Several popular e-commerce marketplaces such as Amazon impose certain requirements on their third-party sellers. To make sales on these platforms, you must abide by these rules, guidelines, performance targets, and policies. You must also maintain your “Account Health” over a certain threshold.
Looking after your account health is important because it will help you gain a visible presence in the world’s most thriving e-commerce marketplace. Your account health can directly impact your brand’s topline and bottom line.
But what exactly is account health and what does optimizing account health involve?
Today, we pick Amazon, home to millions of sellers, which gives a lot of importance to account health and regulates their performance. Read on to dig deep on how and why brands optimize their account health on Amazon.
Account Health with Amazon
Your brand’s account health measures its performance with respect to policy compliance, customer service, and shipping. Amazon provides an Account Health Rating (AHR) to help you monitor your account health based on adherence to these factors. It shows your account’s policy compliance performance by considering the number and severity of unresolved policy violations on your account. AHR also shows account health in terms of shipping and customer service performance.
For a brand, it is highly imperative to optimize all the three parameters for your AHR and ultimately, your Amazon presence and sales. Backing up your amazon account with good health ensures a long and successful run in the marketplace.
Optimizing Policy Performance
To optimize AHR, your policy performance must be in a good shape. Amazon has laid down some policies for the brands and expectedly, has a zero-tolerance for unsettled or unresolved complaints or violations. So, you should respond immediately if you receive a notification about a customer complaint or a policy violation. A customer‘s complaint may be related to product safety, authenticity, or condition. You may also receive notifications that you have violated Amazon’s rules regarding intellectual property, restricted products, or customer product reviews.
Addressing all such notifications will help you maintain your Amazon account in “Good” health and continue selling on Amazon as a trusted and reliable seller. Moreover, addressing complaints promptly is a great way to show customers that you are listening to them and you take their inputs seriously. Conversely, if you fail to quickly respond to and address complaints or violation notifications, your AHR will be marked “At-Risk” or “Critical” and your account may be suspended. If you continually fail to rectify the underlying problem, your account may even be removed from the Amazon marketplace, which will directly impact your sales and topline.
Optimizing Shipping Performance
Your AHR also depends on shipping performance. Amazon measures shipping performance based on a late shipment rate (LSR) which is the percentage of orders that had their shipping confirmation posted after the expected ship date. To maintain a good AHR, your LSR must be under 4%, otherwise, your account may be suspended.
Similar to LSR, you must also maintain a valid tracking rate (VTR) of above 95%. The VTR measures the percentage of total orders that were assigned a valid tracking number over a 30-day period. Of course, the target of 95% only applies to the orders that you fulfill yourself, not for any Fulfillment by Amazon (FBA) orders.
Amazon customers depend on tracking numbers to track their orders and know when they can expect to receive them. By maintaining a high VTR, you can meet these expectations, which will directly influence customers’ preferences for your products. But if your VTR falls below 95%, it may annoy customers and Amazon may prevent you from selling more items in one or more categories. It could also negatively impact your ability to offer premium shipping and guaranteed delivery, which again, can impact your sales and revenues.
Optimizing Customer Experience Performance
Finally, your Amazon account might also take a dent due to poor customer service performance. This performance metric will largely depend on your order defect rate (ODR), on-time delivery rate (OTDR), and return dissatisfaction rate (RDR).
ODR measures your ability within the past 60 days to leave customers as happy as the A-to-Z guarantee promises. To achieve a satisfactory ODR and to maintain “Good” AHR; negative feedback, successful A-to-Z claims, and credit card chargebacks must all be less than 1%. OTDR is the percentage of total orders that made it to customers by the estimated delivery date. Keep it above 97% to make customers happy and encourage them to make repeat purchases in your store.
Finally, customer experiences are also impacted if you don’t respond to a return request within 48 hours or worse if you deny the return request. In either case, your RDR will go up and negatively affect your sales. On a positive note, if you successfully resolve a customer’s issue, get positive feedback, and process the refund before it becomes an A-to-Z claim, your RDR will remain under Amazon’s set target of 10%, which will positively affect your brand’s performance on Amazon.
Conclusion
Marketplaces care about their reputation similar to how brands care about their accounts. This isn’t the case with amazon, every marketplace lays rigid guidelines to avoid any hassle in ensuring a great customer experience. Unfortunately, many resellers don’t pay enough attention to their Amazon account health rating. Later, they wonder why their brand is not doing well and why their topline is weaker than their competitors. Don’t let this be your brand’s story.
You can maintain a strong Account Health Rating by meeting your current marketplace(s) targets around policy compliance, shipping, and customer service. Make a sustained effort to meet these thresholds. Your top line and bottom line will thank you for it.
Ergode helps resellers to achieve their targeted AHR and boost their sales and profits. To know more about our approach, contact us.
