Amazon is a competitive marketplace where sellers rely heavily on customer engagement. If visitors land on your listings but leave without making any purchase, it can hurt your repute and damage your keyword ranking. Therefore, tracking the ratio of customers purchasing products after visiting the listings (Amazon conversion rate) becomes essential for Amazon sellers.
The latest stats show an average conversion rate of 9.58% on Amazon, meaning around 9 visitors out of every 100 buy what you sell. But if you don’t know how to compute and boost the conversion rate, this is what we will help you do. In this article, we will start by discussing the significance of Amazon conversion rate, the method to compute the metric, and best practices to improve the rate. So, let’s get started!
- What is Amazon Conversion Rate?
- Why is it Important to Calculate Amazon Conversion Rate?
- How to Calculate Amazon Conversion Rate?
- How to Monitor Amazon Conversion Rate?
- What is the Ideal Amazon Conversion Rate?
- Factors that Affect Your Amazon Conversion Rate
- Tips to Boost Your Amazon Conversion Rate
- Wrapping Up
What is Amazon Conversion Rate?
Conversion rate is a common marketing metric that computes the digital engagements of the customers with the brand. It is measured as the amount of conversions over the total audience. The term “conversions” can refer to different actions in different use cases. It can be the number of clicks, sales, registrations, or subscriptions.
Basically, conversion is any action that a customer takes, which can be registrations of a course, social media shares, purchases of a product, clicks on a website, subscriptions to a newsletter, etc. The more the customers interact with your digital content, the higher the conversion rate.
Amazon conversion rate is the percentage of customers who visited your product listings and bought your product. Amazon uses conversion rate as a metric to determine the number of customer visits that lead to product sales. Here, the word “conversion” simply means “sales”.
Ordinary shopping websites have a conversion rate of 1-2%. Amazon, on the other hand, has a much greater average conversion rate of 10% because customers either come to Amazon to buy something right away or intend to buy it. This rate is almost 74% for premium Amazon members, which is insane.
Why is it Important to Calculate Amazon Conversion Rate?
Amazon conversion rate is an important metric to convert your visitors into buyers. It denotes the worth of your product on the digital platform.
A high conversion rate on Amazon shows that your product attracts visitors and encourages them to purchase. On the other hand, a low conversion rate represents problems with your Amazon offer. There could be some issues with your product listing, pricing, or customer dealing.
Some of the reasons why Amazon conversion rate is important:
- It helps your products to rank higher
- It lets you improve your listings’ performance
- It highlights the weak areas of your offers
- It allows you to evaluate your A/B tests
The most important reason to track conversion rates on Amazon is that it helps your product listings rank higher and most likely appear on the first page of Amazon search results. In case of a lower conversion rate, your product can hardly rank or show up on the first few pages.
Your product ranking on Amazon depends upon several factors. Amazon’s A9 algorithm handles this task since it is designed to assist in ranking products. Mainly, the two relevancy and popularity metrics help display Amazon products. Other than that, conversion rate, sales history, and organic sales influence determining Amazon’s ranking.
How To Calculate Amazon Conversion Rate?
By now, it must be quite clear that the conversion rate is the total number of visits divided by the total sales of the product. Conversion rate and sales velocity are the two critical parameters for the success of a business, according to Amazon’s A9 algorithm.
Every time your potential visitor converts into a customer, this algorithm receives an indication that your keywords and search terms are relevant to the product, which further boosts its visibility.
You can compute the Amazon conversion rate using the following formula:
Conversion rate = (Total number of orders) / (Total sessions)
The values of “total number of orders” and “total sessions” can be found in your Amazon Sales dashboard. The next section covers the complete process extensively.
How To Monitor Amazon Conversion Rate?
Monitoring Amazon conversion rates is possible with the help of some metrics. You can easily access them from your Amazon dashboard.
To monitor your Amazon conversion rate, follow these steps:
- Launch your Amazon Seller Central account.
- Navigate to the Reports tab.
- Select Business Reports.
- Go to the Sales Dashboard to check the Sales and traffic statistics.
- From the table, locate for total order items and sessions.
- Set your desired time range for analysis.
- Search for “by ASIN” reports and use the conversion rate formula to compute the values.
What is the Ideal Amazon Conversion Rate?
Determining an ideal Amazon conversion rate is hard because it heavily depends on the type of items you sell. However, in terms of average, a conversion rate between 10% to 15% can be reasonable.
For instance, if you run a typical eCommerce website like Shopify for selling products, the average conversion rate will be hardly 1% to 3%. To understand better, this means that out of every 100 website visitors, only one to three customers actually buy something from the website.
If we switch the scenario and consider Amazon, it has a large community of people who trust the platform. Therefore, they are more likely to purchase products on Amazon rather than at other eCommerce stores.
As mentioned earlier, the average conversion rate of the product is almost 10% on Amazon, which is much greater than that of many ordinary e-commerce stores.
In a nutshell, Amazon sellers have no hard and fast value to be met, mainly because what works for one brand may not help the other. Therefore, it is better for every seller to identify goals, understand the product, assess the market, and then set a conversion rate accordingly.
Factors that Affect Your Amazon Conversion Rate
If you have a below-average conversion rate on Amazon, it could be due to several factors, such as the quality of your listing, customer reviews, product price, delivery time, ad campaign, or other elements. Therefore, it is important to optimize and maintain these contributing factors.
Some of the factors that lower your Amazon conversion rate are:
1. Quality of Listing
Low-quality Amazon listings are one of the major factors that cause lower conversion rates. If your product listing is unclear or unappealing, it will be hard to convince potential visitors to buy what you are selling. Moreover, an inappropriate title or insufficient description of the product drops your sales on Amazon. Similarly, customers can’t understand how the product looks if the main image is blurry or you have added a limited number of photos in your stock.
2. Customer Reviews
Most buyers check previous reviews before purchasing anything from a seller. Reviews of your actual buyers are a testimony of your service. Negative reviews can spoil your repute and lower your conversion rate on Amazon. Moreover, buyers will be suspicious if you have left customer queries unanswered.
3. Price of the Product
Most customers make buying decisions based on the price. If you are selling an overpriced or underpriced product, you are less likely to grab customers. If your price is too low, you may not be delivering up to the quality standards. Whereas if your price is set too high, visitors will search for cheaper alternatives
4. Keyword Choice
Your keywords play an important role in maintaining your Amazon conversion rate. Using the right keywords can drastically boost your visibility on Amazon. Similarly, wrong keywords can terribly affect your sales on the platform. For instance, if you are selling a wired mouse but you found “Bluetooth mouse” to be popular in search keywords, you may add your product with the inaccurate keyword (i.e., Bluetooth mouse instead of wired mouse).
So, when a potential buyer searches for a Bluetooth mouse and finds your listing in the search results, he might open it, check the description, and leave the page without purchasing to search for an actual Bluetooth mouse.
When more people keep on visiting your page and leaving without actually buying it, your conversion rate is drastically affected. Computationally, the value of the denominator increases while the number of sales remains stagnant, leading to a drop in the conversion rate.
Tips To Boost Your Amazon Conversion Rate
Conversion rates are important for ranking your product listings higher on Amazon. It contributes to your popularity and sales on the platform. Therefore, you must take measures to improve your conversion rates as an Amazon seller.
Here is a list of tips that can increase your Amazon conversion rate:
1. Smart Keyword Research
Buyers search for different products on Amazon using specific keywords. Performing keyword research helps you draw traffic and a higher click rate to your Amazon listing. You can use a keyword research tool to find the most suitable keywords for your listings. When you rank your products for specific keywords, it increases your visibility, traffic, and sales.
2. Optimize Your Listings
Sellers often ignore optimized product listings on Amazon, and most potential buyers inspect this section before making a decision. Therefore, after you select the right keywords, you should add appropriate titles, product descriptions, and bullet points to your listing. Keep your product descriptions easy to read and understand by including useful information.
3. High-Quality Media
The way your listing appears on Amazon is crucial to its conversion. Your main image is one of the first things that grab the buyers’ attention in the search results list. So make sure to upload relevant high-quality and mobile-friendly images to your stack. Use crisp and clear images with a white or plain background to make your product look attractive. Also, you must edit your professionally captured pictures to highlight product features.
4. Set Optimal Prices
The price of your product plays an important role in decision-making. Overpricing or underpricing your product can harm your sales on the platform. Customers doubt the quality of extremely low-priced products, and you lose profit. Therefore, always set competitive prices by researching your competitor’s pricing plans.
5. Offer Special Discounts
Discounts and promotional sales often boost your conversion rates on Amazon. If buyers find an attractive package through seasonal promotions, coupons, and reduced prices, they are more likely to buy it. You need to decide on these discounted plans and rates as part of your pricing strategy.
6. Sign up for FBA
Slow deliveries negatively impact Amazon conversion rates and sales. You can avoid delays by signing up for Fulfillment by Amazon (FBA), which delivers them quickly and makes them “Prime” eligible. Amazon handles the packaging, shipment, and even customer service aspects of your product.
7. Build a Positive Customer Experience
When a potential buyer visits a listing, your customer reviews can make or break the deal. Buyers will hesitate to purchase from you if your listing lacks enough social proof or you don’t respond to customer queries. Therefore, it is important to improve your ratings and review counts on the platform.
Amazon conversion rate is a critical marketing metric for both expert and novice sellers alike. It not only determines the visitors contributing to your sales but also reflects and affects your ranking on the platform. Therefore, it is important to improve and maintain conversion rates that are influenced by several factors like pricing, listing, reviews, and keywords. You can take the measures discussed in this post to boost your conversion rates, increase your visibility, and rank higher on the platform.