You’re running your Amazon business by the numbers. At some level, you have to be. And while there’s real value in what you might call being business savvy, having instinct, following your gut and any other way to put it, there’s no substitute for data.
Analytics are information resulting from the systematic analysis of data or statistics. Business 101, right? True, but while data and statistics give you insight, the value of that data — especially when there’s lots of it — has everything to do with knowing where to put your focus.
Analyzing the wrong data gives you the wrong insight, which in turn leads to bad decisions, failed results, wasted time and on and on.
Wouldn’t it be great if you knew exactly what to monitor? The best things to monitor?
Are there a simple set of statistics that give you the insight to make your FBA business boom?
To run a company with any degree of success you need to know the health of your everyday operations, and you need to be able to see it at a glance. Making a business boom requires clear, precise information; like a magnifying glass that can be dialed in as needed, bringing focus to the most minute activities, or discrete groups of activities, exposing information for analysis — as well as clear, high-level data encompassing the entire business.
Within that holistic view, there’s value in knowing the best place to keep your magnifying glass pointed. Where should you be looking, on a regular basis, in order to get the clearest view? To what should you have your attention tuned at all times?
The answer lies with KPIs.
Choosing the right KPIs can seem daunting. With a huge set of data … how do you isolate the ones that matter most?
● Key = most important.
● Performance = success or efficiency in achieving goals or objectives.
● Indicators = measurable values that show what happened or is happening.
KPIs are statistics that measure success (or lack of success) and allow you to zero in on what needs to be done to make the company grow. These stats allow you to manage your business effectively without data overwhelm.
With the right KPIs you can easily turn Amazon data into dollars.
If your FBA business were a motorcycle, KPIs would be your gauges. Speedometer. Tachometer. Fuel gauge. As you race down the highway these are the gauges that give you instant info. How are you doing? What needs your focus?
Deeper analysis can, and should, follow from there.
By now you’re wondering, What are the KPIs with which I can achieve this miraculous power? Probably you were already wondering that a few sections ago.
Forgive us. We’ll get to the point.
The three (3) best KPIs for managing an Amazon FBA business are:
Sessions measure how many times people have looked at your product page. The more sessions, the more potential sales of your product. It measures how much attention your products are getting from potential buyers. Without sessions you have no sales.
Your conversion rate measures how many unit sales you make per 100 sessions. A 20% conversion rate means you sell, on average, 20 units for every 100 sessions.
Sessions x Conversion Rate = Products Sold. 10,000 Sessions x 20% = 2,000 Sold
Profit measures how much money you actually make, taking into account everything, like Cost of Goods, Amazon Fees, Marketing costs, Shipping costs, etc.
Those are the top three KPIs.
Together these three, seemingly simple metrics, show you the health of your FBA business.
Sessions directly tell you whether you’re doing well, or have a problem with:
● Advertising (which drives paid traffic to your Amazon listing)
● Keyword rank (which drives organic Amazon traffic to your Amazon listing)
● Main Image (which helps Amazon shoppers notice your listing and click on it)
● BuyBox (is Amazon giving you the traffic or giving it to someone else – Competitors or Hijackers)
● Star rating (a high star rating will result in more people clicking on your listing)
If Sessions are rising, then these areas of your business are doing well.
If Sessions are level or falling, then you know you need to fix something in one or more of these areas.
Conversion Rate (Amazon calls it Unit Session Percentage) directly tells you whether you’re doing well or have a problem with:
● Reviews (Great reviews encourage shoppers to buy)
● Listing copy and images (Great copy and images result in more conversions)
● Video (A good video on your listing results in more conversions)
● Enhanced Brand Content (Great Brand Content gives confidence and boost conversions)
● Feedback (Your feedback score is shown, and gives buyers confidence that you are real and will treat them well after they buy).
If the Conversion Rate is rising, then these areas of your business are doing well.
If the Conversion Rate is level or falling, then you know you need to fix something in one or more of these areas.
Profit (Amazon doesn’t measure this) directly tells you whether you’re doing well or have a problem with:
● Cost of Goods & Freight costs
● Amazon Fees
● Storage Fees
● Advertising Costs
● Selling Price and Discounts
If the Profit is rising, or at least remaining at a healthy range, then these areas of your business are doing well overall.
If the Profit is falling, then you know you need to fix something in one or more of these areas.
You’re out to win this game. Your explicit purpose for being in business will differ from those of other sellers, but in the end you each share fundamental objectives:
- Increased sales
- Satisfied customers
You could distill everything down to those basic goals. Do the things that lead to sales, with a high quality service and product that results in satisfied customers, which in turn leads to more sales, more satisfied customers … The devil is in the details, always, but you can break any Amazon enterprise down to that cycle of success.
Making that work requires that you be aware of data. Lots of it. From sales statistics to customer lifetime value and everything between and beyond, there’s a lot to analyze.
KPIs get you there. KPIs give you your first point of entry. KPIs are the backbone of analytics; they give you the oversight and the insight to know exactly how your Amazon business is doing.
And thereby the confidence to make the decisions that lead to your rulership of FBA.
To Your Success,