Anyone can sell on Amazon, but to outrun your competitors, you have to be different from others. For that purpose, Amazon offers various features, one of which is FBA or fulfilled by Amazon. You can opt for FBA to escalate your sales performance on Amazon. But you must keep an eye on key performance indicators or KPIs to ensure you are doing things right.
There are lots of Amazon seller KPIs. However, there are crucial ones that every Amazon FBA seller must keep an eye on. Some essential Amazon KPIs are revenue, return on ad spend or RoAS, ctr, inventory age, etc.
There are a lot of things to know about these KPIs. It would be best if you learned the basics of these to keep your Amazon sales performance steady. This article will discuss seven important KPIs for Amazon FBA sellers and some relevant topics. So, let’s get started.
Importance Of Monitoring KPI For Amazon Sellers
Correctly interpreting KPIs can help you identify areas for improvement, track your performance, and make sure that you are meeting your goals. There is endless importance of amazon kPIs. Let’s take a look at them briefly:
Make Sure You Are Doing Things Right
When you know what to do to improve, you can adjust your strategy accordingly and make sure you’re on the right path.
In addition, you can also spot trends in your performance by keeping an eye on Amazon KPIs. Thus, it can help you understand what works and what doesn’t so that you can make the most of your time and resources.
Stay Competitive
Amazon KPIs are essential for staying competitive. As an Amazon seller, staying ahead of the competition is crucial. There are countless others that are trying to achieve the same thing as you. You have to outshine the competition to stay on top.
If you want the enormous customer base to treat you differently, you have to do something different. KPIs can help you do that. By tracking your KPIs, you can assess how you stack up against other sellers and ensure you’re putting your best foot forward.
Stay Focused on Business Yields
The right KPI data can help you focus on the business yields of your operations. What your business is generating is a significant performance indicator and you should never ignore it by any means. There are many metrics to figure out your business yields, but as an amazon seller, monitoring the KPIs can give you the same result by putting in less effort.
KPIs can identify areas where you are performing well and areas where you need improvements. This helps you maximize your business’s potential, increase sales, generate more revenues, outperform your competitors and make sure you are getting the most from your investments. By properly interpreting kpis, you can find out where to focus your efforts to ensure that your business is running as efficiently and effectively as possible.
Make The Right Decision
KPIs can help identify areas where you are underperforming and take corrective action. Not only that, but you can also gain valuable insights into your operations. This can help you remain competitive and maximize the return on your investments.
By closely monitoring your KPIs and subsequent analysis, you can make informed decisions to help improve your business operations and ensure that you are getting the best possible returns from your investments.
7 KPIs You Need To Look Out For As An FBA Seller
KPIs bear massive importance for every Amazon FBA seller. Here are 7 KPIs you need to look out for as an FBA seller:
1. Revenue
Sales are the lifeblood of any business, and monitoring them is essential to staying ahead of the competition. Keeping track of sales gives you a clear idea of your Amazon business’s performance. A gradual increase in revenue is an excellent indication of progress.
But to truly understand the success or decline of your business, you need to understand the root cause of any fluctuations. Simply put, you need to determine how much revenue you’ve made over a set period and account for variances in monthly income.
By doing so, you can then formulate an effective marketing and sales promotion strategy that will help drive growth and success.
2. Return on Ad Spend(RoAS)
Return on Ad Spend (RoAS) is a crucial metric to measure the success of your business. Advertising is paramount for any business. Companies spend billions of dollars on ads each year.
Sales sure do increase sales, but a transparent relationship between the two can be the thriving factor for your business. You will need proper knowledge and foresight to ensure you get the maximum return on your ad spend.
3. Click-through Rate (CTR)
The Click-Through Rate (CTR) is a critical Amazon KPI that measures the success of your marketing campaigns. It is the ratio of how many people see your ad and how many of them click on the ad.
It’s a crucial metric for determining the efficacy of your ads. For example, if 100 people see your listing and seven click on it, you would have a CTR of 7%. CTR is closely linked to RoAS and is one of the essential Amazon KPIs to keep track of.
4. The Average Age Of Inventory
Keeping your inventory fresh and up to date is essential for a successful Amazon FBA business. Any excess inventory and the average age of those products can directly impact the Inventory Performance Index.
Experts recommend aiming for a reasonable turnover rate and shipping out new inventory approximately every three months. To ensure you maintain a healthy IPI, tracking the average age of your list is essential. This information is readily available in Seller Central for FBA Sellers.
5. Inventory Performance Index
The IPI, or inventory performance index, is a crucial indicator to measure your inventory and turnover rate. Having an IPI score below 450 can result in various restrictions by Amazon.
To ensure you stay within Amazon’s guidelines, you can access your IPI score directly from Seller Central. Keeping your IPI healthy can help you manage your inventory more effectively and maximize your profits.
6. Quality Content Score
Content on Amazon is vital to increasing your conversion rate and driving sales. To ensure that your content is visible and up to date, you should closely monitor your content. Unexpected product descriptions, images, formats, and other content changes can significantly impact your conversion rate.
To help you identify areas that need attention, many tools are available to calculate your content score. This score will make it easy to determine which areas need to be updated or changed to ensure that your content remains visible and effective.
To ensure you stay within Amazon’s guidelines, you can access your IPI score directly from Seller Central. Keeping your IPI healthy can help you manage your inventory more effectively and maximize your profits.
7. Refund Rate
This Key Performance Indicator (KPI) helps you measure how often your product is returned. Ideally, the idea is to have as few returns as possible or none at all.
Suppose you’re seeing a high number of returns. In that case, this could indicate that your product page is not adequately conveying information about the product, that the product has some defects, or that consumers may misunderstand its use.
To address this, take the time to examine the reasons behind it and make any necessary changes to your product page or design. Doing this can help you improve customer satisfaction and reduce product returns.
To help you identify areas that need attention, many tools are available to calculate your content score. This score will make it easy to determine which areas need to be updated or changed to ensure that your content remains visible and effective.
To ensure you stay within Amazon’s guidelines, you can access your IPI score directly from Seller Central. Keeping your IPI healthy can help you manage your inventory more effectively and maximize your profits.
Amazon sellers’ KPIs are an essential part of the Amazon sales business. However, For FBA sellers, it’s even more crucial. To ensure your business is doing well and for further improvement, you should keep an eye on these seven Amazon KPIs discussed above.
Want more professional guidance on keeping track of your performance? Don’t be shy to contact us. We would love to share our expertise and provide you with the advice you need.