New Amazon Rule "Promised Delivery Time Adjustment" and Its Impact on FBM Sellers

Amazon recently introduced a new rule called "Promised Delivery Time Adjustment", which significantly impacts sellers using Fulfillment by Merchant (FBM). This system automatically adjusts promised delivery times and can greatly affect sellers' business outcomes.

Context

• FBM (Fulfillment by Merchant) means you are using your own logistics instead of Amazon's.
• When a shopper buys your products, they see an additional shipping price and delivery time. Sellers have the flexibility to use any standard carrier available in the market.
• If you use FBM, which means you do not use Fulfillment by Amazon (FBA), delivery speed is crucial to winning customers.
• This delivery method is often used for selling products in large volumes where using FBA is not economically viable.
• We support dozens of resellers who handle high-demand products but sell on various platforms. For them, FBA is not the ideal solution, as Amazon is just an extra revenue stream.
• Sellers with a wide range of products or limited stock or heavy stuff often cannot use FBA.
• Competitors in this category usually do not use FBA either, so it is not a major disadvantage.
• We primarily use this system for resellers with tens of thousands of products in their catalog and often only a few pieces in stock, making it impractical to create another warehouse for FBA.

How Does the New Rule Affect Sellers?

From the 1st to the 15th of the month, Amazon measures FBM delivery performance and then adjusts your delivery time based on the statistics. Promised Delivery Time Adjustment is activated if the metric is below 95%. However, this is an average!

One of our sellers promised an average delivery time of 5 days but delivered on average in 5.4 days and delivered 89.7% of orders on time, successfully delivering 98% of all orders. Amazon considered this too low and adjusted the promised delivery time to 13.6 days to achieve a 95% on-time delivery rate. Although this improved the on-time delivery metric, it led to a tripling of the promised delivery time, which significantly harmed the seller, and their BuyBox rate dropped by 30%. This drop is likely smaller only because other sellers were similarly affected.

How Did This Happen?

Here is an example of 10 orders not delivered on time, the extra days they were delayed, and the reason:

As seen, most orders were delayed by just one day. However, there are two extreme cases where the customer did not pick up the parcel, and one where the item was directly returned. Amazon calculates the delivery time until the item is returned to the seller. Extreme cases, such as customer returns, can significantly affect the average delivery time since Amazon calculates the time until the item is returned to the warehouse, which can take several weeks.

Result?

• BuyBox rate dropped by 30%. This drop is likely smaller because other sellers faced the same problem.
• The decline is likely not greater because the competition faces the same issue.
• Initially, the seller missed delivery by an average of 0.4 days. Now they deliver almost three times faster than Amazon indicates - from a customer experience perspective, this is a total nonsense.
• According to Amazon, this rule is not an experiment but a new standard.

What Actions Are We Taking?

1. Disable Parcel Shops: If possible, we stop using parcel shops to shorten delivery times. Amazon calculates the delivery time from when the customer picks up the parcel, not when it is delivered to the parcel shop.
2. Implement Aftership: All our sellers are gradually implementing Aftership. This helps us better track shipments and improve delivery metrics.
3. Focus on FBA: We are prioritizing selling through FBA to improve delivery times and increase sales, and adding more products to FBA.
4. Deeper Carrier Analysis: We are comparing various carriers and identifying potential issues with specific services.
5. Cancel Problematic Orders: We are canceling orders with incorrect addresses or other problems that significantly worsen delivery statistics much earlier than before.

Who Benefits From This?

It appears that customers do not benefit from this new rule because Amazon does not show the actual delivery times. For example, our seller has an average delivery time of 5.4 days, but Amazon shows a promised time of 13 days. This rule also does not affect FBA sellers, so those using FBA may see an increase in sales in the second half of the month when their FBM competitors are affected by this rule.

Amazon states that this metric is always a 30-day average. However, from the 1st to the 14th of the month, it seems to just collect data and then update on the 15th day of the current month. So, I assume (and hope) this is not the final state.

Amazon's "Intelligent" Solution Formula

Amazon - make it more accurate please

Amazon's new "Promised Delivery Time Adjustment" rule has a significant impact on FBM sellers. We are working on solutions, including optimizing delivery processes and better tracking of shipments, to minimize negative impacts and improve our delivery times. However, Amazon needs to adjust their math according to logic. Right now, it doesn't make sense, hurts the sellers a lot, and doesn't show accurate data for customers.

Amazon needs to implement a more intelligent formula than the one I jokingly mentioned in the previous paragraph - Amazon's "Intelligent" Solution Formula.

They need to stop relying on averages and erase the extremes. Instead, they should consider other metrics beyond just the average, because focusing solely on that is going to mess everything up. I hope this isn't the final state and is just the first test, but it looks like this solution is here to stay. So, if you're an FBM seller, prepare yourself.