Obvious statement of the day; managing a business is difficult. Simply getting through the daily responsibilities of inventory management, marketing and advertising, writing product descriptions, and fulfilling orders is enough to wear anyone out. Then add-in the monumental task of evaluating KPIs and optimizing your store to become as efficient as possible and the question becomes: when do you get time to actually enjoy the fruits of your labor?
Understanding overall product performance on an individual level and how the performance of different products compares to one another over time is crucial to the success of any Amazon store but it is tedious and time consuming to do on your own. Amazon has created the most accessible and competitive marketplace in the history of the world, therefore the ability to identify KPIs and act on the insights that come from them is what separates many stores from the competition.
But how do you siphon through all the data to filter out the pyrite from the true gold and recognize what truly drives profits? The answer lies in the art of comparison and the strategic use of performance benchmarks.
As an Amazon seller looking to maximize your store's profitability, you often shuffle through endless data, seeking insights that can propel your business forward. Unfortunately, looking at surface-level metrics, like units sold or revenue, won't tell the full story about the overall performance of your store. To understand true KPIs like which products are your most successful ones, how a price change affected profitability, or the real ROI from increased ad spend or various promotions, you need support.
To develop this kind of holistic understanding of your business and generate actionable insights you must have a tool that can take a deeper dive into the data and provide you with an understanding of additional metrics like gross sales, average sales price, return rates, profitability, profit per item, profit margin, ad spend, promotional costs, and fees associated with doing business. Once you have all of that data in hand, you then have to put it into perspective, and to do that you need to have access to benchmarking data and the ability to compare performance to different time periods. This is where the magic happens.
The bottom line is that you can't truly know what a high-performing period is until you’re able to compare it to low-performing periods. Using that data, you can set benchmarks (goals) for your business and let accurate, actionable, data be your guide.
Benchmarks act as a narrative framework for your data. They are effectively the goals set based on past performance and the most effective way to set benchmarks for any business is to use past performance as your guide.
What if you could identify which products consistently outperformed the rest? What if you could see how ad spend over one holiday period correlated to that same period the previous year? With robust benchmarking tools, sellers can make informed strategic decisions, rather than relying on luck or guesswork. Having a clear window into this data allows you to set benchmarks for your business at every level and provides predictable performance metrics that can drive your decisions - you can truly learn from your mistakes and maximize on your successes.
Enter The Comparison Report from ConnectBooks.
The art of comparison isn't just an academic exercise; it’s a crucial business strategy, especially for those in the competitive world of Amazon businesses. Imagine you're scaling a steep cliff, the view from each new vantage point shifts and offers fresh insight into your ascent – such is the power of benchmarking in scaling the heights of retail success - a benchmark opens your eyes to what is possible.
Knowing that benchmarks form the backbone of strategic decisions, ConnectBooks recently developed The Comparison Report, an indispensable tool for owners of Amazon businesses.
The Comparison Report was specifically developed to fill the gap in actionable insights that sellers often face. As the Amazon marketplace grows increasingly dense with products, the necessity for a reliable method to dissect and understand sales data becomes paramount.
ConnectBooks recognized that Amazon businesses needed a way to not just gather data, but to interpret it in a meaningful way that leads to better business outcomes. The report aims to simplify complex data into clear, comparative metrics, making it easier for sellers to quickly identify areas of strength and opportunities for growth. With this tool, sellers can confidently adjust their strategies, select the right products to focus on, and ultimately increase profitability with data-driven decisions.
For example, what if by comparing pricing and revenue you discovered that although you lowered your price last quarter, you actually increased profitability by 10%. It may sound counterintuitive, but you would be surprised how often sellers miss these important insights in their books.
Another very specific example could be comparing the success of your store during Amazon’s Prime Day vs a typical day. Perhaps overall sales increased on Prime Day so on the surface it appears like an impressive day. Thankfully, you’re a Comparison Report customer and you can see that on Prime Day there was a higher amount of ad spend and an increase in promotions. When all of this is taken into account the ROI is actually much lower, despite the massive influx in sales.
The ConnectBooks Comparison Report is more than just a lens for clarity; it's a multi-faceted tool designed to enhance business intelligence. Just a few features of the Comparison Report include the ability to:
The ConnectBooks Comparison Report offers Amazon sellers a distinct advantage by turning your data into actionable strategies. It is essential for Amazon sellers who are determined to not just compete, but to lead and redefine the market standards. Benchmarking, while often overlooked, is imperative for making data-driven decisions that can significantly amplify your profits. Having a tool like The Comparison Report in your arsenal provides you with the lens through which you can see the full impact of each product in your store.
This is where a customer story comes to life.
For the sake of anonymity, let's call our protagonist Alexa, an owner of an Amazon business, who was struggling to understand why, despite increased sales volume, she wasn’t seeing it translate to higher profits. It was a puzzle without an apparent solution—until she decided to utilize the ConnectBooks Comparison Report.
Alexa began her benchmarking exercise by analyzing the Comparison Report and comparing her products across two time periods. In May, she lowered prices on one item from $99.99 to $89.99, a significant discount designed to attract more buyers at that lower price point. And it worked! Overall sales were higher than they ever were and, at least initially, Alexa thought that she might have found her sweet spot.
Then, Alexa took a look at April, when the price of this product was still $99.99 and sales were much lower. What she saw from the Comparison Report was that despite the higher sales volume, her cost per unit went up significantly and decreased the overall profitability of this product.
The higher sales volume was, in fact, foolsgold and she returned the product back to the original price.
Let’s take a look at another example of how the Comparison Report helped a different customer with a similar challenge but in reverse.
Another pseudonym, James, is the owner of his own Amazon store and made a similar decision to Alexa when he decided to lower the price of one of his products.
In James’ case, the product was originally listed at $34.95. James felt that this particular product was not getting the traction that it deserved and decided to test lowering the price to $29.92 in order to increase sales volume.
As a Comparison Report customer, James felt confident that he could analyze the results of this decision after the fact to see if it was the right move. Let’s see if he made the right decision:
Using the comparison report, James was able to determine that this minor discount in price more than doubled the profitability of this particular product. As opposed to Alexa, in James’ case, lowering the price turned out to be a massive hit!
The dichotomy between the extreme results of these two examples highlights the importance of using data to make decisions and evaluate the results of those decisions. In both the case of Alexa and James, they each made very similar choices to lower the price of their products but they each experienced widely differing results.
There is no one-size-fits-all all decision that will make your business succeed, which is why you need to rely on tools like the Comparison Report to be your guide as you navigate the turbulent waters of Amazon selling.
The ConnectBooks Comparison Report serves as a pivotal resource for Amazon sellers, revealing the true impact of your product mix, pricing decisions, and market trends. It crystallizes the vast sea of data into actionable insights, carving a path for Amazon sellers to not only navigate but also lead in the marketplace. Indeed, the success of businesses like Alexa's and James’ reinforces the power of benchmarking as a cornerstone of a profitable strategy in the ever-evolving world of e-commerce. Without a tool to compare advanced metrics you might be left without even a definition of what success is for your Amazon store and you could be left flying in the dark.
Grow your Amazon business with unparalleled insights from ConnectBooks. Harness the power of data and discover your products' hidden potential today.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
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