Key Performance Indicators (KPIs)

KPIs are metrics that measure the activities and achievements of a business. These performance indicators allow processes and actions to be continuously and consistently adjusted and optimized.

In the dynamic world of e-commerce, Amazon is an important player as the largest global platform that cannot be ignored. Whether it’s selling individual items or operating a comprehensive online business, success on this platform depends on a variety of factors. One method for measuring and optimizing this success is the use of Key Performance Indicators (KPIs). In this blog post, we will explore the key KPIs for Amazon sellers and explain how they can contribute to improving business results.

What are KPIs and why are they important?

Key Performance Indicators, or KPIs, are performance metrics that serve to measure the effectiveness of an organization or a specific activity. KPIs can help Amazon sellers measure their success and identify areas where improvements are possible and necessary.

The 7 key KPIs for Amazon sellers

Best Seller Rank (BSR): BSR indicates how well a product is selling compared to others in its category. A low BSR indicates that a product is selling well.

  • Every product on Amazon has a BSR, which can be found on the product page under the product information. For example, a product listed as #1 in the “Electronics” category has the best sales rank and is the top-selling product in that category.

Conversion Rate: This is the ratio between visitors who click on your product page and those who actually make a purchase. A high conversion rate indicates that your product meets the needs and preferences of your customers.

  • The conversion rate can be calculated by dividing the number of sales by the number of visits (sessions). You can find this data in Amazon Seller Central under “Reports” > “Business Reports”. For example, if you have 100 sales from 1,000 visits, your conversion rate is 10%.

Customer Satisfaction: The success of Amazon heavily relies on positive customer reviews. Positive reviews increase potential customers’ trust in your brand and product.

  • The simplest way to measure customer satisfaction is to look at the average rating and the number of reviews found on your product pages. You can also check customer feedback in Seller Central under “Performance” > “Feedback”.

Inventory Turnover: This indicator indicates how frequently you have sold and replaced your inventory within a specific period. A high inventory turnover can indicate strong sales performance.

  • To calculate inventory turnover, divide the cost of goods sold (COGS) by the average inventory. The necessary information can be found in your Seller Central account under “Reports” > “Fulfillment by Amazon”. A higher value indicates efficient use of your inventory.

Return Rate: A high return rate may indicate quality issues with your product and can negatively affect your ranking and customer feedback.

  • The return rate is calculated by dividing the number of returns by the number of items sold. This information can be found in your Seller Central account under “Reports” > “Returns”. A high return rate may indicate potential problems with your product.

Advertising Cost of Sale (ACoS): ACoS refers to the ratio between advertising expenses and the resulting sales. A low ACoS indicates an effective advertising strategy.

  • To calculate your ACoS, divide the advertising expenses by the sales from advertising. This data can be found in your Amazon Advertising account. For example, if you spent €100 on advertising and generated €400 in sales, your ACoS is 25%.

Session Percentage: The percentage of Amazon customers visiting your product page is referred to as session percentage. A high session percentage can indicate good visibility and presentation of the product.

  • This indicator indicates the proportion of Amazon users who have visited your product page. You can find this information in Seller Central under “Reports” > “Business Reports”.

You can use specialized software like Jungle Scout, Helium 10, or SellerApp to continuously monitor these KPIs. These tools can help you track and analyze your KPIs. Additionally, Amazon’s own Seller Central platform provides a variety of reports and analytics that can help merchants better understand and manage their performance.

Your success as an Amazon seller depends on monitoring and optimizing your KPIs. Many factors can influence how well your business performs, so it’s important to constantly monitor these aspects. Be aware that changes do not happen overnight.

Wondering how to improve your KPIs on Amazon? Let’s create a plan together! Our team of experts is ready to support you and boost your Amazon sales. Don’t hesitate and contact us today.