Warehousing Metrics Glossary

Order Cancellation Rate

Definition, meaning, and explanation of

Order Cancellation Rate

What is Order Cancellation Rate?

Percentage of orders that are canceled before they are shipped.

How to calculate Order Cancellation Rate?

(Total Canceled Orders / Total Orders) * 100

What is the business impact of Order Cancellation Rate?

High cancellation rates can lead to lost sales, increased costs, dissatisfied customers, and inventory bloat.

Industry standard for Order Cancellation Rate

  • Industry Benchmark: Below 2%

How to improve Order Cancellation Rate?

  • Streamline the process to improve fulfillment efficiency and shrink the cancellation window.
  • Offer flexibility to modify orders through product or variant substitutions.
  • Implement a suitable return policy to minimize order cancellations
  • Improved visibility into post-purchase order processing.

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