Tuesday, July 16, 2024
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The Only 4 Metrics That Matter Selling on Amazon

by Seneca Hampton

Selling on Amazon used to have a low barrier to entry due to low start ups cost. It  was easy to see success quickly. These days, that’s changed. Now the barrier to entry is expensive and it takes a lot of technical skill and time to be successful selling on the platform. When you’re new, it’s easy to spend countless hours a week trying “tricks” and “hacks” to get more sales. But here’s the thing, most of it is a huge waste of time. 

I founded a business that utilizes Amazon as a sales channel because I wanted to create passive income. The Pareto Principle says that 20% of what you do affects the other 80%. And if you look at your life,  it makes sense. 20% of your day would be around five hours. Most of us can accomplish what we need each day in about that amount of time.  I approached this business with that principle in mind. I could spend all day tinkering with different ways to enhance my sales. But at this point, I’ve realized there are only a handful of metrics that will lead to success selling on Amazon.

Instead of spending hours spinning my wheels, I check just 4 metrics. 

Here are the only 4 metrics that matter when selling on Amazon:

  • Best-Seller Ranking (BSR)

Every product has a BSR. If you scroll down any product page, you’ll see the category (ex. home or health) with a number next to it. It might be something like 1483 or 10,000. Basically, the smaller the number, the more sales someone is making. So when I’m looking for abnormalities, I always check my BSR. If it’s the same, it’s not the issue.  If my BSR is higher, it means I haven’t been selling as fast as I did in the past. In this case, I’ll pull up my competitors and see what’s different.  

  • Sales

For the most part, sales are affected by competitors and the calendar. Sometimes, my sales might be down because it’s the weekend or a holiday. Another scenario would be that a competitor is running a promotion, changed their price or increased their inventory. I use the next two metrics to increase sales if needed. 

  • Keyword ranking

Different keywords will drive sales individually. For example, if you type in different keywords like rubber mat, black rubber mat and large black rubber mat, your listing will fall differently in the results for each search. If you are aware of which specific keywords produce the most sales, you simply put them into the search and see where you fall. Has your rank moved or changed? 

It’s possible that just adjusting your keyword ranking based on what you see working for competitors that show up higher in a search will do the trick. How do you do that? One of the easiest is increasing your advertising. 

  • Advertising Spend 

If you’ve done your due diligence and you’ve noticed a competitor now has a lower BSR and they are ranking higher in a search, and you’ve noted your keyword rankings, it’s time to focus on advertising. If they are ranking number one and you’re at number 10, you need to sell more than they are selling. You can do that by advertising more. It’s simple. 

On the flipside, you can waste time spinning your wheels with the latest hack or trick or marketing strategy trying to drum up sales. It’s really that simple, and the beauty of it is that these four simple metrics are all connected to each other. 

When it comes to Amazon, it’s easy to overcomplicate things. But look at it from their perspective. Amazon has a bunch of products in a warehouse and their mission is to get the best product to their customers as fast as possible. Amazon is in it to make customers happy. Spend the time learning how to help them do that. Serve the customer and things will change pretty quickly. 

Seneca Hampton is an entrepreneur with multiple 7-8 figure businesses, from eCommerce to Logistics, Consulting, and Speaking. Seneca’s recent appearance on ABC’s Shark Tank demonstrates how he built Hampton Adams, an online eCommerce-based business that serves a rapidly growing 600,000 customers, has produced over $20,000,000 in Revenue, has zero employees, and only demands 30 minutes of his time per month. All from scratch with $700 to his name. Connect with Seneca on Instagram or YouTube.

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