The Impact of Amazon Product Listing Optimization on Conversion Rates
At DataHawk, we love numbers. We especially love monitoring data & trends to make informed & data-driven decisions about each step of selling on Amazon.
If you are looking for data & insights like us, to beat your competition, you are in the right space. Knowing every aspect of conversion on Amazon is essential to further optimize and boost profitability. Here’s a deep dive into the data we’ve collected from a sample of DataHawk users in 2021.
- What is Amazon Conversion Rate?
- How does the Global Amazon Conversion rate look?
- How do product listings impact the Conversion Rates on Amazon?
What is Amazon Conversion Rate?
[Conversion rate = Total Number Of Orders / Total Page Views]
When you know your current Amazon conversion rate, you can use it as a benchmark for measuring the impact of your optimization efforts. Considering that Amazon’s organic ranking so heavily favors listings that have the highest conversion, understanding the Amazon conversion rate of your listing is vital.
Keep reading to learn how you can monitor and boost your conversion rates on Amazon.
How does the Global Amazon Conversion rate look?
- It is a direct indicator of the health of your listings.
- Higher the conversion better the product ranking on Amazon.
- Impact on conversion rate helps you assess the success of your listings A/B test efforts.
- A breakdown of conversion rate by listings elements helps you determine the weaker areas of your Amazon Product Listings.
According to DataHawk’s analysis, the average conversion rate for thousands of products on Amazon in the US marketplace ranges between 5% to 20%. So, what is an ideal Amazon conversion rate? As per DataHawk’s research, a reasonable Amazon conversion rate on Amazon is seen to be around 10-15%.
However, it also depends on the total sales made. The Amazon conversion rate is labeled as good or bad, considering the sales made with the pageviews. For instance, for five conversions coming from 10 page views, it is a 50% conversion rate. But the revenue generated is meager. If you compare these stats with 100 conversions for say, 1000 page views, the Amazon conversion rate is significantly less, but the revenue generated is the bomb.
Your Margins, along with your price point, also play an essential role. Here’s another example. If your product is expensive or has exceptionally high margins, having low conversion rates, in that case, is very much affordable. If you compare it with items that are cheaper and do not make as much profit, you can only move the needle if they make more conversions; hence a 10-15% Amazon conversion rate might not even cut it.
Here’s another statistic, the conversion rate for Prime members is seen to be much higher, at about 74%. This is attributed to the fact that most of the shoppers visiting Amazon are motivated to buy, either the same day or in the future.
In any case, it is essential to monitor conversion rates because it is one of the factors that propel your listings to a higher ranking. Amazon ranking algorithm weighs conversion rates & sales velocity to rank a product listing & vice versa. This is because each listing element plays a role in boosting the conversion rate on Amazon. We’ll see that in detail in a bit.
In general, if your product has a low conversion rate, it has lesser chances to be seen on page 1 of Amazon search results.
How do product listings impact the Conversion Rates on Amazon?
Amazon’s aim is to offer its shoppers the best pricing & experience possible. This is why Amazon always considers the total cost of an item when ranking products in search results. If your product is priced too high or low for its niche, it’s a sure red flag for Amazon’s Algorithm.
Amazon considers Buy Box status while ranking products in a category. Your pricing strategy plays a significant role in you winning the Amazon Buy Box Amazon. Since the price of a product competing with similar products influences the decision of your shoppers and Amazon too, companies must map their pricing well.
Pricing is the most important crucial factor impacting the Amazon Conversion Rate of a product. As a seller/vendor it’s crucial to set the lowest possible price considering your product, category & competitors.
But, how can you do that?
- Amazon Market Analysis with DataHawk
Our data at DataHawk clearly shows that, on Amazon, there is an astounding correlation between price and ranking. A lower-priced product with low reviews will almost always beat a higher-priced with dozens if not hundreds of more reviews.
If the Median price of the products that are ranking on page 1 of a Keyword search query on Amazon is $100 and the top 25% highest-priced products are priced at $120, you definitely want your product to be in those ballparks and preferably below. Also, this certainly means you’d probably have zero chance at ranking at page 1 should you price your product at, say, $150, which is way above the Median and Top Quartile Market research figures.
In general, our data tells us that being in the low quartile of a price in your niche could boost your conversion rates the most.
This is the most important factor impacting the conversion rate of a product. As a seller/vendor it’s crucial to set the lowest possible price considering your product, category & competitors.
- Amazon Market Analysis: Always try to be in the low quartile of a price considering your competitors.
- Delivery fee-free: If your price permits it, handing out free delivery fees goes a long way
- How you can optimize your pricing on Amazon?
Because Amazon operates based on an algorithm, pricing on this platform can be pretty tricky. Your ultimate goal is to have an attractive price to Amazon to find yourself in the buy box. This situation typically means you have a lower than average price than the competition. Repricing on Amazon is a unique price change strategy that typically seeks to undermine the competition. Competitors can change their price by a few cents to win back the buy box. You can do so easily by logging into Seller Central, giving yourself a slight advantage that will likely only be there for a few moments.
Amazon Price Tracking is another savior to help you get alerted on any change in price. It is important to consider that whether the change is to the item itself, or to another factor such as shipping, the algorithm allows Amazon to dynamically adjust product rankings quickly and effectively. Because of the dynamic nature of prices of Amazon, it is vital that you have a tool to alert you to any price drops that may have occurred.
When it comes to Amazon price changes, there are four comprehensive pricing strategies you can use. Below is a shortlist of pricing strategies that you can use:
- Premium: It is usually high priced and often uses brand names to generate extra interest. As brand names generally have less of an impact on Amazon, those using premium strategy will often turn to discounts on high-end products to generate interest. This strategy tends to be most useful for reputable brands in their sector, such as Gillette or Lynx/Axe.
- Penetration: Penetration strategy is when you place prices lower than competitors to gain market share. This is commonly used by new brands or existing brands releasing new products. In most cases, this is done in the form of a promotion, with prices rising after objectives are reached. This strategy is not profitable in the long run. However, it can help to get the Buy Box in the short run and then generate interest in your specific product through brand loyalty afterward.
- Discount: Amazon Outlet is the land of “I have too much something, and I need to sell it fast.” This option of creating a more appealing Amazon price change is one-way sellers can develop a sense of urgency. Having a discount on your item also provides an additional layer on top of penetrative pricing. The two strategies go together well, so don’t be afraid to use them when appropriate.
- Competitive: The area that gets the most attention when changing your cost approach is competitive pricing. This approach to pricing involves continuous changes to remain focused on the buy box. This strategy is where the usage of DataHawk’s notification systems will come in handy.
Read our article on “Amazon Pricing Strategies” to supercharge your listings.
The enhanced brand content is available to all sellers and vendors having Brand Registry. With a total of 15 modules, it offers you a feature to mix and match different modules to create your template. According to DataHawk research, the availability of A+ Content on a product page on Amazon is one of the top 3 most influential factors affecting conversion rates. *The first one is pricing.
We crunched data across a sample of 33,000 products over a period of 6 months and analyzed how having A+ Content consistently affected paid conversion rates.
- R-Squared on the entirety of the raw data set used was disappointingly low though, coming at 0.033, but the correlation was a positive 18%.
- The median price of the products’ sample was $30, the low quartile was $18, and the top quartile was $55, with a minimum at $2.6 and a maximum at $3,650.
Amazon selects customers in an experimental group to view your page at random. The page which creates the most conversions is typically the winner. MYE will inform you whether your listing is eligible through Vendor or Seller Central. Typically, it just needs to meet a moderate amount of traffic requirements. Read our article on “Leverage Amazon A+ Content Builder To Boost Conversion Rate”
Number Of Reviews :
We crunched data across a sample of 33,000 products over a period of 6 months and analyzed the impact of star ratings on conversion. We found that, on a median basis, products with an average rating of 4.4 to 4.5-star ratings convert twice better than those with 4.0 to 4.1-star ratings.
For every increase in star rating by 1, what is the increase in conversion rate? Our study found that star rating has a coefficient of 0.183
“Going from an average rating of 3.0 stars to 4.0 stars can yield a +25% uplift in conversion rates, going from 4.0 stars to 4.25 grants a +7% boost, and going from 4.0 stars to 4.5 stars results in a +14% improvement.”
You can see how Amazon star rating affects conversion rate on all of our data overall on this graph below.
About 75% of online shoppers rely on high-quality product photos, which is why your Amazon listing images are so crucial. Visual aspects of a product are fundamental. You aren’t likely to gain potential customers without having a good picture. Amazon product listings have a majority of your page taken up by the photo. These photos contain a considerable amount of white space.
You might ask why they would do that, but Amazon’s priority goes back to improving the user experience. With all of your additional photos, you should have the same focus. Images are one of the most important factors in increasing your conversion rates. They make even complex information fun to look at and digest. Also, customers perceive a listing with great images like a professional and trustworthy brand.
- A+ content
- Delivery Delay
- Number of Reviews
- Number of Ratings
- Number of videos
- Number of images
- Inventory management
Amazon and every other online marketplace are evolving continuously. Conventional ways of doing business might be enough to keep your business going, but it is vital to adapt and pivot with the times to crush it!