Overview
Jeff Bezos believes customer obsession as one of the important values that Amazonians follow to this date. No wonder Amazon has a tracking system to further it’s agenda of making it the most customer centric company in the world and at the same time put a leash on the seller operating on its platform. This Account tracking system is called‘Amazon Account Health”.
On the Amazon Account Health page you will find a variety of metrics along with benchmarks you need to meet to continue selling on Amazon; failing to comply will lead to a warning, account suspension, or if not corrected, the dreaded account removal. For your convenience, we will decode each of the metrics today and understand the consequences of not abiding by these metrics.
First the basics. According to Amazon, you need to maintain a ‘Good’ account health rating and address all the policy violations within a given time. If your AHR is ‘Critical’
or ‘At Risk’, your account may get deactivated. In order to avoid such issues, you need to pay attention to the six most important account metrics you need to monitor.
The top three metrics and their benchmarks are as follows:
- < 1%Order defect Rate
- < 2.5%(Pre-fulfillment) Cancel Rate
- < 4%Late Dispatch Rate
What Metrics Should I Pay Attention to on the Account Health Page
As said above, there are six key areas to focus on that mean the difference between selling normally and having to deal with appeals or plans of action.
1. Order Defect Rate – Benchmark < 1%
The Order Defect Rate (ODR) measures your ability to provide a good customer experience. This includes one or more defect orders as a percentage of total orders within the past 60 days. An order has a defect if it:
● Has negative feedback
● A successful A-to-z claim
● Credit card chargeback
According to Amazon’s policies, sellers should maintain an ODR under 1% to sell on Amazon. If their ODR is above 1%, it may result in account deactivation.
2. Cancellation Rate – Benchmark < 2%
This is only for seller-fulfilled orders and measures, in 7-day timeframes, the percentage of orders cancelled by the seller. For example, if a customer cancelled a pending order, your Cancellation Rate (CR) wouldn’t be impacted. As for Amazon account health, this metric must be under 2%.
3. Late Dispatch Rate – Benchmark < 2%
Measured over a 10-day or 30-day timeframe, the Late Dispatch Rate (LDR) refers to how many orders (as a percentage of overall orders) had their shipping confirmation completed after the expected ship date. Your LDR needs to be under 2% or you could face a warning or suspension.
Amazon sellers need to confirm the order shipment by the expected shipping date so the customers can see their shipped order’s status. Orders that are confirmed late (after the shipping date) might lead to an increase in claims, customer contacts, negative feedback, or result in poor customer experience.
4. Valid Tracking Rate – Benchmark > 95%
Again, this metric is only applicable to seller-fulfilled orders. Displayed over a 30-day period, the Valid Tracking Rate (VTR) measures the percentage of total orders that were given a valid tracking number. Keep this metric above 95% and you’re good to go.
5. Policy Compliance
We will have to address this topic in a separate article. To give a brief, policy compliance can include Intellectual property violations, listing policy violations, violations around product authenticity etc.
Generally speaking, you want to remain in the green. There isn’t a hard and fast answer about a specific number of violations that will cause your account to be suspended. If you continue to accumulate similar violations over six months, neglect to appeal them, and aren’t actively improving the root cause of the complaints, there is cause for concern.
What Happens if Your Amazon Account Health Metrics Aren’t on Target?
If it’s your first time having a metric or two slip under the mandated threshold, don’t panic just yet. Amazon will reach out to you and tell you to submit a Plan of Action (POA) within a certain time (usually 48 hours).
POA is very critical, and your business depends on it. Amazon will not suspend your account if you provide an acceptable POA. It means Amazon admits that the problem is clear for you, and you want to rectify it.
Final Thoughts
Taking care of your Amazon account health should always be a top priority, but not at the expense of maintaining other areas of your business. You can evaluate the critical metrics by doing a comprehensive health check-up to ensure Amazon’s policies fulfillment. So, if your listing has an issue, you will be informed, which prevents your account from suspension.
If you liked reading this article, you will also love to read Should You Sell Through Amazon FBA?
