Understanding Amazon’s Performance Metrics and Compliance Requirements for 2025

Amazon’s key performance metrics for 2025 focus on maintaining high customer satisfaction, efficient inventory management, and compliance with updated policies to avoid account penalties and suspension.

Core Amazon Seller Performance Metrics:

1. Order Defect Rate (ODR): Sellers must keep this below 1%. It includes negative feedback, A-to-Z Guarantee claims, and credit card chargebacks. A high ODR risks account suspension.

2. Late Shipment Rate (LSR): This measures the percentage of orders shipped late. Sellers should keep LSR below 4% to maintain customer satisfaction and avoid restrictions.

3. Inventory Performance Index (IPI): A score above 400 is ideal, reflecting good inventory turnover, minimal excess stock, and low stranded inventory. A high IPI helps avoid storage fees and increases storage limits.

4. Sales Performance Metrics: These include Amazon Best Sellers Rank (BSR), sales velocity, and sales estimates, which help sellers understand product demand and optimize stock levels.

Compliance Requirements and Policy Updates for 2025:

• Amazon has tightened rules on returns and refunds, requiring sellers to handle complaints promptly and according to updated standards.

• Enhanced Brand Content (EBC) and A+ Content guidelines are stricter, demanding high-quality, accurate, and compliant product descriptions and images.

• The product review system is more rigorously monitored to prevent fake or incentivized reviews, ensuring reviews are linked to actual purchases.

• New compliance testing requirements are being introduced, especially for categories like electronics and baby products. Sellers may need to use Amazon-approved testing facilities to certify product safety and compliance.

• Amazon increasingly uses AI tools to assess claims such as inventory damage or loss, potentially reducing reimbursement amounts.

Strategic Importance:

• Ignoring these metrics and compliance rules can lead to account suspension, loss of sales, and reduced visibility due to Amazon’s evolving algorithm that prioritizes seller authority and customer satisfaction.

• Leveraging AI-powered analytics and real-time data can help sellers optimize these metrics and stay competitive in 2025’s marketplace.

In summary, sellers must closely monitor ODR, LSR, IPI, and sales metrics while adhering to stricter content, review, and product compliance policies to maintain account health and maximize profitability on Amazon in 2025.