If you want the Amazon team to operate efficiently, there is another important step, which is to set up key performance indicators (KPI). Objectives and Key Result (OKR) is also very popular now. But no matter what kind of assessment method is adopted, there is a key reference indicator. In the process of setting indicators, we must first find the key factors and then set them reasonably.
In the Amazon team, the KPI settings are different for different positions. Next, I will take you to analyze the key assessment factors of different positions in the team in detail.
1. Key Assessment Factors for Account Operation Posts
The guiding ideas and methods for assessing operators for sellers who do boutique mode and sellers who do distribution mode are different. Sellers who do distribution mode only need to look at the two indicators of the number of products on the shelves and the product sales rate. In contrast, sellers who do boutique mode need to consider more things. This book does not recommend the distribution mode, so it mainly revolves around the boutique mode. Next, I will analyze the key indicators of the seller account operation position under the boutique mode.
(1) Gross profit
Gross profit is one of the most critical factors in measuring operational work. Gross profit refers to the balance after deducting various expenses to support the collection of sales proceeds.
(2) Return on Investment (ROI)
ROI = Gross profit/(product cost + domestic freight + first-leg freight)
ROI refers to the economic return that a company gets from an investment business activity. It is a ratio used to measure the profitability of a company and a comprehensive indicator to measure the operating effect and efficiency of a team.
In addition, it is more scientific to set specific ROI goals based on the historical data of this category, because ROI can be continuously optimized. For example, a reduction in purchase prices and first-leg freight will increase ROI.
(3) Inventory-to-sales ratio
Since FBA sellers need to store a large amount of goods in the destination country, once unsalable, it will bring huge economic losses, so the inventory-to-sales ratio is a very important indicator. The inventory-to-sales ratio refers to the ratio of inventory to sales. It is an indicator to detect whether the inventory is reasonable. The inventory-to-sales ratio includes the monthly inventory-to-sales ratio and the annual average inventory-to-sales ratio.
The calculation method is as follows.
Monthly inventory-to-sales ratio = monthly average inventory/monthly sales
Annual average inventory-to-sales ratio = annual average inventory/annual sales
A high ratio indicates that the inventory is too large and sales are not smooth. A low ratio may be due to production not keeping up.
The above are the key assessment factors for account operation positions. Although not many, the various store data involved in the calculation are very complicated. If the specific values of these key factors are to be accurately calculated, the operator needs to record and count the various store data every day.
Mastering the sales, inventory, advertising and other data of the store and keeping good records are the daily basic work of an operator. Because the Amazon backend data template is not designed reasonably, it is difficult to see all the store data. Therefore, it takes a long time for the operator to export the store data every day, which is inefficient and wastes too much time.
I recommend a commonly used tool to all readers: ShopReport function (a functional plug-in of Zi Niao Super Browser), all the data of the store background (including settlement list, transaction list, all settlements, date range report, Amazon inventory, Amazon daily inventory history, Amazon monthly inventory history, Amazon age, advertising report and other core store data) can be exported with one click.
In an Amazon team, product development positions are different from account operation positions and have their own particularities. Some companies are trading companies, and some companies are factory companies. The functions and specific work content of product development positions in different companies are not the same, and are related to the company’s main categories and overall operating strategies. Some companies may emphasize the quantity of product development, and some companies will emphasize the quality of product development.