Troubleshooting your Amazon FBA sales funnel for maximum profit

Today, I’m going to give you a framework to find an Amazon product’s weakness and fix it, so you can make more money. And live the way you want to live.

Let’s use the idea of a sales funnel.

On Amazon (specifically via Amazon ads) the sales funnel looks like this:

Part 1: Impressions

Every day, thousands of people casually see your products in search results (i.e. Impressions). This is the lowest-commitment, highest-quantity activity your Amazon listings receive. It’s just eyeballs.

Part 2: Clicks

Then, a smaller percentage of those people click your listings (via Amazon PPC or organic search). They’re showing some interest. They might be doing research. Or in a buying mood. We don’t know.

Part 3: Sales

You’ll convert a certain % of those clicks into sales. In the case of clicks coming from Amazon PPC ads, you can now look at how much spend it took to create those sales (ACoS). And, factoring in landed COGS and Amazon fees, you can even know how much profit you actually made. Sometimes there’s revenue, but no profit!

And that’s it.

If your product isn’t performing as you’d like, there’s a problem with one of these 3 parts.

Makes troubleshooting nice and easy 🙂

Here’s it is as a simple progression:

Ad Impressions –> Clickthrough Rate (CTR) –> Clicks –> Conversion Rate –> ACoS –> Sales –> Profit

For example:

Here’s sample data for 1 parent ASIN advertised on the Amazon Ads platform:

368,949 Ad Impressions –> 0.22% Clickthrough Rate (CTR) –> 807 Clicks –> 6.19% Conversion Rate –> 57.23% ACoS –> $896.10 Sales –> -$107.18 Profit

Imagine this is your product.

What’s wrong here? Where does the funnel break down?

– the CTR (we aim for 0.5% minimum, otherwise you may want to split test the main photo, price, or get more reviews). You can find more thoughts on Amazon split testing here on my blog.

– the conversion rate (we aim for 10% minimum; the caveat here is that as products get more expensive, like $100+, conversions drop to sub 5% and that’s normal)

– the ACoS. A healthier number would be 25-30% (depending on margins). An ACoS this high eats too much of the profit

– the profit itself. We’re negative (the caveat here is while revenue from ads could result in a loss, if those ad sales are causing more organic sales to happen, that needs to be counted as well)

So, lots to fix.

Impressions, clicks, and ACoS can be improved by running more and better Amazon ads. Whereas CTR and conversions can be improved via Amazon listing optimization.

If you want us to analyze your Amazon funnel and give you a plan to product more profit (that you can implement now in Q4), book a call here:

3 Amazon split tests to make you more money