What metrics should I monitor as an Amazon seller?
When you sell your products on Amazon, it’s crucial that you monitor your store’s performance. You want to provide customers with the best experience to encourage conversions and repeat purchases.
Here are five metrics you’ll want to monitor to see how your store is performing.
1. Order defect rate (ODR)
When users shop at online retailers like Amazon, 67 percent read six or more reviews before trusting a merchant enough to buy their products. If you have a lot of negative reviews, fewer customers will trust you, which leads to a higher order defect rate (ODR) and fewer conversions for your business.
Order defect rate (ODR) is the number of people who have a negative experience with your store. It’s based on numerous negative actions, such as a bad review or negative feedback. Your ODR can also increase if someone requests their money back because they received bad service or if the products are damaged.
These actions negatively impact your Amazon store because they indicates customer dissatisfaction. A high ODR means that your audience isn’t having a positive experience with your business, which can have detrimental consequences.
Another factor that impacts your ODR is A-to-z claims. If someone orders a product from you and the delivery isn’t timely or the product isn’t in good condition, users can make an A-to-z claim to rectify the situation. When your business has A-to-z claims, it negatively impacts your shop.
All of these actions stem from poor experiences or poor customer service. Considering that Amazon values a positive customer experience, these negative actions will have consequences for your business. Monitoring this metric is important for boosting customer satisfaction and maintaining a low ODR.
So, what is an ideal ODR?
If you want to prevent your shop from being suspended, you must maintain an ODR of less than one percent. Amazon calculates ODR over a month to give time for claims to process or negative reviews to change.
Anything one percent or above will result in suspension. You will have 17 days, from that point to show Amazon how you plan to improve your store to provide a better customer experience.
Amazon has sole discretion over whether your plan is approved. If they like your plan, they will reinstate your store on the promise that you will implement the changes stated in your plan. Amazon can also reject your strategy and choose to ban your business indefinitely.
This can also happen if you repeatedly hit one percent or go dramatically above the amount. Amazon can choose to close your store without offering the opportunity for you to redeem yourself.
If you want your Amazon store to continue attracting customers, you must keep your ODR below one percent. Monitoring your Amazon seller metrics will ensure you always know where your ODR is and if you need to improve it.
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2. Pre-fulfillment cancellation rate
Pre-fulfillment cancellations are initiated by the seller prior to shipment confirmation. This typically happens because a customer buys a product, but the seller doesn’t have enough in stock. The seller must cancel the order for the product.
This rate is calculated by the number of cancellations divided by the number of orders in that same time period. If you are constantly cancelling your customer’s orders because you don’t have products in stock, you risk having a high pre-fulfillment cancellation rate.
Amazon wants all businesses to maintain a pre-fulfillment cancellation rate of less than 2.5 percent. If your business goes over this amount, you risk your shop being suspended.
3. Late shipment rate
Have you ever been really excited to receive a package only to find out that the shipping has been delayed? It’s a real bummer for customers and can leave them frustrated if they’re expecting a package by a certain time. Late shipment rate is another metric you’ll want to monitor to ensure you’re providing the best customer experience for your audience.
If your store consistently ships products late, it’s not a good look for your business. Amazon considers late shipping to be two or more days after the set shipping date. When you consistently ship your products late, it makes your business appear sloppy, disorganized, and uncaring towards customer satisfaction.
When you’re selling products on a site that values customer satisfaction, late shipment is not tolerated. Amazon expects that you will keep your late shipment rate below four percent to ensure that you continue to provide your audience with the best experience.
4. Conversion rate
If you want to see if you’re driving successful results, your conversion rate is a good indication of your store’s performance. It’s one of the most important Amazon seller metrics for monitoring success.
This metric shows you how many sales your business is getting. You want to have a high conversion rate because it indicates that people are coming to your page and buying your products.
A low conversion rate, however, calls for some changes to your strategy. There are numerous things you may need to alter to produce better results.
One method is adjusting your pricing to ensure you are competition with your competitors. To evaluate this possibility, check out competing prices. You may find you are slightly over-priced compared to your competitors, which is causing you to miss out on leads.
It’s also a great opportunity to see what else your competition is doing that you may not be doing. Are they offering free shipping or a discount for spending a certain amount? Creating tactical sales strategies can help you boost your conversion rate by driving more leads to your Amazon page.
Another thing you’ll want to monitor is your reviews. As we stated previously, people rely on reviews before deciding if your business is trustworthy. If you have too many negative reviews, it will cause people to shy away from purchasing from your business.
Monitor your reviews and keep an eye out for any negative reviews. When you get negative reviews, take time to address them and help resolve the issue. Those people may end up changing their review because you fixed their problems!
Lastly, focus on improving your inventory management. Many companies fall into the trap of stretching themselves thin with inventory. It hurts their conversion rate because they never have the products in stock!
If you know that a particular product gains popularity, work on keeping more of that product in stock. It will allow you to earn more conversions.
How do Amazon seller metrics affect your product rankings?
Your performance metrics impact your store’s success on Amazon. You want to constantly monitor them to understand where your store stands.
If you are seeing positive results with your Amazon store, your rankings will show it. An increase in conversions and positive user experience will help your products rank higher in the search results. You’ll reach more valuable leads and improve your store’s performance.
On the other hand, if you are seeing negative results, there are serious consequences that will arise for your business. If your site has a low conversion rate, your business won’t make a profit.
In addition, you won’t obtain new leads for your business. This means that your business can’t continue to grow.
If your shop exceeds Amazon’s ODR rate, pre-fulfillment cancellation rate, or late shipping rate, you will lose your selling privileges. Amazon will suspend your shop for up to 60 days or shut down your shop for good.
If you aren’t pushing out more product sales because your store is suspended, you won’t be able to maintain or increase your ranking. It will cause your product rankings to drop.
This means you will miss out on a great opportunity to reach valuable leads for your business. You’ll miss an entire market of people because you aren’t reaching Amazon’s customer satisfaction expectations.
To prevent this from happening, monitor your metrics. If you are constantly keeping tabs on how your store is performing, you will know where problems are occurring and fix them quickly. This will prevent you from losing your store.
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If you want to be successful on Amazon, you must constantly monitor your store’s performance. Keeping track of performance ensures that you keep track of any issues that may arise with customer satisfaction. At WebFX, we know how to monitor Amazon metrics and turn those numbers into actionable tasks.
We’re a full-service digital marketing company that specializes in Amazon services. We have a team of 200+ experts that will bring their knowledge and expertise to your campaign. Our team will help you create a campaign that focuses on helping your business grow.
If you’re looking for an Amazon expert that knows how to drive results, look no further than WebFX. In the last five years, we’ve generated $2.4 billion in revenue and 6.3 million leads for our clients. We focus on driving valuable results that help your business reach new heights.
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