In many ways, selling on Amazon is not unlike any other new business. While having the world’s largest online marketplace at your disposal elevates the potential for profit, this doesn’t mean you can simply count on your customer base. After all, countless other sellers are likely specializing in the exact same products as you, leaving consumers with a critical choice to make. And you, well, with some work to be done.
Unless you’re keen to put forth a tremendous amount of time and effort for minimal results, you need to make customer behavior analytics a key part of your Amazon marketing strategy. They provide knowledge. And from your perspective, these figures can provide the data — and, thusly, the knowledge — you need to guide your Amazon business confidently forward. To serve your customers to the best of your ability, you need to first know what their needs are.
Developing the know-how to make money selling on Amazon involves not only product selection, marketing, and distribution, of course. You need a customer-centric view of your business, and to do that, you need the data to lend you the insight you need to make smart decisions. With such a variety of Amazon seller analytics available to you, the question becomes not whether you can apply to these metrics to bolster your business but how to do so.
So, today, we’re running through some smart tips that you can use to put customer behavior analytics and other metrics to work for you. Tools like Seller Spike can assist you in accessing, collecting, and implementing these metrics into your business. But it falls to you to know what you’re looking for and how to make a sustainable difference in your business as a result. Let’s run through how to analyze and act on Amazon seller analytics.
Keeping Track of Your KPIs
Before we get into more specific terms, it’s essential that you have a working knowledge of what key performance indicators (KPIs) are and the role they play in your business. As their name suggests, KPIs are frequently defined as “a set of quantifiable measurements used to gauge a company’s overall long-term performance.” The most important KPIs for a given business will, of course, depend on the nature of your industry and customer base. You need to take a long, objective look at your business if you hope to make a demonstrable difference in your future.
However, when wisely considered, KPIs can be instrumental in gauging your success to date and in deciding what to do next. This might refer to your marketing, financial, or operational achievements, again based on your goals for the future and the comparative figures for your industry. When it comes to selling on Amazon, you may keep a close eye on any number of metrics. If there’s one way in which becoming an Amazon seller does not disappoint, it’s in the wide range of data provided to sellers.
Because we’re going to touch on a number of data points relating to your Amazon store, bear in mind how KPIs can serve your business in the long haul.
How to Use Amazon Seller Analytics
Amazon seller analytics can give you an endless supply of information, but here are a few key tips to keep in mind as you review your metrics:
- Pay attention to the fluctuation of your sales: Your sales figures will change over time. That’s just a fact. However, you can take steps to adjust your business to fit your customer’s behavior. For instance, your sales are, at least in part, likely change with the season. Use this data to adjust your inventory levels accordingly. The more historical data you have, the more accurate your projections can ultimately be.
- Don’t let your inventory sit idle for too long: Of course, your goal should always be to move your inventory as quickly as possible. But you should actually pay close attention to inventory that is in stock for too long. Tracking this data is often something sellers miss, but if you are a Fulfillment by Amazon customer (FBA), your inventory will begin to incur long-term storage fees at a certain point. Adjust your ordering habits as needed.
- Track how much you’re spending on fulfillment: If you are an FBA seller, then you know how helpful it can be to take this burden off your shoulders. However, fulfillment is costly either way. So you should take these expenses into account when you’re setting your prices. If you’re careful, you might be able to largely offset that cost and keep your profitability where you want it to be, no matter what your fulfillment costs are.
- Acknowledge how your return rate reflects on you: Making sales is all well and good, but you also don’t want your return rate to get out of hand. If the number of customers returning your products begins to rise, Amazon may take this as a sign of your store’s quality, which could adversely affect your relationship. Tracking your return rate then can give you a heads-up regarding what’s wrong and how you can rectify it.
- Never underestimate the power of customer reviews: When it comes to selling on Amazon, your ratings and reviews are the biggest indication prospective customers have about your reputation. To that end, this too should be a KPI that you watch closely. Of course, a stray negative review or two may occur from time to time. But like your return rate, a flurry of negative reviews probably means something fundamental has to change.
- Consider how your conversion rate affects your standing: Your conversion rate may be one of the first metrics you’re keeping an eye on. But you might not realize just how big an impact it has on your business. If your conversion suffers, then Amazon is less likely to promote your store. In fact, low conversion rates on your end might benefit your competition instead, further contributing to your struggle to attract customers.
- Be careful not to enter into promotions lightly: Running a short-term promotion can be huge in getting the word out about your store and attracting first-time customers. But you could wind up draining your inventory in no time and at a fraction of the profits you would normally hit. Be aware of your profit margins, and don’t let too much of your inventory slip away from you without first crunching the numbers on the larger impact.
- Don’t get carried away on your advertising: Similarly, advertising your products could wind up yielding a less than worthwhile result. If ad rates are elevated, then your store could suffer. Instead of boosting your sales and exposure, you’re compromising your mission to such a drastic degree that you are doing yourself more of a disservice than anything. Be strategic in your advertising expenses, and don’t sacrifice profitability.
- Watch your best-seller rank and adjust accordingly: This should go without saying, but retaining the orange Best Seller Rank badge for as long as possible should be an ongoing goal. Particularly, you want to watch your competition closely. If they have claimed this ranking, you could propel yourself back into the race by briefly dropping prices. Sure, slow and steady wins the race, but once in a while, you need a boost.
- Monitor how your competition’s prices change: Just as you should be willing to adjust your pricing to keep your store competitive, other sellers who specialize in the same kind of product are doing the same. Keeping a daily eye on your competition’s pricing can help you decide how you need to respond with your own pricing changes. Without this kind of proactive thinking, you might lose your edge with customers.
How Seller Spike Can Help
We’ve hit some invaluable tips on how you can optimize your profits as an Amazon seller. With so many data points, however, it can be difficult to make sense of it all. Unless you have a way to coalesce your various KPIs into actionable directives, you may struggle to find a way to fully leverage the insights available to you. Luckily, this is exactly where Seller Spike can be of assistance.
Our goal to help Amazon sellers break down their metrics to uncover their true profit numbers. In doing so, you’ll be able to more readily identify growth opportunities and make more informed decisions regarding your store’s future. Our approach applies just as easily to any Amazon business, including private label and retail arbitrage sellers. Essentially, we are dedicated to helping you become a successful Amazon seller.
We accomplish this by taking a broad view of the insights your Amazon business. Generally, this breaks down to four distinct categories:
- Seller Insights: Through real-time tracking of all your sales data, we provide a single dashboard for you to maintain a comprehensive view on all your seller accounts.
- Product Insights: Seller Spike too has a dashboard devoted to the totality of your products. Break down your data for a specific item, parent product or custom tags.
- Settlement Insights: Without a dedicated resource, you might find it difficult to track your transaction history, but this tool helps you dig into settlement reports with ease.
- Order Insights: Likewise, this dashboard provides you with detailed information on every single order ever placed in your store, allowing you to discover what’s working.
Hopefully, the above tips — along with the brief description of how Seller Spike can heighten your ability to function as a data-driven Amazon seller will persuade you to take a more proactive position in your store. The more invested you are in distilling your data into clear directives, the likelier you are to reap the rewards of all your hard work.