Amazon is renowned for maintaining a high standard of business conduct, and tries to ensure that all sellers on its platform stick to established guidelines, in order to maintain customer satisfaction.
These guidelines, known as Amazon Seller Metrics, are mandatory for sustaining the health of an account and the uninterrupted continuation of sales on the Amazon platform.
Here's a look at the specifics of these Amazon account health metrics.
🎯 Order Defect Rate (ODR)
As the name implies, the Order Defect Rate (ODR) determines how good your products are to the end customers. It is calculated as the ratio between the number of faulty orders and the total orders during a 60-day time period.
The aim is to keep the customers happy but if the order has failed to meet the expectations, it will be counted as a defective order.
An Amazon order is marked defective in the following scenarios:
- Negative customer feedback
- An A-to-Z guarantee claim is filed
- Service credit card chargebacks
Ideal ODR: less than 1%. If it breaches the mark, your Amazon account may get suspended.
🎯 Cancellation Rate ( CR)
This determines the percentage of orders cancelled by the seller before they can be fulfilled. This happens possibly when you’ve run out of stock or the product is found to be damaged before dispatching.
It is calculated as the proportion of the seller-cancelled orders and total orders placed in 7 days.
Though your problem can be genuine and unavoidable, Amazon sellers must focus on reducing the incidence rate of cancellations. Also, this can be seen as a lost opportunity to generate sales revenue.
Note: Your Cancellation Rate (CR) will not be affected if the customer cancels the order.
Ideal CR: less than 2.5%.
🎯 Late Dispatch Rate (LDR)
This is calculated as the ratio between the number of orders dispatched after the expected shipping time and the number of orders over 10 or 30 days.
Delayed dispatch not just only upsets the customers as the order will be delivered late - it also puts Amazon in a tight spot. Toe the line and keep the LDR in check otherwise, your account may be served with a warning or deactivation from Amazon.
Ideal LDR: less than 4%
🎯 Valid Tracking Rate ( VTR)
Amazon customers often track their placed orders to determine when they are likely to arrive. It is calculated as the ratio between the total number of orders with a valid tracking number and the number of Amazon orders over a 30-day period.
Keeping your Amazon plus your customers updated on the current location of the orders is of utmost importance and value.
Ideal VTR: more than 95%
🎯 On-Time Delivery Rate (OTDR)
Amazon is known for its swift delivery so any unforeseen delay on the part of the sellers puts a question mark on Amazon too.
On-Time Delivery Rate (OTDR) can be referred to as the percentage of the number of orders that are delivered within the anticipated time.
The sooner the better is an unsaid rule for Amazon delivery. This makes your customers happy with the quick delivery service.
Ideal OTDR: more than 97%
🎯 Return Dissatisfaction Rate ( RDR)
How satisfied are Amazon customers even after returning the product? That speaks of the way returns are addressed by the company.
As per Amazon, “The Return Dissatisfaction Rate is the percentage of valid return requests that were not answered within 48 hours, were incorrectly rejected, or received negative customer feedback.”
And it continues to drop if you:
👎 Receive negative feedback from the customers,
⏰ Failed to respond within 24 hours of the return request being generated, or
🤚 Outright refused to accept the return request.
Ideal RDR: less than 10%.
All these metrics are important to improve the health of your Amazon. Whether you’re a new or an old seller on Amazon, stay at par with the expected performance. Find and fix the problems in your products to stay on the right track to enjoy success on Amazon.
