Every Amazon seller has one goal in mind, scale revenue and increase profitability.

It’s the name of the game, and let’s face it, if you aren’t profitable on Amazon and see no positive growth trajectory in your profits, you are doing something wrong.

It’s crucial, now more than ever, to have your eye on the ball at all times and to take corrective action when and where needed.

Sellers who fail to manage their metrics and make improvements, ultimately lose thousands of invested capital in the process.


Metrics to Consider for Managing Profit Growth on Amazon

Managing Your Metrics with My Real Profit

My Real Profit gives you a breakdown of sales, discounts, coupons, fees, ad spend, refunds, and cost of goods for all of your ASIN’s.

The most important metrics to manage on the My Real Profit report are:

  • Ad Spend
  • Total sales
  • Cost per session (how effective you traffic is)
  • Breakeven conversion %

Bridging the Gap Between Your Current State to the Goal

If you have a high ad spend, but you are not generating sales, you need to address this first, here’s how:

  • Pause the “bleeders” and other high ACOS targets/campaigns and only keep those generating sales with decent ACOS.
  • Optimize bids. Make bulk optimizations and look at the ACOS compared to the CPC vs current bid. For any decreases, make sure that the new bid is lower than the CPC and for bid increases check that the new bid is not too high.
  • By doing this effectively you can shift the sales from PPC to organic and ultimately improve profit while sales remain constant or improve.
  • You probably also have a conversion rate issue. A lot of times, conversion rate is the root of bad ad performance and stalling growth. You cannot outrun a low conversion rate.

Looking at Metrics Through the Lens of Advertising

When it comes to profitability growth you need to choose one direction to focus all your efforts on.

1. Scaling

When you are scaling, you’re expecting profits to go down.

The reason that you’re scaling even though you’re focusing on profitability, is because you’re trying to identify all of the new profitable search terms possible that you don’t already have. You’re launching campaigns, increasing bids, increasing budgets, going after different match types and trying to discover as many new profitable search terms as possible. But your profit will go down first, and then later on, when you focus on profitability, you’re lowering bids, adding negatives, eliminating anything that didn’t work, and inevitably your profits should go up.

2. Optimizing

Once you have finished scaling, you should have pinpointed numerous profitable search terms and keywords. It is now time to remove anything that did not yield results and is not converting into profit. By retaining the successful performers and getting rid of the underperforming ones, you will increase your profits significantly.

If this cycle of scaling and optimizing doesn’t work, chances are that your CVR is not good enough.

Pro Tip: Use profits as your “North Star”, your profits should really dictate everything you are doing. If your ad spend stays the same, and you are working on your CTR & CVR your profits will go up.

Understanding Breakeven Data and How it Impacts Your Profits

Breakeven conversion % is an especially important metric to consider when managing profit growth. It tells you, based on how much profit you make per unit, what conversion rate you need in order to break even. Breakeven conversion % is improved when you drop the cost per session or increase the profit for each unit.

Pro Tip: If the gap between your costs and sale price is small, you need a higher conversion rate to make a profit. The bigger the difference between the percentage of units sold and the break-even conversion percentage, the better. The aim is to reduce your break-even conversion rate and boost your actual conversion rate. The greater the difference between your break-even conversion rate and your actual conversion rate, the more profit you can make.

Blended CPA

Blended CPA (cost per acquisition) is a metric used to measure the total cost of acquiring a customer across all media and channels. In this case, we are just blending paid and organic sales on Amazon. It is calculated by dividing the total amount spent on PPC by the total number of customers (or units) sold. It helps eCommerce and Amazon businesses understand the effectiveness of their marketing campaigns and identify opportunities for improvement. The goal of any eCommerce business is to acquire customers in the most cost-effective manner, Blended CPA is a valuable metric to measure success in this regard.

If your profit per unit before advertising and your blended CPA is equal then you are breaking even.

If your profit per unit is greater than your blended CPA then you are profitable, so you want to get the gap between your profit per unit and blended CPA as small as possible.

How Click Through Rate and Conversion Rate Affects Profits

How does CTR impact profits?

CTR impacts your sessions which in turn impacts conversions. As your CTR increases, we have noticed that your CPC will decrease. This is a win win. Your same ads will result in more clicks, which will result in more sales, meanwhile, your ad costs will go down relatively.

Factors That Affect CTR:

Main Image

To ensure your main image stands out in search results, it’s essential to make it visually appealing and easy to notice. Start by selecting a high-quality image that is clear and fills out the white space effectively. Adding eye-catching elements can further enhance its appeal and draw attention to your product.

In addition to the image, include text on your label or box that clearly sells your product’s unique selling points. For example, for HRDWRK Electrolytes, Mina chose to emphasize key features like “sugar-free hydration” and to highlight important details such as “0 sugar, 0 carbs, 0 calories.” By incorporating compelling text alongside your image, you can effectively communicate the benefits of your product to potential customers and increase the likelihood of them clicking on your listing.

Remember, the ultimate goal is to capture the customer’s interest quickly and drive sales. By pairing a captivating image with persuasive text, you can craft a powerful visual representation that highlights the unique qualities of your product.

This combination not only captures attention but also draws in potential customers, encouraging them to explore further and discover the value your product brings. By leveraging this strategy, you can create a visually appealing and compelling message that effectively communicates why your product stands out from the rest, ultimately enticing customers to delve deeper into what you have to offer.

Determining Your Price/Price Per Unit

Making pricing decisions is crucial for the growth of your Amazon business. Instead of simply following the crowd or trusting your gut feelings, it’s vital to carefully analyze how you price your products to prevent potential financial setbacks. Finding the right balance between maximizing sales volume and ensuring a good return on investment is essential. Therefore, it’s recommended to build your pricing strategies based on data-driven insights to stay competitive and surpass your competitors. Lowering prices can lead to increased sales: Making small adjustments to your prices can boost conversion rates and ultimately drive more sales. Improved conversion rates can bring about the following benefits:

  • Higher daily sales
  • Increased profits for each additional unit sold
  • Enhanced customer perception of value, which can enhance your product’s click-through rate (CTR)

Developing Pricing Strategies on Amazon

Creating effective pricing strategies that generate profits is fundamental in the fiercely competitive world of Amazon selling. Let’s explore different pricing approaches that can elevate your business on the platform.

  1. Utilizing automatic or dynamic pricing involves adjusting prices based on competition and seasonal trends. By establishing diverse pricing rules and monitoring sales, you can efficiently price your products without the need for manual intervention. This method empowers you to define parameters such as maximum and minimum prices.
  2. Incorporating an Amazon repricing tool into your strategy automates price updates, maximizing your return on investments. Opt for automatic rule-based pricing to maintain control over price ranges within your SKU and selectively determine which SKUs undergo repricing. Take advantage of free rule-based pricing tools available in the market.
  3. Algorithmic repricing tools use sophisticated algorithms to strategically adjust prices. These algorithms continuously learn from usage, enhancing their ability to price products effectively over time.
    Leveraging metrics like historical sales data and sales velocity, these tools identify optimal price points that drive maximum sales, helping you achieve your sales targets efficiently.
    Algorithmic pricing excels in competitive environments by leveraging market insights to make unbiased pricing decisions. These tools operate in real-time, dynamically adapting to align with your business objectives and enhance profitability.
    Pro Tip: Profasee is an AI tool that can optimize your price to help improve your CTR
  4. Manual Repricing, a common strategy among e-commerce businesses, entails manually adjusting prices to stay competitive with other sellers. This approach is ideal for sellers with a limited number of ASINs seeking greater control over pricing adjustments. However, managing prices manually becomes challenging for sellers with extensive product portfolios, increasing the risk of pricing errors that can be detrimental to the business.

Reviews and Star Rating

Reviews and star ratings play a crucial role in determining the success of a product and ultimately your profitability growth. Particularly in the online realm, reviews, especially on platforms like Amazon, serve as vital endorsements regarding a product’s quality, performance, and accuracy compared to its displayed images.

These reviews are instrumental for shoppers in making informed decisions about their purchases.

A study revealed that 75% of American consumers prioritize products with top ratings and positive reviews when shopping online. Positive reviews, in particular, influence consumer behavior by offering social proof that a product is worth buying. This reassures potential customers regarding the quality of a product, especially when they cannot physically examine or test it before making a purchase.

Furthermore, accumulating reviews is a key factor in boosting your Best Seller Rank (BSR) on Amazon, which enhances your product’s visibility in search results and attracts more clicks to your listing.

Collecting a higher number of reviews improves the likelihood of turning site visitors into actual buyers. Therefore, having a solid review strategy is essential for your overall success in selling on Amazon. Simply relying on strategies like Pay-Per-Click (PPC) advertising might not lead to conversions if your listing lacks sufficient reviews.


There are several criteria for sellers to earn Amazon badges. There are different types of Amazon badges available. Those are:

  1. Amazon Best-Seller Badge
  2. Amazon Choice Badge
  3. Amazon New Release Badge
  4. Amazon Climate Pledge Friendly Badge
  5. Amazon Prime Badge
  6. Limited-Time Deal or Deal of the Day Badge
  7. Extra Savings, Coupons, and Discounts

The criteria for earning Amazon badges can often be a bit mysterious. It’s not always clear what specific elements Amazon takes into account when granting a badge, but it’s evident that, in most cases, the product should be well-rounded and appealing to customers.

While many of these badges serve as indicators of success on Amazon rather than direct objectives, they can still play a crucial role in distinguishing your products from competitors and capturing the interestof potential customers.