There’s a large number of metrics to worry about on Amazon, but some are more important than others. With that in mind, eDesk examines the six seller metrics you should be making your priority on Amazon.
The best business owners are the ones who manage to minimize their fees and costs the most. Your goal is to maximize the money coming in and minimize the money going out, and fees are one of the top areas to trim the fat on. While there’s not much you can do on the fees Amazon charges, you can control which products get those fees.
For example, look at product size. And let’s say you sell boxes. You’ve got two boxes, one big and one small, in your inventory. You might sell more big boxes, but if the fee percentage is more than the small box when it comes to your overall margin, it might make sense to stop selling the big box and go with just the small box because it incurs fewer fees.
Another way around the whole fees thing is to fulfil items yourself. It’s not always the best strategy, particularly if you sell a lot of items, but it can be one area where you can pad your bottom line a bit more. Just remember that what you save in fees you might pay for in man-hours.
So we’ve just talked about the money going out. What about what comes in? It doesn’t matter how much you cut down on your fees if the revenue doesn’t more than cover the money spent.
Check-in regularly (at least once a day) to your Amazon Payments Report and monitor what your individual products’ earnings are each month. You’ll want to get so intimately acquainted with the figures that you should be able to quote them when woken up in the middle of the night.
3. Best Seller Ranking
Your seller ranking is a bit like hot posts on Reddit: it’s a time-sensitive measure of how well something is doing at a particular moment in time, based on numbers. On Reddit, upvotes are given more weight based on how soon they occur once something’s been posted, and in what sequence.
Seller ranking is similar in that Amazon calculates and updates it hourly and your ranking is weighted based on how many sales a product’s had, and the relative nature of it has to do with how it’s competing against other items in the category you’re selling in.
One thing to look out for is patterns. Do certain items sell better at certain times or on certain days? Are your numbers relatively in line with other sellers? And what external factors were present that could have affected your seller ranking, either positively or negatively?
4. Perfect Order Percentage
You should always be aiming for a perfect order percentage, which means that everything was accepted, processed and fulfilled exactly how it was supposed to. This covers a bit of ground, ranging from actually having the item in stock to delivering the product when you advertised it’d be there.
A closely related metric is the Late Ship Rate — you can skirt around this affecting you by using FBA and letting Amazon handle the fulfilment, as it only pertains to FBM orders.
5. Order Defect Rate
There are three things that constitute the Order Defect Rate:
- The buyer makes an A-to-Z claim,
- The buyer leaves negative feedback, or
- The buyer makes a chargeback claim.
The standard for good behavior in this metric is set pretty high, as Amazon will tolerate an Order Defect Rate that’s only under 1%. Slide past that number, and you could face a warning or suspension. It’s pretty hard to be a successful eCommerce merchant when you’re not allowed to sell on Amazon, eh?
6. Inventory Performance Index
Amazon’s newest seller metric to keep an eye on is your Inventory Performance Index. Amazon states the metric is based on “how well you drive sales by stocking popular products and efficiently managing on-hand inventory”. Scores range from zero to 1,000. A score above 400 indicates that your business is excelling whilst a score below 350 indicates that there are issues and you should take action to improve your score.
You should keep an eye on your Amazon Inventory Dashboard regularly to prevent potential lost sales and implement any of the suggestions Amazon offers you in terms of what you can do better.
Improve your Amazon Seller Rating
While these six seller metrics are ones that may require a bit more attention than others on Amazon, you should always be trying to achieve the best you can, in all metrics. One way to do that is to use eDesk Feedack, which helps automate your Amazon feedback — resulting in increased seller feedback and product reviews.