Order Defect Rate (ODR) is one of the most important performance assessment metrics used by Amazon to evaluate the performance of the seller. Amazon calculates ODR by dividing the number of orders with the negative defects (described below) by the total orders during a given 60-day time period. Order Defect Rate is represented in percentage.
According to Amazon policy, sellers have to maintain an ODR under 1%. If the ODR is higher than 1% then it will result in account deactivation.
Following are the three components which are used to calculate ODR:
- Negative Feedback Rate
- A-to-z Guarantee claim rate
- Credit Card Chargeback Rate
- Negative Feedback Rate
It is important to dispatch orders on time and to communicate and resolve the issues faced by buyer quickly as per the above discussion. If you did not handle that proactively then it will result in buyer giving negative feedback. If your negative feedback rate is greater than 5% it will impact on your account health performance.
The Negative Feedback Rate is measured by the number of orders that have received negative feedback divided by the number of orders in the relevant period.
- A-to-z Guarantee Claim Rate
When a customer does not receive the package in the expected time and after contacting seller regarding the package and the customer did not get any solution then they will open A-to-Z claim so that the issue been forwarded to Amazon. It also covers the conditions in which the item arrives in and the total time of delivery.
A-to-z Guarantee Claim Rate is calculated by this formula:
Following are the types of claims which impacts ODR:
- Claims that were granted, regardless of who funded the claim
- Claims for which you provided an order refund after the claim was filed
- Claims for which you or Amazon canceled the order
- Claims that are under review
- Credit Card Chargeback Rate
Credit Card Chargeback is same as A-to-z claim except that the credit card issuer processes the claim and makes the decision and not Amazon. These claims are carried out usually by fraudulent buyers.
How to Improve Amazon Order Defect Rate (ODR)?
If your ODR is higher than 1% then you will lose the Buy Box. Not only that but it will also result in account suspension. To reinstate the account, a good plan of action has to be submitted to Amazon within 17 days.
To prevent account suspension, it is recommended to also maintain the ODR. It is mostly influenced by A-to-z claims and negative feedback, which is why it is important to carefully examine every A-to-z claim and customer feedback and filter them. Find out the common reasons why you are getting claims and negative feedback and improve that problem. The goal is to try to track down reoccurring problems and rectify them rapidly before it results in long-term damage to the account.
Following are some key segments which can help to keep Order defect rate low:
- To describe item precisely
- To sell high-quality items
- To pack the product excellently
- To ship the item using a reliable shipping company which have a tracking number available
- To respond buyer’s messages instantly
It is best to always check the performance metrics timely so that the order defect rate is maintained.
