Interpretation of Amazon's Self-delivery Update From the Perspective of Chinadivision

In order to improve the shopping experience of buyers and standardize and promote the management efficiency and quality of sellers in the delivery and logistics links, Amazon has updated the Amazon self-delivery on-time delivery rate (OTDR) policy. This new requirement is designed to help sellers improve their sales and operational capabilities while providing buyers with a better shopping experience. Amazon also recommends that sellers maintain an OTDR of 95% or higher as much as possible to further improve buyer satisfaction.

As a professional third-party logistics service provider, Chinadivision keeps up with this trend and takes you to an in-depth interpretation of Amazon's latest self-delivery performance indicator update.

Background and purpose of the 2024 Amazon self-delivery on-time delivery rate policy update

Background

On-time delivery of orders has always been an important topic of concern to consumers. In order to improve the shopping experience of consumers, Amazon has updated its self-delivery performance indicators.

Purpose

By introducing the OTDR policy, sellers are encouraged to optimize logistics processes, reduce package delays and losses, and improve overall customer satisfaction. OTDR is a measure of how well all self-fulfilled products are delivered to buyers on or before the seller's promised "delivery date", which is calculated based on the seller's configured delivery date and does not take into account commitment extensions.

To ensure a good buyer experience, sellers should set accurate delivery times, which not only helps meet delivery promises, but may also increase sales because buyers are more likely to purchase products with faster delivery and these products are more likely to become recommended offers.

If a seller's OTDR is less than 90%, they can use the Shipping Setup Automation (SSA) tool to more accurately estimate shipping times and use Buy Shipping to meet order commitment times.

Amazon Self-Fulfilled On-Time Delivery Rate Policy Content

Effective Date

Implemented from September 25, 2024.

Core Requirements

Self-fulfilled sellers need to maintain an on-time delivery rate (OTDR) of at least 90% without extending the promise in order to list self-fulfilled products on Amazon.com to protect Amazon account performance.

Policy Applicability

This policy applies to all self-fulfilled sellers, excluding orders using the Amazon Fulfillment (FBA) service.

Automatic processing time

On September 25, 2024, Amazon will automate processing time for sellers whose manual processing time is significantly slower.

Performance improvement suggestions

For a better consumer experience, Amazon officially recommends ensuring that the valid tracking rate (VTR) of orders is above 95%, which helps protect the seller's valid tracking rate and avoids restrictions on sales privileges. Amazon also emphasizes the importance of setting appropriate shipping times and the necessity of using delivery tracking carriers that are connected to Amazon.

Logistics service adjustment suggestions

Transportation time settings: According to the latest platform requirements, adjust the shipping time to ensure that it matches the delivery capabilities of the logistics service.

Processing time settings: Use Amazon's automatic processing time function to ensure the accuracy of processing time and reduce delays caused by long processing time.

Transportation time setting update

From August 25, 2024, the platform's shipping time requirements will be updated to match the delivery capabilities of shipping services. Sellers shipping within the United States (excluding Hawaii, Alaska, etc.) can set a maximum shipping time of 5 days for standard shipping and a maximum shipping time of 8 days for free economy shipping.

OTDR definition and calculation method

OTDR, the full name of On-Time Delivery Rate, is a measure of the proportion of self-delivered goods that are successfully delivered to buyers on or before the "delivery date" promised by the seller.

Calculation method

OTDR = (Total number of deliveries on or before the "delivery date" promised in the past 21 days / Total number of orders with a promised delivery date in the past 21 days) × 100%. Note that orders in the last 7 days must be excluded when calculating.

If you don't know your indicators, you can log in to the seller platform, view OTDR in "Performance > Account Status > Delivery Performance > On-Time Delivery Rate" and download the OTDR report to find out the orders that affect performance.

What are the impacts of the policy on sellers?

Sellers who fail to meet the OTDR requirements may face the risk of declining account performance, which in turn affects store rankings and sales. Sellers need to pay more attention to the stability and efficiency of the logistics link to ensure that orders can be delivered on time.

Strategies to maintain high OTDR

Choose the right logistics channel

Sellers should evaluate and optimize existing logistics processes, including preparation time, transportation time, etc., cooperate with reputable logistics companies, and choose the right logistics channel services to reduce delays caused by logistics problems.

Use automated tools

Such as the Shipping Setup Automation (SSA) tool to accurately estimate and automatically manage transportation time.

Use Buy Shipping Services

Buy Shipping Services to meet order commitment time and improve on-time delivery rate.

Regular monitoring and analysis

Sellers should regularly log in to the Amazon Seller Platform to view OTDR data, download relevant reports to identify specific orders that affect performance, and take corresponding improvement measures.

Timely adjust transportation and preparation time

Manually adjust transportation and preparation time according to actual operating conditions to ensure compliance with Amazon's OTDR requirements.

Chinadivision's suggestions for sellers in different shipping countries

For professional sellers shipping from the United States, using three Amazon tools at the same time: Shipping Setup Automation (SSA), Buy Shipping Services (Buy Shipping) and Automatic Preparation Time (AHT) can ensure that OTDR is not affected by delayed order delivery.

For sellers shipping from China, Amazon recommends using the Shipping Setup Automation (SSA) tool to more accurately estimate shipping times and using Buy Shipping to meet order commitment times.

The update to Amazon's self-delivery OTDR policy is intended to improve sellers' operational efficiency and buyers' shopping experience, while providing tools and services to help sellers meet these requirements. Through the implementation of this policy, sellers will be motivated and constrained to optimize their logistics processes, thereby improving overall customer satisfaction and account performance.

As a third-party logistics service provider, Chinadivision is committed to helping sellers optimize logistics processes and improve OTDR to stay competitive in the fierce e-commerce market. The customized logistics solutions and professional consulting services we provide will help sellers meet Amazon's latest policy requirements and achieve continued business growth.