Understanding why and how your Amazon revenue is growing provides you with actionable insights into how you can improve performance in the future.
Analyzing your sales performance data is probably a staple in your daily workflow already. You are checking your sales numbers on ASIN, country, and category level, and keep track of your inventory.
So what’s missing?
We have identified 3 metrics that you might not be tracking yet – but that can make a big difference for your business growth.
1. The relationship between return rate and reviews
Looking at your return rate and reviews separately tell you how much people like your product. High return rates mean that people couldn’t make use of your product, or that it was simply not what they are expecting. Negative reviews might suggest that your product might not live up to customers’ standards.
That’s pretty straightforward.
So what happens when you look at the two statistics at the same time and determine their relationship? You are able to understand why you are getting the negative feedback and can take immediate action to make improvements.
Here are the different scenarios, and what you can do:
You can see how looking at the two rates in combination can tell you a lot more than examining them separately.
For example, analyzing the return rate on its own in the last scenario would leave you thinking that your product is actually doing quite well, even though your customers are unhappy. This, in turn, can lead to future trouble with Amazon when you’re not meeting their performance criteria.
2. The difference between sell-in and sell-out figures
It seems natural to track your sell-in and sell-out data, and you’re probably already doing it. So why did we put it on this list?
Because it is really quite important. Sell-in is the number of products you sold to Amazon, and sell-out is the products Amazon then sold on to the customer.
Looking at your sell-in and sell-out data doesn’t just tell you how well your products are performing, it is also important for managing your long-term relationship with Amazon. Fast-selling products are great, but what happens if sell-in and sell-out data are diverging significantly?
3. Your inventory’s ‘expiry date’
Amazon assesses the profitability of each item individually. So what happens if an item isn’t performing (the sell-out rate is very low)? It lands on the CRaP list – Can’t Realize any Profits (kudos to the Amazon finance team for coming up with this term — who says finance can’t be fun, right?). The CRaP list contains products that are structurally unprofitable, i.e. even under the best possible conditions, Amazon is making a loss.
Believe me when I tell you: You do NOT want to land on that list. CRaP products lose Amazon’s support — that means they are no longer being advertised as often, they will lose visibility and thereby sales will plummet even more. And you can’t counteract with your own AMS efforts, as these products are no longer eligible. In short: the Amazon Flywheel stops spinning for CRaP products.
How can you avoid ending up with one?
There are a few reasons why your product might end up on the CRaP list. One of them is the time (and thereby cost) of storage. Even though the threshold (specific number of days) varies from product to product, you can track the ‘Aged 90+ Days Sellable Inventory’ metrics in your Inventory Health reports as a rule of thumb. By monitoring the ‘expiry date’ of your inventory — aka when your inventory has been with Amazon for a relatively long time — you can identify products that are slow selling and take action before it is too late.
What does this action might look like? Check your product listing and see if the content and images are optimized for ranking and conversion. If you haven’t run a PPC campaign yet, try targeting the product with paid traffic.
Because if you don’t, you risk Amazon not reordering your product at all.
As a vendor with hundreds or even thousands of products, it requires a lot of manual work and hours to download sales and inventory reports from Amazon. Going through them and analyzing data is a painstaking task.
That’s why we made it easier for you. The Sellics Retail Analytics module visualizes your sales performance data and shows you a direct comparison of your sell-in and sell-out data. With this tool in petto, you better understand your revenue growth on Amazon and make sure that you and the online retailer remain in a beautiful and loving relationship — without any CRaP.