Key Metrics for Success: Understanding Amazon KPIs and How They Drive FBA Performance

KPIs, or key performance indicators, are useful instruments for evaluating performance and making progress toward particular objectives. They allow you to track performance over time and develop plans to get your intended outcome by offering objective metrics of achievement.

Amazon KPIs are very important in the world of online shopping. You need to look at creative ways to expand your brand because the competition on the platform is getting fiercer. Fortunately, looking at your KPIs may provide the solution! You can obtain insightful knowledge that will help you make wise decisions and eventually increase your profitability and overall performance by closely examining these crucial variables.

Amazon KPIs to Monitor for Your Online Store

Apart from the apparent seller indicators like as sales, profit margins, and inventory levels, the following are some essential Amazon KPIs that your company has to monitor.

  1. The Index of Inventory Performance

It’s critical to monitor your Inventory Performance Index (IPI) score if you use Amazon FBA for any order fulfilment. Your: is used to generate this score. Sustaining an IPI score at or above Amazon’s cut-off is necessary to prevent FBA storage limits and maintain the integrity of your account. The new FBA capacity management system, which establishes how much storage space you can utilize, also heavily relies on your score. You may obtain important insights into your overall inventory performance and make sure that your products are selling well without being overstocked by keeping an eye on your IPI score. 

  1. Rate of Order Defects

All Amazon vendors are required to offer top-notch customer service. Amazon uses the Order Defect Rate (ODR) to gauge this. The percentage of your most recent orders with one or more faults, such as unfavourable seller reviews, credit card chargebacks, or successfully filed A-to-Z Guarantee claims, is known as your Order Defect Rate (ODR). You should aim to keep your ODR below 1% in order to stay in good standing and stay clear of any problems. If you surpass this limit, you can receive a warning or perhaps have your account suspended. You should also know about what is amazon FBA.

If your ODR isn’t living up to your expectations, assess your customer service procedures and carefully consider the input you’ve gotten. This will assist you in determining any underlying problems that might be causing your ODR to decrease.

  1. Product Evaluations and Vendor Comments

Maintaining the emphasis on improving the customer experience, your seller feedback and product reviews are the next crucial factor to take into account. It’s critical to realize that these two are not the same. Goods reviews rate your real goods, whereas seller feedback expresses the buyer’s experience working with you as a vendor.

  1. Rate of Return

Returns can significantly affect the profitability of your company. Excessive returns can be detrimental to the health of your account and indicate that clients are dissatisfied with your offerings.

Go into Seller Central and select the Reports option to find your overall refund rate. To view the refund rate associated with your Amazon seller account, choose Business Reports > Seller Performance from there.

Furthermore, Amazon offers information on your buyer contact rate linked to returns via the Returns Performance dashboard. On the Manage Returns tab, you can also see an overview of your returns performance metrics.

  1. Rate of Conversion

For Amazon sellers, conversion rate is a critical indicator since it shows how well you convert prospects into actual sales. A poor conversion rate indicates that there are elements in your business that deter potential customers from making a purchase. High costs, unattractive product photos, insufficient product details, unfavourable reviews, and more may be among these variables. A decent average conversion rate on Amazon is between 10% and 15%.

To assess how well each of your goods is performing, you may keep an eye on your unit session percentage. You may then pinpoint any areas that need work and adjust your listings to boost conversions.

  1. Ranking of Keywords

The prominence of your product in Amazon’s search results when a customer searches for that particular keyword is determined by its keyword ranking. More visibility for your products through higher keyword rankings means more chances for sales.

You can optimize your product listing to try and drive more organic (i.e., non-sponsored) traffic in order to raise your keyword ranking. Here are some actions you can take:

  1. Account Health keeping an eye on the condition of your Amazon account is essential because it affects your capacity to sell there. Any problems or infractions might result in the suspension or even deletion of the account. Go to Seller Central’s Performance tab and select the Account Health tab to see the health of your account.

For each measure displayed, you must meet the target criteria; however, note that many metrics are fulfilment type specific and may not apply to you.

In order to keep you informed and to make sure your account stays in good standing and conforms to Amazon’s selling standards, the company also offers an Account Health Rating (AHR). This rating takes into account various aspects, including the quantity and seriousness of policy infractions on your account, as well as the positive effect your selling actions have on the consumer experience.

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