The right product, at the right price and the right time.

This philosophy captures selling on Amazon.com and is amplified during the all-important holiday shopping season when infrequent shoppers cautiously venture to Amazon.com and other online shopping sites to conveniently purchase gifts for loved ones.

If you are an online retailer selling on Amazon.com, what do you need to keep in mind to maximize your revenue during the fourth quarter on the most popular fixed-price marketplace in the world?

Amazon Holiday Expectations

To meet the high consumer expectations during the holiday season, Amazon’s team is extra vigilant leading up to and during the fourth quarter to ensure that third-party sellers (shipping over 30% of all products purchased on the site) provide the same consistent shopping experience that buyers have come to expect from Amazon.com.

Enforcement of Customer Service Levels: The holidays are an important time for Amazon customers due to the negative emotions associated with a gift being canceled or delivered late. To ensure a great customer experience, the Amazon Quality Assurance team closely monitors performance metrics and suspend merchants who underperform.

Significant Increase in Demand Levels: Like other retailers, demand for Amazon products increases during the holiday period. We suggest you monitor inventory levels, shipping lead times, customer service availability and other areas to ensure a good customer experience.

High Level of Customer Contacts: Gift giving can create a high level of personal risk for the individual giving the gift. This typically results in higher levels of customer service contacts during the holiday period. Customer want to make sure the product will arrive on time, and as described. Make sure you staff your customer service departments accordingly.

Seller Best Practices

Succeeding on Amazon is not significantly different from the tenets of retailing - above all treat your customers right. Amazon recommends these specific best practices for providing great customer service especially during the all-critical holiday season:

Shipping Lead Times: Setting realistic shipping lead times is key to managing customer expectations. The Amazon customer is used to receiving the product quickly. Merchants using drop shippers need to be especially conservative as drop shippers can be unreliable at times.

Inventory Levels: At all times of the year it’s important to frequently update inventory levels, but this is especially true during the holidays. Strong demand for certain [Amazon products] can cause spikes in orders when one merchant depletes inventory levels and the next merchant receives the demand.

Shipping Confirmations: Amazon tracks the timeliness of order processing by comparing the order date to when the order is ship confirmed. It’s critical for you to confirm shipments frequently so the late shipping metrics are correct. This is especially important during the high volume holiday period.

Holiday Performance Criteria

How does Amazon monitor and ensure that third-party sellers adhere to its high customer service standards during the holiday season? Amazon established and is continuously monitoring a set of seller key performance indicators to measure the performance of a seller:

• Order Defect Rate <1% (The percentage of Amazon orders that have received a negative feedback, an A-to-Z Guarantee claim or a service credit card chargeback)
• Negative Feedback Rate <5% (The number negative feedback ratings as a percentage of total feedback rating)
• Late Ship Rate <5% (Orders ship-confirmed three or more days beyond the expected ship date are considered to be late)
• Pre-Ship Cancellation Rate <2.5% (Your in-stock rate for items sold with Amazon.com)

Amazon’s category management teams review these statistics over 30, 60, 90 and 365 days to determine trends and may suspend a merchant if one of these is slipping (in some cases a merchant may be contacted first to figure out if there’s an unusual situation). A suspension during the holidays will mean missing out on the Q4 opportunity so implementing the above best practices and carefully monitoring your performance criteria are critical.

If you do get suspended note that Amazon often gives third-party sellers an opportunity to “get their house back in order” post-holidays.

Click here to view Amazon’s Q4 preparation presentation prepared by the Sports & Outdoor category management team (Seller Central credentials required).