Running a successful E-commerce business requires you to have a firm hold on your metrics, especially when you are selling on Amazon. Keeping their customer-centric approach, Amazon uses specific performance metrics to evaluate the best sellers for their buy box position and as an eligibility criterion for their gated category of products.
What are these metrics that you should keep a tab on? What are the industry benchmarks? How often should you review these metrics? We have answers to all these questions and more in today’s blog.
Read on and start measuring what matters!
1. Unit Session Percentage (Conversion) Rate
It is just a fancy way to describe the conversion rate on Amazon. The higher conversion rate simply means that people are showing interest in your product and are buying. Having a higher conversion rating means a higher product ranking and better sales.
If your conversion rate is low, it means that the consumers might be coming to your page but not buying. The reason for this could be that they are able to find a better product at a lower price somewhere else or they aren’t getting all the product information on your page.
Benchmark: The average Unit Session Percentage rate on Amazon is 12.3%
How to Fix: If you are getting a low conversion rate, you need to start working towards driving more leads. Make sure you are offering competitive pricing and have optimised your product listing page to provide all the information customers might be looking for
2. Order Defect Rate (ODR)
Amazon considers the order defective if your customer has a bad buying experience. Order defect rate is calculated based on how many people have
- Made an A-to-z Guarantee claim
- Made a credit card chargeback
- Given a negative review (less than 2 stars)
Benchmark: Below 1%
How to Fix: Provide quality products and excellent customer service to avoid negative reviews. If you have received any negative reviews try to resolve the customer issues as soon as possible and request them to remove the negative review. Order Defect rate does not consider the negative review if the customer removes it, thereby helping to improve your ODR rate. To prevent A-to-z claims, provide complete and accurate information about the product and ship the product on time.
3. Pre-Fulfillment Cancel Rate
If a customer has placed an order but you end up cancelling it due to whatever reasons, Amazon will consider this as a bad experience for the customer. Thereby negatively impacting your Amazon metrics.
Benchmark: Below 2.5% if you are using Fulfilled by Merchant (FBM) and less than 0.5% if you are using seller fulfilled prime
How to Fix: Make sure that you are managing your inventory properly at all times. Keep the extra stock during the festive season and other promotions when you expect a surge in demand. You can also use inventory management tools like sellbrite, zoho, wrkplan, Tranzact for smooth management.
4. Late Shipment Rate
In today’s world of online shopping and instant delivery, nothing is more frustrating for a consumer than to receive an order later than the expected delivery date. More so when you are selling on Amazon, which has mastered the 2 days shipping concept with Prime delivery.
Amazon considers a shipment late if the seller is delivering the product later than the expected delivery date. Considering how serious timely shipping is for Amazon, they send warning notifications to the seller, if they are consistently delivering the product late.
Benchmark: Below 4% for FBM and less than 1% for Seller Fulfilled Prime
How to Fix: Make sure you have enough inventory and are shipping products on time.
5. Valid Tracking Rate
Valid tracking rate measures the accuracy and speed at which you upload the order tracking number in the system. If you are using Amazon delivery services, keeping this metric under control will not be difficult.
Benchmark: Below 5% for FBM and 1% for Seller Fulfilled Prime
6. Buyer-Seller Contact Response Time
Remember Amazon is always about customers and not sellers. They want their customers to not only receive the best product but also the best service. Amazon wants you to respond to all customer queries and messages within 24 hours of receiving them, even on weekends and holidays.
To help you reply promptly, Amazon sends sellers real-time email notifications when a customer messages the seller.
Benchmark: Within 24 hours of receiving
7. Buy Box percentage
The buy Box section on Amazon is rotated among different sellers and is a major contributor to the sales volume. Buy Box percentage represents how many times your products appear in the Buy Box. If your buy box percentage is below 50%, you need to start working towards improving it. You can check out our guide on winning the Amazon Buy Box here.
Benchmark: Above 50% (differs within categories)
How to Fix: As Amazon Buy Box percentage is dependent on stock pricing and availability, it is important that you offer competitive pricing and have enough inventory at all times
8. Product reviews and seller rating
Amazon takes customer feedback very seriously. It gives preference to sellers with good customer reviews while allocating product ranking and buy box position, directly impacting your sales and bottom line. Hence, you should keep a close eye on this metric. Our blog on ‘Amazon Product Reviews 101 for D2C Brands’ will help you get started with your customer feedback strategy.
Benchmark: 4 stars or above (for seller feedback rating)
How to Fix: Be proactive in resolving customer complaints. Provide quality products and exceptional customer service.
9. Policy Violations
Amazon is very sharp in notifying sellers if they violate any of their policies, be it selling restricted products or providing misinformation and making false claims on product effectiveness. Be sure to check your “Performance notification” regularly to avoid unnecessary trouble. You can find the notifications under the performance section of seller central.
A green tick means you have no notifications pending and a yellow exclamation mark (!) means you have pending notifications to read. However, if you see a big red cross, you need to attend to the notification immediately as it shows that your seller account is under Amazon’s scrutiny and needs immediate attention.
10. Performance of Sponsored Ads
Using Amazon Ads is the best way to drive revenues. Track your PPC (pay per click) metrics to understand the effectiveness of your campaigns and tweak your ad strategy as required.
While there are many campaign-level metrics that you would be tracking, two key metrics that you must know at all times are – your Return on Ad Spend (ROAS) and Advertising Cost of Sales (ACOS). If your ACOS is more than 20% you are spending a lot on your ads and need to rethink your Amazon Ad strategy.
Benchmark: ACOS should be below 20%
How to Fix: Be proactive in adjusting your bid. Make necessary changes in your keywords and Ads description
Amazon Metrics and Benchmark Wrap Up
Can’t remember all of it? Here is a snapshot of the top 10 Amazon Metrics you should track,
Improve Your Business Performance With Velocity Insights
As you cannot interact directly with your customers while selling online on third-party platforms like Amazon, performance metrics are your way of understanding if your customers are happy and satisfied with your offerings. Moreover, with buyers’ behavior constantly changing, continuous monitoring of these metrics and a proactive approach to improving them will help you stay ahead of your competitors.
We understand the frustration D2C business owners go through as they try to juggle between immediate business needs while managing sales on multiple online platforms. So, we launched Velocity Insights – a one-stop solution to track all your metrics from various online platforms, including Amazon. Connect your online selling platforms with Velocity Insights in just a few minutes and get a daily business snapshot delivered on your Whatsapp every morning.
Easily Track All Metrics with Velocity Insights
We understand how frustrating it can be to track each and every number the company achieves, especially when you do not have a robust tool in place. So, we launched Velocity Insights – a one-stop solution to track all your metrics from various online platforms. Connect your online selling platforms with Velocity Insights in just a few minutes and get a daily business snapshot delivered to your Whatsapp every morning. Here is an article on how you can track your business performance metrics using Velocity Insight in real-time.