On September 22, Amazon changed the way it calculates sellers’ Late Shipment Rate (LSR), a metric factored in to their Order Defect Rate performance standings. But some sellers were unaware of the policy change until they received an email recently from Amazon.
Some believed they might have been singled out to receive the letter and worried Amazon had flagged their account, but it appears to be going out to all sellers to inform them of changes to its seller performance requirements.
“We are writing to let you know that we are making a change to the way we calculate your late shipment rate,” the letter states. “Prior to this change, an order was considered late when the ship confirmation was overdue by three or more days. To help better set customer expectations, an order will now be considered late if shipment is not confirmed by the expected shipping date.”
That’s a big change for sellers who don’t already have a system in place to update Amazon in a timely fashion when they ship orders.
The email letter also included the sellers’ LSR metric for August under the new system. Sellers who go into their account to check their Late Shipment Rate metric now see the metric computed both ways. Amazon displays the raw numbers of orders the seller received over the past 7 days, 30 days, and 90 days. It then displays the seller’s performance next to the targets for those same periods:
- their Pre-fulfillment Cancel Rate (which has a target of under 2.5%);
- their Late Shipment Rate NEW;
- and their Old Late Shipment Rate.
Sellers have been discussing the new method for calculating the LSR metric since the letter began going out over the past several weeks.
The Amazon help page explains that when a seller confirms shipment with Amazon, the marketplace sends a communication to the customer that the order was shipped
In its email notice to sellers, Amazon explained the new policy as a way to help better set customer expectations. “We have found that if sellers confirm after the expected ship date, it raises customer anxiety, resulting in increased negative feedback and claims.”
Good news for sellers who are unprepared – they have a few months to get ready. In its FAQs, Amazon answers the question “Will this impact my selling privileges?” with this answer: “We ask sellers to maintain their late shipments below a target rate of 4%. We understand that changes to your shipment process may take time, so for the next few months, if you don’t meet the target based on the updated metric, it will not affect your account status.”