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How to Improve Your Amazon Operations to Grow Purchase Orders & Profitability

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How to Improve Your Amazon Operations to Grow Purchase Orders & Profitability

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Amazon is constantly changing. Today, vendors have more insight & tools than ever before to improve their operational performance and Amazon competency. Unfortunately, interpreting and implementing these changes are challenging.

But for Amazon vendors who want to scale sales, it’s essential to use Vendor Central data to create a holistic product catalog analysis, the dynamic factors affecting sales & profitability, and how that aligns with Amazon’s ongoing PO process.

Some Topics We’ll Discuss:
-Leveraging Amazon’s Retail Analytics (Basic + Premium)
-Demystifying Your Amazon Vendor Central Data
-Warehouse Functions & Their Impact on Inventory Availability
-Understanding Amazon’s Demand Forecasting Model
-Combining Operational Data into Your AMS Strategy
our Privacy Policy.

Don’t Miss Out—Former Manager, Vendor Management at Amazon and now CPC Strategy’s Manager of Amazon Vendor Operations, Eric Kauss, is joined by our Head of Markeptlace Strategy, Pat Petriello, for a webinar that delves into maintaining a operationally efficient & profitable business on Amazon.

Amazon is constantly changing. Today, vendors have more insight & tools than ever before to improve their operational performance and Amazon competency. Unfortunately, interpreting and implementing these changes are challenging.

But for Amazon vendors who want to scale sales, it’s essential to use Vendor Central data to create a holistic product catalog analysis, the dynamic factors affecting sales & profitability, and how that aligns with Amazon’s ongoing PO process.

Some Topics We’ll Discuss:
-Leveraging Amazon’s Retail Analytics (Basic + Premium)
-Demystifying Your Amazon Vendor Central Data
-Warehouse Functions & Their Impact on Inventory Availability
-Understanding Amazon’s Demand Forecasting Model
-Combining Operational Data into Your AMS Strategy
our Privacy Policy.

Don’t Miss Out—Former Manager, Vendor Management at Amazon and now CPC Strategy’s Manager of Amazon Vendor Operations, Eric Kauss, is joined by our Head of Markeptlace Strategy, Pat Petriello, for a webinar that delves into maintaining a operationally efficient & profitable business on Amazon.

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How to Improve Your Amazon Operations to Grow Purchase Orders & Profitability

  1. 1. How to Improve Your Amazon Operations to Grow Purchase Orders & Profitability Bridging the Divide Between Your Operations & Amazon Sales Growth
  2. 2. ● Session Recording + Slides Will Be Sent Out ● Join in the Poll Questions ● Submit Questions for our panelists ● Resources Available Today’s Logistics
  3. 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. 4. Pat Petriello Head of Marketplace Strategy CPC Strategy Today’s Speakers Eric Kauss Manager, Vendor Operations CPC Strategy
  5. 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. 6. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2 Why are we talking about Amazon Vendor Operations?
  7. 7. Why are we Talking About Vendor Operations?
  8. 8. Why are we Talking About Vendor Operations?
  9. 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. 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. 11. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2 How do you determine if you’re Operationally Sound?
  12. 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. 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. 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. 15. Key Metrics to Look Into Fast Track Glance View
  16. 16. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2 Understanding Amazon’s Demand Forecasting Model
  17. 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. 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. 19. NEW Amazon’s Probability Forecast Text
  20. 20. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2 Purchase Order Management & Operational Factors that Affect Instock Efficiencies
  21. 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. 22. Warehouse Operations Snapshot
  23. 23. Amazon Communication Preferences
  24. 24. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2 Leveraging Operational Data to Improve AMS ROI
  25. 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. 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. 27. SMALL TEXT STACK TEXT ROW 1 STACK TEXT ROW 2Case Studies
  28. 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. 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. 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. 31. Pat Petriello Head of Marketplace Strategy CPC Strategy Questions? Eric Kauss Manager, Vendor Operations CPC Strategy

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