In the same way the EKG or the medical monitor at the doctor’s office reports your health and physical condition, so too do business statistics keep you in the know as to the health of your Amazon business.
In many ways statistics are the medical monitors and EKGs of the business world.
But what exactly should you be monitoring?
What To Watch
There are any number of metrics to pay attention to. Saturation of information is a very real possibility in the management of any business. Statistical awareness of each aspect of your company is important, and you can get quite granular with any particular area. Ultimately the things you choose to monitor will be up to you.
Tools like ManageByStats can help. MBS is focused on statistical oversight and analysis in the world of Amazon. As you add products, marketplaces and, even, additional Amazon seller accounts, maintaining the altitude needed in order to effectively monitor and know, clearly, how each aspect of your enterprise is doing becomes more and more vital.
It therefore becomes important to know what to watch.
Stats And KPIs
Statistics, or stats, give you the insight you need in order to make adjustments to a particular area in order to “raise the stats”, or drive the trend up. Doing this impacts that specific area, which can also impact other, related areas of the business.
KPIs, or Key Performance Indicators, are also statistics, but these are statistics which tend to encompass a larger sphere of importance, usually impacting a greater portion of the business.
- Statistic: any gauge against which you can measure the trend of the specified area for evaluation.
- KPI: Key Performance Indicator; a stat which is set apart as a metric of overall business performance.
A Key Performance Indicator is a value that demonstrates how effectively your company is achieving its key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. KPIs, like the EKG or the medical monitor, can give you an excellent overview of the overall health of your business. Using KPIs brings focus to what can be a large amount of information, letting you see clearly how things are going.
The KPIs To End All KPIs
Multiple metrics could be named KPIs and monitored routinely to check your corporate health. From years of evaluation and working with thousands of Amazon sellers, we’ve isolated four (4) as the most effective overall, and present these here as the best indicators of how your Amazon business is doing.
KPIs are the next evolution of the quest to blend at-a-glance management info with deep-dive information and stats. KPIs give you a quick look at how you’re doing overall.
The KPI statistics we recommend you use are:
- Conversion Percentage
- Average Review
Sessions and Conversion Percentage show traffic to your Amazon listings and how well those listings are turning into sales.
Profit shows the profitability of the account, and Average Review gives an indication of how the products are doing in terms of customer response.
Tracking trends for these four metrics gives a good indication of the real-time health of your Amazon business. They’ve been shown to be key for taking the pulse of your Amazon business.
Managing By Statistics
There’s plenty of information out there on how to evaluate trends, what steps to apply to revert downtrending statistics, when to take certain steps and so on. Statistical analysis and action is a well-mapped subject.
Let us add add two additional points to that wealth of knowledge. One that’s not often preached, one that’s hardly preached at all.
The thing that’s not often preached is selecting the correct date range for evaluation. When judging trends with statistics or KPIs, using a date range that’s most valid for that particular metric is key. For example, if you’re looking at gross sales for the whole company, selecting a date range of 2 or 3 days and looking at the trend for those days may not give you the best indication of the overall health of that stat. You wouldn’t want to make major changes based on a trend for that short period of time.
Further, and a bigger part of this, is taking action in advance. If you’re looking at the correct range for a statistic, you can spot trends in advance and take action before a precipitous drop. If you see a long term downtrend in a stat, catching it with the proper evaluation can give you a heads-up so you can act accordingly to revert — before it becomes a real problem.
The thing that’s hardly preached at all is evaluating uptrends. If a stat is doing well, especially really well, that’s actually the time to take a hard look. Do an investigation as to why it’s doing so well, find the reason or reasons and strengthen those things. Investigations and action are not just for when a stat is dropping.
This is a key part of managing toward expansion, and is often overlooked.
Paging Doctor Business Owner
As an Amazon seller and business owner you wear many hats. One of your more vital is that of what we might call Primary Care Physician. The health of your business, knowing it, being aware of potential issues, making recommendations for getting healthier and staying healthy … if your business were alive (and in many ways it is), this is the sort of instruction it would look to you to provide.
Knowing the statistical health of your business is the first step to knowing how to make it stronger. And, ultimately, how to guide it toward a longer, more productive life.
To Your Success,
Your ManageByStats Team