What Are Amazon KPIs and Why Are They Useful?<\/h2>\n\n\n\n
KPIs can be used to measure the extent to which important objectives have been implemented or to what degree they have been achieved. In the manufacturing industry, for example, an important KPI can be the average utilization of a machine compared to the maximum possible utilization. <\/p>\n\n\n\n
However, the concept has also become widespread in the digital industry. As an example, the conversion rate is a vital KPI and applicable to businesses of all sizes – whether it’s your online store or Amazon. For advertisers, in turn, KPIs relate to the impressions of an ad and its click-through rate. B2B websites, on the other hand, often measure their success on the basis of leads. <\/p>\n\n\n\n
On Amazon, key performance indicators help you keep an eye on critical success factors. Only those who measure their success or failure know where things are going wrong and what is already going well. Then it is also possible to optimize with sense and understanding.<\/p>\n\n\n
![\"The](\"https:\/\/d2bw95mh2ee04s.cloudfront.net\/prod\/content\/wp-content\/uploads\/2021\/09\/23141055\/amazon-seller-metrics.jpg\")
<\/figure><\/div>\n\n\nWhat KPIs Does Amazon Use?<\/h2>\n\n\n\n
Unlike sellers who have their own online store, marketplace sellers face special challenges. This is because Amazon KPIs of relevance are often specified by the online giant itself. If you don’t pay attention to these key performance indicators of Amazon, you have no chance of ranking high with your products or winning the Buy Box<\/a>. And those who fail to do so will hardly sell any products.\u00a0<\/p>\n\n\n\n To make matters worse, many of the usual Amazon KPIs, such as impressions or the rate of clicks, can only be measured approximately by the marketplace seller, or cannot be measured at all. The best chance to influence click-through rate, conversion rate, and sales is for sellers to know the Amazon KPI metrics<\/a> and optimize their business accordingly.<\/p>\n\n\n\n But there is another important reason why relevant Amazon KPIs should definitely be monitored: Amazon does it, too. If sellers disregard the performance metrics, they run the risk of not being able to meet the required standards. As soon as this happens, Amazon knows about it – and it can have an impact on more than just Buy Box rankings or profits. Anyone who has ever had to develop an action plan understands that this is a useless endeavor that only wastes time and money. In the worst case, the e-commerce giant will even block the entire seller account. For entrepreneurs whose core business is Amazon, that would be a disaster. <\/p>\n\n\n\n There is a lot that speaks for monitoring all key performance indicators. If an Amazon KPI threatens to slip into a critical range, countermeasures can be taken at an early stage and the account block can be avoided.<\/p>\n\n\n Have you ever asked yourself: \u201cHow does amazon measure success\u201d? By now, every marketplace seller should have realized that the shipping method and shipping time play an important role. Amazon prefers it when sellers ship via its in-house “Fulfillment by Amazon” (FBA) program. On the one hand, this flushes more revenue into the platform provider’s coffers, and on the other, it guarantees fast and uncomplicated delivery, which ensures customer satisfaction. But the Prime by Sellers or Fulfillment by Merchant shipping methods also meet the standards.<\/p>\n\n\n\n Equally important as Amazon key performance indicators<\/a>, however, is the general seller performance. This consists of different indicators:\u00a0<\/p>\n\n\n\n Professional merchants don’t just list their products on Amazon, monitor key KPI metrics, and call it a day. There is more to it than that. Private Label sellers in particular also have to deal with the issue of advertising. When it comes to Amazon Marketing KPIs however, the same performance metrics apply to the logistics giant that are used in conventional marketing.<\/p>\n\n\n\n An equally important Amazon KPI<\/a> is therefore the ACoS, short for “Advertising Cost of Sale”<\/a>. This indicator puts the costs of advertising campaigns in relation to the sales generated by this advertising: ACoS = advertising costs\/sales.\u00a0<\/p>\n\n\n\n With a turnover of 50,000 euros and advertising expenditure of 3,000 euros, the ACoS would therefore be 6%. However, the maximum ACoS varies from product to product. For this purpose, all additional costs incurred by the retailer must be deducted from the sales price, e.g. manufacturing costs, sales tax, or overheads. If, for example, the retailer makes a profit of 15 percent of the selling price on a coffee machine, the ACoS must not exceed 15 percent. Otherwise, it would be a loss-making business.<\/p>\n\n\n\n However, how high or low the ACoS is as an Amazon KPI is determined by a variety of other factors that must be considered individually, such as the PPC campaign’s goal<\/a>, the margin, and the competitive pressure within the product line. Unlike Google Ads, Amazon Ads do not only pay out when a product sells, but they also have an impact on organic visibility.<\/p>\n\n\n\nPenalty for Non-Compliance <\/h3>\n\n\n\n
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<\/figure><\/div>\n\n\nImportant KPIs: Amazon Seller Performance Metrics<\/h3>\n\n\n\n
KPI Amazon<\/strong><\/td> Description<\/strong><\/td> Maximum value \/ Ideal value<\/strong><\/td><\/tr> Rate of order defects<\/td> Negative rating, service-related credit card chargeback, A-to-Z guarantee<\/a> application.<\/td> below 1%, preferably 0%<\/td><\/tr> Cancellation rate<\/td> Cancellations of the seller before order processing<\/td> below 2.5%, preferably 0%<\/td><\/tr> Rate of validity of tracking numbers<\/td> Tracking numbers that are valid<\/td> min. 95%, preferably 100%<\/td><\/tr> Rate of delayed deliveries<\/td> delayed delivery = shipping confirmation after the expiry of the expected shipping date<\/td> below 4%, preferably 0%<\/td><\/tr> Dissatisfaction with returns<\/td> Return request with negative customer review, return queries not answered within 48h, return queries incorrectly rejected<\/td> below 10%, if possible 0%<\/td><\/tr> Seller ratings<\/td> Average rating of the seller and number of reviews<\/td> as positive as possible, as high as possible<\/td><\/tr> Response time<\/td> The average time is taken to respond to customer queries over the last 90 days<\/td> under 24h, if possible under 12h<\/td><\/tr> Stock<\/td> Out of stock, delivery problems<\/td> as seldom as possible<\/td><\/tr> Dissatisfaction with customer service<\/td> negative rating of a customer from a reply in the buyer-seller mailbox<\/td> as low as possible<\/td><\/tr> Reimbursement rate<\/td> The ratio of refunds of the last 30 days to the total number of orders<\/td> as low as possible<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Other Relevant KPIs for Amazon<\/h3>\n\n\n\n