Knowing your metrics is critical. This is especially true on Amazon as the emphasis on customer satisfaction means if you’re performing below the expected level, you will be penalised. We have therefore pulled together some key performance metrics that you should keep a track on.
1. Order Defect Rate (ODR)
Your ODR is the number of people who have a negative experience with you. There are 3 factors that are used to determine the OD:
· An A-to-Z Guarantee claim is made
· A customer makes a chargeback
· A negative review is left (1 or 2 stars)
If the ODR is over 1.19%, your account health rating would shift from green to yellow, and you’d also see a notification in your seller account.
2. Valid Tracking Rate (VTR)
Valid Tracking Rate measures how often you use valid tracking numbers on your orders. Amazon customers depend on tracking numbers to find out where their orders are and when they can expect to receive them. The Valid Tracking Rate (VTR) is a performance metric that reflects those expectations. Amazon suggests that sellers must reach and maintain a 95% VTR.
3. Cancellation Rate
The cancellation rate (CR) is the percentage of total orders cancelled by the seller, during a given 7-day time period. Cancellation rate only applies to seller-fulfilled orders. This metric includes all order and item cancellations initiated by the seller, with the exception of those that were requested by the customer using the order-cancellation options in their Amazon account. Pending orders or items that are cancelled by the customer directly on Amazon are not included. Amazon’s policy recommends sellers to maintain a cancellation rate under 2.5% in order to sell on Amazon. A cancellation rate above 2.5% may result in deactivation of seller-fulfilled offers.
4. On-Time Delivery
Your On-Time Delivery score shows the percentage of seller-fulfilled packages that buyers received by the estimated delivery date. This number is based on confirmed tracking information.
5. Late Shipment Rate (LSR)
Late shipments to customers often prompt negative reviews, therefore on-time shipping is essential is gaining customer satisfaction. For example, if a customer has not received their item 2 or more days after it was due, Amazon will note the product as being ‘late’. If your products are marked ‘late’ consistently, it will not be condoned by Amazon (a customer-centric company).
6. Unit Session Percentage (Conversion) Rate
A high conversion rate stipulates that your products are selling relatively well. A low conversion rate will therefore require you to implement a strategy to try and sell more of your products. This is vital in ensuring that your products retain a high page ranking on Amazon.
7. Buyer-Seller Contact Response Time (CRT)
CRT measures the number of messages a seller replies to within a 24-hour period (including weekends). Amazon expects sellers to reply to messages the same day as they were posted, so checking any messages is essential. Preferably, a seller should respond to any messages in less than 24 hours (as Amazon notifies sellers by email).
A seller’s performance will impact their growth and rankings on Amazon, which is why they should check out their metrics on their Seller account daily. In addition to this, Amazon looks for those sellers with excellent metrics (account health) to be in with the chance of winning the Buy Box.