Monthly Performance Metrics Explained

Top 4 ExpertCPG Client Monthy Performance Metrics

Want to know both how we’re doing managing your Amazon Account and how your brand is performing?  Below you’ll find the Top 4 Performance Metrics which we email you monthly to keep you up to date on your account’s progress.  We’ve included a quick video explaining each of these metrics to better understand how you’re doing.  

DISCOVERABILITY

“Number of Bid Changes”

The key metric used to measure the impact of product’s “Discoverability” on Amazon is the “number of bid changes” within Amazon advertising campaigns.  The goal of bid changes is to find the optimal bid amount to reach customers in a way that aligns with the brand’s goals, whether that’s breaking even, generating profits, or investing in growth as a new brand. By making bid changes, advertisers can increase their chances of winning advertising spots and reaching their target customers.

To gauge the effectiveness of product “Discoverability” on Amazon, we focus on the frequency of bid adjustments within Amazon advertising campaigns. Let’s dive deeper into this metric. When you run ad campaigns on Amazon, promoting your products across various platform touchpoints, including search pages, product detail pages, and even off-Amazon channels, it’s essential to recognize that a “set it and forget it” approach won’t yield consistent results over time. Market dynamics, competitor strategies, and bid amounts are constantly evolving, which means the cost of winning ad auctions and reaching your target audience is also in flux. By regularly adjusting bids, you’re more likely to strike the optimal balance between ad spend and customer acquisition, aligning with your brand’s goals. This might mean breaking even, investing heavily as a new brand, or generating profits as a more established player. Through our collaborative discussions, we establish tailored targets for your brand and leverage bid changes to fine-tune your Amazon ad campaigns, ensuring they resonate with your target customers.

BUYABILITY

"New Customers to Brand"

Expert CPG Commerce uses the “new customers to brand” metric to measure “Buyability” on Amazon, which is defined as customers who have not purchased from a brand in the last 12 months. This metric is impactful because it aligns with the company’s mission to help brands reach more customers on Amazon and beyond. The metric is vital for increasing and growing a brand’s customer base, as it measures the brand’s ability to attract new customers and keeping your existing ones.

At Expert CPG Commerce, we utilize a key metric to assess a brand’s “Buyability” on Amazon, which is crucial to our mission of expanding a brand’s customer base beyond its current reach. This metric, known as “new customers to brand”, gauges the impact of our efforts and the number of customers we’re able to tap into. Amazon’s methodology for calculating this metric involves identifying customers who haven’t made a purchase from a brand within the past 12 months. This means that even if a customer made a purchase two or three years ago, they’re still considered new customers in Amazon’s eyes. We believe this metric is highly relevant because it directly supports our goal of helping brands grow their customer base on Amazon and other platforms. By tracking “new customers to brand”, we can measure a brand’s ability to not only retain existing customers but also acquire new ones, ultimately driving growth and expansion.

OPERATIONS

"Number of Alerts Monitored"

Expert CPG Commerce uses the number of alerts monitored and acted upon as a key metric for operations. Alerts can affect a product’s “sellability” on Amazon, such as losing the buy box or having a negative review.   The team takes immediate action to resolve issues, including contacting customers to turn negative reviews into positive ones.  Proactive monitoring and management of these alerts enable minimal downtime, minimal customer impact, and ultimately, growth in sales on Amazon.

At Expert CPG Commerce, we prioritize operational efficiency by closely tracking and responding to a wide range of alerts. These alerts, which can originate from within the Amazon platform, serve as an early warning system, enabling our team to swiftly address potential issues that could impact your product’s sellability. For instance, we monitor alerts related to buy box eligibility, ensuring your product remains visible and available for purchase on the platform. We also respond promptly to negative customer reviews, engaging with the customer to resolve their concerns and potentially turning a negative experience into a positive one. Additionally, our team is alerted to changes in Amazon’s fulfillment center operations, such as revised product weights, which can affect FBA fees. We verify the accuracy of these changes and, if necessary, request Amazon to investigate and correct any errors, ensuring you receive reimbursement for any incorrect charges. By proactively managing these alerts 24/7, we minimize downtime, reduce customer impact, and ultimately drive sales growth on Amazon.

INVENTORY

"FBA Inventory Utilization %"

Expert CPG Commerce measures inventory performance using the FBA Inventory Utilization Percentage metric. This metric represents the percentage of inventory that is not excess inventory.  Amazon considers inventory with a supply of over 90 days based on recent sales as excess inventory.  Minimizing excess inventory and maximizing the FBA Inventory Utilization Percentage reduces fees, storage costs, and improves overall inventory performance, leading to a better Inventory Performance Index (IPI) score.  The goal is 100%. 

At Expert CPG Commerce, we monitor “Inventory” performance using a key metric: FBA Inventory Utilization Percentage. This metric represents the proportion of inventory that’s actively being used, rather than sitting idle as excess stock. Amazon considers any inventory with a supply exceeding 90 days, based on recent sales, to be excess. Our goal is to minimize excess inventory and maximize the FBA Inventory Utilization Percentage, aiming for 100%. This requires a delicate balance, as increasing sales may necessitate restocking, which can lead to excess inventory. The complexity of this balance is further compounded by the varying sales velocities of different products. To optimize inventory performance, we focus on minimizing excess inventory and maximizing the utilization ratio. By doing so, we can reduce fees, storage costs, and improve overall efficiency on Amazon, ultimately leading to a better Inventory Performance Index (IPI) score. Our expertise in forecasting shipments and optimizing inventory levels enables us to achieve this balance and drive better inventory performance for our clients.