In the age of the corona virus, the topic of health is literally everywhere and is referred to in all cases. We hope you are healthy and stay at home. With the topic of health and Amazon, we decided to write a bit about how to keep your Amazon account in good shape and what to do if there are health issues with our Amazon account.
It’s no secret that one of the biggest reasons for Amazon’s success has been its unparalleled customer service compared to other platforms. Amazon places great emphasis on maintaining consumer trust and providing a positive consumer experience in every aspect of its business. One of the factors that ensures that Amazon maintains the best possible customer experience is to oblige third-party sellers to maintain appropriate sales standards. Below I outline what requirements you need to meet so that your sales are not held up.
Amazon Account Health
This is a set of factors used by Amazon to evaluate overall sales and customer service performance. It consists of three main elements:
Order defect rate (ODR): <1%
Order cancellation rate: <2.5%
Delayed shipping rate: <4%
ORDER DEFECT RATE (ODR)
The Order Defect Rate (ODR) is a key measure of your ability to provide good customer service. It includes all orders in the last 60 days and is a combination of three different rates:
– Negative Feedback Rate – comments and ratings
– A to Z Guarantee Claim
– Chargeback Claims
These three factors are collectively considered when determining an account’s ODR level. Amazon takes all defective orders and then divides them by the total number of orders in a given period. So if one A to Z warranty was found against you, and customers left two negative reviews, with a total of 100 orders placed in a given period, your ODR is 3%. According to Amazon’s policy, sellers must keep ODR below 1%. If your ODR is higher than 1%, this will deactivate your account. However, this does not happen automatically. If you are just starting to sell on Amazon and your order volume for the last 60 days was 50 and you get one negative experience bringing your ODR to 2% you will more than likely only get a warning. However, if the rate remains >1% for an extended period of time or jumps to this level on an account that has thousands of orders and has been selling for years, then limiting sales or blocking your account is pretty much a certainty.
NEGATIVE FEEDBACK RATE
Negative feedback is usually given by customers who did not receive exactly what they wanted – a mistake in shipping the order, the product arrived damaged, etc. Another common reason is a delay in the delivery of the product or unsatisfactory contact with the seller. If you have received negative feedback from a customer, you can take two steps to remove it. If the customer review is inadequate and the order has been shipped in accordance with the applicable standards, you can ask Amazon to remove it. The other option is to contact the customer to resolve the situation, offering a discount, a rebate on future orders or simply an apology in the hope that they will remove the comment.
A TO Z GUARANTEE CLAIM
The A-to-Z claim protects customers when: they have not received the package within the maximum expected delivery time, they receive a different product than expected or the product has arrived damaged. Amazon’s policy is that in this situation, the customer should first contact you to resolve the issue. If, after 48 hours, you have not been able to reach an agreement with the customer, or if the solution is not satisfactory to the customer, Amazon allows you to submit a claim. Once your claim is accepted, Amazon gives you 5 days to resolve the issue. During this time you must contact the buyer, if you fail to do so, the claim will automatically be recognised in favour of the customer. If you have attempted to resolve the problem, the customer making the claim must describe their position – the reason why the claim is being made, to which you, as the seller, must respond. Amazon then considers both positions and makes a decision on the matter, which may or may not affect your ODR. The type of A-Z warranty consideration that will negatively affect your ODR:
– Claims accepted in favour of the customer and purchase cost refunded from your account to the customer. Note: in this case, the customer is entitled to keep the item of purchase.
– Claims for which you have refunded the purchase cost to the customer after an A-Z claim has been opened. Please note: if the customer agrees to refund the purchase cost through mediation between you and the buyer, ask them to close the A-Z claim first and then return the funds
– Claims where you or Amazon have cancelled the order
The following types of claims do not affect ODR:
– Claims granted to you but paid by Amazon
– Claims rejected by Amazon
– Claims withdrawn by the customer
If an A-Z claim appears on your account, you should always try to resolve the dispute with the customer as soon as possible. If you have been unsuccessful, remember that your response to Amazon, should not be emotional, try to be brief and specific.
A credit card chargeback is similar to an A-to-z warranty claim, except that the credit card issuer reviews the claim and makes the decision, not Amazon. Card chargeback means that the buyer acknowledges the purchase but informs the credit card issuer that they have encountered a problem, e.g:
– The buyer claims not to have received the item.
– The buyer returned the product but did not receive a refund.
– Unauthorised use of a credit card
To prevent chargeback claims, follow these tips below:
– Always use the customer address listed on Amazon when shipping the product. The seller is responsible for any disputes reported in connection with orders shipped to a different shipping address.
– When shipping a product, always add the tracking number received from the carrier to the system.
– Use the delivery confirmation option (signature required) for high value goods.
Respond to any chargeback claims within 7 calendar days of receiving the complaint, similar to how you would respond if you received an A-Z complaint.
All three factors count towards the ODR rate, in addition to the health of your sales accounts there are two other important factors which, if exceeded, also risk sales being blocked.
LATE DISPATCH RATE
As with the previous indicators, this late dispatch rate is also shown as a percentage of defective orders in relation to the total and must not exceed 4%. Please note that all orders received should be confirmed in the Amazon system according to the scheduled date.
PRE-FULFILMENT CANCELLATION RATE
This is the percentage of orders cancelled by the seller before shipping is confirmed. The pre-fulfillment cancellation rate should be no higher than 2.5%. Therefore, when adding products to your Amazon listing, you need to be sure that you are able to fulfill the shipping. You should also pay attention to your international shipping settings. If you want to ship your products to Germany only, for example, be sure to uncheck shipping to other countries in your settings.
Amazon’s goal is to protect the consumer experience and preserve shoppers’ trust. If the orders you process are not compliant, the customer experience when shopping on Amazon will be negative and Amazon’s reputation is at risk. To reduce this type of situation, Amazon has put in place a number of restrictions if you fail to meet the standards set.
Firstly, if your ODR starts to increase significantly, you will automatically lose the Buy Box for your products. Second, Amazon may freeze your funds in your account to prevent withdrawals, or suspend or close your sales account.
AMAZON ACCOUNT BLOCKING – Amazon Account Health
Amazon can block your sales in three different ways. Each of these three blocks is due to different reasons and the consequences will be different.
Suspensions occur when your order defect rate is just over 1% and there are no other negative factors such as late deliveries or cancellations before orders are confirmed. At this point, you simply cannot sell on Amazon. Once your seller privileges are removed, you have 17 days to create a Plan of Action. If you have a history of suspensions, getting back to selling on Amazon can be difficult.
Your account is given a rejected status when you send an unsatisfactory Plan of Action (POA) in the event of a suspension, or this is another recent account suspension. To avoid finding yourself in this situation you should carefully and diligently prepare your first POA. In this situation, you should also not send a Repairs Plan repeatedly and in an ill-considered manner, as this may lead to the third level, the blocking of the merchant’s account.
Amazon does not accept repeated appeals of account blocking. Your Repair Plans are no longer read and you have irretrievably lost the ability to sell on Amazon. In this situation, Amazon will block the withdrawal of your funds for a period of 90 days, after which it will close your selling account.
PLAN OF ACTION (POA) – AMAZON REQUIREMENTS
According to Amazon’s guidelines, your Recovery Plan should consist of three parts.
- ROOT CAUSES: Your plan of action should start with an explanation of the error that led to the customer dissatisfaction. Accept whatever happened and don’t shift the blame to customers.
- SOLUTIONS: Tell about the actions taken, new policies, procedures you have implemented to solve the problem. Explain in detail how the solutions you have taken will help your business remain compliant on Amazon.
- PREVENTING ACTIONS: The final step is to formulate preventive actions. This is an important part of your action plan, at this point you need to show what you will do in the future to avoid instigating a similar situation.
Your action plan should be factual and concrete. Focus on the events that led to the problem rather than presenting your product, company or customer. Avoid using emotional language. Don’t question how Amazon’s policies work. Amazon needs to be sure you know which actions led to your account being blocked.
Provide an explanation for any problems. Some deactivations can result from a combination of problems (for example, a high number of defective orders can result from negative reviews and undelivered orders). You must address each faulty order by giving reasons why it occurred.
Make sure the plan you present is clear and the Seller Performance team will have no problem reading your explanation. Remember, you are one of thousands of Amazon sellers who write to Seller Performance, so your remediation plan should be brief – being too wordy in your description could lead to your plan being rejected.
The second step of your action plan is problem solving, which means you have a solution ready for each cause of the problem. If delayed shipments have led to a dip in your results, mention the new shipment fulfillment system or the new contract with the courier company and how this has helped improve the situation.
The third step is to ensure that you don’t instigate a similar situation in the future. So, for example, if your customers have complained about receiving damaged products, you need to ensure that new packaging standards for shipments have now been introduced and so products will be delivered to customers in perfect condition.
If you are a new seller on Amazon, or looking to start selling remember that maintaining a level of account health, will allow you to sell safely and sustainably. Knowing Amazon’s policies is the surest way to succeed in international selling.
If you have any concerns or need help, please reach out to us. Want to share your thoughts on this article? Write a comment – it might just be the answer to another seller’s question. Be a part of Go2Market community.
Happy Performance Management