Today, we’ll focus on metrics and areas worth measuring to increase sales on marketplaces based on the insights gained.
ROS (Return on Sales)
When selling on multiple different marketplaces (like Amazon, Allegro, or Erli), it’s crucial to understand the profitability of each channel. This helps you to not only identify the most profitable marketplaces, but which ones require more support and which ones may not be worth continuing to sell on.
Profitability = (Revenue – Costs) * 100
ROAS (Return on Advertising Spend)
ROAS is calculated by dividing advertising revenue by its cost. It provides insights into the return on investment for your advertising expenses. A higher ROAS is generally better, but it’s essential to strike a balance to avoid overspending on advertising.
Inventory Product Rotation
Identify which products contribute to the majority of your marketplace sales. Understanding which products perform well allows you to maximize their potential. It’s often the case that 80% of your sales come from 20% of your product assortment.
Competitive Product Prices
Monitor both the average market prices for the products you sell and the prices of competing products. This information helps you determine your pricing strategy and find unique selling points.
Seasonal Sales Fluctuations
In many industries, there are seasonal fluctuations in sales, often influenced by weather conditions. Monitoring these trends can help you expand your product range and reduce the impact of seasonality on your sales.
Number of Returns and Their Reasons
The number of returns and the reasons behind them can indicate product quality, product information accuracy, or customer service quality. Minimizing returns by improving product information and customer education is crucial.
Returns without Specified Reasons and Non-Deliverable Orders
Keep an eye on the number of returns without specified reasons and orders that weren’t delivered. While these are challenging to track manually, they are essential to manage effectively, especially in the fashion industry.
Product Ratings and Reviews
Customer ratings and reviews are valuable sources of feedback. Analyzing them can help you identify areas for product improvement and inform your marketing strategies.
In summary, measuring various metrics is crucial when selling on marketplaces, and it’s not just about tracking sales volume. Profitability is the primary metric to focus on, and other metrics can influence it to varying degrees.
If you need support in expanding your sales on platforms like Allegro, Amazon, Erli, or other marketplaces, let’s have a conversation.