7 Amazon Seller Metrics You Should be Tracking
Online sellers nowadays tend to sell their products over multiple platforms. But whether you sell exclusively on Amazon or across other eCommerce sites, a key component of the success of your business relies on keeping track of your metrics.
As more people sign up for online shopping on Amazon and the number of sellers increases by the day, it is more important than ever to keep a close watch on your Amazon seller metrics. Many sellers are painfully unaware of how important tracking metrics is – if not done properly, it can make or break your business.
Contrary to popular belief, a seller’s metrics are not just a barometer for your seller account. Rather, it has a significant impact on how your products are ranked in the Amazon marketplace. But with many metrics to keep track of, staying on top of it can seem like a daunting task. We are here to help. In this article, we give an outline of important metrics to actively track in order to maximize your success on Amazon. If you are not currently using Amazon Performance Metrics, you are missing the boat on critical information essential to your business.
Why Are Amazon Seller Metrics So Important?
You may already know that Amazon sets high standards for its sellers. In Amazon’s view, the customer experience and satisfaction are equally #1. So it only follows that Amazon actively works to elevate sellers who best fulfill these markers and other critical seller metrics.
Your standing as an Amazon seller can and does impact your eligibility to sell certain products in certain categories. Your seller metrics also play a role in your ability to list in gated categories. This is nothing new. By intimately understanding your seller performance metrics, you can keep a close eye on areas where you need to improve as well as seeing in which areas you excel.
Lastly, in the event your seller account is suspended, Amazon will review your performance history to determine their decision to reinstate your account.
How to Access Your Amazon Seller Metrics?
For an overview of your metrics, simply login to Seller Central, navigate to the ‘Performance’ tab and select ‘Account Health’ from the list. From the health screen, you can view a detailed breakdown of your Amazon Seller Performance Metrics. We’ll describe each of them below
Seller Rating
Your Seller Rating is a score anywhere from 0 – 100 and combines six main metrics to determine your overall performance as an Amazon seller. These are:
• Processing, handling, and shipping times
• Order cancellation rates
• Chargeback rates
• Customer inquiries
• Customer reviews
• A-to-Z claims
When you stay on top of your Seller Rating, you’re keeping a keen eye on the broad view of your business. Using these metrics to determine where you have room to improve is essential.
Product Ranking
Did you know? About 40% of Amazon shoppers never get past the first page of Amazon search results. This is a huge potential customer loss, which is why it’s crucial that you as an Amazon seller focus on boosting your product’s ranking so that you have a chance to compete for precious real estate on the first page.
With optimized listings, solid sell-through rates, and a decent pricing structure, Amazon may award Best Seller ranking. This ranking is determined by the number of sales you have and is not based on customer feedback. So get to selling!
Order Defect Rate (ODR)
The ODR is a key metric determined by calculating the number of negative customer experiences in your seller profile. If any one order meets the following criteria, Amazon considers it defective:
• An A-to-Z claim is opened
• A customer initiates a chargeback
• A negative review of fewer than 3 stars
It goes without saying, then, that the more negative reviews, returns, and chargebacks you have, the less customers are likely to trust your seller profile. This has a negative impact on your ODR if you don’t rectify the situation quickly. In fact, Amazon maintains a strict rule of any seller maintaining an ODR of less than 1% to maintain good standing.
Pre-Fulfillment Cancellation Rate
This is a hugely important metric in which you will need to keep a close eye on your inventory levels. You want to make sure you are not offering a product you cannot ship. Heaven forbid, a customer orders one of your items, and you have to cancel the order because you do not have the inventory. This is a pre-fulfillment cancellation, and can severely impact your account health, especially if it happens on a recurring basis.
To keep your account in good standing, you must stay below 2.5% of pre-fulfillment cancellations. This is calculated by the number of overall cancellations divided by the number of orders within a specific timeframe. So it’s important to regularly check all inventory levels, and update your Amazon catalog accordingly.
Inventory Performance Index (IPI)
This is a relatively newer metric, but very important if you are enrolled in Fulfillment by Amazon (FBA). Amazon will calculate your FBA storage limit based on your IPI score and will limit storage for sellers with a low IPI. Their process for calculating IPI is not known, but they suggest the following:
• Update which items you keep in stock
• Reduce excess inventory
• Avoid stranded inventory
Unit Session Percentage Rate
As with any eCommerce business, your conversion rate is crucial to the success of your business, Amazon included. To track your conversion rate, simply take the Unit Session % Rate, which is calculated using the following formula:
Unit Session % Rate = Units Ordered / # of Sessions
If your conversion rates are low, there are several things you can do:
• Check that your listings are fully optimized
• Check your price to make sure it’s competitive in the marketplace
• Check your listing for relevant keywords, and optimize for this Oftentimes, simply adjusting your price is all it takes, and can even give you a chance to compete for the coveted Amazon BuyBox.
Buyer-Seller Contact Response Time (CRT)
How responsive are you to messages from customers or potential customers? You may be surprised to learn that this is a key metric and is vitally important to the success of your Amazon business. As a seller, Amazon expects you to answer any customer inquiries within 24 hours (even on weekends).
In a perfect world, you’ll want to respond as soon as possible (less than 12 hours is ideal!) It’s easy to get notified by email every time a customer sends you a message to your Seller Central account. If you are consistently unresponsive, this has a negative impact on your seller metrics. It’s all about good customer service!
The Final Word
Amazon is not a “set it and forget it” platform. As will any other eCommerce business, you’ll want to keep a close eye on all of these metrics. Check your Seller Dashboard frequently to make sure there are no outstanding issues. Identifying and resolving issues as soon as possible is essential to the health of your business.
We know this can take a lot of time and dedication. If you are overwhelmed with your Amazon business, let us help! We have a team of Amazon experts that are eager to work for you to help make your Amazon business shine.
