The best way to improve on your 2014 Amazon.com sales in 2015 is to closely analyze your 2014 data. Identify deficiencies, seasonal growth patterns, marketing ROI, big forecasting changes, and much, much more. Amazon provides a plethora of sales metrics in Vendor Central–there’s no time like the present to use it.
1) Look Back and pull all your important data from Vendor Central. This includes your 2014 scorecard, monthly sales data, forecast, and trailing 12-month item sales. Compare it to 2013 data. Calculate your return percentage. Keep this data for next year so you have a longer-term view of your sales.
2) Look Back at chargebacks, analyze their root cause, and fix them! Amazon chargebacks are numerous but they are avoidable. Chargebacks are usually a symptom of inefficient or insufficient, or inaccurate processes. If you have broken processes for PO management, shipment management, or item management, it will cost you.
3) Look Back at your out-of-stock performance over all products and on an item level. Out of stock products create a cycle of lower sales. Your top products should be in stock at all times. We advise our clients to have a <10% out of stock rate. Do your products have the correct availability code? Are you shipping within the ship windows? Are you backordering constantly? Are you getting PO cancellations each week? Are you short-shipping? Are you using the Amazon-provided forecast? Is the forecast accurate? Find out and adjust accordingly!
4) Look Now at your processes for supply chain and plan small improvements throughout the year. Adopt LEAN practices – that’s how Amazon has done it! We recommend you read The Goal: A Process of Ongoing Improvement and grab a copy of The LEAN Pocket Guide.
5) Look Now and review constraints in personnel, resources, cash flow, capabilities. Plan on how to eliminate these constraints, through augmenting and elevating them.
6) Look Now at your costs. Are you actually making money? Have your raw material costs increased? Are you giving an Amazon competitor lower costs? Lower cost of goods to Amazon are automatically approved. Higher costs can take >60 days for approval.
7) Look Forward to plan and forecast your inventory. Download the 25-week Amazon item forecast in Vendor Central Amazon Retail Analytics Basic. Keep in mind that the forecast is for Amazon customer sales, not POs–so adjust the timing accordingly. Realize that it is an estimate of the probability of a sale, not a buying plan, and it changes weekly.
8) Look Forward to budget merchandising dollars and plan advertising. Amazon provides ample opportunity for you to spend money. Strongly consider seasonal or year-round Amazon Self Service search ads. And keep plenty of budget reserved for the holiday Lightning Deals and category page placements. You’ll want to take advantage of all the extra traffic flowing into Amazon.com. Extra tip: Try to plan your non-Amazon advertising in line with Amazon campaigns so you get a consistent message across to customers.
9) Look Forward and analyze your freight costs. Amazon may seek a higher freight deduction with the newly revised UPS billing model in place. If you are a collect vendor you may want to switch to prepaid freight.
10) Look Forward to seeing Amazon at trade shows. If you are large enough, plan a Vendor Meeting at a tradeshow or at Amazon’s headquarters in Seattle. If you are smaller, consider retaining an Amazon Navigator who may work with 10+ accounts and can get some time with an Amazon buyer.
Happy New Year and all the best for happy Amazon sales from the LEAN Channel Management Team!