To have a good Order Defect Rate (ODR) is essential for sellers as this is how Amazon “evaluates” your business and how you are doing as a seller. The Amazon Buy Box is crucial for success and not meeting the expectations could even lead to a deactivation of your account.
What does the Order Defect Rate display?
The ODR is the percentage of orders that have received any negative feedback, an A-to-Z Guarantee claim or a service chargeback. These claims are divided by the total number of orders during a specific period of time, e.g. within 30 days.
If you have fulfilled 100 orders in this interval and you get one negative feedback from a customer and two A-to-Z claims your Order Defect Rate is 3 %.
This is far higher than the maximum of 1 % which is recommended by Amazon. A negative claim and one negative claim for the same order is counted as one, not two.
You Order Defect Rate is 1 % or even higher?
What happens first when you reach the 1 % limit is losing your buy box for all of your products except the FBA items (at first, depending how the rate increases). Amazon wants to protect a positive customer experience and ensure the trust of the customers in the Buy Box; that’s why the products you ship lose the Buy Box eligibility if you reach the ODR-limit.
What happens with my Amazon Account?
Furthermore, Amazon could even terminate your account straight away, hold payments in to refund customers.
Since the Order Defect Rate is very important for Amazon, you whole agreement with Amazon could be in danger if you reach the 1 % limit – regardless the size and turnover of the company.
Should I consider FBA?
As mentioned before, Amazon is quite strict when it comes to the ODR so FBA is a good way to meet Amazon’s expectations and, if necessary, to decrease the ODR percentage and consequently no to lose you Buy Box eligibility.
How can I improve my Order Defect Rate? (Tips)
Of course, there are many different aspects to consider outside Amazon like marketing, expansions, customer support, etc. but what you should do on Amazon to improve your ODR is the following:
a) Read all ALL A-to-z claims and the feedback of your customers:
As the ODR is all about claims, you know what the reasons were and how to avoid them in the future. People will tell if they had to wait to long for the parcel to arrive, if it was broken, not matching the expectations or whatever reasons there was.
b) Make sure your customers get their order asap
Delivery delays are the main reason for bad reviews, for cancellations and for claims. Finding proper storage solutions and the best distribution network possible is what it’s all about. Amazon FBA can be the best solutions here, it also has an positive impact on the order defect rate.
To keep your ODR where it should be throughout the year, make sure to think about possible delivery issues before, during or after certain holidays. As this can be also connected to higher numbers in orders (hopefully), this higher demand must naturally also be considered – supply bottleneck should always be avoided.
The Order Defect Rate on Amazon is always important and taking a look at it from time to time surely makes sense.
The main aspect is not reaching the 1 % limit and if you reach it to take measures against it.