Amazon FBM OTDR Performance Metrics Update 2024

01.Update on Amazon FBM On-Time Delivery Rate (OTDR) Policy

 

Starting from September 25, 2024, Amazon FBM sellers must maintain at least a 90% On-Time Delivery Rate (OTDR) without extending the promised delivery dates to ensure your Amazon account performance.

 

The new requirements for Amazon FBM performance metrics are designed to help sellers enhance their sales and operational capabilities, providing buyers with a superior shopping experience. For an even better buyer experience, we recommend maintaining an OTDR of 95% or higher.

 

Maintaining an OTDR above 90% results in a superior shopping experience for buyers.

 

Note: This policy does not apply to products using Fulfillment by Amazon (FBA) services, as sellers are not responsible for the on-time delivery commitments of FBA orders.

 

02.What is On-Time Delivery Rate (OTDR)?

 

1. Importance and Components of Amazon FBM On-Time Delivery Rate

Amazon displays the estimated delivery time on the product information page and at checkout, indicating the time from the buyer placing the order to receiving it. Therefore, setting accurate delivery times for your products helps ensure a good buyer experience and may increase sales because:

• Buyers are more likely to purchase products with faster delivery times.
• Products with quicker delivery dates are more likely to become the featured offer (the offer displayed at the top of the product detail page that buyers can purchase directly or add to their cart).

 

Tip: The total delivery time is calculated as follows:
Total Delivery Time=Handling Time+Shipping Time+Any Holidays and Weekends+Additional Buffer Time (to account for carrier delivery issues)

 

2. Definition of Amazon On-Time Delivery Rate (OTDR)

The On-Time Delivery Rate (OTDR) measures the percentage of FBM products delivered to buyers on or before the seller-promised "Delivery Date." This date is based on the delivery date configured by Amazon sellers, without considering promised extensions. For buyers, receiving orders on time significantly enhances shopping satisfaction. It is recommended to set appropriate shipping times based on actual conditions to ensure buyers receive their products within the estimated time.

 

3. OTDR Calculation Formula

OTDR= Total Number of Orders with Promised Delivery Dates in the Past 21 Days (excluding the last 7 days)÷Number of Orders Delivered on or Before the Promised Delivery Date in the Past 21 Days (excluding the last 7 days)×100%

 

For example, if you had 130 orders with promised delivery dates in the past 21 days, and 30 of those orders had promised delivery dates within the last 7 days, then to calculate OTDR, exclude the 30 orders from the last 7 days (130-30=100). If 90 out of the remaining 100 orders were delivered on or before the promised delivery date, your OTDR would be 90%.

 

03.How to Ensure OTDR Compliance

 

Amazon Seller: What do I need to do to comply?

Amazon Official: We will notify sellers whose OTDR is not meeting the required standards via email in advance. Additionally, we have prepared the following guidelines for you:

 

1. Check Your OTDR Performance

   Log in to Seller Central, go to "Performance > Account Health > Delivery Performance > On-Time Delivery Rate," and download the OTDR report to find orders that caused the OTDR to not meet the required standards.

 

   For more details, Click to learn more [OTDR Performance]

 

2. Adjust Handling Time and Shipping Time, and Utilize Amazon's Delivery Tools

   Amazon FBM sellers can manually adjust their handling and shipping times and use Amazon's "Buy Shipping" service to meet the estimated delivery times promised to buyers.

（1）Handling Time:

     Set default handling times at the account level; set different handling times for various products at the product level. Method: Update handling times on the Manage Inventory page in Seller Central (update one product at a time) or upload the Inventory File Template (bulk update products).

 

（2）Shipping Time:

• Automatic Shipping Time Setting: Enable "Shipping Settings Automation (SSA)" to have Amazon automatically calculate your shipping time based on your shipping address and carrier preferences for precise time estimation.
• Manual Shipping Time Setting: Edit shipping templates in "Shipping Settings" to customize your shipping times.

 

   For more details,Click to learn more [SSA Help Page]

 

   Steps:

   1. Open Shipping Settings, go to Seller Central > Settings > Shipping Settings.

   2. Create a new shipping template.

   3. Enable Shipping Settings Automation.

   4. Select the warehouse address for the target site.

   5. Choose the carriers and shipping services used by the seller.

   6. After saving, the shipping time in the corresponding shipping template will be managed by Amazon.

   7. To exclude remote areas where delivery is not possible, uncheck those areas during setup.

 

   Shipping Choice:

   Using "Buy Shipping" can effectively avoid account performance issues. Order high on-time delivery probability shipping labels from Manage Orders, your API, or third-party ERP system service providers.

 

   For more details, Click to learn more [Buy Shipping Help Page]

 

   Steps:

   1. Initial Setup: Go to Seller Central > Settings > Account Info > Shipping and Returns Info > "Buy Shipping" Preferences.

   2. Choose FBM orders to use Buy Shipping: Go to Seller Central > Orders > Manage Orders > Pending, and click the "Buy Shipping" button.

   3. Select Shipping Carrier and Method: Choose packaging dimensions/add new package dimensions and enter package weight, then the system will automatically filter available shipping channels, estimate costs, and delivery times.

 

Tips: Amazon calculates handling and shipping times on business days.

• Handling Time: The estimated time from the buyer placing the order to the seller handing it over to the carrier.
• Shipping Time: The time from when the seller hands the package over to the carrier until it reaches the buyer's address.

 

Note: If you are a professional seller shipping from within the United States, you can use three Amazon tools: Shipping Settings Automation (SSA), Buy Shipping, and Automated Handling Time (AHT). OTDR will not be affected by delayed orders.

• Currently, only Amazon FBM professional sellers shipping from within the United States can use all three tools to get OTDR exemption. Professional or individual sellers not shipping from the U.S. cannot yet enable Automated Handling Time (AHT), but we will continue to update and optimize our products to enhance the seller experience. Please look forward to future updates.
• Set the account's default shipping address based on the actual shipping address to effectively achieve OTDR performance metrics.

 

 

04.Common Questions About Amazon FBM OTDR

 

Q1: Why is this OTDR policy change being implemented?

A1: The policy update aims to help sellers improve delivery times and operational capabilities, providing buyers with a superior shopping experience.

 

Q2: When will the new OTDR performance metrics take effect?

A2: The new metrics will take effect on September 25, 2024.

 

Q3: What if my OTDR falls below 90%?

A3: We recommend Amazon FBM sellers shipping from China to use the Shipping Settings Automation (SSA) tool for more accurate shipping time estimates and use Buy Shipping to meet order delivery commitments. For Amazon FBM professional sellers shipping from the U.S., it is recommended to use SSA, Buy Shipping, and Automated Handling Time (AHT) tools. See Seller Central for specific details.

 

Conclusion:

In conclusion, staying updated with Amazon's latest FBM OTDR performance metrics is crucial for maintaining a high level of customer satisfaction and ensuring your seller account's health. By adhering to the new requirements and utilizing Amazon's recommended tools, you can achieve a 90% or higher on-time delivery rate, ultimately boosting your sales and enhancing your operational efficiency. Keep these guidelines in mind to stay competitive and provide your buyers with the exceptional service they expect. For more detailed information, make sure to explore the resources provided by Amazon and continuously optimize your shipping strategies.