Factors that Influence the Amazon Algorithm and How to Use Them to Increase Sales and Profitability

With more than 80% of sales on Amazon taking place on the first page, it is more important than ever to rank high in search results. Amazon works with its own proprietary search algorithm to determine which products are placed at the top of search results and with an emphasis on the consumer, Amazon will always promote the products that are most likely to convert.

While there is less emphasis on paid advertising, it is still relevant and requires a more strategic approach. However, as it is not the sole driving force of visibility, it is crucial to understand the factors influencing Amazon’s algorithm to maximize profitability.

1. Seller Authority

With the aim of providing a positive customer experience, the Amazon algorithm places importance on a seller's previous, as well as current, activity on the platform. How long a seller has been active on Amazon, the feedback rating of the seller, the performance metrics, the inventory levels, the fulfillment method and the number of products, are just some of the factors on which the algorithm ranks a product.

2. Sales History?

A history of consistent sales, plus sales velocity, weighs heavily on organic rank. The more sales being generated and the potential for increased sales in the future, the higher Amazon will rank a product.

3. Impressions?

The more views a product receives, not only on the Amazon Marketplace, but also affiliate and partner sites, the higher Amazon will rank a product.

4. Click-Through-Rate (CTR)

CTR represents both ad relevance and customer engagement. It is a calculation of the percentage of impressions on a search result page that resulted in a click. A high CTR indicates a high volume of traffic which is indexed by the algorithm to improve product rank.

5. Conversion Rate (CVR)

As a measure of the rate at which potential customers view and then buy a product, CVR is a pivotal factor in a better product ranking. A higher conversion rate means more sales which contributes to a higher rank by Amazon’s algorithm.

6. Organic Sales

Sales generated from organic product listings, have a powerful influence on the Amazon algorithm. Sales velocity from organic sales is prioritized over sales from paid advertising when it comes to product ranking.

7. PPC Sales

In the latest update of the Amazon algorithm, the role of PPC plays a less important role on product ranking. The reason being, paid ads don’t always yield relevant product pages. However, PPC still remains a key driver for increased traffic, CTR, CVR and sales velocity. All of which are important ranking factors and contribute to a solid organic?presence.

8. Internal Sales

Sales generated from placements other than through search results, such as ‘frequently bought together’, ‘recommended’ or ‘similar products’ will influence product ranking.

9. Off-Site Sales

Both the seller and Amazon benefit from promoting products off-site as it not only brings in new-to-brand sales but also creates brand awareness. Page views and sales can be increased by including links on external websites, blog posts, social media etc

10. Reviews

The Amazon algorithm is all about customer satisfaction and therefore product reviews are one of the decisive ranking factors. A high number of reviews will rank a product higher in search results than those with few or no reviews. In addition, reviews feed into the trustworthiness of both products and sellers, resulting in a higher CVR and sales velocity.?

In Conclusion

With a goal of building customer credibility and an understanding of how the Amazon algorithm evaluates a product for ranking, applying the right strategies will increase sales, profitability and ultimately rank a product higher on search term pages.

#amazonalgorithm #amazonadvertising #amazonppc #amazon

DISCLAIMER: This material is provided as a source of information based on our unsubstantiated findings. While every measure has been taken to ensure the reliability of the material we?make no guarantee of any kind, express or implied, regarding the accuracy, validity or reliability of any information in this article.