This guide is designed for leaders of brands selling on Amazon, who are looking to ramp up growth but don’t have a clear plan. It’ll help you diagnose the root cause of slow growth, determine realistic growth goals, and uncover and implement actionable solutions to fast-track your success on Amazon.
Almost every brand will face a period of stagnant growth on Amazon, especially given how cluttered the marketplace is today.
Whether you're managing a small brand or a multimillion-dollar business, navigating these challenges can be daunting.
I’ve used this same process for brands of all sizes, from $1M up to global industry leaders, across Amazon and other marketplaces. The approach is grounded in the eCommerce equation [link], a reliable framework for tracking KPIs and guiding strategic decisions.
Setting up
To get started, this is what you’ll need:
- Access to a tool like Helium10 or JungleScout.
- Download a copy of this customizable Amazon KPI benchmarking and target-setting model.
- Collect the following data:
1. Benchmarking
A. Your Own Business Metrics
Start by creating a spreadsheet to document key metrics over the last 24 months, such as revenue, share of voice (SOV), conversion rate (CVR), page views (PV), ad spend, and other relevant KPIs. This historical data will provide a baseline for identifying trends and patterns in your business performance.
Additionally, break down your revenue and SKU count by category and by month. This detailed view will help you pinpoint which categories are driving growth and which may need attention.
Include metrics such as:
- Revenue by SKU and category: Identify which categories and products contribute most to your bottom line, and how their growth is evolving over time..
- PV, CVR and AOV trends: Track how your traffic and conversion rates and AOV have changed over time, particularly in response to marketing efforts or seasonality. Are any of these key levers driving meaningful shifts?
- Ad spend allocation: Evaluate where you’ve been investing in ads and the return on that investment. I prefer to look at TACOS (total ad cost of sales = ad spend / total revenue) because that’s a better indicator of how ads are contributing to driving the whole business.
You’ll dig more into these in the audit, but for now get a sense of high level trends, and perhaps start thinking through how you’d like to see these metrics evolve.
B. Competitors and the Market
Understanding your position in the market is crucial. Start by assessing the total size of the market (i.e. each category you sell in) using tools like Helium10, focusing on the top 60 listings in your category. Benchmark your market share.
Identify at least three key competitors:
- A direct competitor: One whose performance you aim to surpass.
- The market leader: The brand dominating your category.
- An aspirational brand: A brand from another category that embodies the voice or positioning you aspire to, someone whose branding or positioning you think are really well done.
Gather insights on:
- Assortment and pricing: Compare competitors' offerings and prices against market averages to understand where you stand.
- Product Detail Page (PDP) and ad content: Analyze what competitors highlight in their images, videos, and A+ content. What messages are they prioritizing?
- Keyword strategy: Identify the keywords competitors are bidding on and how they align with their product positioning.
C. Target Setting
With a clear understanding of your business and competitors, it’s time to do a first pass of setting growth targets. Use the template from above to input your current revenue and KPI numbers. Set an ideal target revenue number, and the template will project what traffic is needed to achieve that, assuming your CVR and AOV remain constant. You can also adjust CVR and AOV and let traffic adjust.
The numbers the calculations spit out may mean nothing to you yet, or it may shock you to see how much change is needed to hit your aspirations. So next, we’re going to audit where this change is going to come from.
2. Auditing key levers
As you go through the following audit, take notes for each section on key opportunities or initiatives you identify that can improve that lever. Also jot down any notes on how you think this will impact AOV, traffic, or conversion rates.
We’ll come back to this table at the end of the exercise when it’s time to re-set targets and plans.
Bear in mind that there’s no way to know exactly how much any action will impact these key levers until you actually run a test. You need to use a sense of intuition and a STRONG dose of sensibility to come up with a best guess on impact, and remember that impacts aren’t cumulative, so if you adjust price and update images, you won’t see 1+1=2 increase in conversion rates.
And if you don’t have a strong sense for impact now, that’s fine - we’ll work out reasonable goals later.
A. Assortment
Review your product assortment in detail. Examine your SKUs by category and sub-category, assess your bundling architecture, and analyze revenue per SKU. This will help identify opportunities for SKU rationalization or expansion. Also run a search on the terms that drive the majority of your traffic (you can find these in Amazon brand analytics or Helium 10) and look at how your products display. Don’t forget to check on mobile.
Consider:
- Shelf display: How are your products appearing on the digital shelf? Are they taking up enough space, or are there so many that it’s confusing to customers? Do you need to change your parent SKU structure?
- Product performance: Are some SKUs generating almost no revenue while others are clear topsellers? Can you kill off some of the poor performers? Iterate on the top performers?
- Bundling opportunities: Can you create bundles to increase AOV or cater to different customer needs?
- Expansion possibilities: Are there gaps in your product line that could be filled to capture more market share, like launching new products and scents? Note: I suggest you leave category expansion out of this process, because expanding into new categories is a more complex question that should be covered as part of a brand and product assessment, not simply to “plug a hole” on Amazon.
B. Price/AOV/Margin
Evaluate your current pricing strategy, AOV, and profit margins. If one of your goals is to become more profitable on Amazon, explore ways to drive higher AOVs through bundling, premium pricing, or upselling.
Questions to consider:
- Price elasticity: How sensitive are your customers to price changes? How did demand change when you’ve changed prices before? Be open to price adjustments in either direction - I’ve seen significant upwards price adjustments have negligible impacts on topline sales (while improving profit), and price decreases disproportionately drive up BOTH conversion rates and traffic, leading to sales and net profit increases. Note: You may just have to test this out.
- Margin improvement: Are there inefficiencies in your pricing or costs that could be optimized? Could you adjust your bundle sizes to move up or down a FBA size tier to reduce FBA fees? Can you shift demand to a higher-margin category?
C. Traffic
Conduct an Amazon Brand Analytics audit and a search funnel audit to assess the quality and quantity of traffic to your listings. This will reveal whether you're attracting the right audience and converting them effectively. Also look at the child SKU report from the previous step.
Key areas to audit:
- PV/day over time, PV/SKU, and Revenue/PV: Is traffic increasing or decreasing? Which SKUs are driving that? Which SKUs make the most revenue per visit? You should consider what’s leading SKUs to get more traffic than others, and consider driving more traffic with ads to the high Rev/PV SKUs.
- Search funnel performance/CTR: Are you ranking for the most relevant keywords? What percentage of clicks are you driving for those keywords (CTR)? Is there something you can do to improve that, like improving your hero image, title, price per unit? By the way, I’ve had an instance where dropping price (which you’d expect to increase conversion rate) actually increased page views by a factor of 4x! Think through all the things customers are sensitive to when they search, and solve for that. By the way, Amazon lets you run A/B tests on Titles, hero images, and A+, and you should always have those running.
- Organic vs. paid traffic: Which channels are driving the most valuable traffic? How is your organic traffic trending over time? This is a good trend to track as it can help troubleshoot when sales are down, whether they’re being driven by ad performance or lower demand.
D. Conversion Rate (CVR)
Download the sales dashboard detail page sales report to get unit session %. Estimate benchmarks for your category.
(Note: I prefer to track page views over sessions because they’re more comparable to paid clicks, so I can estimate organic page views by total page views - paid clicks. Then I calculate CVR by dividing units ordered / page views).
Don’t overlook:
- Customer journey: Go back to the competitor benchmarking assessment you did and do a sitewalk for your products, comparing to other leading products. Why might customers drop off? Can you do better with your images, or add in more descriptive A+ content? Have you given the customer enough options (variations) to choose from? Also check if there are competitors advertised on your page. Lastly, check for bad reviews. There’s not much you can do about one sticky bad review, but you can make sure to address any issues in your next shipment, or put more information in your PDPs that explains the problems.
- Inventory management: Ensure you're consistently winning the buy box and have sufficient stock levels to meet demand.
E. Advertising
Search for some of the main category terms, your main competitors, and your own brand, and see how you’re displaying. Do the same for your competitors to compare. Look at brand search funnel analytics and your ads data (spend, sales, ROAS, CPC), broken down by strategy type (branded, non-branded) and category.
Focus on:
- Budget split by type: Now, look at your advertising data and break it down brand and non-brand campaigns, and assess your ROAS, preferably by category. For non-brand campaigns, a ROAS close to 1 might be acceptable, but ensure that your branded campaigns are driving strong returns. What does your split look like per category vs revenue by category?
- Search funnel alignment: Look at Amazon’s brand search funnel analytics and check how much of your branded traffic you’re capturing (impressions and clicks). Do the same for key category terms. This will give you an idea of whether you’re advertising the right amount on branded. Branded spend is a contentious topic [link to linkedin post] but most people agree you want to bid on at least the top 2 branded placements, while not taking up more than 95% of the impressions for the term. Top of search sponsored brands is usually a good idea.
- Category targeting: This is arguably the best way to acquire new customers on Amazon, by putting yourself in front of them when they search for the product they’re looking for. If you’re a smaller brand, you may not be able to afford extensively spending on high volume expensive keywords like “face moisturizer”, so you might spend more on long tail keywords, but it is worth occassionally investing aggressively in one big term, at least once you have some reviews. Check out the search funnel report and see how much you’re showing up for a term, and compare to the Helium10 plugin’s analysis of the revenue on the first page of search results. What’s the tradeoff? Sponsored brand ads work well here too, at the top of search (although they’ll be expensive). You could also consider placement lower down the page.
- Competitor targeting: Are you effectively targeting your competitors' customers? The best way to think of this is, which brands’ customers am I targeting (advertise there even though you may get a low ROAS) and which brands am I clearly better than (e.g. higher reviews, better price, better value or branding). Definitely advertise there. Don’t focus on the rest and heavily avoid and negate brands with a different audience to yours.
- Amazon ad spend optimization: While I do think you should be monitoring ROAS, I think you should only have targets in place for TACOS (I mean, you should have a revenue and an ad spend target anyway, which gives you TACOS: ad spend / total revenue). I actually don’t care too much if ROAS goes down as long as we stay within our TACOS goal and at or above topline goal. Actually, in an ideal world, you’ll be spending more on low-ROAS non-branded terms, but sales on these will push your organic ranking and sales up more, so if you’re doing things right, you should see ROAS decrease while TACOS stays the same and topline increases. That was a bit of a ramble, but all of it is to say you need to find the right level of ad spend that’s going to support your topline sales growth. Most smaller brands have smaller budgets, and most are very scared of spending too much on ads, but I think this is a mistake. Amazon has become an ad merchant above all else [link] and you need to pay to play - but the payoffs are enormous. You could test this by running a short (e.g. 8 week) test where you push up ad spend on high-ROAS campaigns (not branded) in 2% TACOS increments over 2 weeks, and measuring the impact on TACOS.
- Off-Amazon activity: What are you doing to drive awareness of your brand off Amazon? All of the brands who are scaling on Amazon over the last few years have done so by doing some sort of awareness-driving off-platform, whether that’s creating videos about how the product works on TikTok (and getting some influencers to do the same), or fully growing a DTC business. If you’re not already doing this, maybe you think you don’t have resources for it, but you should really consider it. You can even outsource it [link]. If you’re a brand with a bigger budget, you could consider Amazon top-of-funnel media like DSP and STV too, as a portion of your total budget, but you probably already have an agency suggesting this for you. If you’re not there yet, my suggestion is to wait until you’ve maxed out PPC before moving to DSP and STV.
- Amazon ad management team: How good is your ad team? This is a tough one and you may not even feel like you know enough to assess it, but it’s an important question. I’ve seen all types of Amazon ad managers and I can tell you that the bad ones can do some real damage: apart from massive wasted budgets, they can create chaos on the account that can take years to unwind. It’s not a bad idea to get an agency to audit your account. Even for very small brands, a good agency can be a high ROI investment. On the other hand, the right SaaS and the right person managing ads is a big differentiator; put a different way, I’ve never seen a brand be successful on Amazon WITHOUT very strong and strategic ad management. It’s the key pivot point.
3. Action Planning
A. Adjust Your Target Tool
Now go back to your target KPI tracker and input a realistic but ambitious goal for AOV, PV, and CVR, and incremental assortment.
You can get pretty far by taking intuitive stabs at how these numbers will change. But if you’re making significant changes to your assortment or using this exercise for actual budgeting — which I do — then it’s probably worth doing some light modelling out of AOV, PV, and CVR per category with your current SKU mix and how you think it’ll change in the future state.
Start with incremental assortment. Be realistic - if your catalog is bloated and you need to cut down on SKUs, then reduce this number, but if you think you will add net SKUs, add those in here.
For AOV, keep it the same unless you’re planning on increasing prices or dramatically shifting assortment mix. If you think your incremental SKUs will change AOV, you can adjust that here.
For CVR, it’s usually safe to assume that this will decrease over time and as traffic increases, so assuming you make minor improvements in your merchandising, I would keep it the same. Increase it if you’re dropping pricing or undergoing a major overhaul of merchandising, but not by more than 25%. Bear in mind that if you’re adding incremental assortment that’s got a much higher or lower CVR than your average, you should factor this in.
That leaves you with traffic.
The most controllable lever is paid traffic driven by paid spend, so estimate what budget you’ll have available for paid spend and divide that by the estimated CPC to find your paid clicks. Bear in mind CPCs can inflate organically by as much as 25% YOY and will increase if you expand into more expensive categories.
Now all you have to do is estimate organic traffic. I’ve put in an assumption that organic will remain at the same ratio to paid traffic that it is currently (but you can adjust this - if you’re planning on increasing paid traffic a lot, you may want to reduce this by 20%). You also need to make an assumption around the incremental traffic from your net new SKUs. In reality, they won’t add incremental page views equal to another SKU, they’ll “cannibalize” some of the existing traffic. So I’ve added an assumption that each incremental SKU adds incremental traffic equal to 10% of the average page view per SKU, which is pretty realistic, unless you’re launching a massive new category with lots of ad spend behind it.
Et voila, this will leave you with your target revenue. You’ll probaby play around with these numbers a fair bit until you reach a mix that “feels right”, and that’s OK - it’s an art and a science.
B. Set OKRs and KPIs
Now you can go back to your notes and list all of the items that you’re going to do to support these changes, and track them against key results.
Group all of the micro-changes you noted into overarching “projects” or objectives, collectively with a clear ability to make an impact. Ideas that don’t fit and with uncertain impact, like say, exploring Amazon Creator Connections, are important to backlog so you can focus.
I like bucketing these the OKRS into themes that support business goals so that they’re easy to communicate with the organization.
For example, you might have a goal of building a best-in-class brand in your category, and generating incremental traffic with efficient marketing as another goal, so you may structure your pillars and OKRs as:
In case it’s not obvious, it’s important to have metrics and results that you can clearly measure and track on a weekly basis - and that are also directly linked to and achievable by the objective.
C. Prioritize, Plan, and Delegate Initiatives
You and your team can now break down the objectives into specific actions, prioritize them based on impact and feasibility, and delegate responsibilities to your team or external partners. Typically, you'll want to address conversion / content improvements first, followed by pricing adjustments and then traffic acquisition through ads, so that you can isolate the impacts of each test. However, bear in mind that Prime Day July and October and Black Friday / Cyber Monday are key windows around which you need to have stability on the account, so it’s usually helpful to plan backwards from the next deal event.
If in doubt about the team’s capacity to tackle all the initiatives, my suggestion is to prioritize the one that will drive traffic first, unless you’ve benchmarked your brand as needing significant improvement to play in the category (Clicks and conversion rate), in which case, get that right first.
D. Track and Monitor KPIs, Drive Team Ownership
This is the most critical and ongoing part of the process.
Monitor your KPIs weekly, comparing results week-over-week, month-over-month, and year-over-year.
Yes, it’s a lot of work, but you have to be looking at the numbers on a weekly basis - more than just revenue.
Whoever is owning the implementation of the objective should be reporting at least bi-weekly on whether they’re on track to hit the KR.
Identify and diagnose any significant changes, and make data-driven decisions on next steps based on the key drivers.
This will create discipline and ownership around key metrics and give people a sense of agency and control, once they see their actions having an impact.
Ultimately that will create the feedback loop you need, because the boots-on-the-ground will have the trust to give valuable feedback about what’s working and what’s not.
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