Top 5 KPI's for Brands on Amazon
What Metrics Can be Used to Evaluate the Health of a Product Listing?
E-commerce managers managing large product catalogs on Amazon have the Herculean task of tracking 100s to 1000s of product listings and struggle with how to measure the success of a product listing. Aside from sales data, what is the best way to determine if a product listing is perming well and identify areas for improvement?
Top 5 KPI's for Amazon Product Listings
Based on our research, we recommend measuring and tracking certain product listing elements to determine if a product listing is healthy. Use the following product listing KPI's to measure the health of products on Amazon and determine next steps to increase visibility and boost sales:
- the current number of reviews
- star rating
- Buy Box ownership
- search rank
Customer Reviews & Star Rating
Verified customer reviews are one of the top indicators of a successful product. Amazon suggests that you have at least 15 product reviews and a star rating of at least 3.5 stars before your product listing is considered retail ready, as these are top features in a product listing driving sales. Consumers trust verified reviews which drives more sales which drive more reviews which boosts organic search which drives more sales.
This cycle demonstrates the importance of increasing the number of reviews behind a product listing. If the number of ratings and reviews is not increasing, you may see your organic search performance decrease and sales slow. Set goals to increase your number of verified reviews and star rating and, with some creative campaigns, watch your ratings and reviews grow.
Buy Box Ownership
Ideally, Amazon will own the Buy Box 100% of the time on your product listings, ensuring that the sales do not go to a 3p seller or a competitor's listing. Ensure that Buy Box volatility is low by not allowing your product to have a low inventory or to go out of stock. Monitor 3p sellers to ensure they aren't setting the price too low and violating MAP on your listings. A low rate of Buy Box ownership is an indicator that you have inventory or MAP issues with your product listing.
Organic Search Rank
While it has been said that the digital shelf is endless, the reality is that it is finite. 70% of shoppers do not click past the first page of search results which means it imperative to get product listings on the first page and ideally, within the first three items displayed. Use search rank as a key performance indicator of your product listing. Increase the number of search terms that you are ranking for by improving content and copy on your product listings.
ACOS & TACOS
Total ad spend/ total ad sales x 100= ACoS
ACoS (Ad Cost Of Sale) is a useful KPI for brands running sponsored ads on Amazon as it measures your ad spend in relation to generated revenue. The average ACoS is around 30% but you should aim lower - the lower the ACoS the higher the profitability.
Total ad spend/total sales revenue x 100 = TACoS
While ACoS is a useful metric regarding your Amazon Advertising ad spend, TACoS (Total Ad Cost Of Sale) provides a more complete metric to measure the success of your Amazon Advertising plus organic search rank. TACoS is a similar calculation to ACoS, but it takes into account your overall revenue rather than revenue generated solely from ads. It’s a way of measuring the "halo effect" that advertising can have on your business, with sponsored content turning into organic sales.
Reviewbox customers have an edge on other brands with our Brand Report Card. Contact firstname.lastname@example.org to find out how to get started tracking the health of your product listings.