1.
How to Improve Your Amazon
Operations to Grow
Purchase Orders & Profitability
Bridging the Divide Between Your
Operations & Amazon Sales Growth

2.
● Session Recording + Slides Will Be Sent Out
● Join in the Poll Questions
● Submit Questions for our panelists
● Resources Available
Today’s Logistics

3.
Overview
D E L I V E R I N G
L A S T I N G
R E S U L T S F O R O U R
C L I E N T S
Solutions
About CPC Strategy

4.
Pat Petriello
Head of Marketplace Strategy
CPC Strategy
Today’s Speakers
Eric Kauss
Manager, Vendor Operations
CPC Strategy

5.
Today’s Agenda
● Why are we talking about Amazon Vendor Operations?
● How do you determine if you’re Operationally Sound?
● Warehouse Functions & Their Impact on Inventory Availability
● Understanding Amazon’s Demand Forecasting Model
● Leveraging Operational Data to Improve AMS ROI

6.
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Why are we talking about Amazon
Vendor Operations?

7.
Why are we Talking About Vendor Operations?

8.
Why are we Talking About Vendor Operations?

9.
Why are we Talking About Vendor Operations?
All Amazon Vendors want to increase sales.
In order to do so, you need a fully integrated program
which implements operating efficiencies that will lead to
increased sales.
Amazon is moving to a self-service model through Vendor
Central. A vendor now more than ever needs to know how
to obtain accurate information and put processes in place
with the data that is available.

10.
Expanding
Product Offering
Steps to Operational Efficiency
Content +
Product Setup
Amazon
Operational
Efficiency
Purchase
Order
Management
Warehouse
Efficiencies
Advertising /
Marketing
Efforts
Increased
Sales Growth

11.
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How do you determine if you’re
Operationally Sound?

12.
Are Operations Affecting Marketing?
5 Key Questions to Ask Your Team
1) Are you instock at the level you think you should be?
2) What is Amazon telling you they will need to meet demand?
3) Are your purchase orders shipping on time?
4) Is your product prepared correctly for sales/shipping by Amazon?
5) If chargebacks are an issue what is that data telling you?

13.
True Cost of Stocking Out
Lost Sales When Product is out of Stock
+
Loss in Organic Ranking (Result of Lost Sales Velocity)
+
Re-Investment in Resources to Recover Ranking
=
True Cost of Stock Outs on Amazon

14.
5 NEW Key ARA Basic Metrics
Target % Definition
1 Fast Track Glance View Rate 90% The percentage of times a customer visits a detail page and the item is instock for Prime shipping.
2
Percentage of Total Glance Views Dependent
Shows for a specific period the percentage of the total glance for a vendor that are attributed to the
specific asin. Using this metrics shows where traffic is going for a vendor’s product. It can also be used to
identify asins where there are low glance views being attributed and need addressing with content
enhancement or AMS.
3 Changes in Glance Views (prior period) Dependent
Shows the percentage increase or decrease in glance view to the prior period. Sue this metric in a similar
manner as Percentage of Total Glance Views.
4 REP OOS (out of stock)
<5% The percentage of time a customer visits a detail page and the asin is not currently available and the asin
is designated replenishable.
5 Lost Buy Box (LBB) Due to Price
<5% The percentage of times that the vendor has designated an asin as being available for purchase orders,
but Amazon loses the sale to 3rd party due to price.

15.
Key Metrics to Look Into
Fast Track Glance View

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Understanding Amazon’s Demand
Forecasting Model

17.
How Does Amazon Determine Inventory Levels Needed?
Vendor
Lead Time
Glance
Views to
Detail
Page
Stock
Availability
SeasonalityProduct
Cost
Analysis of
Demand
Forecast
Retail
Price
Orders
Placed

18.
NEW Amazon’s Probability Forecast
1) Amazon’s new Probability Forecasting presents both a challenge & an
opportunity.
2) Selecting the right Demand Forecast can be difficult, and properly
interpreting this information is critical to a Vendor’s success.
3) With the advent of the P-Level forecasting, Amazon has made a shift in
how they are communicating demand to vendors as well as creating
several options for the vendor choose from to use.
4) This shift to a more vendor driven action on what inventory to carry,
puts more burden on the vendor to decide what tolerance they have for
carrying inventory based on expected need from Amazon.

19.
NEW Amazon’s Probability Forecast
Text

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Purchase Order Management &
Operational Factors that Affect Instock
Efficiencies

21.
What Drives an Amazon Chargeback?
There are in total 22 possible areas that can incur a chargeback if not handled
correctly. The ones listed below are the most common.
3 Top Chargeback Categories
PO On-Time Accuracy – Measures if you ship what you confirmed in its’ entirety.
PO On-Time Compliance – Measures purchase orders being shipped on time.
Prep Issue – Measures if product has been prepared to the specifications that are
shown in the vendor manuals. Examples of this are, taping boxes shut, poly
bagging items and scannable UPC codes on the outside of packaging.

22.
Warehouse Operations Snapshot

23.
Amazon Communication Preferences

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Leveraging Operational Data to
Improve AMS ROI

25.
ASIN Level PDA Targeting
Item Comparison Report → Other ASINs a customer looked at when they looked at your ASIN.
ASIN Product Title
#1 Compared
ASIN
#1 Compared
Product Title
#1 Compared
%
#2 Compared
ASIN
#2 Compared
Product Title
#2 Compared
%
D026FKDJSD Zen Apple Slicer A027FKJD Henry’s Apple
Slicer
8.77% B027FKJD Sally’s Apple
Slicer
5.77%
D026FKDJDG Zen Carrot Slicer A022FKJE Henry’s Carrot
Slicer
6.42% B022FKJE Sally’s Carrot
Slicer
3.42%
D026FKDJST Zen Pear Slicer A026FKTJ Henry’s Pear
Slicer
7.03% B026FKTJ Sally’s Pear
Slicer
5.03%

26.
ASIN Level PDA Targeting
Market Basket Analysis → What other product appeared in customers shopping cart?
ASIN Product Title #1 Purchased
ASIN
#1 Purchased
Product Title
#1 Purchased
%
#2 Purchased
ASIN
#2 Purchased
Product Title
#2 Compared
%
D026FKDJSD Zen Apple Slicer A027FKJD Henry’s Apple
Slicer
8.77% B027FKJD Sally’s Apple
Slicer
5.77%
D026FKDJDG Zen Carrot Slicer A022FKJE Henry’s Carrot
Slicer
6.42% B022FKJE Sally’s Carrot
Slicer
3.42%
D026FKDJST Zen Pear Slicer A026FKTJ Henry’s Pear
Slicer
7.03% B026FKTJ Sally’s Pear
Slicer
5.03%

27.
SMALL TEXT
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STACK TEXT ROW 2Case Studies

28.
Client: Brand Generating $10M+/year with
Amazon
Challenge: Brand had plateaued at
a little under $1M in Shipped COGS /
month with a Replenishable Buy
Box Rate of 63%
CPC Strategy begins consulting
relationship in October.
Improvements in Operational
Efficiency allow for more aggressive
AMS strategy, contributing to 48%
YOY growth during Holiday
Improvements in Operational Efficiency coupled with a robust AMS strategy lead to:
Q1 2018 Monthly Shipped COGS have averaged $1.4M, averaging 41% lift YOY

29.
Client: Brand Trending to $1M+ / Year with
Amazon
Challenge: Brand started with
Amazon in late summer 2017 and
quickly realized the operational
challenges of working within the
platform
CPC Strategy begins operational
consulting relationship only, in Oct.
2017 to improve Operational
Efficiency. Shipped COGS increased
from Nov to Dec by 204% due to
strategic targeting of key operational
metrics for immediate impact.
● Average Shipped COGS for the first four months have maintained within 10% of the Dec peak.
● Average instock rate was 65% compared to a Q4 level of 44% allowing for confidence to
implement the AMS strategy for future growth.

30.
Program Goal: Increase Sales
Creating a process to proactively
replenish inventory to keep up
with demand and avoid
stockouts
Use Vendor Central report
data to create efficient
processes and instock rates
Growing purchase orders and
catalog coverage with Amazon
Maintaining high Buy Box share
against third party sellers
Using operational data to
inform marketing efforts
on- and off-Amazon
Understand what is needed to
communicate effectively with
Amazon/s self-service model
Identifying areas which will
generate chargebacks and
strategize how to minimize

31.
Pat Petriello
Head of Marketplace Strategy
CPC Strategy
Questions?
Eric Kauss
Manager, Vendor Operations
CPC Strategy