Amazon operations positions are different from traditional Internet operations positions. Strictly speaking, the nature of Amazon operations staff’s work is online sales or e-commerce sales. The salary of Amazon operations staff is linked to sales performance. The higher the sales performance, the higher the salary of the operations staff.
The monthly income of an Amazon operations staff is usually composed of basic salary plus commission (some companies will pay commissions on a quarterly basis, and some companies will pay commissions on a monthly basis. The specific commission calculation cycle needs to be determined according to the situation of different companies). If the team has good performance in a year, there will be additional dividends, which we will not count for the time being. The basic salary of Amazon operations staff can be determined according to the actual situation of the industry and the consumption level of the city where they are located. The core of the salary system design is still the commission part, which is also the key to the design of the Amazon team’s salary system.
The Amazon team has two commission methods for operations staff: one is to calculate the commission based on the account return (deducting the Amazon platform commission and advertising expenses), and the industry standard is usually 1%~2%; the other is to calculate the commission based on the final profit, and the industry standard is usually 3%~5%. Of course, the more profit created for the company, the higher the commission ratio will be.
Since the two commission methods are more popular, should the commission be calculated based on account repayment or profit? Which method is more reasonable? Strictly speaking, both methods have their own advantages and disadvantages.
The reasons for calculating commissions based on account repayments are as follows.
Reason 1: The repayments have deducted various costs of the platform, and only include procurement costs, first-leg freight and gross profit, so there is no problem in principle to calculate commissions based on account repayments.
Gross profit = Repayment-Purchase cost-First-leg freight
Reason 2: Many companies use the method of calculating commissions based on account repayments because their procurement costs are unwilling to be disclosed to operators and are commercial secrets.
The reasons for calculating commissions based on profits are as follows.
Reason 1: We have found in a large number of practices that when calculating commissions based on account repayments, there will be a situation where the commission is several hundred yuan, but the gross profit is negative.
Reason 2: We have found in a lot of practice that if the commission is calculated according to profit, then the operation staff will optimize the allocation of goods because of their concern for profit. If they can use sea delivery, they will not use air delivery, and if they can use air delivery, they will not use express delivery. The saved freight is profit.
Although the two commission methods have their own advantages and disadvantages, it is recommended that the company calculate the commission according to profit, which is more reasonable and is also very good for the development of the entire Amazon team in the long run. The specific reasons are as follows.
Reason 1: For the team, it is very important to let the operation staff understand and learn to control profits. Not only should the operating accountant provide the salesperson’s profit statement, but also let the operation staff understand the profit, understand how to increase profits, reduce costs, what is the profit margin of the SKU that the operation staff is responsible for, and where to start optimizing the SKU.
Reason 2: Improve efficiency and get front-line employees moving.
① The team continues to increase investment in promotions, PPC advertising, flash sales, finding reviewers, and off-site flash sales, so that the operation staff can estimate profits by themselves and reverse the cost budget.
②Have pricing power and make pricing flexible. Fixed pricing can easily miss the peak sales season and produce unsalable inventory.
Reason 3: There must be a unified goal so that unified actions can be taken. A sense of belonging must be created so that employees can regard the company as a platform for personal development.
Reason 4: Improve the boss’s own vision.
①Don’t worry about what will happen to employees if they know the purchase price, but find ways to improve employees’ capabilities and provide good supporting services for the platform.
②Improve the internal training system, improve the promotion channel, and make good use of fission entrepreneurship, partnership system, equity incentives and other methods to enable employees and companies to achieve mutual success.