No matter if you're a seasoned Amazon seller or just starting out, monitoring the appropriate metrics is vital for the success of your business. By gaining an understanding of the key performance indicators (KPIs) that impact your sales and profitability, you'll be equipped to make data-driven decisions and optimize your strategies. Within this article, we will delve into 12 essential metrics that every Amazon seller should actively track in order to foster business growth and maximize their achievements.
Additionally, we will provide guidance on accessing these metrics from Amazon Seller Central, ensuring you possess the necessary tools for effective performance monitoring. Let's embark on this journey and uncover valuable insights that will propel your Amazon business to new heights.
Here are some examples of the most important seller metrics to track:
Sales Revenue
Sales revenue is the lifeblood of your Amazon business. Tracking your overall sales revenue allows you to gauge the health and growth of your business over time. It provides a clear picture of your business's financial performance and helps you set revenue targets.
To get Sales Revenue metric from Amazon Seller Central, simply follow the steps below:
- Sign in to your Seller Central account.
- Click the Reports menu, and then click Business Reports. Under By Date, select the Sales and Traffic. You'll see a quick snapshot of your sales revenue (Ordered Product Sales), units sold (Units ordered) and other related metrics in the dashboard.
- You may also download the data for further analysis by clicking Download button on the top right. The file would be downloaded to your computer as a CSV file.
Units Sold
Keeping an eye on the quantity of units sold provides valuable insights into the demand for your products. By monitoring this metric, you can gauge the number of units you have sold within a specific timeframe. This information can be instrumental in determining whether it is necessary to expand your inventory to meet customer demand. You don't want to have "sold out" for your top sellers!
To get Units Sold metric from Amazon Seller Central, simply follow the steps below:
- Sign in to your Seller Central account.
- Click the Reports menu, and then click Business Reports. Under By Date, select the Sales and Traffic. You'll see a quick snapshot of your store's units sold (Units ordered) and other related metrics in the dashboard.
- You may also download the data for further analysis by clicking Download button on the top right. The file would be downloaded to your computer as a CSV file.
Conversion Rate
The conversion rate measures the percentage of visitors who make a purchase. A high conversion rate indicates effective product listings, compelling imagery, and a seamless customer experience. Monitoring this metric helps you identify areas for improvement and optimize your listing to drive more sales.
There are multiple conversion rate you could look at. For instance, Units Sessions Percentage which tells you how many items were purchased for the number of potential shoppers who saw the product listings. This metric is available in the business reports. You may derive this number by downloading the Sales and Traffic report following the instructions below:
- Sign in to your Seller Central account.
- Click the Reports menu, and then click Business Reports. Under By Date, select the Sales and Traffic. You'll see a quick snapshot of your store's units sold (Units ordered) and other related metrics in the dashboard.
- On the right side, make sure to check the metric: Units Sessions Percentage.
- Lastly, download the data by clicking Download button on the top right. The file would be downloaded to your computer as a CSV file.
You can also calculate the conversion manually with the formula below:
Conversion Rate = Units Sold (Units Ordered) / Number of Sessions
Once you have learned how to find the conversion rate of your products on Amazon, the next step is to assess your product's performance in comparison to the industry benchmark or standard.
Determining a satisfactory Amazon conversion rate can be challenging since it varies depending on the type of products you are selling or the industry you're in. On average, aiming for a conversion rate between 10% and 15%.
Having said that, it's very crucial to read and interpret this number with context. For example, if you have 60% conversion rates, with only 5 visits per day, it would not be a good number because the visits is too little and even with the high conversion, you can't make a good profit with the low visits.
Average Order Value (AOV)
Average Order Value (AOV): The AOV represents the average amount customers spend per order. Tracking AOV helps you identify cross-selling and upselling opportunities. By increasing your AOV, you can boost your revenue without the need to acquire new customers.
To calculate the Average Order Value (AOV), simply divide the total revenue generated by your Amazon store during a specific time period by the number of orders received within that same period.
AOV = Sales Revenue (Ordered Product Sales) / Number of Orders (Total Order Items)
For instance, let's say you made 1000 sales in January, resulting in a total revenue of $50,000. In this case, your AOV for January would amount to $50 ($50,000 / 1000 orders).
In Amazon, you can find the number of orders can be derived from "Sales and Traffic" report under the field "Total Order Items". To retrieve AOV, you will need to manually calculate it from the dataset you download from Amazon. You may follow the steps outlined in this article to download the Sales and Traffic report.
Page Views or Sessions
Page views refer to the total number of times your product listings have been viewed by customers, while sessions represent the total number of visits to your product pages.
Tracking the number of page views or sessions on your Amazon listings provides insights into the traffic and engagement your products receive. It helps business understand the visibility and appeal of the products offerings, as well as understanding customer shopping behaviour on the Amazon platform.
If one listing gets higher page views than the others, it indicates that there are more interest in this products. Hence, by monitoring page views or sessions, Amazon business can identify changes in customer interest over time and introduce new products to gauge the new trends.
To access page views or sessions data for each products (ASIN) in Amazon Seller Central, follow these steps:
- Log in to your Amazon Seller Central account.
- Go to the "Reports" tab in the top navigation menu.
- Select "Business Reports" from the dropdown menu.
- Under By ASIN - Select "Detail Page Sales and Traffic".
- Select the period you want to analyse.
- Click "Download CSV" to export the data.
Advertising Cost of Sales (ACoS)
For sellers running Amazon advertising campaigns, ACoS is a critical metric. ACoS represents the ratio of advertising spend to the revenue generated from advertising campaigns. A low ACoS indicates efficient ad spend and a positive return on investment (ROI). Conversely, a high ACoS indicates that your advertising spend is not yielding favorable results.
To calculate the Advertising Cost of Sales (ACoS), divide the total advertising spend by the attributed sales revenue, and then multiply the result by 100 to express it as a percentage.
ACoS = (Advertising Spend / Sales Revenue) * 100
For example, let's suppose you spent $500 on advertising campaigns in January, which resulted in $5,000 in attributed sales revenue. In this case, your ACoS for January would be 10% (($500 / $5,000) * 100).
On Amazon, you can access the necessary data for calculating ACoS in the advertising reports provided in your seller or vendor account. To obtain the report, simply follow the steps below:
- Log in to your Amazon Seller Central account.
- Go to the "Advertising" tab located in the top navigation menu.
- Select "Campaign Manager" from the dropdown menu.
- Select Campaigns.
- Select a period from the dropdown.
- Click Export to download the data as CSV file.
In the file downloaded, you can get the field "Spend" that represents Advertising Spend, and the "Sales" field for Sales Revenue from the ads. By using these fields you can now calculate ACos using the formula above.
ROAS
Similarly, Return on Advertising Spend (ROAS) is also important to track, especially for sellers running ads campaign regularly. Both ACos and ROAS is used to measure effectiveness of Amazon ads campaign. While ACos measures the percentage of ads over sales gained from ads, ROAS measures the effectiveness of your ad spend by quantifying the revenue generated for every dollar invested in advertising.
A higher ROAS indicates more effective ad spend, as you generate higher revenue relative to the advertising investment. Conversely, a lower ROAS suggests that your advertising campaigns may need adjustments to improve their profitability. Comparing your ROAS to industry standards can provide insights into how well your campaigns perform in relation to competitors.
To calculate ROAS, divide the attributed sales revenue by the advertising spend, and multiply the result by 100 to express it as a percentage. The formula for ROAS is as follows:
ROAS = (Attributed Sales Revenue / Advertising Spend) * 100
For example, if you spent $1,000 on advertising campaigns and generated $10,000 in attributed sales revenue, your ROAS would be 100% (($10,000 / $1,000) * 100).
On Amazon Seller Central, you can access all the ads campaign data for calculating ROAS in the advertising reports. To obtain the report, simply follow the steps below:
- Log in to your Amazon Seller Central account.
- Go to the "Advertising" tab located in the top navigation menu.
- Select "Campaign Manager" from the dropdown menu.
- Select Campaigns.
- Select a period from the dropdown.
- Click Export to download the data as CSV file.
Cost Per Click
Similarly, The Cost Per Click (CPC) metric is crucial for Amazon sellers running advertising campaigns. It measures the average cost incurred for each click on your ads and provides insights into the efficiency and effectiveness of your advertising spend.
A smaller CPC indicates more efficient ad spend, as you're acquiring clicks at a lower cost. On the other hand, a larger CPC suggests that your ad spend is relatively higher for each click received.
Understanding CPC is essential for optimizing ad campaigns and maximizing return on investment (ROI) on the Amazon platform.
To calculate CPC, divide the total advertising spend by the number of clicks generated by your ads. The formula for CPC is as follows:
CPC = Advertising Spend / Total Clicks
For example, if you spent $500 on advertising and received a total of 100 clicks, your CPC would be $5 ($500 / 100 clicks).
On Amazon Seller Central, you can access all the ads campaign data for calculating CPC in the advertising reports. To obtain the report, simply follow the steps below:
- Log in to your Amazon Seller Central account.
- Go to the "Advertising" tab located in the top navigation menu.
- Select "Campaign Manager" from the dropdown menu.
- Select Campaigns.
- Select a period from the dropdown.
- Click Export to download the data as CSV file.
Customer Reviews and Ratings
Positive customer reviews and high ratings are crucial for building trust and driving sales. Monitoring this metric allows you to gauge customer satisfaction, identify potential product or service issues, and take proactive steps to maintain a stellar reputation.
To access your seller feedback ratings and reviews in Amazon Seller Central, follow these steps:
- Log in to your Amazon Seller Central account.
- Navigate to the "Performance" tab in the top navigation menu.
- Select "Feedback" from the dropdown menu to access your Feedback Manager.
- In the Feedback Manager, you will find your overall seller feedback rating displayed on a scale of 1 to 5 stars. This rating represents the average rating received from customers based on their experiences with your products and services.
- The Feedback Manager will also show you the total number of feedback reviews you have received from customers.
- To view a breakdown of feedback reviews, scroll down to see the number of Positive, Neutral, and Negative seller feedback reviews for the past 30, 90, and 365 days.
- Additionally, you can view the lifetime number of feedback ratings you have received.
By regularly checking and analyzing feedback, you can identify areas of improvement, address customer concerns, and take appropriate actions to enhance your seller performance on Amazon.
Concessions Rate / Units
Concessions are a critical aspect for Amazon sellers as they directly impact profitability and customer satisfaction. Concessions refer to reimbursements or refunds provided to customers for various reasons, such as returns, lost or damaged items, misleading or incomplete listing details, customer dissatisfaction or even customer changing their mind can be considered as concessions.
A higher value of concessions may highlight potential issues, such as product quality concerns or fulfillment challenges. It's important to analyze the reasons behind concessions to identify areas for improvement and mitigate their impact on your business.
To calculate the total value of concessions, sum up the monetary value of all reimbursements and refunds provided to customers during a specific time period. This can be obtained using Concessions Dashboard available in your Amazon Seller Central account.
The Concessions Dashboard is available to Vendors in Vendor Central (opens new window)under the "Reports / Concessions Dashboard" tab.
To access concessions data in Amazon Seller Central, follow these steps:
- Log in to your Amazon Seller Central account.
- Go to the "Reports" tab in the top navigation menu.
- Select "Concessions Dashboard" in the dropdown.
In the Concessions Dashboard, look for 3 important metrics: Concession rate, Concession units, and Defect Category.
Concessions Rate refers to percentage of customers asking for refund. Try your best to keep this refund rate as low as possible.
Concessions Units refers to the number of orders that received a refund.
Defect Category refers to the reason customers request for refund.
Analyzing concessions data allows you to understand the financial impact of customer returns, lost or damaged items, or other concessions. By identifying trends and patterns, you can take proactive measures to reduce concessions, improve product quality, enhance fulfillment processes, and ultimately boost profitability and customer satisfaction.
Profit Margins
Analyzing profit margins allows you to evaluate the financial performance of your Amazon business. Understanding your profit margins helps you evaluate the profitability of your business or each product (depending on the granularity you're looking to analyse) and make informed pricing decisions. Monitoring profit margins helps you assess the effectiveness of your pricing strategies, cost management, and overall business performance.
If you want to ensure the long-term success of your Amazon business, you need to understand profit margins for your business as an overall and for each products.
Profit margins represent the percentage of revenue that remains as profit after deducting all costs and expenses associated with the sale of products. A higher profit margin indicates greater profitability and efficiency in generating revenue. Conversely, a lower profit margin may require a review of pricing, cost control, or operational efficiency to maintain profitability.
To calculate profit margins, you need to subtract the total costs and expenses from the total revenue generated and then divide the result by the total revenue. The formula for calculating profit margins is as follows:
Profit Margin = (Total Revenue - Total Costs and Expenses) / Total Revenue
For example, if your total revenue in a specific period is $50,000 and your total costs and expenses amount to $40,000, your profit margin would be 20% (($50,000 - $40,000) / $50,000).
To obtain the necessary data for calculating profit margins, you need to analyze your financial statements and reports. The data can be obtained from various sources, including your Amazon Seller Central account, accounting software, or financial records. Key components to consider in calculating profit margins include product costs, shipping costs, Amazon fees, marketing expenses, and other operational costs.
The process of calculating profit margin may be a long and complicated process. Danalyser is currently working on setting up a system with trackers and dashboards to help Amazon Sellers calculate and visualise profit margin metrics easily! If you're interested, do subscribe to the email list below so we could keep you updated.