On Amazon, account health is wealth—literally! Nurture it, and you'll enjoy explosive profitability; neglect it, and you'll find yourself on the outside looking in. 🪟
To help keep your account in top shape, we gathered some information about the factors that affect your account health. As a bonus, we also uncovered a master plan to dodge account suspension and termination.
Account suspension is one of the worst things you can face as an Amazon seller. Not only will you lose sales, but your customer base can suffer due to credibility issues.
That's why SellerApp believes you should focus on your Amazon Account Health Rating (AHR). It's a critical metric for ensuring that your account doesn't face the consequences of violating Amazon's policies.
Here are the things you should take note of to maintain a good AHR:
🩺 AHR in a nutshell
In simple terms, this metric summarizes your account's overall performance. The higher your AHR, the 'healthier' your account. Amazon uses a scoring system from 1 to 1000; anything above 200 is a good rating.
Your rating depends on three main factors:
1. Customer service performance
Your Order Defect Rate (ODR) is the key factor under this metric. It's the percentage of orders returned or canceled due to unsatisfactory products or services. An ODR of over 1% is considered high and can significantly harm your AHR.
How to calculate: Number of orders returned or canceled/Total number of orders within the same duration
2. Policy compliance
Amazon has some seriously strict rules to ensure excellent customer experience. As for a smooth selling experience—it's up to you to achieve that! Start by adhering to the platform's guidelines for product listing, fulfillment, pricing, customer service, etc.
How to calculate: It's Amazon's call, but you can get a good evaluation result by following its policies. 🔎
3. Shipping performance
This metric uses your late shipment rate (LSR) as a determining factor. It covers all orders that were shipped late and/or did not arrive on time. A healthy account should have an LSR of 4% or lower.
How to calculate: Number of orders shipped late or did not arrive on time/Total number of orders within the same duration
What happens if your account is 'unhealthy?'
Scores below the "Healthy" rating (200–1000) mean your account has several violations. The sanction will depend on your actual score:
- "At Risk" (100–199) - Amazon might suspend your selling rights and tag you at risk of deactivation.
- "Unhealthy" (99 and below) - Your account is tagged eligible for deactivation or is already deactivated. This rating is usually given to accounts suspected of fraud or other illegal activities.
In both cases, your customers cannot see or buy your products, and you cannot fulfill existing orders. To appeal your unhealthy rating, you must submit a Plan of Action (POA) to Amazon within 48 hours. ⏲️
💪 But a better way to avoid account suspension/deactivation is to become a better seller! Simple things like selling quality products and promptly responding to customers can rid you of the stress and risks of an unhealthy selling account.
After all, improving your strategies is easier and cheaper than starting over again.
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BITES OF THE WEEK
- Watch and Learn: Get familiar with Amazon Account Health.
- Sellers, Rejoice!: Amazon has rolled out the Account Health Rating Tool.
- Heads Up: Amazon FBA removals policy changes on November 1, 2023.
- Checkup Time: Why does your Amazon account need a complete health checkup?
5 critical metrics that affect your account health
Aside from the key AHR metrics, other equally important criteria can determine your account health. YourSeller listed 5 factors that you should monitor to steer away from policy violations:
1. Cancellation Rate (CR)
This metric tracks seller-initiated cancellations for seller-fulfilled orders in a 7-day period. Amazon requires you to keep a CR below 2.5%.
Fun fact: eBay has a more strict CR requirement at < 0.5%. FYI, in case you plan to sell there. 💭
2. On-Time Delivery Rate (OTDR)
OTDR calculates the percentage of shipments delivered on time compared to all tracked shipments. To maintain a healthy account. You should aim for an OTDR of above 97%.
3. Valid Tracking Rate (VTR)
This measures the percentage of shipments with valid tracking numbers within 30 days. As such, it applies only to self-fulfilled orders.
A VTR of above 95% is considered a decent one.
4. Return Dissatisfaction Rate (RDR)
This metric is designed to gauge customer satisfaction with your return process. Like VTR, it also applies only to self-fulfilled orders.
As Amazon’s known for easy returns, you’re expected to have an RDR of under 10%. To achieve this, handle return requests properly to avoid negative return feedback.
Formula: (Negative return requests/Total return requests) x 100
5. Invoice Defect Rate (IDR)
This relatively new account health metric measures the invoicing experience of Amazon Business customers. You’re required to maintain an IDR of less than 5%.
Formula: (Number of orders from Amazon Business customers with no invoice issued within 1 business day after shipment confirmation/Total number of orders from Amazon Business customers) x 100
💡 Golden rules of account health metrics
To ensure your account’s in mint condition, keep your OTDR and VTR high and the other metrics low. And, don’t forget to do a regular account health check-up to enjoy a smooth selling experience.
Prevent account suspension with this 2-step plan
When Amazon sends you an account suspension notice, there are two questions you should ask:
- Why is my account being suspended?
- What can I do to prevent this from pushing through?
To answer these questions, Jungle Scout devised a two-step plan that can help you cure this headache.
🕵️ Step 1: Determine the cause
Note that Amazon won't give you a clear explanation about your violation. So, to answer the first question, review your recent actions to check if the cause is:
- Internal - things within your control, such as your customer service performance, product policy compliance, and shipping performance; or
- External - factors outside your control, such as policy changes and bad actors targeting your account.
✍️ Step 2: Create a POA letter
As we said earlier, Amazon allows you to appeal your suspension through this. When creating your POA, remember to:
- Address the problem. State the cause that you've identified in the first step. If you didn't arrive at a solid conclusion, provide your best guess based on your objective analysis.
- Explain actions taken. Describe the corrective actions you've already implemented before sending the letter. Don't forget to include evidence to support these actions.
- Present future plans. This is the core of your POA. Outline how you'll prevent similar issues in the future to show your commitment to resolving the situation.
- Attach supporting documents. It could be receipts, email copies, screenshots, or other proof that strengthens your appeal for reinstatement.
🤍 Keep calm and avoid suspension
Regardless of the reason for your account suspension, avoid any impulsive reaction that can sabotage your case. Amazon rarely grants second chances for appeals, so make your initial attempt count.
If you have the budget, consider hiring experts to help you sort things out. But if not, following the plan above can still give you a good shot at reinstatement.