Irina Balyurko

Definition of cadence (Merriam-Webster)

• rhythmic sequence or flow of sounds in language (/the grand cadence of his poetry
• the beat, time, or measure of rhythmical motion or activity (// steady cadence of drums)

Even if you don’t know much about music structure you are familiar with cadences – they exist in every kind of Western music, and cadences is what creates a feeling of organization, flow, and a sense of either resolution of temporary stop in a music piece. In simple words, cadences are the backbone of all types of music we are familiar with.

Businesses that run well have cadences too, we just use less melodic words to describe them (processes, SOPs, planning, checklists). And Amazon business is not an exception – every successful Amazon business has cadences. And while growth phase can be chaotic, long term sustainability (read: sales growth) is impossible without certain rhythmic activities that keep the heartbeat of the business.

So what are the cadences of a well run Amazon business?  

Let’s look at it with the ‘top down’ approach

 

Cadence one 

Frequency: Annual

Theme: Vision and macro-planning

Tone:  Strategic planning. ‘Bigger picture’ objectives, such as opening new markets, adding new products, resources planning, setting revenue projections and budgets, assessing resourcing needs.

 

Cadence two

Frequency: Quarterly

Theme: Micro-planning and calibration  

While annual planning is critical I am a true believe in quarterly goal setting. Our human focus just doesn’t go much far beyond next 3 months. One of my mentors says that we underestimate what we can do in 3 months, and overestimate what we can do in one year. I have found this true for myself and from working with other businesses.

Tone: Review of the prior quarter (planned vs. actual results, and any lessons learned), next quarter revenue projections, marketing plan and promotions calendar, changes to catalog/products, inventory projections and replenishment for the coming quarter.

 

Cadence three 

Frequency: monthly

Theme:  Calibration and implementation

Tone: implementation of quarterly planning, review of monthly performance KPIs, adjustments to macro-planning based on implementation results, inventory replenishments as needed

 

Cadence four

Frequency: daily

Theme:  maintenance pulse

Tone: maintenance activities (buyers emails, notifications, addressing or following up on ad hoc issues), product pages checks. If your Amazon business is not active then daily may be adjusted as needed, but it’s important to keep consistency of checking proactively, not just reactively. Often issues come up without notification emails. Proactive checking in on your Amazon presence and within your Amazon account minimizes risk of issues going undetected.

Whether you are a solopreneur, a small family run business, or a larger company with multiple product lines, you need a systemized approach to manage yourself, your business, your division.

When you hear a band that is out of rhythm, it does not matter how good music is, being out of synch will overshadow everything else.  Same with Amazon business: establishing cadences for each functional area  is like creating a steady heartbeat for your Amazon business. It gives sense of control, provides valuable retrospective insights, which allows make better decisions, and, most importantly,  eventually helps to actually achieve goals you set.   

If your Amazon business is out of synch and needs controlled flow and rhythm – contact us to see how we can help you bring order to chaos.

The largest ecommerce platform in the world, Amazon, allows scale and reach that is hard for any other channel to compete with.

And while Amazon has been gaining immense strength, retail has been losing in overall retail sales:

 

It’s clear that Amazon has become a behemoth to capitalize on.

But growing on Amazon can also be a road of challenges, frustrations, and lost sales.

 

What does it take to succeed on Amazon?

 

By now we have worked with hundreds of brands, and I personally have talked with hundreds more about their experiences of growing on Amazon. And regardless of industry, level of sales, products, or type of a company, companies that do well on Amazon have a number of things in common.

 While there is no ‘easy’ button for success, and every company has their own ‘secret sauce’ , they all focus on same things.   

 

1. They Invest  in their Brand Representation on Amazon

 

A brand that sells well and is poised for sustainable long term growth on Amazon scores ‘excellent’ on the following brand presentation indicators:

• Easy to navigate product catalog. If a customer is searching for a specific size, color, flavor, etc. is it easy for them to find the right variation? The more clicks a customer has to make in their search the higher chance of a customer navigating away
• High resolution images.  Role of images on Amazon product pages is more and more critical. In addition to high resolution product images successful brands include lifestyle images
• Optimized title, bullet points, and product description. Copy should include relevant keywords, and benefit driven product description to optimize SEO and customer experience
• Enhanced Brand Content (on Seller Central), or A+ page (on Vendor Central). Adding EBC or an A+ page increases conversion up to 7%. Investing in brand-centric rich content will pay dividends over a long period of time
• Average review rating 4 and above. Increasing reviews is a moving target, but brands that do well focus on average review ratings just as much as on the quantity of reviews
• Public responses to customer questions or negative reviews on product pages Brands that do well respond to customers’ questions and negative feedback

 

Product pages are the first, and often, the only opportunity for a brand to turn a browsing customer into a buyer.

Ask yourself a question: if Amazon were the only place a potential customer could get introduced to my brand, how would I feel? Even on a ‘gut’ level an answer to this question indicates if you need to invest into your brand presentation.

 

2. They Obsess with Key Metrics

The most important KPI (key performance indicator) is usually revenue, however, sales numbers in isolation do not give a true picture of the health of your Amazon business.  Amazon charges a number of fees, some are fixed, and some are variable. In addition to Amazon fees, your business has its own costs: production, operational, etc.

So what performance indicators do successful brands track? Metrics can be broken into 3 main categories: Revenue, Advertising and Marketing, and Operational.

Revenue Metrics:

• Top Revenue
• Bestsellers, i.e what and how many SKUs carry at least 70% of revenue (exception: highly customized catalog)
• Product Page Visits
• Conversion Rate
• Average Order Value
• Product Review Average Rating

Advertising and Marketing:

• Impressions
• Clicks
• Orders
• Conversion Rate (orders/clicks)
• Cost of Sales (ACOS)
• Promotion ‘Take’ Rate

Operational:

• In Stock Rate
• Refund Rate
• Monthly Storage Fees
• Average Transactional Fees
• Shipping Costs (if FBA – average cost per pound, if merchant fulfilled – cost of shipping to a customer)
• Seller Feedback Rating
• Account Health (Account Status and Performance Notifications)

 

I often talk to brand owners that are frustrated with Amazon fees, and how challenging it can be to reach desired profit. If you feel that way, remember you are not alone. But it does not mean there is no opportunity to grow profitably.

The first step is understand all the costs associated with operating on Amazon, and understand revenue driven performance indicators.

Improvement is impossible to reach without understanding the full picture. And getting that ‘full’ picture means knowing all the relevant data.

 

3. They Focus on Experimenting and Incremental Improvement

One of my mentors often says that in nature there are only two states:  there is a state of growth, and a state of dying – there is nothing in between. So if you are not growing, you are slowly dying.

While it seems harsh, in business it is often true. And growth does not necessarily mean top revenue growth. It does not always mean huge leaps. Growth means experimenting and focusing on incremental, and ongoing improvement.

Few months ago I talked to a brand that was one of the first in their niche to sell on Amazon. Their first mover advantage (back in 2010) helped them reach dominance in their category. However, growth turned into stagnation of sales, and then quickly turned into consistent decline. During their robust growth phase this brand got comfortable, and when red flags emerged, it was almost too late to act.

Unfortunately, stagnation often means upcoming decline.

Brands that do well are constantly experimenting, and they are focused on small improvements. Why? Because even a small improvement means exponential return. And bigger improvements are simply accumulation of smaller changes. For example, even 0.5% increase in conversion rate can mean thousands, or even hundreds of thousands in additional annual revenue.

Let’s look at an example, and pick area of improvement: 

Your current In Stock Rate is 75%, which is means you are out of stock 25% of the time

Analyze your forecasting, production and shipping lead time. Identify the reason for less than 100% in stock rate: do you sell through faster than you plan? Do you underestimate your shipping lead time? Once you understand the reason behind running out of stock, put action steps in place to improve that rate. Do not aim for 100% – aim for more than 75%.

Remember, growth is merely an accumulation of incremental changes.

Growing on Amazon can be challenging, but if you follow the lead of successful brand owners, your chances of success go dramatically up.  

 

Last week I read an interesting thing: a concept used by U.S Navy SEALs called Front Sight Focus. When pursuing a target (for example, aiming at a terrorist) front-sight focus means focusing intently at the front of their weapons after lining it up with a target. You are aware of your surroundings, but all of your attention is focused on that small piece of metal in front of you.

I immediately thought of that in the context of my personal development quest of being intentional about shiny objects, single tasking (instead of multi-tasking).

But it is also very much applicable to business.

For all of us who are in pursuit of professional targets execution of incredible concentration and 
single-mindedness can be so tough. In the world of multitude of tactics, tricks, platforms, strategies, and opportunities zeroing in on ONE thing requires remarkable discipline.

But more often than not it also is a requirement for tremendous success.

Few months ago we had to part ways with a great client because they had to close their business. This is what they said: “I think (company name) has gotten sidetracked too often and too many rabbit holes. It’s tough to recover.  We should have gone Amazon first, I think”.

These are wise words, as wise as words said in hindsight are.

And to me the emphasis in that quote is not even about going on Amazon first (though Amazon is a great, agile, and scalable platform to start on), but on getting sidetracked and going down too many rabbit holes.

And that requires first, a target, and then a front sight focus.

What is your target? What is your front-sight focus?

Determine your target.

Sales growth is not a target. Gaining more visibility in search results is not a target. Growth of 150% in gross revenue in 3 months can be a target.

Then determine your front-sight focus.

Does  25% more units of your bestseller help you hit your target? Then that is your front-sight focus. Focus just on that ONE thing.

Does raising a price by $1 help you hit your target (and raising prices on Amazon is easier than you may think). Then have that tunnel vision for the next 3 months.

E-commerce world is ever evolving, and keeping up with changes on Amazon is a feat of its own. But that does not replace mental attitude and intentional pursuit of the underlying business goals. Tactics, strategies, automated tools are not targets of their own, they are just that, tools and means to reaching your goal.

If you are struggling to determine should be your Amazon target and your front-sight focus, let’s connect.

 

A virtuoso violinist, Paganini, was known to push the limits of both technical and artistic abilities of violin performance, but he made some miraculous feats as well. One legend has it that once during a performance one string of Paganini’s violin broke (if you don’t know, violins have 4 strings). A moment later then another two snapped. Instead of stopping Paganini continued to perform brilliantly with just one string. When he stopped, the audience erupted in applause.

Paganini went on to compose a number of pieces for just one string.

And it’s undeniable: he created more beautiful music on just one string than most musicians on all four.

There are a number of experiences that can be drawn from Paganini story. Some may say it’s an example of an artistic pinnacle. And it’s true. But to me it’s an example of a high form of art created in a strict form of constraints. (1 string instead of 4), which to me is the real superpower.

What does this story to do with Amazon?

On Amazon we operate in a strict environment of constraints (Amazon TOS, Amazon ownership of customer data, Amazon changing policies, list can go on). I like to say that we we are let in to play in Amazon’s sandbox. It’s a huge and powerful (soon to be a spaceship), yet it’s still a sandbox, with defined lines of significant definitions and rules. Breaking those rules, in a best case scenario, results in stern slap the hand. Worst case – kicked out of the sandbox for life.

I have to think about these constraints daily. I have to think how do I achieve results for clients while operating in those constraints.

But an amateur musician and a linguist in me pops her Liberal Arts head up amidst spreadsheets and numbers and ROIs conversations.

In my own humble way, I want to achieve what Paganini did creating freedom of mastery (aka his beautiful music) in a context of constraints.

Shane Snow in his book ‘Smartcuts: How Hackers, Innovators, and Icons accelerate Success’:”Here’s a fact: Creativity comes easier within constraints“.

That’s interesting. I can see correlation with my daily professional life.

If 18th century violin virtuoso is not your jam, Dr. Seuss might be:

Dr. Seuss wrote his famous ‘Green Eggs and Ham’ using only 50 different words. Allegedly after his editor said that he couldn’t write a book using fewer than 225 words of ‘The Cat in the Hat’.

And all of that leads to a really interesting question, an idea I have been obsessing with:

What if we flip the coin and look at Amazon constraints that we deal with daily not as a challenge but as an opportunity to create even better results? What if it’s an invitation to hone our craft (in my case deliver results for clients on Amazon) to the disruptive level of success, rather looking at it as trying to succeed in spite of constraints?

Now, that’s a fun shift of perspective. If I haven’t lost you here yet, this is where I will lose most of you. Here are some thought process buckets I am tackling this obsessive idea along:

 

Data is a commodity

 

Data is becoming cheap, and certain skills needed to operate in the world of Amazon are becoming cheap. Yesterday I was talking to somebody who is thinking of replacing their team of PPC analysts with software. And examples like this are abound. Every day there are tools and software options coming out saying they are that ‘secret sauce’ to unlock your Amazon success. Until they are not.

In the world of high level tactics that are prone to succumb to change of rules or limitations of API Amazon access any day, I have to explore my value creation and delivery while operating in the context of constraints and changes. Which takes me way outside of the high level tactics world.

 

Data is a commodity, but art of data interpretation is gold

 

When we look at a lot of numbers we often ask ourselves a logical question: What does it mean?

Where do I take that data, what do I do with it?

The art of data interpretation to me is a two-fold question:

1.What data points do I aggregate? What do I need to look at in order to derive gold nuggets for decisions? Opportunities? Risk reduction?

Because, again, I need to deliver results, and decisions based on data are a huge part of it.

2. What is a valuable piece of information, and what is a distraction? Pretty dashboards with charts and numbers can be just that, pretty. Where is a faulty assumption of a cause and effect, and where is a true correlation?

And both questions serve the main goal: How do I get 1+1 = 25?

Because getting 1+1=2 type of results for clients will leave me washed up on the shores of shallow Amazon consulting sooner than later (which I believe will happen to most in my niche, sorry/not sorry). That’s not in my plans.

 

Interdisciplinary approach

 

I am fascinated with interdisciplinary approach to solving problems. Professional journey of linguistics, music, and literature -> investment banking -> Amazon consulting has something to do that. Personal journey of a girl from a small town in Siberia in Soviet Union settling in the US has something to do with that as well.

What happens when you take the disparate things, things that are not connected and connect them?

Albert Einstein defined it as combinatory play. Combinatory play is the “act of opening up one mental channel by dabbling in another”. In other words, it is taking two unrelated things and putting them together to generate new ideas. We all do combinatory play to some extent, simply because we aggregate our experiences, conversations, lessons, observations.

To me being intentionally interdisciplinary is critical for hyper value creation and getting 1+1=25.

The other day I learned about forestry supply chain, which apparently is one of the longest supply chains in the world. What can I take from a long supply chain in manufacturing and implement in our speed of delivery? Because speed of delivery and speed of digesting external changes is critical to creating results in Amazon world.

At Goldman Sachs we were hyper focused on risk assessment and risk reduction (understandably), so when I look at any part of our implementation processes I can not help but think: where are risk points, and what can I put in place to reduce or eliminate risks that are in my control?

Because it matters not to make mistakes that can be avoided.

And all of these fun thoughts, surprisingly, take me to a place of creating freedom of mastery in the world of constraints.

All the sudden daily reminders of not playing in my own sandbox become a starting point for honing my craft, for creating more value, and, ultimately, delivering innovative approaches for my clients.

And that is a fine place for anyone looking to achieve high level of mastery to operate from.

In February 2019 FTC brought it’s first case against an Amazon third party seller who was paying for fake reviews.

Almost in every Amazon related conversation I have with brand owners product reviews come up. There is a lot of information floating out there about role that product reviews play in Amazon algorithm, some true, some not.

Considering that I thought it’s time to get clear on what are truths and what are myths when it comes to Amazon product reviews.

 

Myth: You may not ask customers for product reviews on Amazon

Truth: You may ask customers for their honest review, however, you may not provide them an incentive to leave a review, or a positive review only.

Let’s look at how Amazon itself articulates that rule (from From Amazon Seller Central guidelines, bolding is mine):

“For example, you cannot offer compensation for a review, and you cannot review your own products or your competitors’ products. You can ask buyers to write a review, but you cannot ask for positive reviews or ask a reviewer to change or remove their review.

Amazon further clarifies what falls under incentive:

• Payment (including money or gift cards)
• Refund or reimbursement, including through non-Amazon payment methods
• Free product
• Entry to a prize drawing or competition
• Discounts on future purchases
• Other gifts

However, asking a customer for their honest review is very much within Amazon TOS (Terms of Services), and every brand should do that.

 

Myth: you always have to have more reviews in order to grow sales. If you are not getting more reviews, your sales will not grow

Truth: Importance of quantity of product reviews varies depending on the stage of your Amazon business, competitive landscape, and other factors.

When somebody comes to me often one of the first questions is ‘we need more reviews’. When I dig deeper it usually means they want more sales, and read somewhere that without getting more reviews they will not grow sales.

It is important to keep in mind that more often than not product reviews is not a businessgoal in itself. Reviews are a post-purchase reflection. It’s a lagging indicator, not a leadingindicator.

For example, if your average review rating is below 4, then true question is understanding the root cause of lower rating of reviews (is it fulfillment, product development issue, lack of user instructions, or inconsistency between what’s described on a product page and what they received?). That points to an issue that is outside of product reviews, with the root cause earlier in a customer journey.

If your product review take rate (i.e how many customers that purchased left a product review) is below (1-2%) then a true question is not getting more reviews, but getting more customers that bought from you leave reviews. While you may say it’s semantics, often truth gets lost in semantics.

While in general having more product reviews is better, it does not mean it should always be the focus or a goal in itself. It’s important to keep in mind that it is a lagging indicator, determine if it is a roadblock to growth at the current stage. If yes, determine appropriate strategy based on the right KPI (quantity of reviews, average rating of reviews, higher rate customers leaving reviews).

In some scenarios there is a question of reputation management: a common example is a bad production run led to products defects, which were not caught in time. In this scenario the right objective is not to remove reviews, but increase rate of customers leaving reviews. Which means needing to generate sales.

Myth: With all the Amazon rules it’s impossible to get product reviews nowdays

Truth: There are multiple, Amazon compliant, ways to solicit reviews

1. As you already saw in the 1st myth the simplest way to get a product review is to ask a customer for one. There are many 3rd party tools that can automatically send a product review email to customers after a purchase. This is really a ‘must’ for any brand selling on Amazon. In our experience implementing this process can as much as double your product review take rate.
2. Package inserts. Add a postcard in your Amazon packaging asking customers to leave a review, with easy to follow instructions on how to do it (since there will be no link for them to click)
3. Outside traffic. Send your social media audience, or an email list to Amazon for a one time or occasional purchase, with a clear request to leave a review after they buy. You can also ask them to simply leave a review without a purchase, if you are just starting out with no product reviews at all.

 

Myth: All product reviews are equal

Truth: History and type of a review contribute to overall review rating in a specific way

Reviews are part of the biggest factor in Amazon algorithm: sales performance history (in other words, how well do your listings convert will largely define how your future organic rankings will stand). However, there are two factors we need to consider:

1. Recency of a review. Recency does matter. If you have a batch of bad reviews (like in our example above of a defective production run not caught in time), the more recentyour positive reviews are, the less influence those bad reviews will have on your overall review rating.
2. Verified or unverified reviews. Reviews tied to an Amazon purchase are called verified.

Reviews that are left without a prior Amazon order are unverified.

In 2016 Amazon started using Verified Purchase badge as part of their search algorithm. In other words, it is better to have verified purchase reviews than unverified.

Verified badge are also tied to higher conversion because of higher trust factor.

 

Myth: You can not do anything about bad reviews

Truth: While you can not have a bad review removed you can decrease impactof bad reviews to further sales

This one is really more of a perspective shift. Yes, Amazon rarely removes reviews, however, we have found that to combat impact of negative reviews it is more productive to focus on increasing positive reviews. Sometimes it means addressing issues that caused negative reviews, or increasing product review take rate.

And here are truths and myths about product reviews. In the end we always have to keep bigger picture in mind: reviews are very important, but they are rarely an objective in itself. Depending on other factors, such as stage of the business (growth, defense, new market, etc.), competitive Amazon landscape product reviews can play different role of importance in positioning and sales growth on Amazon.