The Ecommerce Sales Equation

Is there a simple equation for E-commerce sales?

On an open platform like Amazon, this simple equation needs to be optimized to take control of growing your sales. You are the merchant…

Traffic * Conversion * Average Selling Price (ASP) = Sales

Let’s examine the components:

Traffic

If nobody is even looking at your product page, you will not generate any sales on Amazon (or any marketplace or your own direct-to-consumer website)!

There are many opportunities to optimize your listing, including the name and keywords that will help surface it in results.

But even with well-crafted listings, you will still not receive enough traffic to reach your goals. So, you must consider additional means to drive traffic, including pay-per-click (PPC) and other advertising opportunities, social media efforts, and even email marketing to your existing customer base.

You can easily overpay for paid traffic and become reliant, OR be smart and balance your organic vs paid traffic by using data and analytics.

Conversion

Once taking into account everyone who arrives at your product page, what are you doing to convert that opportunity into sales?

This can include how you manage resellers, optimize content, manage customer reviews, and ensure inventory meets the demand being generated.

ASP (Average Selling Price)

What price optimizes profitable sales?

How do promotions play into the price?

Do you actively monitor prices to remain competitive and win the Buybox? How can you use variations and bundles to improve your average sales price?

Are you utilizing programs like subscribe and save effectively?

With slow-selling items, you may be constrained by the amount of data you have to intelligently manage pricing. For brands with high-volume sellers, machine learning (such as with the i2o platform) can help surface insights that guide precise actions to make sure optimal sales price is achieved.

Sales

Ka-Ching! Now you got your sales and it’s time to analyze sales by category/subcategory/type of products/new vs old products and delve into profitability analysis.

Do you have the tools to dive deep and find insights to take control of your sales equation?

Book a free discovery call to learn how i2o can deliver actionable insights to your teams.

Share