A Guide to Understanding Amazon Account Health

Still trying to figure out what the Amazon Account Health page is all about?

In some measure, Amazon’s business model centers on the execution of its third-party sellers,  referring to you. And to make sure that all third-party sellers provide consistent product quality and customer service, Amazon imposed certain metrics and policies to provide sellers with the tools needed to check and improve their performance.  These tools are accessible in Seller Central through the Performance Menu. 

What Is Amazon Account Health?

As a third-party seller, you need to agree to and follow certain guidelines imposed by Amazon. One requirement is to comply with metics at certain levels, which is known as Account Health. There are many metrics you need to meet to continue selling in Amazon; failing to comply will lead to a warning, account suspension, or if not corrected, the dreaded account removal. 

Amazon has allocated a page in your Seller Central account called “Account Health” that showcases six important metrics that you, as a seller, need to focus on. That’s not to say you should ignore other metrics and policies.  It’s just that these metrics are critical to keeping your selling privileges on Amazon.

How to Check Your Account Health

To access the Account Health page,  open the Performance Menu and choose Account Health. 

Seller Central > Performance Menu > Account Health

On the Account Health page, you can access an overview of how well you’re doing complying with Amazon’s performance targets and policies.  You will notice that the account health is composed of three metrics: 

• Customer service performance
• Product policy compliance
• Shipping performance

These metrics are measured based on the Order Defect Rate or ODR. The ODR is the percentage of the total orders that resulted in the negative seller feedback, an A-to-Z Guarantee claim that was not denied, or a chargeback (the reversal of a credit payment initiated by the issuing bank). 

The target ODR for all sellers should be below 1 percent. On the Amazon Health page, you can view your order defect rate broken down by Seller Fulfilled versus Fulfilled by Amazon orders and by the three metrics: negative feedback, A-to-Z Guarantee claims, and chargeback claims.

Product Policy Compliance

Amazon has provided third-party sellers with a long list of policies to follow. A single infraction of Amazon’s policies places a seller account at the risk of possible account suspension. To make sure you have not violated any of these policies, check out the Product Policy Compliance section of the Account Health page, which include the following:

• Suspected intellectual property violations
• Received intellectual property complaints
• Product authenticity customer complaints
• Product condition customer complaints
• Product safety customer complaints
• Listing policy violations
• Restricted product policy violations
• Customer product reviews policy violations

As a rule of thumb, you should respond immediately to a performance notification from Amazon.  This means someone has filed a complaint against you or that you have violated any of the aforementioned policies. Remember, Amazon sets a zero target for product policy complaints or violations. Take heed. 

Shipping Performance

The policy on this one is simple. Amazon measures shipping performance based on a late shipment rate (target is below 4 percent) and a valid tracking rate (target is above 95%). But, you are only responsible for the orders you fulfill. Amazon is accountable for Fulfillment by Amazon’s performance.

What Metrics Should You Pay Attention to on the Account Health Page?

1. Order Defect Rate

The Order Defect Rate (ODR) measures your ability within the past 60 days to make sure customers are as happy as the A-to-Z guarantee promises. The ODR covers areas like negative feedbacks, successful A-to-Z claims, and credit card chargeback, all of which must be less than 1% to achieve a satisfactory ODR. 

2. Cancellation Rate

This metric is only for seller-fulfilled or FBM orders. It measures, in 7-day timeframes, the percentage of orders canceled by the seller. A seller needs to maintain a percentage below 2.5% to pass this metric.

3. Late Dispatch Rate

Your LDR or Late Dispatch Rate needs to be under 4% or you could face a warning or suspension. Measured over a 10-day or 30-day timeframe, the Late Dispatch Rate (LDR) refers to how many orders (as a percentage of total orders) had their shipping confirmation posted after the expected ship date.

4. Valid Tracking Rate

This metric is only applicable to seller-fulfilled orders or FBM. Displayed over a 30-day period, the Valid Tracking Rate (VTR) measures the percentage of total orders that were assigned a valid tracking number. Keep this metric above 95% and you’re good to go.

5. On-Time Delivery Rate

The On-Time Delivery Rate (OTDR) sums up, as a percentage of total orders, how many packages made it to their respective doorsteps by the estimated delivery date. This metric also only applies to seller-fulfilled orders, so it’s advisable to keep it above 97%.

6. Return Dissatisfaction Rate

The Return Dissatisfaction Rate (RDR), which needs to be under 10%, can increase if you get negative feedback (Negative Return Feedback Rate), don’t respond to the return request within 48 hours (Late Response Rate), or deny the return request (Invalid Rejection Rate).

7. Invoice Defect Rate

Amazon recommends that sellers maintain an Invoice Defect Rate below 5%. This rate is defined by the share of orders placed by Amazon Business customers for which you have not provided a downloadable VAT invoice (or a receipt) within one business day after shipping confirmation. This metric is in line with the Amazon Business invoicing policy

What Happens if You Fail the Amazon Account Health Metrics?

If you fail to meet the target metrics of Amazon Account Health, Amazon will request a Plan of Action (POA) from you for improvement within 48 hours. If your POA is accepted by Amazon; i.e., it demonstrates that you understand the problem and how you intend to rectify it, then Amazon will not suspend your account.

How Can We Help You?

We can share more best practices with you and help you meet your Amazon Account Health Metrics. We can also share different ways to leverage platforms and opportunities that Amazon provides its sellers to follow all the policies related to Amazon Account Health. 

If you need help, feel free to reach out to us here at Sellers Launch, and we will be more than happy to schedule a meeting with you. We hope to hear from you soon!