10 Metrics for Amazon Store Optimization, Don't Ignore!
Most Amazon sellers are very good at selling online and simplifying operations. However, when it comes to improving cash flow, you must focus on the relevant data to help your store grow. These 10 figures alone are not meaningful in themselves, but they can provide a complete financial picture if they are included in the overall business. Monitor each number each month and compare it to the previous month, the same month last year, and your goals or budget to make preliminary forecasts and judgments.
- Sales and Returns
Sales and returns are tracked by main product line or category. Returns should be tracked as a percentage of sales by product line, and should be noticed if the return rate increases. Tracking sales through promotional/marketing channels will help in evaluating advertising and promotions.
- Order Quantity
It is important to track the number of orders by product line and marketing source, as the amount of the order can distort the final results presented. For example: Yesterday’s sales were 300 orders$20=$6000, and today’s sales were 200 orders$30=$6000. Yesterday and today’s total sales are the same, but the details of the sales are completely different, and the profits are completely different.
- Average order value
Once you’ve tracked sales and number of orders, you can calculate your average order value, which is the average amount per sale. Its purpose is to entice customers to buy more items each time.
- Cost of sales
Cost of sales is the cost of the product and other direct costs involved in processing the order, such as head-way shipping, advertising, etc. Track cost of sales as a percentage of overall sales, combined with your overall budget, compare the previous month to the same month last year.
- Gross profit margin
Gross profit is simply sales minus direct costs. Gross margin is calculated by dividing gross profit by sales, telling you how much profit each product generates.
- The number of visits by the passenger flow
Tracking consultant sources and their number of visits can be of great help in marketing planning, evaluating channel performance, and controlling costs.
- Conversion rate
The conversion rate is calculated by dividing the number of monthly orders by the number of monthly visits. If your store has a high volume of visits but very little transaction volume, you need to take a comprehensive look at which link is the problem.
- Marketing costs
Even if you sell the same product to two customers, your net profit for each order may not be the same. Because it depends on how much you spend to attract each customer to your store.
- Indirect costs
Indirect costs, such as wages and rent, are mostly fixed. These fees must be paid regardless of sales volume. However, only if it helps to generate more profit, otherwise, it can be exempted.
- Net profit
Net profit is the sales remaining after you cover all costs and expenses and is the final scorecard for your business. Track net profit and percentage of sales.
The above 10 digital indicators will provide you with a more basic business dimension. With stable and effective tracking, you’ll know where your business is going and where it’s going to optimize operations to increase profits. The above is to share the 10 indicators of Amazon store optimization, hoping to help sellers.