Dive into the Deep Waters of Amazon Performance Metrics
Welcome to the deep waters of Amazon performance metrics, where success and survival go hand in fin.
Just like schools of fish navigating through the vast ocean, Amazon sellers must navigate through a multitude of metrics to ensure smooth sailing in their business.
So, strap on your flippers and let's dive in to explore the fascinating world of Amazon performance metrics.
Memorize These Four Vital Metrics
First and foremost, let's talk about the four vital metrics for all sellers managing their own (MFN and SFP) orders.
These metrics assess your shipping and data entry efficiency and include:
Pre-Fulfillment Cancel Rate (PFCR): The percentage of orders you cancel before confirming dispatch.
Late Shipment Rate (LSR): The number of times your shipment confirmations are untimely or missing over the total number of orders you receive.
Valid Tracking Rate (VTR): The rate at which the tracking numbers you upload in a 30-day period turn out to be valid.
Buy Shipping Label Rate (SFP only): If you sign up for Seller-Fulfilled Prime (SFP), you'll need a near-perfect record for on-time dispatch and delivery, order acceptance and tracking, and data entry in your seller account.
For MFN orders, there's an additional performance metric to keep top-of-mind:
Order Defect Rate (ODR): The percentage of orders with which buyers have a negative experience.
Maintaining a smaller ODR will improve your chances of success by helping you win the coveted Buy Box.
So, fixate your eyes on the hook and keep these eight tips in mind:
An order will only count once, even if the buyer pulls a triple whammy (negative feedback, claim, and chargeback).
There's a difference between 'negative feedback rate' and overall 'feedback score'.
If the buyer retracts the negative feedback, it's also removed from its effect on the ODR.
A-to-Z claims don't affect the ODR after they're withdrawn.
You have 2-3 days to resolve a claim and 30 days for an appeal.
Fraud chargebacks (where the buyer denies placing the order) don't affect your ODR.
Service chargebacks (where the buyer notifies the bank that there was an issue with the order) are 'charge disputes' that count toward your ODR.
The smaller the ODR, the higher your chances of winning the Buy Box--talk about a hook, line, and sinker!
But wait, there's more!
Let's dive into inventory metrics for FBA sellers, specifically the Inventory Performance Index (IPI).
This indicator is used to assess your FBA inventory management and limit your stock levels if you're under-performing.
Amazon will assess you twice before the start of a business quarter, so make sure you're keeping track of these metrics:
Excess inventory: It estimates the proportion of units deemed to be in excess of 90 days' worth of demand.
Stranded inventory: It reflects the number of units stored but without an active listing.
FBA sell-through rate: This is the number of units sold over 90 days versus units usually in stock.
FBA in-stock rate: This indicates how efficient you are at maintaining stock levels over a 30-days period, against total sales in 60 days.
The best part?
We're just getting started!
There's an entire ocean of metrics to explore, from experience metrics to advertising cost of sale (ACoS) and return on ad spend (RoAS).
Fulfillment Metrics (MFN and SFP): Sail the Waves of Efficiency
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