For FBA sellers, focusing on various business aspects is crucial, but prioritizing your Amazon Account Health is essential. It encompasses metrics and indicators that Amazon employs to assess seller performance and reliability. Overlooking your account health could result in reduced sales and profits, or potentially lead to account suspension. Our guide offers vital insights to help you effectively monitor and improve your account health, making your FBA journey more manageable.
How To Find Your Amazon Account Health Rating
Your Amazon Account Health Rating is a direct reflection of your customer satisfaction management through orders. Regular monitoring of this rating is key.
Here’s how to find your rating:
- Log in to Seller Central.
- Navigate to the ‘Performance’ tab in the main menu.
- Select ‘Account Health’ from the drop-down list.
- The Account Health page displays various performance metrics, providing an overview of your standing relative to Amazon’s standards.
Keep in mind that not only do these metrics immensely affect your overall ranking but they also determine how probable it is for buyers to trust and choose your products among countless competitors.
How Is Your Amazon Account Health Rating Calculated?
Understanding the calculation of your Amazon Account Health Rating might seem complex at first, but it becomes clearer when you break down its individual elements. Essentially, this rating is not based on a single factor, but rather on multiple aspects of your selling performance on Amazon. Combined, these metrics offer a detailed view of how effectively you’re meeting Amazon’s standards and satisfying customer requirements.
There are 3 overarching principles to your Amazon Account health, which are:
- Customer Service Performance
- Shipping Performance
- Product Policy Compliance
Customer Service Performance
This is primarily made up of your Order Defect Rate (ODR).
This is particularly crucial as it directly influences customer satisfaction. The ODR is calculated as a percentage by taking the total number of orders with ‘defects’ – such as negative feedback, credit card chargebacks or A-to-Z guarantee claims – and dividing them by the total number of orders during any given time frame. Remember, a lower ODR reflects well on your account health.
Related: 8 Ways To Improve Your Amazon Order Defect Rate
Shipping Performance
Your shipping performance is made up of:
Cancellation Rate
This metric feeds into buyer experience and measures pre-fulfillment cancellations initiated by you, not customers. Divide total seller-cancelled orders against dispatched ones to get this rate in percentage form. High cancellation rates may lead Amazon to question your inventory management.
Late Shipment Rate
Your Late shipment Rate calculates percentages based on orders shipped late regardless of their delivery dates—efficient fulfillment processes help minimize your Late Shipment Rate and boost overall account health.
Related: Creating an Amazon FBA Shipping Plan to Easily Manage Shipments
Valid Tracking Rate (VTR)
This measures how many of your shipments include valid tracking numbers – essential for ensuring that goods reach customers and for resolving any delivery disputes. A high VTR reflects positively on you as a reliable seller.
Product Policy Compliance
This refers to the adherence to specific rules and guidelines set by Amazon regarding the products that sellers list and sell on the platform. These policies are designed to ensure that all products meet certain standards for safety, legality, and quality, and that they are accurately represented to customers.
Key points of Amazon’s product policy compliance include:
Prohibited Product Listings
Amazon has a list of products that are prohibited or restricted from being sold on the platform. This includes illegal items, products that infringe on intellectual property rights, and items that pose health and safety risks.
Product Safety
Products sold on Amazon must comply with all applicable safety standards and regulations. This includes consumer product safety rules and, for certain products, testing and certification requirements.
Authenticity
Sellers must ensure that all products are authentic. Selling counterfeit, pirated, or knock-off merchandise is strictly prohibited.
Accurate Descriptions
Sellers must provide accurate and clear descriptions of their products. This includes details about the condition, features, and functionality of the product.
Compliance with Other Regulations
Depending on the product category, there may be additional regulations to follow. For example, food items must comply with food safety regulations, and electronic items must meet certain FCC standards in the United States.
Labeling and Packaging
Products must be properly labeled and packaged in accordance with Amazon’s requirements and relevant laws. This includes proper hazard warnings and usage instructions, where applicable.
Product Recalls
Sellers are responsible for responding to any product recalls and taking appropriate actions as required by law and Amazon policies.
Pricing
Products must be priced appropriately, and sellers must adhere to Amazon’s pricing policies, including not setting prices excessively high.
Hazardous Materials
If selling products that contain hazardous materials, sellers must comply with specific storage, handling, and shipping regulations.
Other Notable Metrics
Return Dissatisfaction Rate
Return Dissatisfaction Rate (RDR) looks at how effectively sellers manage returns. It includes factors like failure to respond timely to return requests or issuing refunds without requiring item return(s). Keep this low for maintaining good account health.
Invoice Defect Rate
This critical metric focuses on B2B sales: the Invoice Defect Rate (IDR). Especially pertinent for vendors selling through Amazon Business, IDR weighs seller performance in invoicing. It considers missing invoices or those failing to adhere to Amazon’s invoicing policy, hence impacting your account health.
On-Time Delivery Rate (OTDR)
Finally, we have the On-Time Delivery Rate (OTDR), which assesses overall efficiency in shipping and handling processes. It runs by tracking how regularly orders arrive within the estimated delivery window promised to buyers—a high OTDR equates to happy customers and a healthier account score.
By understanding these metrics, you can better implement strategies aimed at enhancing their account health rating, leading to continued success on Amazon’s platform.
How Can You Improve Your Amazon Account Health?
To surpass Amazon’s benchmarks and excel in your FBA business, consider adopting these strategies:
Encourage Positive Reviews
Customer feedback plays a vital role in influencing buying decisions. A higher number of positive reviews contributes to a healthier Amazon account. To encourage customers to leave feedback, consider sending review requests after their purchase. Utilizing third-party feedback software for automating these requests can greatly increase your positive reviews, thereby enhancing your Amazon account health. However, it’s important to note that attempting to directly influence or offering incentives for reviews is against Amazon’s policies.
Respond to Customers Quickly
Quick responses make a significant impact! They build credibility, trust, and most importantly, customer satisfaction, which can lead to repeat business. Amazon requires sellers to reply to customer inquiries within 24 hours. Delayed responses can negatively affect your account health, so it’s crucial to respond promptly to maintain a good standing.
Provide Accurate Product Descriptions
When buyers make decisions based on the descriptions and images of your products, it’s essential to represent them accurately. Be sure to detail key aspects like the primary use, the materials used, dimensions, weight, and the benefits it offers. This approach not only boosts sales through clearer descriptions but also helps to minimize negative reviews, which can impact your Amazon account health. Accurate product representation is your opportunity to enhance customer satisfaction and maintain a healthy selling account.
Ship Products On-Time
Prompt delivery is crucial! Amazon values its reputation for quick shipping and expects its third-party sellers to uphold this standard. Additionally, customers can become frustrated if they have to wait longer than expected for their orders. Therefore, it’s important to make sure you dispatch orders within the given time frame. This practice not only aligns with Amazon’s expectations but also enhances customer satisfaction.
Sell Quality Products
It’s important to conduct detailed inspections of your product samples before shipping them to Amazon warehouses. While it may not be feasible to examine every item you sell, especially when purchasing in bulk, you can request a few samples from your supplier. This allows you to thoroughly check the quality, safety, and durability of the products. Such vigilance helps maintain high standards and customer satisfaction.
Maintain Competitive Pricing
Price significantly influences consumer choices. Sellers who offer competitive pricing often maintain better Amazon account health, ensuring their products are never overpriced.
Using smart repricing software can help identify the optimal pricing for your products, keeping you competitive with others in your market. By employing strategic repricing, sellers can adjust their prices effectively, increasing their chances of winning the Buy Box and boosting their sales.
Final Thoughts
Maintaining your account health is vital for success on the Amazon. It not only enhances your reputation and credibility with customers but also plays a crucial role in your overall sales performance. A healthy account ensures better visibility, higher chances of winning the Buy Box, and a trustful relationship with Amazon and its customer base. By focusing on accurate product descriptions, competitive pricing, prompt responses to customer inquiries, and adhering to Amazon’s policies, sellers can sustain a thriving business. Ultimately, a well-maintained account leads to increased customer satisfaction, repeat business, and long-term growth on one of the world’s largest e-commerce platforms.
