Sign-up in March & get a $100 Amazon gift card!

Valid through 3-31-24 on our FBM or FBA services. Gift card payable after setup fee is received.

What happens if Sellers cancel too many Amazon orders?

When Amazon sellers cancel too many orders, it can damage seller metrics and even cause account suspension. Meaning, the merchant can’t sell anymore.

A merchant’s tradeoff between order cancellations and good seller metrics.

When Amazon sellers cancel too many orders, it can damage seller metrics and even cause account suspension.  Meaning, the merchant can’t sell anymore.  Thus, there is a tradeoff between the quantity of orders canceled and sales.  It’s a dilemma for every Amazon seller.  This article explains the order cancellation dynamic, offers guidance to sellers on how to manage it, and how to avoid seller account deactivation.

What is the threshold for good pre-fulfillment cancellation?

Generally, an Amazon seller’s pre-fulfillment cancellation rate should be under 2.5% in their 7 day grading period to avoid risk of deactivation. That means a Seller can cancel 1 out of every 40 orders in the grading period and remain on par with the metric. Importantly, any orders that buyers request to cancel do not count towards the metric.

What can Sellers do instead of canceling a shopper’s order?

There are a few common reasons that a seller feels they need to cancel an order: 

  • Out of Stock:  When seller gets an order but doesn’t have the item in stock.
  • Listing Issues: Inaccurate or altered listings (e.g., incorrect product details, multipack confusion, etc.).
  • Pricing Errors: Incorrect pricing that could lead to losses on the transaction.

 

All of these issues have options other than canceling the order.  For example, out of stock items can perhaps be ordered or purchased from another seller or locally to complete the shipment.  Also, sellers can just ship the order even if it will be a minor financial loss instead of canceling too many orders and exceeding the 2.5% cancellation threshold.  This is a conscious decision where the minor loss of shipping a few unprofitable orders is better than the risk of account deactivation resulting in no sales.  For sellers who maintain strong metrics, these tradeoffs are easier to make. Occasional orders can be canceled without the seller account being severely impacted. 

How to prevent order cancellations 

As Amazon sellers grow their stores, they tend to have more SKUs and more inventory to manage physically and in their Amazon store. It can become increasingly difficult to manually keep the Amazon store prices and quantities accurate. Fortunately, there are systems that can help integrate your inventory management with Amazon.  As you add more offers, it’s important to inspect the listing to make sure you are able to fulfill the whole listing as some have a pack quantity or extra items included. 

In conclusion, Amazon sellers may have legitimate and rational reasons to cancel buyer orders, but it’s crucial to approach the decision comprehensively.  Sellers are wise to consider the impact on seller metrics and long-term business viability. By implementing strategic solutions and leveraging automated tools and services, sellers can navigate these hurdles more effectively and sell successfully on the platform.

Aim to keep your cancellation rate below 1/40 orders per week to stay within Amazon's threshold for this metric.

READY TO GROW?

Expand online sales in 2024

Contact us to learn how our services help you grow on marketplaces

Call (480) 881-0546 or message us in the form