What is Service Level Agreement (SLA)?

A Service Level Agreement (SLA) is a formal commitment to meet specific performance standards within defined parameters. In e-commerce and fulfillment, SLAs govern how quickly orders are processed, how fast they are shipped, what accuracy levels are maintained, and how issues are resolved. SLAs can be internal (your own performance targets), customer-facing (delivery promises), or partner-mandated (marketplace requirements).

Why It Matters

SLAs set clear expectations and create accountability. Marketplace SLAs (Amazon’s late shipment rate under 4%, for example) carry direct consequences—account suspension, lost Buy Box, or penalty fees. Customer-facing SLAs (ship within 24 hours) drive purchase decisions and set satisfaction benchmarks. Internal SLAs align your team around shared operational targets and make performance measurable.

How It Works

• Definition: Specify the metric, the target, the measurement period, and the consequence of non-compliance. For example: “All orders placed before 2 PM will ship the same business day. Late shipment rate will not exceed 2%.”
• Monitoring: Track SLA compliance in real time. Know at any moment how many orders are at risk of breaching their SLA.
• Escalation: When orders approach their SLA deadline, escalate them automatically—reprioritize in the fulfillment queue, alert supervisors, or trigger override workflows.
• Reporting: Report SLA compliance regularly to stakeholders, identifying trends and systemic issues that threaten performance.

How Nventory Helps

Nventory tracks SLA compliance across all channels and order types, automatically flagging orders at risk of breaching their deadlines. The system escalates at-risk orders in the fulfillment queue, provides real-time SLA dashboards for each marketplace and carrier, and generates compliance reports that help you maintain seller performance standards.