The E-commerce Leader

[00:00:00] Kyle: you should have a couple of big metrics, whether that’s your ranking, what you’re doing and to get into the weeds are helpful when you want to solve a specific problem.
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[00:01:00] Jason: Today’s hot take episode is about key metrics for Amazon sellers. And we have got some fantastic insights, tips and suggestions from Michael VZ, Chris green, Kyle hammer, and I’m going to serve as the host in this conversation. Gentlemen, how are we today? And are you ready to dive into key Amazon metrics?
[00:01:20] All right. I’m going to go around the horn here, guys. I want your hot takes or just do one at. What is the key marketing metric from your point of view or key metric for Amazon selling.
[00:01:29] And I’m going to pick on Mr. Kyle hammer first, Kyle, give us one and then, we’ll then we’ll go around the horn and you did give us another one. If we have
[00:01:38] Kyle: time. Yeah, I’m going to do a call back to, one of our prior shows where we talked about a conversion rate and probably one of my favorites is unit session percentage rate in seller central.
[00:01:52] And that is essentially the conversion rate. Of your listing. And I think it matters because obviously you can put a ton of eyeballs and traffic onto a product listing page. But if nobody’s buying it, you have a serious problem. And the nice thing about it is a couple of few little tweaks, which you can split test fairly effectively on Amazon, can mean you can use the same amount of traffic to generate.
[00:02:15] A lot more sales by just moving that number by percentage points. I really focusing on that one.
[00:02:22] Jason: Okay. Give us the name of it again. And, and a little more info about the specific,
[00:02:26] Kyle: It is the unit session percentage rate. And it’s underneath your business reports in seller central and essentially it’s tracking, how it’s calculated is it’s dividing the number of units ordered by the total number of sessions or visitors to a product.
[00:02:42] And it’s that little metric that you want to pay attention to because it, it can, it, we talked about, big doors swing on little hinges before, and that is one of those little hinges, I think, as an Amazon seller, you want to be.
[00:02:54] Jason: Because it transcends the both paid and organic traffic. It doesn’t it’s agnostic in terms of paid or, organic traffic or whatever.
[00:03:03] Yeah. Okay. Yep. Love that, man. Love that. Okay. Let’s keep going around the table. Michael, you want to go next?
[00:03:09] Michael: Sure. Cause stole my thunder in that my favorite metric, if I had to pick one on Amazon would be unit session, percentage, very related to that. W we’re going to restrict us just one metric, interest in the difference between advertising percentage compared to your gross margin percentage.
[00:03:23] So for example, if you sell a product for $20 and you have, after all your costs, $8 in it, it’s a 40% margin. If you then spend 40% of your. Your revenue on ads, you’ve made no money. And if you spent more, you’re going to make a loss. So the difference between the advertising spend on a product line for a particular period divided by the sales of that product for that same period is.
[00:03:45] So that’s the advertising to sales ratio. The difference between that percentage annual gross margin is really critical because ad spend keeps going up and up as a percentage of your costs on Amazon. So you’ve got to keep a tight eye on that difference between those two numbers.
[00:03:58] Jason: Oh, okay.
[00:03:59] All right. You got it, man. You guys are in the deep end of the swimming pool. So fast on this. I’m like, okay, Chris, what do you got, man? What’s your magic. We’re covered back to bring us back to the kiddie pool, buddy. That is the shallow end,
[00:04:12] Chris: Those pools that have. It just slopes straight in, right?
[00:04:15] There’s all the way to zero kind
[00:04:18] Kyle: of thing. That’s a mug. That’s a mud puddle.
[00:04:21] Jason: No, we’re not playing in the
[00:04:22] Chris: bud. Come on. It’s like a fancy pool. You gotta be careful when you get in and it can be slippery. I’m a gold a little way back because when I was a bigger seller on Amazon, a lot of these metrics didn’t exist and a lot of these, ways to advertise and promote your products.
[00:04:33] It didn’t. And I’ll throw something out there just for the people for throwback. If you know what the Friday sale is, then you know, how far back we’re going, with Amazon and promotions and metrics and things that you can track and all this stuff, that was never my game. That was never my specialty.
[00:04:45] I leave that to the number crunchers, even if people that really enjoy looking into those, those metrics. But I throw out a different metric, especially as someone. Heavy into KDP and anything print on demand. You could throw much by Amazon and this as well. I want to see the search results ranking, right?
[00:04:59] If I’m number one for Mikey. That’s what I like. If I’m not number one, I’m like for Pete’s sake, why am I not number one? Because if I’m going to make a product, especially write a book about a certain subject, I expect to be number one, cause I’m going to make it the best of it and try to make it competitively priced.
[00:05:14] I’m gonna do everything I can to make sure that I am the number one actual result. And I don’t want to manipulate that. I don’t want to like, keyword spam and what were those links that they call where they put keywords in the link and then they would send it out and stuff like that.
[00:05:27] I want to be the number one result, because if you’re the number one result, that means that Amazon’s algorithm is saying to the customer who searches for the search term. This is the number one result. And that means their algorithm says, yes, the reviews mean that this is the number one result. The low return rate on this product means the number one result the, and I don’t know the exact, whatever the phrase would be for this, but the number of people who click on this page basis, the second thing that Kyle was talking about, number of people, click on this item and actually buy at that percentage level.
[00:05:55] Then these other products for this keyword. So this is the number one product. And as a marketing guy, I love it because then I can say, Hey guys, guess who’s number one, result for this keyword. And you can’t fake that. You can go in and actually check it. So I know you guys are going in seller central and deep in the weeds of some of these metrics, but I like this fully perfect, visible metric that anybody can put in.
[00:06:17] You can check it right now, go for it for entrepreneur and see if the number one reason. And again, it’s got two thumbs. It’s this guy right here. No sponsor, no ads. Number one, resolve the books we’ve been out for a month, right? That’s some social proof. And I can use that as a social media marketing.
[00:06:31] And the only way you can get that is to earn it right. You can’t buy that. You can’t buy your way through them. You might be able to buy your way. Do some tricks and get there for one month or one day or one week or something, but to be a longterm number one, result for a keyword, you gotta earn that.
[00:06:46] And I like to do things that earn that, like quality and low return rate, trusted reviews and, sales, rank spiking, and all this stuff. That’s the fun part for me. So I know it’s a little different than your typical metrics, but that’s a, that’s something I like to check in and
[00:07:01] Jason: confirm that I’m in there.
[00:07:02] Yeah. Yeah. Love it. Okay, great. I don’t have any wisdom to add to the conversation your guys, except I, do promote my books on the old Amazon. And, I do use, advertising dot, amazon.com. I always just call AMS. Thing I was looking at there is the RO has, I don’t know, is that not a top thing?
[00:07:18] Is that the right phrase? And always try to figure out are my book ads making, an appropriate, Outcome and a, am I making money losing money? What’s the deal. And with books, of course, you’ve got your, you got to figure out your margin on the book. So you can figure that out.
[00:07:31] But that’s the one I always just look at as I’m running my, my book promotional campaigns. And then of course with books, it’s so simple. It’s just look at the BSR and my number one, or am I number 742 in a category? If you’re on the bestsellers list of a hundred books or, visit.
[00:07:45] In any sub category. You can just look and I know I was keep track of that. And. That’s th those are the two that I go to, okay. Kyle, keep going on the deeper into the swimming pool, though, if you
[00:07:57] Kyle: haven’t already, let me sort of circle back to Chris’s point about product ranking that I think is probably the most important metric.
[00:08:05] If you’re going to track any of them, where do your products actually rank? Right up there with what you’re pointing out, Jason, which is, your. Metrics, what are your per unit numbers and understanding those numbers before you turn on any advertising, like how much money you’re actually going to be making.
[00:08:23] And then I would say moving into, or to your role. Last question. That’s a great, that’s actually fairly newer for Amazon, but Facebook and Google have been using row ads, which is return on ad spend, as a metric for a long time. And. It’s in order to, be in line with the bigger advertisers of the world.
[00:08:39] Amazon moved from its classical, achos or a costs, metric that they use, which was a percentage of spend, over sales that the sales for that particular campaign. And so knowing that number is important, but it all comes down to really understanding. What is how much margin do you have in your product to spend on advertising?
[00:08:59] And is that advertising actually driving your organic ranking, or impacting your organic ranking so that you do show up on page one, you show up towards the top of page one, because that’s the name of the game. Ultimately, I think on Amazon,
[00:09:12] Jason: Yeah, I love it. Okay guys, keep going. Michael, any other thoughts? Second metric you wanna mention or something? Yeah,
[00:09:19] Michael: not really, but just tiny up. The deeper end of the swimming pool is a, it’s interesting that we just a couple of slightly broader reflection first. Matt marketing.
[00:09:27] Obviously important cause it’s a driver of revenue, which is the kind of top of the business funnel, if you like. So being able to say you’re number one for something is something I under rate the importance of, I think. And to your point, Chris, I literally just had a look and entrepreneur is sitting right up there and also 10 times the price of the nearest competitor.
[00:09:43] So that’s already great social proof. The backend is important. I’m with Kyla. I like, I guess I like the deep end of the swim pool to use your metaphor. I would say. Any metrics that account for, the difference between your profit margin before ads and the profit margin after the ads are really important.
[00:10:02] They have to account also. And this is the tricky bit for the fact that if you make an ad driven sale on Amazon, probably two in Google, but explicitly, definitely two on Amazon, it will drive your organic ranking. So you have to somehow account for that. And there are different ways of doing it. For me, the advertising to sales ratio is not a perfect way of doing it, but if you take, if you spend, a hundred bucks on ads for a product and you get a thousand dollars in sales for that product in say a month, then your advertising sales ratio is 10.
[00:10:28] That doesn’t tell you everything you need to know, but at least keeping an eye on that number does two things. Number one, is it overall working? And number two, is it, am I making a margin on it? So those kinds of metrics are fiddly, but because they impact your profits so very directly, I think they’re just really important to fiddle around with, until you’ve got a handle on them.
[00:10:46] If in my opinion, if you’re that kind of person to Chris’s point, you may not be any might want to hire somebody to do that instead.
[00:10:52] Jason: Free for all guys. Any other thoughts? Ideas, ricochet action. Yeah. I want
[00:10:56] Chris: there’s something out about Keepa, which if you’re not familiar with keep it to keep it.com. And to watch a video to figure it out.
[00:11:02] There’s so much data and keep up, but something they’ve added, I think fairly recently, it wasn’t, there always was the number of reviews and I’m starting to see this. It’s typically a very straight line of review, especially for popular selling products. The more they sell the number of reviews go up and you really don’t want them to spike all of a sudden you’re like, whoa, what does that is that suspicious?
[00:11:20] But having a large number of reviews, especially positive four and five star reviews, again, like I say, for social proof, for the customer to be. This has a lot of reviews. Like a lot of customers look at reviews before they make a purchase and you can only earn good reviews. There’s people who try to fake it and do all this stuff.
[00:11:35] And Amazon is pretty good at sniffing that stuff out. Reviews of something that’s easy. It’s like external, anybody can look at it for your competitor’s products or for your products. And then again, useful for social proof. But Jason, what you were talking about with the book stuff, I think for anybody that’s they don’t want to go in the deep end in the weeds and all this stuff.
[00:11:50] If they can run some ads where they’re not losing money, they’re breaking. Like that’s like the magic, like golden path kind of thing. Cause if you’re there now you can start tweaking things here. What if I change this right now? I can change something without the risk of losing. Because I know the risk of losing money for a lot of people’s I can’t, I’m not even looking at it.
[00:12:07] If there’s a possibility that it was money. But if you can get the word there’s one, let’s try this, let’s try this. And then you’re going to find that golden for Pete six. Now we’re just printing money. We spent a thousand, we get 3000 back. That’s where people want to get. And that’s an easy thing
[00:12:19] Jason: to track and look at.
[00:12:20] And for authors, it’s so fun because you’ve got so many tools in your toolbox. You spend a little money on AMS. See what happens. And then you can change the cover. You can change the description. You can run one of the countdown timer deals, or, the free three-day promo deals for the book.
[00:12:37] And then see what happens on the bounce. If there is one afterwards, and all of those things in combination, give you three terrific. Three or four. Things to play around with to try to continuously optimize the other thing that I would just say that I’m neglect and I want to do better at is continuously updating myself, published books with interior link.
[00:12:59] And referral to not only my own the books, which I’m not good at doing, but it’s duh, but to, to affiliate offers and loose of, resources and that kind of thing, self publishing, you can make a lot of money just on that simple backend strategy. And your books and that gives you more marketing muscle to, to push them in the top of funnel.
[00:13:21] And so to your point, Chris, even if you know your numbers and you lose money on the front end sale on AMS, if you know the backend numbers. Associated with your book, then it’s not losing money. You’re just, you’re losing money in that first step, but on the second step you’re breakeven and et cetera, et cetera.
[00:13:37] That’s fun stuff to play around with as you start to nerd out over these things, and when you get a catalog of 3, 4, 5 books, it starts to become obvious. There are a lot of ways for them to gather that, just take time and energy and thought. And of course, the discipline to execute on those ideas.
[00:13:54] Yeah.
[00:13:55] Chris: Other thoughts, you know what I think we need Jason, you know what we need, if people can get to that place with the ads. Then what, if we could give them here’s 10 things to try. Once you break, even on your ads, right? Yeah. Try one at a time. That would be an amazing guide and it should be an amazing, offer, Hey, get this guide it, put it in the front page of your book.
[00:14:12] Get this guy to come to this website, come to this funnel, put your email address, and I’ll give you the 10 things that you can test with 24 hour turnaround to see if it works and you can dial it in, if it’s the easiest, small little product funnel out there. Yeah. We’re getting off track though, but that’s what
[00:14:26] Michael: I do.
[00:14:27] Just one thing too, that I thought, just trying to simplify this down to your point, Chris, to two thoughts, number one, know who you are. So if you’re not a profit analytics kind of guy, then don’t pretend you are, and don’t get distracted from what you’re good at. If you’re amazing at marketing, like you are Chris then, but do hire somebody in, cause you might have a ton of tweaks that you could make that would really improve your profit.
[00:14:46] If you bring in somebody with that kind of. The second thing is let’s simplify this down. You’ve either, if you’re not making enough sales, you’ve either got a conversion problem or a traffic problem. If you have a conversion problem, that is if you’ve got a 1% conversion, let’s say a hundred people see your product listing and only one person buys then throwing traffic at that is going to be very impoverishing and also won’t work very well.
[00:15:05] So I think to Kyle’s point of the conversion to remote being really important, the first thing is to make sure the conversion rate is at, in levels such that you can afford to run traffic to it. And then once you’ve got that conversion rate sorted, Low traffic issue, then advertising can be a very effective solution.
[00:15:20] So it’s a question of knowing what the problem is before you pick up the tool to solve it.
[00:15:25] Jason: Yeah, love it. Okay. Final thought before we wrap it, final
[00:15:29] Kyle: thought there’s two more metrics that I think are useful for a physical product seller at VA seller and Amazon. One is the order defect rate. You usually only are paying attention to this metric list, but when there’s a problem, but having it monitored at some level to look for spikes in stuff, is helpful.
[00:15:49] It’ll help you curtail some issues. An example of this was one time. A manufacturer of our swapped out one of the eight, we have a cell, a journal, an art journal, and they swapped out the paper, but they didn’t tell us. So we say, Hey, this is normal paper. They substitute with an alternate one cause they couldn’t get the normal paper that they could and they wanted to hit their deadline.
[00:16:09] And so they swapped it out. Guess what? Our customers were pretty quick to point out the fact that something had changed. Influx of returns and people saying, Hey, this isn’t what we ordered. And you see these, all the spike in a defect rate. Cause that’s what people are marking it when they send it back to Amazon and we’re like, what’s going on?
[00:16:27] And finally we tested it. And then, so we implemented as a response to that was when they do the quality control check. Now they actually use a caliper to measure the thickness of the paper and that’s in the report that we actually have run. Like those little. Or the defect rate can help guide you and give you some insight into that.
[00:16:47] The other metric that I think is more and more important is the inventory, in your index story or, inventory performance index score. That is, index, from zero to 1000. Basically the Amazon grades, every seller on and. If you drop, then they just changed this. I think it’s five 60, but it might be different than that.
[00:17:07] If it drops below a number Amazon’s limiting the amount of inventory you can actually send into FBA and it’s actually going to become more problematic for you. So making sure that score stays high enough, something to easily have you or a team just to keep an eye on. Because you definitely want to not be on the limited side when it comes to sending an inventory, particularly around Q4, when you’re making your money, it would be really a bad outcome.
[00:17:31] If they’re like, Hey, guess what? You can’t send in as much as you would hope for, even though you ordered it and have it sitting in your warehouse. Too bad. So inventory performance index and that score, and then also your order defect rate, I would be keeping an eye on that, but big picture, just real quick to Chris’s point and what we’ve covered, you should have a couple of big metrics, whether that’s your ranking, what you’re doing and to get into the weeds are helpful when you want to solve a specific problem.
[00:17:58] So you don’t need to be looking at the, in depth, every day going and looking at your seller section percentage or unless you’re trying to solve a conversion problem and not time. And you’re actively looking at it. So my point being have some big key metrics that you do monitor that are those north stars, but then use those in the weeds metrics when you’re trying to solve a specific problem.
[00:18:20] And therefore you can stay pretty lean and fast in making quick. Oh, I love
[00:18:24] Jason: it, man. Okay guys. Wonderful conversation today. Appreciate your support on this. I know all of our community members who are hardcore, Amazon sellers appreciate this kind of content a lot. And so with that, I’ll wrap it here. I would just point out.
[00:18:41] Mr. Chris green does have, is challenged for entrepreneur going right now. The book and the book is still available, even though the challenge is closed. Give us a quick update, Chris, is that right? So go get that book on him. Any other plug you want to mention?
[00:18:56] Chris: Entrepreneur.com is always going to have all the latest updates and information, and the book is number one result on Amazon.
[00:19:03] And I’ll definitely run another challenge, but we’re in the middle of a challenge now. And yeah, once challenge starts, you can’t join. I actually stick to that. It’s not a marketing gig or anything like that. Get in before it starts or else you can’t get in. So you can join the waitlist entrepreneur.com/challenge has a waitlist.
[00:19:17] I’ll run it again.
[00:19:18] Jason: Awesome. Okay guys. Good times. Good times. I’m going to end it here. My dog wants to go outside. I can tell. So it’s time to end the podcast. Thanks everyone.
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