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What Does Amazon’s Rank Algorithm Look for?

I had a client when I was first starting out who said, “Well, I figured I must be making money because I have more money at the end of the month than I did at the beginning.”

And while that is certainly true in the most broad sense, it won’t work in today’s Amazon where competition is fierce and pressures can come from every direction. 

To increase your rank on a keyword, you need to get more clicks, conversions, and fewer returns than the competitors offering a product that Amazon sees as a substitute or close match. 

There are four key metrics that determine getting rank on Amazon:

Can people find your product for target keywords so they can buy it?

Do you have a lot of traffic to your product for that keyword?

• Do they buy it once they get there?

•  Finally, do they return it and decrease the perceived value for Amazon to send traffic to your page?

What are some challenges you face when trying to rank?

Perhaps last year page views were more than twice what they are this year. So what are the root causes of page views being down?

Perhaps when you pull your Category Listing Report, you realize that whomever was previously managing your listings wasn’t thorough and you don’t have any keywords on half of the catalog.

Perhaps you’re the only brand using a white background photo and everyone else is using a lifestyle image. 

Perhaps your pricing isn’t competitive or your picture doesn’t reflect the perceived value from the price point. 

Basically, there are a lot of ways that rank can be affected, and they mostly come down to: 1) getting sufficient clicks for a keyword and 2) getting sufficient conversions for a keyword. 

Increasing Ad Spend Can Be Harmful

Just increasing advertising spend isn’t going to be the one size fits all solution to increasing rank. 

Last year, I started working with a client who had an agency prior to us who was just throwing money consistently at the listings, and devalued the conversion rate to the point that they were actually losing rank on their top sellers. 

If you have a lot of money to spend on ads, make beautiful landing pages on your Storefront and send the traffic there so it doesn’t count as a session on your detail page, and therefore doesn’t count against your unit session percentage. Same with Facebook and Google traffic – or influencers! Send those to the Storefront, and protect your rank on your detail page. 

Keep Your Refund Rate Down

Amazon’s algorithm is incentivized to maximize how much of a percentage it gets per sale. When a refund is processed, the sales commission is also refunded back to the seller. Amazon’s rank algorithm therefore is looking for keywords with solid traffic for a keyword, great conversion, and low return rate compared to competitors. 

Generally speaking, you want your overall refund rate to be around two percent if you’re in a hardlines and then around six to eight percent in softlines, although certain types of products are more challenging than others, such as fitted cotton shirts.

Of course, there are some days that you’re going to be at three, four percent. Some days you’re going have very few returns, but you want to aim for that 2% trailing 30 days figure. So that means an accurate detail page, that means really great packaging, products that don’t break and have really great quality control. Upload user manuals and guides, upload videos – and reference them in your A+!

Driving Traffic by Keyword Can Feel Like Playing Poker

When you first launch a product, you may not be sure of which keywords work best for your product. You might have a good idea… but not know. 

That means that typically for a launch of a product in a new category or subcategory for a client, I budget $3-6k just for the launch phase of ads. This includes indexing for a broad variety of keywords and the brand name as well as testing how well the product performs via keyword, category, or product targeting. 

Sometimes, you take a big risk and your payoff is fantastic. 4.1 ROAS out of the gate! Sometimes, you take a big risk with a new product like I did recently, and hit a solid.5 ROAS over Prime Day. Terrible!

Techniques to Boost Conversion

There is something called an “ads penalty” when you first launch a product with less than 20 or so reviews. What it means is that, compared to another item at the same price point, shipping type, features, and content, your product will convert at about half of the rate as the other product. 

As a result, you need to take action to increase your conversion rate during that time period and prevent your rank from being adversely affected. 

I typically recommend a buy one get one free promotion for the first month, or possibly two while you’re growing your reviews. For expensive items, it might make more sense to off a money off (not percentage!) coupon to incentivize conversion.

Bottom line – until you have those reviews lined up (usually minimum 20), you’re going to struggle to compete and it’s cheaper in the long run to offer a discount than continue to pay for twice as many clicks to get the same sales volume. 

Grow your rank by: 

• Ensuring your listing is stuffed full of relevant keywords, with the most valuable in the title and first two bullets

• Bid on keywords that have good conversion, and ensure you’re getting continuously increasing search impression and search rank on those keywords so that your organic rank can increase

• Use all of the tools available to you to build your page into a selling machine. All sellers now have access to Premium A+ if they follow a few simple rules with Basic A+. Use whatever resources are at your disposal to maximize the likelihood that the right customer will add your product to their cart and check out

•  Keep track of your returns comments, feedback, and reviews to try to maximize customer satisfaction. Whenever you see a trend, do root cause analysis and try to fix the defect before it spreads and impacts your listing in the long term

Happy selling!

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