What is order defect rate?
Order defect rate is the number of people who order defective products within a certain time period. To figure out your defect rate, you divide the number of negative orders by the number orders in the same time frame.
This is one of the most important metrics Amazon uses to assess your seller performance. They want to ensure that they are providing the best customer service for their users. To quantify your seller performance, they look at your order defect rate to ensure you are providing a positive customer experience.
You must maintain the high standards Amazon has set for sellers. It is crucial that you maintain a high level of customer service for Amazon users. This is the best way to keep selling on Amazon’s platform and reach valuable leads.
When Amazon calculates order defect rate, they usually wait a month to calculate it to give time for defects to process and show up in your account.
Here are the recommended numbers you’ll want to see on your account:
- Late shipment rate: Below 4 percent
- Pre-fulfillment cancel rate: Below 2.5 percent
- Order defect rate: Below 1 percent
If your account hits these numbers or goes above, it will result in a suspension or closure of your Amazon store.
What makes an order defective?
When Amazon calculates your order defect rate, it’s crucial that you understand what it considers when calculating your rate. Here are three main factors Amazon considers when calculating your rate:
- Credit card charge back: If someone requests to get their money back, it can affect your order defect rate. People request money back for multiple reasons, such as fraud, bad service, receiving damaged goods, or never receiving a refund for a return. If the credit card charge back is a result of your customer service, it will impact your order defect rate.
- Buyer makes an A-to-Z claim: Amazon offers an A-to-z guarantee for people who buy products from companies that sell on the market place. If the delivery isn’t timely or the item isn’t in good condition, users can make an A-to-z claim. When users make these claims, it negatively impacts your order defect rate.
- Negative feedback: Whenever your audience leaves negative feedback, it’s a reflection of poor customer experience. A poor customer experience will lead to more negative feedback and high order defect rates.
These are the main factors Amazon takes into consideration when calculating your order defect rate. It’s important to note, however, that only one defect per order is possible. If someone makes an A-to-z claim and leaves negative feedback, it will only count as one negative experience rather than two individual claims.
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How does Amazon order defect affect your rankings?
If your order defect rate is at or above one percent, you will lose your seller status. Amazon suspends accounts that go over one percent for their order defect rate. The minute your defect rate rises above that number, Amazon strips your business of your Buy Box except for products listed with Fulfillment by Amazon.
Amazon gives you 17 days to remedy the situation and come up with a solution. It isn’t as simple as saying “it won’t happen again” or “I’m sorry I didn’t know the rules.” Amazon requires that you respond with a plan of action to remedy the situation.
This means you must identify where your customer satisfaction is falling short. Look into negative feedback and A-to-z claims that people make. Are there common trends that you notice?
You may find that all the feedback is similar in nature, which will help you pinpoint the problem. It may be something simple that you can fix. When you notice these commonalities, you can create an order defect rate plan of action to improve your rate.
It’s important that you constantly monitor how your audience perceives your business. If you can notice problems early and rectify them, you’ll prevent people from having a poor experience. This will prevent you from having a high order defect rate in the first place.
If you aren’t providing your audience with a satisfactory experience, fewer people will purchase your products. They will see that you have a low seller rating and won’t feel comfortable purchasing from your business. A lower seller rating means less conversions, which leads to lower product rankings.
To prevent this from happening, stay in tune with your audience. It will help you understand how they perceive your business and how you can improve the experience.
It’s especially crucial if you want to remain a seller on Amazon. If you order defect rate rises dramatically higher than one percent or consistently goes above one percent, Amazon will suspend your account and may never reinstate it.
How to improve your Amazon order defect rate
There are many ways you can prevent your business from getting to the point of suspension due to a poor order defect rate. Here are four ways to improve your defect rate.
1. Reply to all negative feedback and A-to-z claims
Negative feedback and A-to-z claims have a huge impact on your order defect rating. If you want to improve your Amazon order defect rate, respond to all negative customer feedback and A-to-z claims.
The first step is to find out why someone filed a claim. There can be a variety of reasons, including cancellations, late shipments, miscommunication, or unmet expectations. It’s crucial that you understand what went wrong for each member of your audience that leaves negative feedback or makes a claim.
It’s an opportunity for you to solve the problem for your audience. You can offer something to them that will help fix the situation. It may even get some people to change their feedback about your business!
When you’re in tune with your audience’s issues, it will help you create a better customer experience for your audience. You will know what issues they face and be able to prevent these issues from happening in the future.
By addressing issues ahead of time, you’ll improve your order defect rate and keep it below one percent.
2. Prepare for the holidays
Even the best Amazon sellers risk a high order defect rate due to late shipments because of the busy holiday season. In fact, many sellers get suspended in January because they can’t keep up with orders in December.
To prevent this from happening, use Amazon’s holiday mode. In this mode, you can set custom quantities for the holiday months to prevent overselling. This allows you to handle the right amount of orders so you don’t get bogged down.
You also have the option to pull your listings once it gets closer to the holiday. Set a cutoff date for the latest you’ll be able to ship the product without it arriving past the holiday. After this date, you can set your products as invisible until the holiday season is over.
It may seem upsetting to pull your products for a few weeks, but it will benefit your business in the long run. You won’t lose your seller account and risk not being able to sell on Amazon anymore.
3. Review your listings
If you want to ensure that you don’t have a high order defect rate, check your listings. You want to make sure your listings are properly filled out and provide all the information your audience needs.
Make sure your listings are accurate. From the information to the photos, be sure that everything is true. You don’t have to have the wrong photos or product description for an item and lead your audience to get confused.
If your information isn’t accurate, it will lead to more unhappy customers that leave negative feedback or make an A-to-z claim. You prevent this from happening by providing an accurate listing for your audience.
4. Monitor your listings
If all your listings are accurate, the next best thing is to monitor them. See where there are commonalities amongst listings. Are there common problems that cause people to have a poor experience?
When you monitor your performance, you can make changes to improve your listing. You can improve things like packaging, shipping times, and more. It’s a great opportunity to provide your audience with a best experience and keep your defect order rate low.
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WebFX will help you improve your Amazon order defect rate
A high order defect rate can have damaging consequences to your business. If your rate is too high, you risk Amazon banning your business from selling products. At WebFX, we will help you take preventative measures to keep your defect rate low.
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