A Simple Tool for Managing Large Catalogs, Even If You Have 100s or 1000s of Products
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Managing an expansive catalog with hundreds or even tens of thousands of SKUs is daunting to say the least. We’ve seen it time and time again since 2014. Utilizing SKU Economics on Amazon help you manage these products. It can be a huge benefit for your brand to increase sales and profit.
Needless to say, we have the answer to managing large SKU counts.
The majority of large catalog brands have already developed a streamlined research and development (R&D) process. Otherwise, they wouldn’t be able to keep expanding their product line(s).
However, the R&D team is commonly separated from the catalog management team, if the latter even exists. This routinely leads to potential home runs that end up being strikeouts.
Below, we’ll explore how to simplify prioritization for your growing catalog.
This will include access to our Profit Pulse System (PPS), a tool that can help you more easily prioritize your catalog work, content strategy, ad management, and inventory forecasting.
Bottom line, this helps you increase sales and profit.
What is Amazon SKU Economics Report?
Amazon’s SKU Economics report has been around for years at the single-product level. In 2024 you can now see all of your SKUs with one report. This handy report tracks all of your products’ economic performance over time. Listing out the seemingly never-ending fees associated with each of your Stock Keeping Units (SKUs).
Essentially, it provides a holistic view of how your products have been performing within a clear and concise view over time.
How to Access Your Amazon SKU Economics Report
Single SKU Economics Report
Here’s what the single-SKU report looks like. Since there isn’t a way to create a direct link, due to it being SKU-specific, please follow the steps below for how to access the single SKU Economics data for a selected SKU.
Firstly, you must be logged in to your Amazon Seller Central account:
- Click the top left “menu”.
- Hover your mouse over “inventory”, or it may require a click.
- Click “manage all inventory”.
- Click the link of your desired SKU within the “sku” column. The name of your SKU is the link to click, and it’s usually a blue or purple hyperlink.
- Scroll down to the “sku economics” section and click the “sku economics report” button link below the information chart as shown below.
Full Amazon SKU Economics report – currently only a download only option
Here’s what the full Amazon SKU Economics report process looks like when all of your catalog SKUs are included. This link should take you directly to your personal report as long as you are signed into your Seller Central Account: https://sellercentral.amazon.com/sereport.
If this direct link doesn’t work (you must be signed into Seller Central), then follow the steps below for how to manually access the Amazon SKU Economics Report.
The Benefits of Continuous Catalog Prioritization
A proper prioritization process brings numerous benefits to sellers. If you implement our process, you’ll be asking yourself, “Why haven’t we done this sooner?!”.
Here are several benefits to solidify the importance of getting started today.
1. Overcoming analysis paralysis with heat mapping
With a large catalog, it’s easy to become overwhelmed and get stuck in the planning phase.
A well-designed prioritization system provides a clear and visual framework for decision-making, helping you move forward with confidence.
Below is an example that quickly visualizes:
1) a brand’s #1 top-selling product (Group A falls into the bottom 5% (Group C2) of the catalog’s products by ROI.
2) If you look a few more rows lower at row 4, you’ll see that their #4 top-seller is leaving orders on the table by underutilizing advertising.
3) On the flip side, their 5th most selling product is likely spending way too much on advertising.
However, this is not always true. We would have to dive deeper into each product’s lifecycle to confirm if this is a launch product where a more aggressive ad budget and lower ROI is expected.
Another question is whether or not lower Organic Sales rank is due to cannibalization. Here’s a different write-up behind the science of mirroring and cannibalization.
When we presented this analysis to the prospective brand that we now manage, they were blown away by each of these insights, which only took us a few minutes to surface. It goes without saying that we found dozens of these quick wins across their roughly 500 products.
2. Increased focus and efficiency
Such a system is designed to avoid spreading yourself too thin, ensuring your resources are being used effectively.
We recommend establishing quarterly goals and then reassessing them at the end of each quarter. Also, try to be mindful of your team and do not expect them to fix everything in a single quarter. On that same note, try not to change too many things at once for a single product so that you can accurately split-test.
3. Data-driven decision-making
By setting clear goals and tracking your performance against them, you can make informed decisions based on actual data rather than intuition.
4. Fluidity
The iterative nature of the prioritization encourages continuous improvement. By regularly reviewing your performance and adjusting your strategy, you can stay ahead of the curve and adapt to changing market conditions.
5. Increased Cash Flow
By focusing on the products within the groups containing your top sellers and products promising the most potential, you can free up cash flow that would otherwise be tied up in Amazon Fees.
achieve sustainable long-term growth and profitability.
Implementing the PPS Profit Pulse System: A Step-by-Step Guide
To effectively implement the PPS Profit Pulse System and manage your large catalog, follow these six steps:
- Analyze your catalog: Begin by conducting a thorough analysis of your entire catalog. Look at sales data, customer reviews, and other key metrics to identify your best-selling products and those with the most growth potential. Then, separate your products into the three tiers defined by the PPS Profit Pulse System.
- Prioritize content work: Once you have your products categorized, focus on content work for each tier in rolling three-month periods. This allows you to set specific, achievable goals and develop targeted strategies for each tier.
- Set clear goals: For each product tier, establish clear and measurable goals. These might include targets for revenue, traffic, conversion rates, or other key performance indicators (KPIs). Having specific goals will help you stay focused and track your progress over time.
- Develop a comprehensive strategy: With your goals in place, it’s time to develop a comprehensive strategy for your prioritized products. This should include a content strategy (e.g., optimizing product listings, creating enhanced brand content), ad management (e.g., running targeted PPC campaigns), and organic rank optimization (e.g., improving search visibility through keyword targeting).
- Monitor your progress: Regularly monitor your performance against the goals you set for the previous period. This will help you identify what’s working well and where there’s room for improvement.
- Adjust your strategy: Based on your performance data, make adjustments to your strategy at defined intervals (e.g., every three months). This iterative approach ensures that you remain agile and responsive to changes in the market and your catalog’s performance.
The Profit Pulse System (PPS): Catalog Prioritization Made Easy
The PPS Profit Pulse System is designed to help you navigate the complexities of managing a large catalog.
Our system involves analyzes your catalog, separating your products into three distinct tiers based on their potential for revenue growth.
Categorizing your products in this way allows you to get a clear picture of what to optimize.
Dynamic Catalog Prioritization with Ease
Managing a large catalog can be challenging, but significant growth and profitability can be achieved with the right tools and strategies. Dynamic prioritization offers a proven framework for catalog prioritization, helping you focus your efforts on the products with the most potential and make data-driven decisions that drive results.
By following the process outlined above, you can overcome the challenges of managing a large catalog and achieving your long-term business goals with predictability.
Remember, success on Amazon is not about trying to do everything at once. It’s about focusing on the right things at the right time and not being afraid to ask for help.
Your Final Move
Ready to elevate your Amazon business to new heights? Adverio‘s expert consultants can provide the strategic guidance and actionable insights you need to optimize your SKU economics and drive sustainable growth. With our data-driven approach and deep understanding of Amazon’s complex ecosystem, we’ll help you identify high-potential products, streamline your inventory management, and maximize your profitability. Don’t let inefficient SKU management hold you back – let Adverio be your trusted partner in unlocking the full potential of your Amazon business. Schedule a consultation today and take the first step toward a more profitable future.
Frequently Asked Questions (FAQs) – Utilizing SKU Economics on Amazon
1. What is SKU economics on Amazon?
Analyzing the profitability and performance of individual SKUs to optimize your product mix.
2. How can I identify high-margin SKUs?
Evaluate factors like sales velocity, cost, and competition to pinpoint your most profitable products.
3. Why is inventory optimization crucial for SKU economics?
Maintaining the right inventory levels ensures you meet demand without tying up too much capital.
4. How do I effectively manage underperforming SKUs?
Consider bundling, discounting, or removing slow-moving products to improve overall profitability.
5. What are the benefits of data-driven SKU management?
Informed decisions lead to higher sales, reduced costs, and greater return on investment.
