I've been selling on Amazon for a while now, and through hard experience I've learned a few do's and don'ts when welling product on Amazon. There are things I wish I would have known before I began that may have changed the way I approached selling on Amazon.
But first, I want to make sure this article is for you. If you haven't figured out how to sell on amazon, first read this. If you're a current seller, you're in the right spot, however you might find some great ideas here as well. So don't forget to follow this link after! I'll include the link again at the end of the article so no worries.
Now keep in mind, if you already have a seller account you may be thinking that “well if they wanted me to know they would have told me when I signed up.” Which is what I thought. And technically they do in all the disclosure agreements, but let's be honest, who actually reads those word for word when they are a mile long? If you do, good on you.
I'm going to break down the most important things about your Amazon Seller Central account health so you can keep them happy, and not get your account into trouble. If you're a beginning seller, these are things to know about selling on Amazon, so read on!
What is Amazon Account Health Referring To?Whether you know it or not, Amazon watches closely how you respond to customers. Their focus is to ensure that all who sell product on Amazon provide a universal great customer experience. This goes to show why they have grown so large to become one of the largest and fastest growing companies in the world!
Your Amazon account health is referring to metrics measured by Amazon such as:
- Negative customer feedback
- Product cancellation rates
- Late shipments
- Products with valid tracking numbers
- Product defect rate
- For more of the tracked metrics click here…
If you have bad customer feedbacks, or a high percentage of product cancellations, etc. Amazon will not hesitate to suspend your account, or even restrict you from further selling on their marketplace.
Can you see the importance of knowing these metrics?
There are namely 4 metrics that have the largest effect on your account health. I'm going to explain what those 4 metrics are and what they mean. The 4 metrics that you should always be aware of are:
- Order Defect Rate
- Pre-fulfillment Cancel Rate
- Late Shipment Rate
- Valid Tracking Rate
Each of these metrics have very high expectations and should be tracked daily.
Order Defect Rate
The order defect rate is referring to the overall measure of a good customer experience. In short, it's the number of orders that have some form of defect divided by the total number of orders.
For example, Let's say you have 5 orders that are reported back from your customers to have a defect, and your total number of orders for that week are 100 total orders. Your order defect rate would be 5% (which is above what amazon requires you to be at by the way..ill discuss further on).
Amazon expects you to keep an order defect rate to be lower than 1%. That means less than 1 order out of every 100 orders you have is the max amount of defects.
The order defect rate is broken down to 3 categories or key components. They are:
- A-to-Z Guarantee Claim Rate
- Negative Feedback Rate
- Service Chargeback Rate
For the sake of this article I'm not going to cover each of those, suffice it to say that you need to make sure your orders ARE NOT DEFECTED! For more info on the Order Defect Rate, click here.
Pre-fulfillment Cancel Rate
Pre-fulfillment cancel rate is referring to how often a seller cancels an order that has been placed, before it has been shipped to the customer.
From the customer point of view, how annoying is it if you find a great deal, place an order and can't wait for receiving the product. You then get a notice that your order has been canceled due to an incorrect price. Would you feel the service was acceptable? Of course not!
This is important to Amazon because they want to maintain a high expectation of customer satisfaction and want their customers to return.
The pre-fulfillment cancel rate is expected to maintain a rate below 2.5%. This is 2.5 of every 100 orders is the max pre-fulfillment cancel rate.
Might want to know about that one.
Late Shipment Rate
This one is pretty self explanatory. The late shipment rate refers to your customer receiving a shipment later than when you stated it would arrive. If you are fulfilling your own products, this is a big one to keep in mind. If you use Amazon FBA, rest assured that they are on top of this.
The late shipment rate that Amazon requires sellers to not exceed is 4%. Again, out of every 100 orders, the max amount of late shipments is 4.
Valid Tracking Rate
As a customer purchasing online, how important is it to you to track your shipment and know when it is expected to arrive? If you're like most, you want to know where it is at in the shipping process.
Amazon sees the importance of this from the customer's point of view, and as a result they measure very closely how many of your incoming orders have confirmed with a valid tracking number.
The expectation from amazon is to have a minimum of 95% of your orders need to have a valid order tracking number confirmed. That means that you are allowed only 5 out of every 100 orders to not include a valid tracking number.
If you sell with Amazon FBA, rest assured again that this won't be an issue for you.
Now You Know
There you have it. Now you know what to look for in keeping your standing square with Amazon. Don't overlook these, Amazon will not hesitate to suspend your account without second thought. These are strict rules that YOU HAVE TO ABIDE BY AS A SELLER.
The best way to stay on top of this is to have a simple process every day. Some do this through a basic checklist of things to ensure are done on a daily basis that will result in keeping the above metrics in good standing. Remember the link to I mentioned in the beginning of the article, well here it is! Here i'll show you how I did $7,500 on Amazon in under a month (my first month).
Follow these metrics closely, and you won't have any problem keeping your relationship healthy with one of the worlds largest businesses. For more information on the many other metrics that are expected from Amazon, follow this link.
As always please post your questions and comments below! Happy selling!