Amazon’s New Shipping & Delivery Policies, Key Changes and Their Implications

Amazon continues to set the pace for customer satisfaction and delivery expectations. As we approach the latter half of 2024, Amazon is rolling out significant changes to its shipping and delivery policies that will impact Sellers across the platform. These updates aim to enhance the customer experience by ensuring faster, more accurate delivery times while also providing tools and guidance for Sellers to meet these new standards. Let’s dive into the key changes and what they mean for Amazon Sellers.

The Importance of On- Time Delivery

Amazon’s focus on fast and accurate delivery is not new, but it’s becoming increasingly important to the marketplace operator. It’s well known that the delivery speed and reliability of the delivery date expectation set during checkout are major factors in customers’ purchasing decisions. To meet this expectation, Amazon will be rigorously enforcing a new on-time delivery rate (OTDR) policy that will directly affect Sellers’ ability to list products on the marketplace.

Starting September 25, 2024, Sellers will need to maintain a minimum 90% OTDR without promise extensions to continue listing seller-fulfilled products on Amazon.com. This policy change underscores the importance of reliable shipping practices and puts the onus on Sellers to meet customer expectations. For optimal performance, Amazon recommends maintaining a 95% or higher OTDR for all seller-fulfilled orders.

It’s worth noting that this policy doesn’t apply to Fulfillment by Amazon (FBA) orders where Amazon is responsible for meeting delivery promises. However, for Sellers managing their own fulfillment, this change could have significant implications.

Updates to Transit Time Settings

To help improve OTDR and the reliability of delivery date promises made to customers, Amazon is reducing the number of transit days allowed for both Standard and Free Economy shipping options in shipping templates.

Some Sellers may have already noticed an update to the transit time requirements which became effective August 25, 2024. For Sellers shipping from the continental United States (excluding Hawaii, Alaska, and US territories), the maximum transit time allowed for Standard Shipping has been reduced to 5 days, while Free Economy shipping will have a maximum of 8 days.

There’s an important caveat for media items such as books, magazines, and DVDs. These products will continue to have a maximum transit time of 8 days for Standard Shipping. Sellers should pay close attention to their product categories to ensure compliance with these new transit time limits.

For those offering Free Economy shipping, Amazon has already adjusted max transit times in shipping templates from the previously allowed 5 to 10-day range to the new 4 to 8-day requirement. While no action is required from Sellers, they continue to have the option to disable Free Economy shipping if they prefer not to offer this service within the new timeframe.

Introduction of Automated Handling Time

Perhaps the most significant change for many Sellers will be the introduction of Automated Handling Time (AHT), set to take effect on September 25, 2024. AHT will use historical shipping data to set more accurate handling times for each SKU based on how long a Seller has typically taken to ship it in the past. For new products without historical data, AHT will default to the manually configured handling time.

This automation aims to provide customers with faster and more accurate delivery date estimates, potentially leading to increased sales for Sellers. However, it also means that Sellers will need to consistently meet these handling time expectations to maintain an acceptable OTDR. AHT will automatically take Order Handling Capacity into account (the maximum number of orders that have been fulfilled in the past 90 days) and adjust delivery promises to reflect longer handling times accordingly; the objective is to avoid overburdening Sellers with shorter handling times that cannot be met.

This feature will be automatically enabled for Sellers who currently have a handling time gap of 2 days or more compared to their actual shipping performance (Sellers can find their current handling time gap here). AHT is already available in the Order Handling Settings for Sellers that want to test how the new setting will affect their fulfillment workflows in advance of the September 25th obligation.

It’s important to note that handling time only considers business days, excluding weekend days unless weekend operations are intentionally enabled in Order Fulfillment settings.

AHT for Seller Fulfilled Prime Orders

For Prime orders that have one-day or two-day delivery expectations, the same-day handling time will continue to apply. Prime orders with standard delivery will default to a one-day handling time, unless a same-day default handling time is configured at the account-level, in which case, Prime orders with standard delivery would have a same-day handling time.

Exceptions and Protections

Amazon recognizes that certain products, such as custom-made and/or personalized items, certain media, and heavy or bulky goods, may require more flexible handling times. Sellers can request exceptions for these types of SKUs, allowing them to set manual handling time overrides. However, it’s important to note that exempted SKUs will not receive OTDR protection from late deliveries. OTD protection will be available to provide a safety net for Sellers as they adjust to the new policies.

To qualify for OTDR protection, Sellers must meet three conditions:

Have Shipping Automation (SSA) enabled on the relevant shipping template. SSA helps set accurate delivery dates through automated transit time calculations based on preferred shipping services. (L earn More)
Have AHT enabled on their account. (Learn More)
Purchase “OTDR protected” Standard Shipping services through Amazon Buy Shipping

Preparing for the Changes

With these significant updates, Sellers should take proactive steps to prepare:

Review current shipping practices and identify areas for improvement.
Get familiar with the new transit time and handling time requirements.
Consider enabling Automated Handling Time if it’s not already active to analyze how the required changes will impact business operations and workflows before the September 25th deadline.
Evaluate product catalogs to determine if any items might qualify for handling time exceptions. Contact Seller Support and request that a ticket is created to have Handling Time exceptions applied to the list of SKUs.

Looking Ahead

Meeting customer expectations for fast and reliable order delivery is more crucial than ever. Amazon’s new policies reflect this reality, pushing Sellers to optimize their fulfillment processes or risk losing visibility on the marketplace. While these changes may present challenges, they also offer opportunities for Sellers to streamline their operations and potentially increase sales through improved delivery promises. Staying informed and continuously monitoring performance will help Sellers to ensure continued success on the Amazon marketplace.