3 Underestimated Amazon Seller KPIs That Affect Profits

Demian Lazurko – CEO at MyRealProfit
Demian Lazurko CEO @ MyRealProfit
amazon coupon and promotion redemption rate

1) Coupon Usage Rate

Calculation: Coupons Redeemed / Total Units Sold * 100%

Coupons became 2nd after the PPC marketing option, but do you track its performance precisely as ads?
Coupon usage average statistics:
Coupon: 1 – 5% | Usage rate: < 35%
Coupon: 6 – 9% | Usage rate: 45%
Coupon: 10 – 14% | Usage rate: 55%
Coupon: 15 – 20% | Usage rate: 60%
Coupon: 21% + | Usage rate: 70%

Why do you need to track it?

If the usage rate is higher than the market average, you are underpricing your product, and you can decrease coupons by x% without seeing a big difference in sales velocity.

Also, keep in mind. For every coupon redeemed, you pay Amazon $0.6 each.

2) TACoS

Calculation: TACoS (Total Advertising Cost of Sales) = Ad Spend / Total Sales
* 100%

TACoS measures advertising spend relative to the total revenue generated. TACoS gives you a snapshot of how your Amazon PPC ads perform, directly impacting total sales.

We recommend tracking TACoS with Organic / Advertising Sales % as they depend on each other.

The average TACoS for Amazon is about 8%, but it depends on the pricing category.

Why do you need to track it?

Just a few examples:
a) TACoS is growing, but sales are the same = you are cannibalizing your organic traffic.
b) TACoS is digging, but sales dropped significantly = your product needs PPC support to stay in the positions you usually have.  

The best-case scenario is when your sales are growing and TACoS is the same, which means you are successfully scaling your product without cutting your profits.

3) Refund Rate %

Have you ever thought about how much money you spend out of your pocket on returns and how it impacts your profit?

On average, you have to sell three products to cover one refund.

We have a fantastic post about refunds! You can read the full article here: click

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