18 Amazon KPIs Every Seller Should Track + How To Get Started

As an Amazon seller, data is one of your most valuable assets. It enables informed decision-making, helping you fine-tune strategies and strengthen your position in the marketplace. At the core of this data-driven approach are key performance indicators (KPIs), which provide measurable insights into various aspects of your business performance.

This article explores the most important Amazon KPIs, from Buy Box ownership to sales velocity, and explains how to track them effectively. Analyzing these metrics uncovers opportunities to streamline processes, increase profits, and reach your business goals.

Main Takeaways From This Article:

• Understanding and tracking KPIs is essential for making data-driven decisions that enhance your Amazon business performance.
• Focusing on critical KPIs like Buy Box ownership, sales velocity, and customer satisfaction helps improve profitability and market competitiveness.
• Employing best practices in KPI monitoring, such as using reliable data sources and prioritizing actionable metrics, leads to more effective results.
• Continuous education and adaptation to market changes ensure your KPI strategies remain effective and responsive to consumer needs.

What Are Amazon Key Performance Indicators (KPIs)?

Amazon KPIs are quantifiable measures that sellers use to track and evaluate the success of their selling activities on Amazon. These indicators act as benchmarks against which sellers can assess their performance, marketing strategies, customer satisfaction levels, and profitability. 

Importance of Tracking Amazon KPIs for Amazon Sellers

Here are the top five reasons for every seller to track Amazon KPIs:

1. Track Progress Over Time: KPIs provide a historical perspective, enabling you to monitor trends in your sales, customer behavior, and operational efficiency.
2. Identify Performance Gaps: Analyzing KPIs can pinpoint areas where your performance is lagging, allowing you to adjust pricing, improve advertising campaigns, and optimize fulfillment processes.
3. Uncover Growth Opportunities: KPIs can highlight untapped potential, such as high conversion rates indicating a need to expand your product offerings or low click-through rates suggesting improvements to product listings.
4. Benchmark Against Competitors: Tracking industry benchmarks for key KPIs helps you evaluate your performance relative to competitors and identify areas where you can catch up or stand out.
5. Make Data-Driven Decisions: Using KPI analysis to inform your decisions enables you to optimize operations, control costs, and boost overall profitability.

18 Critical Amazon KPIs to Track

Here are 18 key Amazon KPIs every seller should track to gain valuable insights into their business performance.

1. Sales Velocity

This metric measures the rate at which your inventory is selling. It's calculated by dividing the total units sold by the average inventory level over a specific period. A high sales velocity indicates efficient inventory management and strong product demand.

2. Order Defect Rate (ODR)

The ODR is a critical aspect of your Amazon marketplace health. This KPI reflects the percentage of orders that contain errors, such as cancellations, late deliveries, or wrong items. You will want to keep your ODR low to help maintain customer trust.

3. Conversion Rate

This KPI calculates the percentage of people who click on your listings, make a purchase, and convert into customers. The higher your conversion rate, the more effective your ads, content, and listings are. 

4. Cost Per Acquisition (CPA)

This metric evaluates the average expenditure associated with acquiring a new customer via advertising campaigns. By tracking CPA, you can understand the efficiency of your advertising efforts and optimize your budget allocation.

5. Total Advertising Cost of Sales (TACoS)

The total advertising costs are expressed as a percentage of your total ad sales. This ratio, or TACoS, helps Amazon sellers assess whether they are spending the right amount on advertising to generate the best possible returns. A low TACoS indicates a healthy balance between advertising spend and revenue generation.

6. Click-Through Rate (CTR)

The percentage of potential customers who click through your ads, based on their impression of the copy and the ad placement's targeting, is the CTR rate. A high CTR indicates that your ads are highly effective.

7. Return on Ad Spend (ROAS)

This metric measures the revenue generated from your advertising campaigns for every dollar spent. A high ROAS indicates a profitable advertising strategy.

8. Average Order Value (AOV)

This metric measures the average amount spent per order. Increasing AOV can improve your profitability, which requires analyzing your product mix and promotions and offering bundled deals and discounts.

9. Buy Box Ownership

Winning the Buy Box is crucial for increasing sales as it positions your product as the default seller for a specific listing. Track your Buy Box win rate to assess your pricing competitiveness and optimize your listing content.

10. Perfect Order Percentage

This metric measures the percentage of orders fulfilled flawlessly, with no errors or issues. This includes accurate and timely delivery, correct items, and no damage. A high perfect order percentage is crucial for building customer trust and reducing negative feedback.

11. Pricing Competitiveness

This metric assesses how your product prices compare to those of your competitors. Competitive pricing is essential for winning the Buy Box and attracting customers. Track your prices relative to competitors and adjust accordingly to maintain a competitive edge.

12. Customer Satisfaction and Reviews

Monitoring customer reviews and feedback closely can indicate the level of customer satisfaction. Positive reviews foster trust and draw in new customers while promptly and professionally addressing negative feedback showcases your dedication to customer satisfaction.

13. Product Return Rate

This metric measures the percentage of orders that are returned by customers. A high return rate can negatively impact profitability and increase operational costs. Analyze your customers’ reasons for returns to identify areas for improvement, such as packaging, product descriptions, or customer service.

14. Inventory Turnover

This metric measures how quickly your inventory sells. A high inventory turnover indicates efficient inventory management and strong demand. It also minimizes the risk of holding onto slow-moving or obsolete stock.

15. Inventory Performance Index

This metric reflects Amazon's assessment of your inventory health. Factors considered include sales velocity, excess inventory, and long-term storage fees. A high IPI score is crucial for maintaining a healthy selling account and avoiding inventory storage fees.

16. Fulfillment Performance

This measures how effectively you fulfill orders, especially when using Fulfillment by Amazon (FBA). Key factors include on-time shipping, order defect rate, and late shipment rate. Maintaining high fulfillment performance is essential for maintaining a good seller rating and avoiding account suspensions.

17. Late Shipment Rate

This metric measures the percentage of orders shipped later than the expected delivery date. A high late shipment rate can negatively impact your seller rating, increase customer dissatisfaction, and lead to account suspensions.

18. Account Health

This overall metric reflects the health of your Amazon seller account. It considers various factors, including order defect rate, late shipment rate, and customer satisfaction. Maintaining a healthy account is crucial for long-term success on Amazon.

Best Practices for Tracking Key Performance Indicators

To effectively track and leverage your Amazon KPIs, follow these best practices:

Set Clear Goals

Begin by identifying your business goals, whether it's boosting sales, enhancing customer satisfaction, or improving inventory efficiency. Clear goals can help you align your KPIs with your overarching business strategy, ensuring each metric brings you closer to your desired outcomes. 

To set effective goals: 

• Use the SMART Criteria: Make sure your objectives are Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). For example, setting a target to boost sales by 20% within the upcoming quarter exemplifies a SMART goal.
• Prioritize Your Objectives: Understand which goals will have the most significant impact on your business and focus on them. Not every KPI will directly affect your overarching objectives, so it’s crucial to prioritize accordingly.
• Align Goals With Team Efforts: Communicate your goals across your team to ensure everyone is moving in the same direction. Align team targets with these overall business objectives to enhance collective performance.

Use Reliable Data Sources

When leveraging Amazon KPIs, it's pivotal to ground your analysis using reliable data sources. Reliable data ensures that the actions you take will yield accurate and efficient results. Whether you're relying on Amazon's Seller Central or third-party analytics platforms, the quality of the data sources you’re using can impact your understanding of business metrics.

To make the most of the data: 

• Use Amazon Seller Central: This is the primary source of trusted data on your performance metrics. Regularly check this dashboard to understand your sales patterns, customer interactions, and other key metrics.
• Integrate Third-Party Tools: Tools like Informed Repricer can offer additional insights and help track performance effectively. They provide in-depth analysis and often have features that automate data collection.
• Stay Updated: Data sources can frequently update their methodologies or data capture mechanisms. Keeping abreast of these changes can ensure accuracy and help in refining strategies accordingly.

Monitor KPIs Regularly

Paying consistent attention to your Amazon KPIs is crucial. Monitoring these metrics regularly ensures you are aware of any changes and can make timely adjustments. Here are some tips to effectively monitor your KPIs: 

• Set a Regular Schedule: Based on your business needs, decide on a frequency for each KPI. For high-impact metrics, consider daily or weekly reviews, while others might only need monthly or quarterly checks.
• Use Dashboards: Leverage tools that provide a visual dashboard of your KPIs. A centralized view allows for quick assessments and comparisons.
• Define Clear Indicators for Success: Establish targets for each KPI. Knowing what success looks like makes it easier to implement effective strategies.
• Document Your  Progress: Record your KPI results over time to analyze them for trends and forecast future performance.

Prioritize Actionable Metrics

When tracking Amazon KPIs, it’s crucial to prioritize actionable metrics—those that can directly impact your business. This means investing your time and resources into KPIs that show what’s happening and suggest a clear course of action to improve outcomes. 

Here are a few tips for prioritizing actionable metrics: 

• Identify Key Business Goals: Align KPIs with your overall business objectives. This ensures that the data you analyze is directly relevant to your goals, such as increasing sales, improving customer satisfaction, or enhancing operational efficiency.
• Choose KPIs That Drive Decisions: Focus on metrics that can guide your strategic decisions. For example, if you want to enhance profitability, pay close attention to the Average Order Value (AOV) and Return on Ad Spend (ROAS).
• Measure Performance Impact: Regularly assess which KPIs provide the most significant insights into your performance and make adjustments as needed. If tracking a specific KPI isn't leading to measurable improvements, consider shifting your focus to a more impactful metric.

Automate Where Possible

Automation helps Amazon sellers work more efficiently by handling repetitive tasks and reducing errors. It saves time and ensures accuracy, allowing you to focus on strategic decisions and growing your business.

Here are some tips to effectively implement automation in your Amazon business: 

• Automate Routine Tasks: Leverage tools to automate order management, customer communication, and feedback requests to improve customer satisfaction and streamline operations.
• Integrate Analytics Platforms: Platforms like My Real Profit can help automate the creation of analytics dashboards, offering insight into crucial KPIs without manual data crunching.
• Set Up Alerts: Configure alerts for critical thresholds such as low inventory or fulfillment issues, allowing you to address them proactively without constant manual monitoring.
• Invest in Repricing Tools: Automated repricing tools like Informed Repricer can optimize your Amazon pricing strategy in real-time, enhancing Buy Box ownership and profit margins.

Stay Educated and Adaptive

Selling on Amazon demands being adaptive. Ecommerce trends, algorithms, and marketplace policies are in constant flux. If you don't adapt to these changes, you'll find yourself losing opportunities. 

Here's how you can stay ahead of the curve: 

• Engage With Amazon Communities: Join forums and social media groups where Amazon sellers share insights and experiences. Being part of a community can provide real-time updates and firsthand accounts of what's working in the ever-changing Amazon landscape.
• Attend Webinars and Workshops: Webinars and workshops often feature experts offering valuable insights into the latest trends and advanced selling techniques.
• Regularly Read Industry Reports: Subscribe to industry newsletters or business reports that focus on ecommerce and Amazon selling. Staying informed about broader industry trends will enable you to make strategic adjustments to your business.

Automate Pricing and Improve Critical KPIs With Informed Repricer

Tracking the right Amazon KPIs is essential for driving growth, optimizing performance, and staying competitive in a dynamic marketplace. By focusing on the metrics we covered in this post, sellers can gain actionable insights, streamline their operations, and make smarter business decisions. 

However, managing KPIs effectively requires the right tools to save time and maximize results. Informed Repricer simplifies this process with its advanced analytics and AI-powered pricing strategies, giving you the edge you need to succeed.

Our powerful repricing tool can help you:

• Automate Pricing Adjustments: Set custom rules and algorithms to automatically adjust your prices based on competitor pricing, demand fluctuations, and your desired profit margins.   
• Improve Buy Box Win Rate: Increase your chances of winning the Buy Box, which significantly increases your product visibility and conversion rates. 
• Optimize Profitability: Maintain competitive pricing while maximizing your profit margins.   
• Save Time and Resources: Free yourself from the time-consuming task of manual repricing and focus on other aspects of your business.

Experience the benefits of Informed Repricer firsthand. See how our automated repricing solutions can transform your Amazon store.

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