Are you successful as an Amazon Seller? Did your sales rise?
Have you accomplished your objectives and goals?
These are questions you might face that make you question yourself.
Key Performance Indicators (KPIs) help answer all these questions.
- 1 What are KPIs?
- 2 Why Should You Track the Performance of Your Business?
- 3 What Makes an Effective KPI?
- 4 5 Simple and Essential KPIs to Track Your Amazon Store’s Progress
- 5 Final Thoughts
What are KPIs?
Key Performance Indicators (KPIs) are the quantifiable measures that help you track and assess the performance progress of your business.
Simply put, they are just like a progress report that helps you identify the pressure points of your business and gives useful insights to analyze best practices and effective strategies to foster your business growth.
KPIs provide an actionable plan to achieve your overall business objectives and goals like driving customer traffic to your Amazon product listing page, improving the ranking of your products, and boosting your sales.
Why Should You Track the Performance of Your Business?
Imagine you have put a lot of effort to establish your store on Amazon and spent a lot on PPC campaigns to market your products. If you are unable to accomplish your targets, what’s the use of putting in a lot of time, effort, and money?
You might face a situation when all things are going well, but you end up losing the game. For example, you may be happy with a greater number of shoppers visiting your Amazon product listing page, but if they don’t buy your product, all your efforts are in vain.
Tracking essential KPIs helps you analyze the progress of your business strategies in every aspect like customer service, sales, ratings, reviews, repeat purchase rate, shopping cart abandonment rate, and conversion rate. This can help you decide on the right path to take to accomplish your targets and goals.
What Makes an Effective KPI?
There are many KPIs that help Amazon sellers improve productivity and lower process costs. But it takes time and effort to identify the essential KPIs for your store, gather data, and review the results.
With appropriate metrics in place, you can recognise the root cause of the challenges you might face.
Here are the four characteristics that help you choose the right KPI:
- Simple and easy to understand
- Access to real-time results
5 Simple and Essential KPIs to Track Your Amazon Store’s Progress
Monitoring the progress of an e-commerce store is essential for the growth and success of Amazon sellers. But it is also important that you identify the right KPIs that measure your business growth.
Here are five simple and essential KPIs that help Amazon sellers measure the progress of their business, evaluate what strategy works and what doesn’t, and constantly refine, and develop their marketing approach.
Product Ratings and Reviews
Have you ever bought a Mac or an iPhone without viewing its ratings and reviews? You wouldn’t. Every shopper before purchasing a product inquires about the quality of the product because customers trust each other more than they trust brands.
In today’s digital world, as 80% of shoppers opt to purchase online, it’s quite common for an Amazon shopper to compare the ratings and reviews of a product before purchasing it. This makes product ratings and reviews, the most important KPI for Amazon sellers to build the brand and increase sales.
Regular auditing of your product’s ratings and reviews helps you to know what your potential customers are thinking about your product’s quality, what are their needs and other valuable information, which you could use to focus on increasing customer satisfaction.
Generally, products with no reviews give shoppers a perception that they are the first to buy a product and may not show much interest to purchase. Also, terrible reviews and fewer ratings badly impact your product’s organic rankings and ultimately affect your sales.
Pageviews are the number of visits to your Amazon Product listing page. The total number of page visits gives the Amazon algorithm an idea about the popularity and demand of your product among shoppers.
It is a simple and effective metric that demonstrates how efficient your current organic and paid marketing campaigns are to lead customers to your Amazon product detail page.
A higher number of page visits means more traffic to your product listing page on Amazon which indicates good SEO practices.
In general, more clicks to view your listing means more conversions. More conversions directly translate to higher search and product rankings.
More visits but limited conversions to sales probably indicate a problem with your product listing that needs to be focused on.
Not all visitors to your product listing page buy your product. They may click on your Ad to view your product or just add it to the shopping cart.
The conversion rate is the percentage of visitors that buy your products in a specific period. It measures the effectiveness of your business strategy in converting a potential visitor to a buying customer.
Monitoring the conversion rate in every stage of the marketing and selling process allows you to:
- Understand how your sales funnel is performing
- Identify multiple pressure points
- Evaluate which marketing strategies are giving the greatest return on investment (ROI).
Many tools like Google Analytics help you to know the conversion rate of your website. Amazon has tools, especially for PPC, which you can use to get your conversion rate report.
The end goal of any marketing strategy is to increase revenue. Conversion rate is one of the important metrics you cannot lose sight of to achieve the estimated revenue.
Shopping Cart Abandonment Rate
Many visitors add your products to the shopping cart but exit the shopping cart without completing the purchase. This might be due to reasons such as unexpected shipping costs, not being able to find a coupon code, and the non-availability of express shipping.
The shopping cart abandonment rate is when a prospective customer begins a check-out process for an online order but drops out of the process before the transaction is completed.
It can be calculated by dividing the total number of completed transactions by the total number of transactions that were initiated.
It is an important metric of the online shopping process that signals poor user experience or a broken sales funnel. It helps analyze the problem of converting visitors to customers and allows you to focus on improving and optimizing the checkout flow and shopping cart experience.
Reducing the shopping cart abandonment rate is an effective and immediate way to increase sales and revenue.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the total cost of sales and marketing you spent to convert a potential lead into a customer over a specific period. This includes the cost spent on employee salaries, inventory upkeep, Ad campaigns, and other marketing costs.
CAC helps you compare the money you spent to attract customers against the number of customers you gained.
CAC is the most important metric for Amazon sellers that calibrates your investment and determines the profitability of your business.
KPIs help you make the right decisions at the right time and scale your online business in the right direction. KPIs regularly help you glean useful insights from your data and improvise your business strategies.
Choose essential KPIs that make it easier to analyze your Amazon store’s progress and monitor them closely to ensure success.
If you need any professional help with regard to Amazon store management, do get in touch with us.
BIE is a Vancouver, British Columbia-based agency providing human resources to manage all things Amazon.