Amazon is the world's largest online marketplace that has transformed India's ecommerce landscape. According to research, Amazon achieved a stellar growth rate of 82% in the year 2020.
From large enterprises to small and medium-sized businesses, local sellers fuel Amazon's growth while growing themselves. Amazon welcomes sellers of all kinds and sizes to thrive and reach the crores of customers with easy onboarding and pave a successful path.
In this blog, you'll have an in-depth analysis of how Amazon profiles its sellers through the STEP program and how sellers can improve their performance and become a premium seller on Amazon.
Understanding seller profiling on Amazon: Amazon STEP
With the number of sellers rising exponentially on Amazon, it became really difficult for them to treat all sellers equally and incentivise their performance. This made them launch the STEP program on December 1st 2020, aiming to help over 700,000 sellers accelerate their growth on the marketplace.
Amazon STEP is a performance-based benefits program to empower sellers of all sizes and tenure to drive their growth on Amazon India by focusing on their performance.
The program simplifies the seller experience by providing customised and actionable recommendations. It has multiple levels, including Basic, Standard, Advanced and Premium. The sellers can unlock these benefits by improving their performance. Moreover, the consistent performers at “Premium’ are considered for ‘Premium Plus’ and ‘Premium Pro’.
These benefits include fee waivers (weight handling fees and lightning deal fees), faster disbursement cycles, online and offline training, priority seller support and world-class free account management.
Note: You don't have to register for Amazon STEP; you are automatically enrolled into the benefits program. If you are a new seller, then you will start at the 'Standard' level and enjoy 'Standard' benefits.
Benefits of each level
The benefits get progressively better as you move from standard to premium. Also, the coveted premium tier has some unique benefits, such as fee waivers, a dedicated account manager, and quick payments.
How Amazon measures your performance?
Amazon STEP measures the performance of a seller based on seven inspection criteria standardised by them:
Criteria 1: Total cancellation rate
Amazon expects minimum order cancellations from its sellers. So, this performance metric includes:
Self-cancellation - initiated by the seller, i.e. when the seller does not have enough inventory or cannot procure an ordered item, the seller must cancel the order
SLA-breach cancellation - initiated by Amazon, i.e. when the seller has not shipped and marked the order as 'ready-to-ship' within 24 hours of the estimated ship date
However, the cancellations requested by the customers are not included in total cancellation rate.
Criteria 2: Total late dispatch rate
Amazon expects speedy order fulfilment from its sellers. To ensure that, Amazon has implemented stringent guidelines that sellers need to adhere to or pay penalties for any breaches. The late dispatch rates include all orders that are not marked as ready-to-dispatch on time.
Criteria 3: Seller controllable return rate
Amazon expects minimum order returns. For this, Amazon considers all orders which were returned (or refunded) by the customer that could be controlled by the seller, such as—customer receiving a defective or damaged product, customer facing size issues, quality of product, or product not being as it was described on the product page.
Criteria 4: Out of stock rate
Amazon wants its sellers to ensure that their products are in stock at all time. To ensure that Amazon considers how many customers visited your product page where you were out of stock (OOS) on that product. As it amounts to a loss of sale opportunity, Amazon considers it as a fault.
Criteria 5: Prime listing customer views %
Amazon expects maximum views on prime listings. For that, Amazon considers the number of customers views on your products with a prime badge as a percentage of total customer views on your products.
Criteria 6: Regional in-stock %
Amazon wants to fulfil more orders as local and zonal to offer speedy delivery of orders to their customers via the same-day or next-day delivery. To evaluate that, Amazon compares customers views on your Buy Box (BB) product listings in which you have stored inventory in the same customer location and the total number of customer views on your BB listings.
Criteria 7: Net sales volume or net sales unit
Amazon strives to achieve maximum sales. For that, Amazon considers the total value of products that a seller sells to the customers, excluding returns and cancelled products.
How to become an Amazon premium seller?
To become an Amazon premium seller, you need to meet the following performance criteria:
Total cancellation rate: Sellers should have a total cancellation rate of less than 0.5%
Total late dispatch rate: Sellers should have a total late dispatch rate of less than 0.5%
Seller controllable return rate: The seller controllable return rate of a seller should not exceed the vertical benchmark set for product categories
Out of stock rate: Sellers need to ensure that out of stock rate is less than 5%
Prime listing customer views: Sellers should have prime listing customer views of more than 50%
Regional in-stock: Sellers should have a regional in-stock of more than 35%
Net sales volume or net sales unit: Sellers need to generate INR 20 lac in revenue OR sell more than 6000 units
Tips to reduce cancellation rate
Update your product listings on a regular basis with the right selling price and quantity available in the inventory
If you are selling on multiple marketplaces, update your inventory numerous times per day
If an ordered product is not available in your inventory, try to source it immediately to ensure on-time order fulfilment
In case you are unable to source the product, remove the product from the listing as soon as possible
Create your product listings based on your order processing capabilities instead of entering too many listings and then failing to fulfil some of them
Check and re-check price submissions to ensure that there are no errors in price submissions as it can lead to increased order cancellations
Plan and manage your inventory during the time of flash sale, to avoid stockout issues which can lead to order cancellations
Tips to reduce late dispatch rate
Create product listings of the products that you will be able to ship by or before the expected ship date as per your order processing capabilities
Ship the orders and confirm the shipment with Amazon by the expected ship date provided in the order details
Pack orders and mark them as ready to dispatch on a first come first serve basis
Avoid packing orders and marking them as ready to dispatch on the last day
Review your order fulfilment processes regularly in order identify and resolve any inefficiency that can result in late shipments
Increase your order processing capabilities during flash sales and other events
Tips to reduce seller controllable return rate
Showcase sufficient high-quality images Customers may never know what exactly they are buying if you use pixelated or blurry images. This increases the chances of product returns. To prevent this, you must include high-resolution images of your products from all profiles.
Create informative descriptions If you're not using accurate and informative product descriptions, customers may set the wrong product expectations and return the product after receiving it. To avoid this, you should create content-rich product descriptions, including all the features, materials used, weight, size, and more.
Provide easy-to-read and accurate size charts Returns can arise due to incorrect size ordered by the customers, particularly for clothing or footwear brands. Additionally, there is a slight variation of size from brand to brand. You can provide an easy-to-read size chart to control returns that arise because of this sole reason.
Ensure products reach the customers in the right condition Another reason for returns is when the product reaches your customer in a damaged or substandard condition. To avoid this, you need to use the right packaging materials. For instance, a fragile crockery set should be bubble-wrapped and then sealed in a corrugated box.
Tips to reduce out of stock rate
Ensure real-time inventory update after every order and receiving inventory from a supplier
If you are selling on multiple marketplaces, ensuring correct inventory levels is more crucial
Maintain adequate inventory of your best-selling products which have more customer views to avoid stockouts
If you do not know the demand of your product and you are not sure how much quantity to update, you can use Amazon’s automated tool
If you are a prime eligible seller, you should prioritise on high demand ASINs while ensuring the above requirement
Tips to improve regional in-stock
Analyse the zones with maximum demand Based on your order history, you can analyse the regions from where you get the maximum orders. It will help you plan your inventory distribution according to high sales zones. You can also use Amazon's RIM tool to know your demand. If you're just starting out, you can distribute your inventory in metro cities like Mumbai, Delhi, Bangalore, and more to reach maximum customers.
Identify your best selling products You need to look for products with high sell-through rates and distribute them to different fulfilment centres. Again, if you are new on Amazon, then you can distribute the inventory of your flagship products.
Tips to improve net sales volumes or net sales units
Run flash sales and participate in promotional events One of the most effective ways to increase sales on Amazon is through a flash sale, lightning deals or a promotional event. You can promote these events to create a buzz and attract more customers thus bringing you more sales and more revenue.
Offer product kits and combos You can offer your customers with product kits and combos which can help you to increase your sales and average order value (AOV). Two or more products bundled into a kit easily make their way into shopping carts as they offer reasonable value deals and provide solutions to multiple needs.
Create a comprehensive product catalogue Offer as much products as you can so that your customers have enough options to choose from. Even if you have a small range of products, you can still offer them multiple product variants such as colours, flavours, and more.
Study your competitors You can stay updated on product innovation, pricing patterns, and customer shopping trends by analysing your competitors. It will help you identify best selling products, and analyse why customers like them. This way, you can tweak your sales strategies based on market trends to replicate their success. Moreover, competitive pricing will help you increase your chances of winning Buy Box.
Run advertisement campaigns on Amazon A great strategy to increase your product visibility on Amazon is to run advertising campaigns. Using paid advertisements, you can create highly-targeted and tailored ads for customers who are most likely to purchase your products.
Leverage Amazon’s insights If you open Amazon's seller central, they have curated a dedicated space to provide sellers with actionable insights into growing their sales. Based on these recommendations, sellers can modify their sales strategy to accelerate their sales.
How and when Amazon evaluates your performance?
Amazon STEP program follows a quarterly evaluation cycle. This means, you can move to a new level (or continue at the same level) based on your performance in the last quarter.
Let's take an example, based on your performance for the time period January 1, 2021 to March 31, 2021, you will either move to ‘Basic’, ‘Advanced’ or ‘Premium’ level, which is effective from April 5, 2021, or continue at ‘Standard’ level. This means, you will stay at this level until the next evaluation. Most importnatly, Amazon will conduct the evaluation only if you have fulfiled at least 30 orders and have at least 5 different ASINs in the evaluation period. Else, you will remain be at the ‘Standard’ level.
How Eshopbox can help you become a premium seller on Amazon?
Working with a tech-enabled 3PL like Eshopbox can help you on your journey to becoming a premium seller. Let's see how:
Meet every SLA to avoid late dispatch and order cancellations
Eshopbox’s SLA-driven and streamlined pick and pack service allows you to pack every order and mark it as 'ready to dispatch' on-time, without fail.
How does it help? By meticulously processing orders with the SLA in mind, sellers can avoid late dispatch and cancellations initiated by Amazon.
Prevent out of stock (overselling) and cancellation with accurate inventory relay
Eshopbox syncs your inventory across all sales channels every 5 minutes, this enables you to relay accurate inventory levels to each marketplace and avoid out of stock (overselling) and self-cancellations.
How does it help? By relaying accurate inventory levels, you only receive orders for inventory you have.
With Eshopbox, you can use powerful merchandising techniques like product kitting to combine multiple products together. This helps you maximise product exposure and offer exciting deals to the customers.
Frictionless fulfilment during flash sales and promotional events
Eshopbox handles the exponential surges in order volumes by combining its extensive fulfilment infrastructure with organised workflows to manage flash sales effectively. All you need to do is notify Eshopbox about the time and duration of the flash sale and the Eshopbox will take care of the rest —from increasing your daily pick capacity to allocating adequate manpower.
How does it help? It helps you accelerate your sales, boost additional revenue and ensure uninterrupted order fulfilment.
Accurate order processing to avoid seller controllable returns
Eshopbox conducts quality checks at the time of receiving inventory and order processing to make sure your customers get the correct products in their hands. If you have unique products which need to be specially examined, Eshopbox allows you to customise the inspection criteria as per your specific needs.
How does it help? It helps you deliver the right products with incredible order accuracy and prevent seller controllable returns.
Distribute your inventory with Eshopbox to improve your regional in stock and prime listing customer views
Eshopbox has a powerful network of fulfilment centres spread across India. You can split your inventory with Eshopbox based on your most demanding zones and improve your regional in stock. Moreover, with speedy order fulfilment, you'll able to win prime badges. Thus, it will increase prime listings on your products which can help you gain more views.
How does it help? It helps you improve your regional in stock by storing your products closer to your customers in multiple locations, win prime badges and more views on prime listings.
Eshopbox helped Plixlife and many more brands to build a stronger presence on Amazon by helping them win prime badge, meet delivery timelines, and comply with all the policies and guidelines.
"Our collaboration with Eshopbox has allowed us to serve our customers on Amazon in the best way possible. Owing to the Amazon Prime badge, we receive a lot of orders with stringent processing and delivery timelines. However, the Eshopbox team has been able to seamlessly manage Amazon's compliance requirements. We have seen a drastic improvement in customer satisfaction leading to a stronger presence on Amazon."
-Rishubh Satiya, Co-founder, Plixlife
Now that you've understood the journey from a standard seller to a premium seller on Amazon, you can start working towards it with actionable steps. It will help you grow your online business with outstanding performance and reap the exclusive benefits of Amazon's most rewarding bracket. Thus, empowering your brand on India's unrivalled marketplace leader.