Data Analytics Tools: Does Every Amazon Seller Need Them?
Let us be straightforward. Do you want to be successful on Amazon? If so, you will need data analytics tools. However, let’s see why you need really good data analytics software for your business.
The techniques that successful Amazon sellers who go on to earn six figures or even millions of dollars employ differ significantly from those used by average Amazon sellers.
High-performing sellers use the best tools because they recognize the value of accurate information and how it can help them stand out from the competition.
Sellers who continuously make more intelligent, high-quality business judgments than their rivals will surely experience greater success.
In this article, we will deep dive into the benefits of data analytics tools for Amazon sellers.
Why Do You Need Amazon Data Analytics Tools?
Investing in one of these analytical tools is crucial if your Amazon business sells more than two or three things.
A small number of goods can still be manually analyzed. However, managing the data on your own gets challenging if you sell more than two or three products on Amazon.
Making choices for your Amazon business will be easier and more lucrative in the long run if you use analytics tools.
When you sell on Amazon, it’s critical to keep track of your performance. Your success depends on your ability to interpret your data. You need to be aware of what is lucrative and what is turning out to be a huge drain on your cash, as well as what is working and what is not.
You must take advantage of all accessible data as an eCommerce seller in order to boost your sales. Products and sellers’ rankings, unit session percentage rates, units ordered, order defect rates, inventory performance, fulfillment performance, fees, and invoice defect rates are just a few facts that may be of interest to you.
If you only have a few goods and have plenty of time to explore Seller Central, manually conducting Amazon analytics for your company could be effective. But if you want to scale and expand your Amazon business, you must invest in a strong analytics tool. One limitation is that using only Seller Central’s reporting capabilities may not be sufficient. There are methods to exploit the information that Amazon has about your sales in order to perform far more sophisticated analysis, which may subsequently result in more successful decisions.
Top 3 Benefits of Data Analytics Tools
#1: Plan Inventory
Planning your Amazon inventory involves understanding how much stock to have on hand at all times without incurring costly overstocking costs, as well as how much to ship to a fulfillment center and when to restock. Failure to do this correctly results in stockouts, decreased resupply limitations, tied-up capital, and depleted resources. Your company’s profitability on Amazon may suffer if you can’t deliver merchandise to your FBA center because of low restrictions.
When you don’t get rid of your extra inventory to increase your sell-through rate and create a place for top sellers, your restock limitations may be reduced. An increased sell-through rate signals to Amazon that your inventory management system is effective and that you can swiftly convert your product into cash. Therefore, it makes financial sense to provide you with a greater resupply limit in order to increase Amazon customer satisfaction and keep inventory moving through FBA warehouses rather than leaving it idle.
By giving you a precise picture of what you have on hand, the right analytics software assists you in managing your business successfully. Inventory systems can be created using a manual count and ledger system, a spreadsheet, or an automated digital solution.
#2: Calculate True Profits On Amazon
Any business that sells on Amazon has the potential to be very successful, but if you don’t track Amazon sales and fees carefully and persistently, you could not be aware of your real Amazon profit.
How can you create a real-time profit and loss report? There are several approaches:
- The average profit per unit is multiplied by the number of units sold. This is quick, but extremely inaccurate because of several aspects that you overlook.
- Asking your accountant is generally helpful but slow, and lacks pertinent analyses.
- Using spreadsheet software and Amazon Seller Central Reports is time-consuming and inaccurate.
- A tool that enables precise real-time profit and loss tracking with little effort.
Whatever method you choose, think about all costs you need to take into account in order to calculate your true profit.
The FBA fee is the standard amount that Amazon charges you when you ship products from FBA facilities to consumers. Many sellers are unaware that the FBA charge listed in Seller Central’s “Manage Inventory” option is only an estimate. In reality, you can pay a different sum for each item that is shipped. Additionally, the FBA fees can alter suddenly, for instance, if Amazon staff use
s bigger packaging to ship your goods.
Because they are dependent on the typical amount of the items you keep, Amazon storage fees are difficult to predict or even estimate. Naturally, since this volume changes over time, your storage fees will increase or decrease.
Returns are unavoidable in the selling industry. A return with Amazon FBA does not result in the cancellation of a sale when you are back at the beginning. On the other hand, a return is a complicated computation that, most of the time, results in a loss.
When a consumer returns an item to Amazon, they are given their entire product cost back right away. You must now record this sum as a loss with the current date (which cancels the profit previously made). Due to Amazon’s added refund cost and refusal to pay back the FBA fee it assessed during order processing, you really lose out. If the item turns out to be a dud, your loss might increase significantly.
Beware of FBA Errors
Amazon’s warehouses occasionally make mistakes, which might end up costing you money. If you catch a mistake in time, you can ask Seller support to check it again and fix it if it hasn’t already been done. You may either stop losses from happening or get your money back with this method.
To make your life easier, use the Lost & Found tool by Sellerlogic which automatically analyzes all FBA transactions and shows hidden reimbursement claims without exception.
Find out more about Amazon refunds here.
#3: Make Decisions Faster and More Efficiently
With the right data analytics tools, you can generate better insights if you want to look for new business opportunities.
Why? Because such a tool or software allows you to combine data from multiple sources to get a clear view of each product and product category.
Moreover, increased efficiency is the result of a better understanding of the current situation and ongoing business. Get all necessary information in one place and see changes fast and react to them.
Amazon is an extremely competitive platform. You must make use of the top tools offered to Amazon sellers if you want to have an advantage over your rivals. Monitor your performance and that of your competitors with the aid of Amazon business intelligence analytics tools.
Efficient data analytics tools will help you reduce costs by using one software instead of hiring specialists. Sounds cool, doesn’t it?
Frequently Asked Questions
Without market analytics, you cannot accurately assess how you are performing in comparison to the market at large.
Compare the main features, and decide what exactly you need and which benefits you can get. Check out the pricing options and if there’s a free trial.
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