GO Achieves our Agency’s Record-Low Vendor Central Chargeback Rate
What We’re Celebrating:
Every penny of a chargeback (fees that Vendor Central brands incur when they don’t follow Amazon’s shipping requirements) reclaimed is critical to boosting profitability. According to Stratably, 61% of 1P brands find profitability management to be one of their biggest challenges on Amazon. To address this, GO places a heavy emphasis on reducing Vendor Central clients' operational costs. This resulted in us acquiring a 0.3% total chargeback rate for all of 2023, the same great chargeback rate in Q1 2024 that we earned in Q1 2023, and our lowest chargeback rate yet of 0.2% in Q2 2024. This saved our clients almost $3 million in 2023, and we’re continuing to see significant cost savings this year!
Our Chargeback Rate Vs. the Industry
As stated in the ‘Operational Performance’ tab in Vendor Central, a 5% chargeback rate is considered “good” for brands on Amazon. However, GO found that benchmark too high and initially aimed for a 2% benchmark in 2021.
We ended up averaging below 1% in 2022, ultimately inching closer to 0.5% by the end of the year. The next push was to get below 0.5%, and we achieved that throughout all months of 2023, ultimately reaching 0.3% for the year.
Our next goal was to dig into smaller chargeback issues, such as prep reduction initiatives, to drive this metric closer to 0%. The major chargeback costs had already been addressed for most clients, so it was just a matter of solving some of the less impactful problems.
We began this initiative in January 2024 and experienced the same great rate in Q1 2024 that we yielded in Q1 2023. We then saw a major performance boost in April 2024, and this was due to monthly reporting and focusing on mitigating costs for brands whose shipped COGS were over $100K, chargeback percentages were greater than 1%, and chargebacks were rising versus prior months. This resulted in a 0.2% total chargeback rate for Q2 2024!
Need help reducing your chargebacks?
Get in touch with us today and let our operations team tackle unnecessary costs for your brand.