of the seller performance metrics are different ways to measure whether or not sellers are successfully shipping the right products on time and providing shipment information to the customer. The Order Defect Rate, Late Shipment Rate, On-Time Delivery, and Valid Tracking metrics all measure this in one way or another. Within these metrics Amazon tracks whether or not you confirmed shipment by the expected ship date, provided a tracking number, have received any negative seller feedback or A-to-z claims or have a high refund rate which can be attributed to poor shipping or the wrong product being sent out.

If you are filling orders yourself or through a third-party logistics (3PL) company and are having trouble keeping these metrics green, then it’s time to review your shipping practices. Are workers shipping the wrong products? Are they being packed for shipment poorly? Are you able to ship within 1-2 days of the order being placed? Are you confirming shipment and tracking numbers with Amazon? If you find you are having trouble with any of these you need to take hard look, find where the breakdown is happening and put processes in place to better manage or even automate to eliminate communication errors or breakdowns.

Accurate Inventory Count

The Cancellation rate measures how often sellers cancel orders before shipping. Cancellations usually happen when a seller discovers there is not enough inventory to fill an order. If this metric is not consistently green, consider using an inventory management software that will accurately publish inventory numbers to Amazon and any other channels you are selling on and prevent you from selling more than you have in stock.

Return Dissatisfaction Rate

This is one of the two new metrics Amazon is testing. It measures whether or not you are replying to and correctly processing customer requests for returns. Again, it applies to seller-fulfilled orders only and tracks the following:

• Failure to respond to the customer’s return request within 48 hours.

• Negative feedback from the customer about the return.

• Rejection of a return request for an item that is eligible for return and failure to refund the customer.

This metric is still in beta. It’s not being used to penalize sellers. Sellers should still watch this metric and ensure they are managing returns quickly and effectively to help prevent A-z claims. Keep in mind that In most cases Amazon requires that your return policy is as least as good as their 30-day policy.

Managing Customer Messages and Feedback

These metrics apply to all sellers, both selling via FBM or the FBA platform. Amazon requires that all customer messages be replied to within 24 hours and measures this with the Contact Response Time metric. If a message comes in that does not require a response (a customer sends a thank you or a business sends you spam) remember to use the “mark as no reply needed” option at the bottom of the message.

The Customer Service Dissatisfaction metric is the second new metric Amazon introduced over the holidays. It is also still in beta and will not affect your account standing yet. Amazon explains this metric as follows: “When you respond to a buyer message about an order, we include a question for the buyer immediately below your response asking ‘Did this solve your problem?’ Buyers can respond ‘Yes’ or ‘No.’ Customer Service Dissatisfaction Rate is the percentage of customers who respond ‘No.’”

This metric may just stick. It’s the same one Amazon uses with its own customer and seller support reps. If you are having trouble with it, review how you are responding. Put yourself in the customer’s shoes. Are you using a positive tone, apologetic if needed? If customers need to be directed to the Amazon marketplace, are you providing them with instructions on how to do so? Don’t get defensive. Do bend over backwards to ensure the customer is satisfied. Remember: In the eyes of Amazon, customers are always right, even when they are not.

Upset customers will sometimes leave negative and neutral feedback for the seller. Feedback should be monitored daily and used to discover and correct any problems customers may be experiencing with your products or shipments. Ask Amazon to remove any inappropriate feedback, such as product reviews or complaints about order fulfillment if you use the FBA service.

Keep your account in good standing by staying on top of your seller performance metrics. If you are not using the FBA platform on some or all of your products, be sure you have a reliable shipping solution in place, automating as much of the order processing as possible. Put a reliable person on customer support and feedback. Remember that, according to Amazon, the customer is king, and they expect you to treat them that way.