One of the things I focus on is: Learn. Do. Review.
I’m going to practice what I preach and look back over the past year, and past several years. When you review, it’s a prelude to changing your action to get a different future.
One of the things in the future of Amazing FBA is a new podcast, 10K Collective. Examples of some topics include preparing your business to sell, how to get some massive loans to boost sales, and how to get money back from Amazon in refunds. This podcast is ideal for those who already have revenue and more advanced sellers.
It’s tempting in a review to just give a list of numbers. However, I think it is important to pull them together into a picture. The numbers tell a story.
- How are you feeling about your Amazon business?
- What skills have you learned that is not immediately going to show in KPIs?
It can often take several years for skills to show changes in personal income.
- What mindset shifts can you identify?
A mindset shift I have seen in my own business is that I don’t rely on research as much. I get something out there and try to sell it to see if a market is any good.
- Where are you going with this business? Are you on track?
- What high-level things do you need to track?
Basic Key Performance Indicators (KPI)
- Always “close the loop” –to improve FUTURE action, review the effects of PAST actions
The classic time to do this is to look through your profit and loss reports in January for the previous year. This will give you a good indication of how profitable you were and will help you adjust to make sure there is profit there.
- Always know your financial numbers or you’re driving utterly blind.
You need to know things like the break-even point for products, if a product is profitable at a certain price, for example.
- Know your product-based KPIs (sessions & conversions).
People are often ignorant of this, however, it is very easy to find out.
- Measure your Keyword & Ad-data. Ads cost a lot – you MUST measure if you’re getting a result.
Within the retail business, ads make the most money. It is the largest source of revenue for Amazon, so it is important to keep track of how much you are spending on it.
Seller Central Dashboard
If you’re doing FBM=Fulfilled by Merchant
- How is FBM measuring up to FBA?
- Keyword ranking
- Conversion rates
Main report: By ASIN> Detail Page Sales and Traffic by Parent Item
- Sessions (visits)
- unit session percentage (Conversion rate)
- Download your data monthly (Full data disappears after 18 months)
Amazon Ads (Onscreen data)
- How well is your product converting?
- Could you experiment with pictures, price, text to improve this?
- How does it compare to last year?
Amazon Ads data
Check on screen (Advertising > All Campaigns) BEFORE using Search Term Report – it’s a lot easier!
- Check which campaigns have resulted in significant spend; and which in meaningful sales
- Check each Manual Campaign:
o Dig till you get “Targeting” = keywords you’re targeting o Adjust “Columns” so you see all of the data o For each keyword with significant traffic, check the following data points:
▪ Impressions – (how many times an ad was shown) –
▪ Clicks – what ads actually got shoppers to visit your listing?
▪ Click-Through Rate (CTR)-(clicks÷impressions) – look out for:
- clicks under 0.7% (irrelevant, reduce bid);
- or over 0.7% (relevant, will help keyword ranking; raise bid per click)
▪ Orders – is this keyword driving sales?
- Are there opportunities for keywords with good search volume? (Impressions)
- What keywords should you be targeting?
- What putting as NEGATIVE keywords?
Profit & Loss
Check 3rd party tools (eg Fetcher, Hello Profit, etc.) BEFORE using Accounting package (Xero/Quickbooks etc.) – it’s a lot easier to check for GROSS profit
- Check which products have resulted in sales; profits – margins
- NB Amazon ads as % of sales (ATS ratio) – make sure it’s not above about 10%
Have clear goals. We talked more about this in episodes 297 and 298. And it is important to look at the progress to get to those goals. Try to have a big picture view and measure if you are moving towards your goals.
I look forward to helping guide you in 2019 and making it one of the most prosperous and exciting years yet.
Watch Review of the Business Year part 1
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