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The Amazon On-Time Delivery Rate (OTDR) quality measurement for self-fulfilled orders by sellers (also known as Merchant Fulfilled Network (MFN) and Fulfilled by Merchant (FBM) and seller-fulfilled orders) recently saw a change by Amazon. Seller-fulfilled product listings need a minimum OTDR of 90% starting September 25, 2024, to avoid the transition to Fulfilled by Amazon (FBA) results.
Amazon now implements a system to deliver products by their stated dates through their shipping with Amazon or third-party vendors to customers. The updates to this policy have brought worries among sellers who use the platform. The importance of Amazon’s latest changes requires investigation together with their implementation difficulties and strategies for sellers to succeed in this marketplace.
What is the On-Time Delivery Rate (OTDR) and Why Is It Important?
Every time your seller-facilitated orders arrive at their designated date your system registers them as part of the OTDR rating. The ability to sell seller-fulfilled orders requires that your OTDR stays above 90%. Your rates will be restricted through MFN listing when Amazon detects them falling underneath this threshold.
New transit time settings and handling time modifications through Amazon affect sellers’ performance regarding the recently established OTDR requirements. The following examination focuses on new Amazon updates.
Changes to Handling Time Settings
The modification made by Amazon to handling time settings has generated significant industry concern. Amazon uses this policy to modify your handling time when you establish a manual duration that is longer than your actual shipping period.
What’s the Concern?
Some sellers plan to extend their handling time duration to three days to establish protection for weekend periods and holiday dates and unexpected delivery impediments. Sellers can improve customer satisfaction by creating extra time through their buffering system that enables them to deliver more than promised. Amazon will initiate automatic handling time adjustments if the stated time exceeds actual handling time by two days or more thus potentially removing the advantage of buffering.
The new policy about handling time has caused alarm for sellers due to its mandate for expedited order shipping even though it goes beyond their comfort zone, particularly during peak periods or worker shortages. Members of the forums have disclosed that they plan to delay deliveries intentionally to prevent automatic handling time reductions.
Carrier Issues and Their Impact on OTDR
Even if sellers ship products on time, there is still a chance that delays can occur due to carrier issues. The OTDR measures on-time delivery—not just on-time shipping—so if a carrier delays an order in transit, it can count against a seller’s OTDR, even if the seller shipped on time.
Many sellers have voiced frustration, noting that despite fulfilling orders promptly, their OTDR remains below 90% due to factors outside their control, such as delays with the carrier. While Amazon states it will take action against sellers who consistently have low OTDR rates, there’s no clear indication of what these actions will entail.
What Can Sellers Do to Maintain a High OTDR?
Sellers have multiple approaches to maintain compliance and business success despite the introduction of new policies and transit and handling time changes.
1. Prioritize Fast Shipping
The first solution for order delivery is to handle shipments with rapid speed which seeks same-day or next-day processing. Shipping your products as fast as possible lets you fulfill Amazon OTDR requirements before potential courier problems arise.
2. Choose the Right Shipping Carriers
Selecting reliable carriers is critical. You should modify your shipping strategies to find carriers that provide dependable delivery periods. Monitoring your shipments will prevent unexpected delivery delays that can damage your OTDR performance.
3. Work with a Third-Party Logistics (3PL) Provider
If the new changes are challenging for your business, consider using a third-party logistics company (3PL) to handle your MFN orders. A 3PL specializes in managing inventory, packaging, and shipping, ensuring that your orders meet Amazon’s standards. They can help with on-time deliveries and ensure that your shipping timelines align with Amazon’s updated policies.
4. Switch to Fulfillment by Amazon (FBA)
Businesses dealing with large product volumes and best-selling items should employ Fulfillment by Amazon (FBA) as an effective fulfillment option. Because the FBA fulfillment method bypasses the OTDR policy it provides sellers with comfort about delivery timeliness. While using MFN listing for some products you can move your highest-selling items under FBA. The combination of regular Amazon requirements with your business flexibility is achievable through this integrated method.
5. Monitor Your Metrics Regularly
Check the OTDR together with other performance indicators through Seller Central. You should use the available data to detect problems at their initial stages regardless of their source as handling time inconsistencies carrier delivery delays or other contributing factors. When your OTDR reading approaches 90% you need to resolve the problem to avoid damage to your product listings.
Final Thoughts: Adjusting to Amazon’s New Policies
Sellers will face two challenges with the new OTDR policy and handling time settings yet proper planning and focused attention enable them to prosper on Amazon. Your customer service standards will remain excellent by implementing quick order fulfillment and using secure delivery services with either 3PL providers or Fulfillment by Amazon whenever possible.
Success demands that you maintain awareness of new developments at Amazon since these changes will influence your operations. A well-prepared business can successfully implement new strategies with minimal disturbances during the process of refining its shipping methods.
Ruben A
CEO at PAS
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