Amazon
How to Track Your Amazon On-Time Delivery Rate (OTDR)
- Written by Rachael Pilcher
The “Amazon Effect” has radically changed customer expectations about buying items online. Shoppers expect fast, flawless product delivery with every order, and there’s more pressure than ever for ecommerce sellers to meet these demands.
For Amazon sellers, customer satisfaction ultimately decides the fate of their business. If you’re selling on this marketplace, monitoring your seller metrics is essential to keep everything up and running. The On-time delivery rate (OTDR) is one of the key metrics that your business needs to pay particular attention to.
In this blog, we’re looking at why Amazon’s On-time delivery rate (OTDR) is so important for marketplace sellers. We’ll also walk you through how to calculate and improve OTDR, and show you how Veeqo’s free shipping software can help you maintain good Amazon account health.
Table of contents
What is Amazon OTDR?
What are the recent changes to OTDR?
How to calculate OTDR
How to improve your OTDR
How Veeqo helps maintain key Amazon metrics - and more!
What is Amazon OTDR?
Amazon has a range of metrics that help sellers measure their account health, delivery operations, and customer satisfaction levels. One of these is the On-time delivery rate (OTDR).
Your OTDR includes all shipments which are delivered by their Estimated Delivery Date (EDD) represented as a percentage of total tracked shipments. OTDR only applies to seller-fulfilled orders.
Amazon recommends that all sellers maintain an OTDR greater than 95% in order to provide a good customer experience.
What are the recent changes to OTDR?
Under the recent policy updates announced on 25th July 2024 and going into effect on September 25th, sellers must maintain a 90% or higher On-time delivery rate (OTDR) without promise extensions for their seller-fulfilled orders. Sellers with an OTDR below 90% risk restriction of their ability to have seller-fulfilled products listed on Amazon.com, though they can still offer Amazon Fulfilled (FBA) listings. For a great customer experience, Amazon recommend that you maintain a 95% or greater OTDR for all seller-fulfilled orders.
Amazon has also changed the way they measure OTDR. Previously, OTDR was calculated after any "promise extensions" were added to the delivery date. Promise extensions are additional days Amazon may add to the original delivery date to account for factors like weather, transportation issues, or a seller's history of late deliveries. Now, Amazon measures OTDR based on the percentage of seller-fulfilled items that were delivered on or before the original "Deliver by" date, before any promise extensions are applied. In other words, the OTDR metric no longer includes the extra days provided by promise extensions. It's solely focused on whether items were delivered by the original promised date, not the extended date.
How to calculate OTDR
Amazon calculates your OTDR by dividing the number of packages delivered on (or before) the promised delivery date shown on Seller Central (without promise extensions) by the total number of packages that were supposed to be delivered in that time frame.
It’s important to note that a seller’s promised “Deliver by” date is calculated using seller-set Handling and Transit Time, prior to the addition of promise extensions. This date may be different than the delivery date shown to customers if promise extensions were added.
For example, if you had 130 orders with a promised delivery date in the last 21 days, and 30 of those had a promised delivery date in the last 7 days, OTDR will be calculated excluding the 30 orders from the last 7 days (130 – 30 =100). Of those 100 orders, if 90 of those were delivered on or before the promised "Deliver by" date, your OTDR would be 90%.
To calculate OTDR without promise extensions, Amazon consider a 14-day window of time. They pull data from shipments that had a promised delivery date in the last 21 days, and exclude the most recent 7 days as the shipments from last 7 days may still be in the process of being delivered.
How to improve your OTDR
You can get help managing your delivery dates using Amazon tools designed to set accurate delivery dates, reduce late deliveries, and to meet or exceed the minimum OTDR requirement, and because Amazon is making calculations on your behalf that affect OTDR, you will not be held responsible for late deliveries if you use all three tools:
Use Veeqo to purchase ‘OTDR Protected’ shipping labels that have high reliability for On-time delivery
Enable Shipping Settings Automation (SSA) on your Amazon account, which sets more accurate delivery dates for your orders by automatically calculating Transit Times of your preferred shipping services from your warehouse to each buyer's location.
Use Automated Handling Time (AHT) on your Amazon account, which sets more accurate Handling Times per SKU based on how long it has taken you historically to hand-off each SKU to carriers.
Purchase ‘OTDR Protected’ Labels
When you purchase shipping labels through Veeqo, we'll flag the carriers and services that are "OTDR Protected" - reliably meeting Amazon's delivery time requirements. We'll also let you know which labels have a 'Late Delivery Risk'.
Demand forecasting
Shipping management software like Veeqo has demand forecasting tools built in, so you can see at a glance when your peak sales seasons are. This can help you predict which products you should stock up on, so you can meet spikes in buyer demand in your Amazon store without affecting your delivery times.
Real-time inventory tracking
To ensure orders get to your customers on time, optimized inventory management is essential. The quicker you can get your orders picked and packed, the quicker you can get them on the way to the customer. Inventory management can get very stressful, very quickly, especially if you’re managing your Amazon store (and multiple other sales channels) using a spreadsheet system like Excel.
That’s where comprehensive shipping software like Veeqo can help. Integrating Veeqo with your Amazon store lets you automatically track and control inventory in real time. It’s one of the best solutions to help you prevent stockouts and keep your Amazon inventory up to date.
Further reading: Here's Why You Need to Ditch Excel for Inventory Management
Regular carrier reviews
If you’re relying on a single carrier to get your orders shipped, it’s important that you choose one with a good track record of on-time deliveries. Even if it’s a mostly reliable carrier, you should carry out regular reviews to see if you can optimize your shipping processes in any way.
If your shipping operations are the primary obstacle to maintaining a high OTDR, then you’ll need to look at switching carriers, using ‘OTDR protected’ labels or using multiple carriers to keep your metrics and seller reputation on the right track.
How Veeqo helps maintain key Amazon metrics — and more!
As part of the Amazon family, Veeqo helps you easily maintain critical Amazon metrics such as On-Time Delivery Rate (OTDR), Valid Tracking Rate (VTR), Order Defect Rate (ODR), Cancellation Rate (CR) and Late Shipment Rate (LSR) metrics, as well as giving you protection from delivery-related claims including A-to-z and SAFE-T.
Valid Tracking Rate (VTR)
Like the OTDR, the Valid Tracking Rate (VTR) is another important metric that measures your Amazon account health.
Your VTR calculates the percentage of total shipments that are given a valid tracking number in any given 30-day period. A VTR of above 95% means you’re in good standing with Amazon as a seller — and your VTR must stay above 95% to avoid account suspension.
With Veeqo, there’s no need to worry about your VTR. All labels purchased in Veeqo automatically send a valid tracking ID to Amazon.
This means your VTR will stay at 100% as long as the label is purchased through Veeqo.
Order Defect Rate (ODR)
Your Order Defect Rate (ODR) reflects how well, and how often, a seller can ensure a satisfactory shopping experience for their customers.
This involves calculating the number of returned orders as a percentage of the total number of orders within the past 60 days.
An order is generally considered a defect if it results in:
A credit card chargeback
A damaged item
An incorrect item
Negative buyer feedback
A successful A-to-z claim
Amazon expects all sellers to maintain a high level of customer service by maintaining an ODR of below 1%. If you hit an ODR of over 1%, you risk account suspension. In Veeqo, you are able to purchase ‘Claims Protected’ labels which mean you will see 6x more successful A-to-z claim successfully appealed.¹ These claims will not affect your ODR. Keep reading to find out more about our A-to-z guarantee claims protection.
A-to-z Guarantee claim protection
One key factor in your ODR is the number of A-to-z guarantee claims you receive from customers. In Veeqo, you can see at a glance which shipping labels can protect you from these delivery related A-to-z claims.
If you ship with one of these Veeqo labels and you make a successful appeal to a claim, it won’t affect your ODR.
If a customer asks to be refunded due to a delivery related issue, Amazon offers protection against A-to-z guarantee claims as long as you:
Purchase a ‘Claims protected’ shipping label on Veeqo
Ship on time — which will be considered at the moment of the carrier’s 1st scan, not when you confirm shipment
Respond to any customer inquiry in Buyer-Seller Messages within 48 hours
Amazon will cover the cost of these claims and they will not affect your Order Defect Rate. In Veeqo, when you ship your Amazon orders on time using trusted carriers, you'll get 6 times more Amazon-paid refunds for any A-to-z claims.¹
SAFE-T claim reimbursements
Seller Assurance for E-commerce Transactions (SAFE-T) is a policy implemented by Amazon to provide seller protection and insurance coverage for refund requests and claims made by customers.
It serves as a protection plan when orders are fully refunded due to issues such as damage or loss in transit, inaccurate descriptions, or customer dissatisfaction.
If you purchase a ‘Claims Protected’ label in Veeqo, you are able to file a SAFE-T claim for delivery related issues.
In Veeqo, when you ship your Amazon orders on time using trusted carriers, you'll get 1.5 times more SAFE-T claim reimbursements. You can only make a SAFE-T claim if you have not raised an A-to-z claim.²
Cancellation Rate (CR)
Having to cancel orders can be a major headache for Amazon sellers, impacting your account health, customer satisfaction, and bottom line. Maintaining a cancellation rate below 2.5% is vital to avoid potential account deactivation.
With Veeqo, you can take control of your cancellation rate and safeguard your Amazon seller account. Our advanced inventory management system ensures real-time stock level synchronization across all your sales channels, preventing overselling and stockouts – two common culprits behind cancellations.
Key features that help reduce your cancellation rate:
Multichannel inventory sync: Veeqo seamlessly integrates with Amazon, as well as other marketplaces and sales channels, keeping your inventory levels accurate and up-to-date across all platforms.
Automated stock level updates: Every sale is instantly deducted from your available stock, eliminating the risk of overselling and the need for manual inventory updates.
Low stock alerts: Use our reports to monitor when stock levels are running low, allowing you to reorder in advance and avoid potential cancellations due to stockouts.
Bundling and kitting: Easily manage product bundles and kits, ensuring accurate inventory tracking for complex product offerings.
Forecasting and demand planning: Leverage Veeqo's forecasting tools to anticipate demand and optimize your inventory levels, minimizing the likelihood of cancellations.
Late Shipment Rate
Maintaining a low Late Shipment Rate (LSR) is crucial for Amazon sellers. An LSR above 4% may result in deactivation of seller-fulfilled offers. With Veeqo, you can take control of your LSR and improve your overall seller performance. Our suite of shipping and inventory tools help streamline your entire order fulfillment process, from order management to shipping, ensuring your orders are picked, packed, and shipped promptly.
Key features that help reduce your LSR:
Efficient order processing: Veeqo's automated order routing and batch picking capabilities help you process orders faster, reducing delays.
Real-time inventory management: Avoid stockouts and backorders by syncing your inventory levels across sales channels, preventing late shipments due to inventory issues.
Shipping carrier integration: Connect with trusted carriers like Amazon Shipping, UPS, FedEx, and USPS, and purchase 'OTDR protected' labels directly from Veeqo, streamlining the shipping process.
Further reading:
As a busy ecommerce seller, it can get stressful trying to juggle orders, shipping, and inventory — as well as keeping an eye on your important Amazon metrics to avoid account suspension.
Veeqo’s free, comprehensive business shipping software makes it easy. Plus, you can earn up to 5% back on eligible shipments with Veeqo credits. Simply create a Veeqo account, connect to your Amazon stores, and start shipping and saving today.
¹As compared to claims received for orders shipped on-time outside Veeqo. To be eligible for A-to-z claim protection you must: 1) Purchase the shipping label on Veeqo, 2) Ship on time, which will be considered at the moment of the carrier’s 1st scan, not when you confirm shipment, and 3) Respond to any customer inquiry in Buyer-Seller Messages within 48 hours.
²As compared to claims submitted for orders shipped on-time outside Veeqo. To be eligible for SAFE-T claim reimbursement you must: 1) Purchase the shipping label on Veeqo, 2) Ship on time, which will be considered at the moment of the carrier’s 1st scan, not when you confirm shipment.
