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Get Started Selling on Amazon: The Complete Step-by-Step Guide (Part 10 of 12)

31
Jan

Read time: About 11 minutes!

Part 10: Improving Your Seller Ratings & Ensuring Your Account is Not Suspended

In Part 9, we covered The Magic in Positive Ratings & How to Get Them!

The third point on my post 12 Things I wish I knew Before I Started Selling on Amazon is Don’t let your “Account Health” deteriorate. I briefly touched on how customer metrics can affect your seller account’s “health” which can ultimately lead to your account being suspended.

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On this part of the series, I wanted to expand on that.

Looking it from Amazon’s perspective and how important customer service is to them you can see why customer ratings carry so much weight in determining what your seller account status is. The Customer Metrics in your Amazon account offer a report and status of your account and how you are doing with respect to customer satisfaction.

How Amazon Customer Metrics Ratings Work

Amazon frequently reviews the performance of sellers and notifies them by assigning a rating to each performance category they have in place.

From your seller account, log in and refer to your Amazon 360 Seller Dashboard to view your rating in all customer metrics categories and determine the action needed to improve your rating. It’s always a good idea to spend some time each week to go through your metrics to see if there are any areas that need improvement. I generally only do this if my ratings drop from “Good” to “Fair”.

Your customer metrics ratings have a direct impact on whether or not you can apply for ungating on gated categories as well as being a Featured Merchant and being awarded the Buy Box.

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Good good-health-amazon-tims-30-streams-of-passive-income

Good rating means your performance is meeting Amazon’s standards for that metric.
Fair fair-health-amazon-tims-30-streams-of-passive-income

This rating means that your performance does not currently meet all of Amazon’s standards for that metric. You should act fast to improve this rating. If you fail to do so, this will will eventually lead to your rating being downgraded to Poor.

Poor poor-health-amazon-tims-30-streams-of-passive-income

This rating means that your performance does not currently meet Amazon’s standards for that metric. If you don’t fix the issue(s) highlighted and improve your ratings you run the risk of your Amazon Seller’s account being suspended.

Checklist to Complete (Optional)

It’s a good idea to review the 5 areas listed below to gain further understanding on maintaining and/or improving your Amazon Customer Metrics:

  1. Order Defect Rate
  2. Cancellation Rate
  3. Late Shipment Rate
  4. Policy Violations
  5. Order Refund Rate

 

1. Order Defect Rate (Target < 1%)

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This is the percentage of orders that have received a negative feedback, an A-to-Z Guarantee claim or a service credit card chargeback. Your seller performance target for this metric should be less than 1%. Monitor your Order Defect Rate from your Amazon 360 Dashboard.

Negative Feedback

Any Amazon buyer that places an order can leave a feedback from a 5 star (best) to a 1 star (worst).  All feedback is visible by buyers and can influence other potential buyers when making a decision to purchase an item.

Tips to avoid negative feedback:

  • Customer Communications – Make sure your or your customer service team is responding to inquiries and claims in a timely and concise manner.
  • Ship on Time – Always ship based on the Lead Time to Ship you have configured.
  • Clear Policies – Include clear and concise policy information regarding returns, cancellations, refunds, etc.
  • List Items in Stock – Only list items you have in stock and can fulfill in the proper timeframe (based on your Lead Time to Ship duration).
  • Accurate Product Information – Include accurate product information to ensure your products are correctly mapped to Amazon’s UPC/catalog.

As a general rule, Amazon never removes buyer feedback even if an issue is unwarranted or has been resolved. In such situations, it is reasonable for you to ask the buyer to remove their feedback- ask politely.

Amazon allows buyers to remove feedback they have left within 60 days from the date they created it. Try your best to work with buyers to resolve any issues regarding your transactions.

The only exception to this is when your product is is using FBA- in case of customer service or late shipment type complaints, Amazon normally removes such negative feedback.

Within your Amazon 360 Dashboard pay attention to the Feedback section. Pay specific attention to your most recent negative feedback. Simply select the feedback to be directed to the order where you can trouble shoot the problem and avoid any future negative feedbacks.

A -to- Z Guarantee Claims

These are claims that the buyer has filed with Amazon due to not receiving their order or the item was not as described, damaged or missing parts. As a seller you should be proactive with your customers to resolve any order problems and this will avoid most A -to- Z Claims.

Tips to avoid claims:

  • Customer Communication – Make sure your customer service team is responding to inquiries and claims in a timely and concise manner.
  • Refunds – If necessary, make sure to refund orders in a timely fashion.
  • Fulfillment – Make sure to use a shipping carrier that can provide tracking information.  Send all tracking details and shipment information to the buyer as soon as the product ships.  Utilize proper packaging for your products to ensure they are delivered undamaged.  For items that unexpectedly go out of stock, cancel the order and contact the buyer immediately.
  • Accurate Product Information – Make sure you are providing accurate product information.

Avoiding Service Credit Card Chargeback

A chargeback occurs when a cardholder contacts their bank to dispute the charge for an order placed on Amazon.  Chargebacks are typically filed for non-receipt of the item ordered to unauthorized use of the credit card.

Some cases are legitimate however, sometimes Amazon customers may be unhappy with an A-Z Claim that was ruled against them or may want to get a refund on an item beyond the stated return period and if you refuse to accept the return they file a chargeback against you.

Chargebacks are seller’s worst nightmare. Avoid them at all cost. Normally, the buyer will report their order to their bank/credit card company as unauthorized prompting their bank to reach out to you via Amazon to get more information about the claim.

Amazon has nothing to do with it and they can’t help you. All they do is comply with the bank/credit card company’s request. You then have to provide proof indicating that the charge was indeed authorized.

Unfortunately, most times than not, banks unfairly side with the buyer but don’t let this stop you from fighting a chargeback if it’s unwarranted.

Tips to avoid chargebacks:

  • Fulfillment – Make sure to always ship to the shipping address provided.  You are liable for any disputes filed for orders you sent to a different shipping address. When doing MF (Merchant Fulfillment) always provide a tracking number. For higher priced items (e.g. $100+ pay the extra to receive signature confirmation for delivery)
  • Shipping Carrier – As noted above, it’s best to ship with a carrier that will provide a tracking number and/or required signature for higher ASP (average selling price) items.

 

2. Cancelled Orders (Target < 2.5%)

customer-metrics-amazon-tims-30-streams-of-passive-income

Amazon considers any order cancelled by a buyer for any reason as a cancelled order. As a seller, you may also cancel an order that you’re not able to fulfill or for any other reason.

Tips to avoid canceled orders:

  • Inventory Stock – Make sure to only list items that you have in stock and ready to ship. It’s crucial to immediately pull down items that you’re unable to fulfill.
  • Fulfillment – It is important you ship your products out based on the Lead Time To Ship number. Orders that are overdue by three or more days Amazon will consider the order late and buyers may then want to cancel their order.
  • Pre-fulfillment Cancellation Rate – This will equal the number of orders cancelled by a seller prior to ship-confirmation divided by the total number of orders during that time period. Your seller performance target for this metric should be less than 2.5%.

 

3. Late Shipment Rate (Target < 4%)

To help better set customer expectations, an order will now be considered late if shipment is not confirmed by the expected ship date. An order was previously considered late when the ship confirmation was overdue by three or more days. We are making this change because we have heard from customers that when sellers confirm after the expected ship date, it raises customer anxiety and results in increased negative feedback and claims.

Note: The expected ship date is calculated based on the handling time configured by you in the ‘Manage Your Inventory’ section in Seller Central. If you do not set a handling time, the default for the ship date is 1-2 business days..

Your seller performance target for this metric should be less than 4%. Make sure you monitor your Late Shipment Rate from your Amazon 360 Dashboard.

Late Shipments

Order that are ship confirmed late may lead to increased customer contacts and negatively impact the customer experience.

Tips to avoid late shipments:

  • Lead Time to Ship – As noted above, it’s crucial to ship your orders out according to the Lead Time To Ship number. If you find you’re late ship rate increasing, you should consider increasing your Lead Time To Ship while you figure out any fulfillment issues.
  • Ship Confirmations – When orders are shipped, make sure to enter shipping confirmations and tracking information. This will update Amazon who will notify the buyer. Buyers that do not receive the confirmation as expected have the potential to cancel their order.

Strategy:

Consider utilizing the Fulfillment by Amazon (FBA) service. This service will take over all of the shipping, fulfillment and customer service obligations allowing you more time to concentrate on growing your business. Participating in the FBA program also contributes to your chances of being awarded the Buy Box.

 

4. Policy Violations

If you’ve been reported for incorrect listings or business practices, you may receive a policy violation warning, or haven’t read an important Amazon update yet, you might be flagged for a Policy Violation. Access your Seller Central account to view the details of the policy violation.

Policy violations are a serious issue and may result to the removal of your selling privileges without prior warning.

 

5. Order Refund Rate (Target < 5%)

The refund rate is the number of orders refunded by a merchant divided by the number of orders in the time period of interest. Your seller performance target for this metric should be less than 5%.

Refunds

Amazon considers all orders that were refunded for any reason in this calculation.

Tips to avoid order refunds:

  • Inventory Stock – Typically sellers with a high refund rate, also have a high rate of items out of stock.  This is caused by items being posted for sale and buyers purchase the item(s) prior to the seller pulling down the item.  Therefore, resulting in a refund.  It’s key to keep accurate updates on quantity.
  • Fulfillment – Refunds are also typically due to damaged items and/or missing parts. Make sure you have proper packaging for the right products to avoid damaged goods.  Ensure all parts to an order are packaged and included in the shipment (i.e. missing remotes to TVs or cables to a DVD).
  • Customer Communication – Occasionally there may be the need to cancel an order.  If necessary, contact the buyer immediately to inform them of the cancellation.  If you find an incorrect buyer address, contact the buyer to quickly to resolve the problem and ship the order.

Reference

Refer to the following pages for more information:

As always, if you have any questions or get stuck and need help completing any of the steps outlined here, leave me a comment below or email me and I’ll be happy to help.

Keep Reading 

Up Next, Part 11: Moving Up to Fulfillment by Amazon (FBA)

This post is a part of the ongoing Get Started Selling on Amazon: The Complete Step-by-Step Guide series, follow the links below to read them:

Part 1: Creating Buyers & Sellers Accounts for Selling on Amazon
Part 2: Researching Hot & Profitable Products To Sell on Amazon
Part 3: Finding the Right Suppliers for Your First Amazon Inventory Batch 
Part 4: Getting Ungated on Restricted Amazon Categories
Part 5: Listing Your First Product on Amazon
Part 6: Testing the Market Before Making the Big Purchase
Part 7: Purchasing Stock to Sell on Amazon
Part 8: Shipping Your First Amazon Order, YAY!!! 
Part 9: The Magic in Positive Ratings & How to Get Them
Part 10: Improving Your Seller Ratings & Ensuring Your Account is Not Suspended (Current)
Part 11: Moving Up to Fulfillment by Amazon (FBA)
Part 12: Scaling Up Your Amazon Operation (Coming soon)

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3 Responses

  1. Stuart

    Hi Tim,

    I stumbled across your blog whilst checking out the Passive Income sub on Reddit. I’ve now read through the first 10 installments of your how to sell on Amazon guide (hopefully number 11 is coming soon!) and just wanted to thank you and to let you know how helpful it has been to get an upfront look at the process and potential pitfalls before investing any serious time/money in setting up my own Amazon store. Keep up the good work and good luck on achieving your 30 before 30!

  2. Stuart

    Hi Tim, Stuart again. So I’ve just managed to find the 11th part of your guide (my bad) so please feel free to edit that out of my last comment! FYI the Keep Reading list just under your 10th guide shows number 11 as coming soon. Cheers

    1. Sorry for the late response Stuart, I thought I already responded to this earlier. But thanks for your kind words, glad you found part 11 and I’ve updated the error on 10th part as per your suggestion. Thanks for catching that!

      I hope you’ve take some action by now!

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