Amazon has grown exponentially since launching in 1994, reaching over 310 million active customers in its last published count in 2016. In 2000, Amazon introduced its marketplace, giving third-party sellers the ability to list their products, providing an attractive opportunity to independent companies to sell to Amazon’s hundreds of millions of customers. In 2017, Amazon marketplace sales reached $118 billion dollars worldwide.
In addition, a study by ad and market research firm Survata also revealed that 49% of consumers turn to Amazon when they are first making an online purchase, while 36% prefer search engines such as Google when they are shopping online.
While these numbers present a huge market opportunity, it is still a challenge for vendors and their products to be seen on Amazon. Reason being, the number of products competing for consumers’ limited attention on Amazon is currently at 353 million products and still growing, according to this report. Making your product stand out, therefore, takes some work.
In the face of these challenges, it is important to spend the effort to improve your product’s listing and increase your ranking.
In this article, we offer some suggestions for improving your listing with the use of inventory management tools. To start off, let’s take a quick look at the A9 algorithm and the factors to consider in order to rank higher and appear on the first page of Amazon’s search results.
The A9 Algorithm
The A9 Algorithm is the system behind the Amazon search box. This algorithm ensures that searchers get the most relevant results for every query. There are three factors that influence product ranking in Amazon. These are:
One of Amazon's goals is to maximize the revenue per consumer. Thus, products with better conversion rates are ranked higher. Factors that influence your conversion rates include sales rank, customer reviews, pricing, and the size and quality of the images you use for your listing.
The A9 algorithm works by gathering results and listing them based on the relevancy. To ensure the relevancy of your product, you should optimize your title, description, brand number, and specifications. Keywords that are relevant to your item should also be included.
Customer experience is one of the areas that Amazon focuses on. Customer reviews, order processing speed, stock rate, perfect order percentage (POP), and exit rate are several factors that contribute to your ranking on Amazon.
Overall, great customer experience and complete product information are the keys to ranking higher on Amazon.
On top of that, efficient inventory management of your products listed on Amazon is also a crucial factor that affects your ranking. Many vendors are unaware of the fact that Amazon prioritizes listings with adequate inventory.
How great inventory management enhances your Amazon listings’ rankings
1. Reduced Stock-Outs
One of the situations that can significantly affect your listing is stock-outs. Amazon’s algorithm will not include a product in the search results if it’s out of stock. Hence, once your product is not listed in the results page, your competitors will simply get a free pass to rank their products over yours.
Secondly, stock-outs can impact your Best Seller rank (also called sales rank), which is considered when evaluating your conversion rate for search engine ranking purposes. The calculation for the Best Seller rank is your sales velocity or how fast your items are being sold. With stock-outs, you will lose sales velocity, which is unfavorable.
Let’s take a look at the example of Jungle Stix to better see how stock-outs affect your Amazon ranking. The said product was in the Best Seller Rank number 1,742 before they ran out of stock for 26 days. Eight days after their stock-out, their ranking went down to number 27,758. Jungle Stix needed to have giveaway promotions to recover their ranking from the stock-out.
You can regularly monitor your supplies by using an inventory management system that sends notifications about your inventory levels and analytics regarding your customer, products, and sales patterns, in order to minimize stock-outs on Amazon.
You can further reduce stock-outs by taking note of these factors when employing an inventory management system:
Inventory Order Lead Time
Inventory order lead time is the period between the placement of an order and its arrival. Ideally, you should ensure that you have enough stocks until the inventory arrives so you can avoid a stock-out on Amazon. Use an inventory management software where you can set up low stock alerts and lead times to keep your amount of supplies stable.
Inventory forecasting is simply predicting the number of products you’ll need for a certain period. Inventory forecasting allows you to prepare enough supplies to last you until your next order. You can utilize an inventory management software to gain insights regarding your sales trend so you can forecast based on data.
2. Efficient Order Processing
As mentioned earlier, Amazon values customer satisfaction. They value sellers who have efficient, reliable processes more than those who have received complaints due to inaccurate orders or slow transactions. One of the ways to deliver customer satisfaction is through fast and accurate order processing — and an inventory management software can help you with this. It can help improve the order processing speed for better ranking by giving you real-time data on all your stocks. You can also attend to customers’ queries faster with a better overview of all your products.
3. High Perfect Order Percentage (POP)
The Amazon Perfect Order Percentage (POP) is one of the metrics for customer satisfaction. It tracks the number of orders that are perfectly processed and fulfilled — from the moment the buyers add the product to their cart, to their doorstep. Better POPs result from well-maintained listings, accurate inventory, and smooth product shipping.
The common obstacles to having POPs are inaccurate shipping, canceled orders due to stock-outs, and late shipments. While some of these may be caused by unforeseen circumstances (e.g. delayed shipments due to harsh weather), most can be prevented by having good inventory management system. For instance, there is inventory management software that can streamline critical operations, such as accounting and shipping, for smoother transactions.
Amazon advises sellers to maintain 95% POP. If yours is below the said percentage, you should look to streamline your operations using inventory management to reduce errors and increase speed.
Increasing your Amazon ranking requires more than just optimizing your product titles and descriptions. You also need an organized system behind the scene to ensure that you’re delivering the best service to your customers — this is where inventory management comes in.
Utilize the features of inventory management software and you need not worry about running out of stock or committing errors in order details anymore. With inventory management software, everything can be taken care of on a single platform.
Aside from increasing your Amazon ranking, inventory management software also allows you to automate tasks which helps to save time and increase profitability while delivering customer satisfaction.
Looking to use inventory management software so you can improve your Amazon ranking? Then look no further than Sweet Technology’s inventory management software. Its smart capabilities can help you avoid experiencing stock overages and shortages by providing you with accurate and real-time data of your inventory.
Sweet Technology can also be integrated with various eCommerce, accounting, and shipping applications such as Amazon, Shopify, and Stripe. Integrating Sweet to your online platforms can help drive your profits by improving customer experience.
To find out more about how Sweet can help you, request a free demo today.