Amazon Sales Rank Explained

In this section, we’ll explore the concept of Amazon Sales Rank from a seller’s perspective: that’s you!— so you can arrive at a pretty good idea of what it is. The idea behind an on-point interpretation of sales rank is to bring in maximum profits…and maintain a well-rounded perspective on the topic.

Why do you need a well-rounded perspective on sales rank? Let me explain: Like many e-commerce specialists, I’ve surveyed the Amazon vendor scene for a reasonable amount of time now, both as a participant and as an analytical observer, and one of the most frequent missteps I and other e-commerce commentators see Amazon sellers making is this:  they totally do not “get” the idea behind Amazon’s sales rank.  Many folks don’t consider it important at all, while there are sellers who—and this is just as bad—decide it’s THE MOST important aspect of their Amazon merchant experience. Truth is, there are other criteria that are just as important, if not more so!  (We’ve touched on these factors in the previous chapters and we’ll continue to explore them as we go.)

no1amazonsalesrankLet me define Amazon’s sales rank: It’s a numerical gauge, from the highest to the lowest—with a lower number meaning more movement or sales action–representing the period of time since an item last sold. (So, in this case, high is not good.) For instance, starting around one hour after an item sells, its rank will start to rise until it sells again. The longer the time frame in between sales, the higher its sales rank. When the product sells, the rank will plummet and then, an hour later, the cycle starts again, as the sales rank number begins to rise.

Where does this number—the sales rank—actually appear? Well, in every item category, under the product description caption, there it is: A figure which aims to capture in rankings an item’s popularity.

Lindsay Buroker’s site explains it this way:  “[The current sales rank of a book given as an example] is 57,194 which means quite simply that at this point in time there are 57,194 books that are “better” selling…The number really has the most to do with how long it’s been since your last sale.  And if you don’t see ANY rank, it means you haven’t sold any items as of yet (with thanks to  http://www.lindsayburoker.com/amazon-kindle-sales/amazon-sales-ranking-explained/.)

In this section:

  1. Is The Sales Rank Formula Complicated?
  2. Historical Data Matters: Predictive Software
  3. Determining a Good Sales Rank per Category
  4. SalesRank: Tapping Into Your Risk Level
  5. Another Chart: Actual Sales Figures

Is The Sales Rank Formula Complicated?

Another common misconception about the sales rank is that the “secret” (as it’s never really be revealed) formula behind the rank is so convoluted that it takes into account many more factors than simply sales.  It’s my contention that this idea is completely untrue.  It is literally only sales (recent and historical–more on the difference later on) which are factored in.

Nada…nothing…else is added to the mix.

As I said, it is not THE most important factor, but don’t make the mistake of de-emphasizing its importance, either.  For example, you might be thinking:

“My sales rank won’t affect me one way or another.  My customers couldn’t be happier with me.”

Wonderful! It’s great that your attention to quality, distribution and customer service are getting rave reviews.  Yes, that makes a huge difference in your GENERIC Amazon “resume”. HOWEVER, that doesn’t cover the sales rank gap.   Even if your customers/Amazon members DO leave countless reviews and you DO earn top ratings for your customer service and the quality and shipment of your products, these overall good marks won’t necessarily help your sales rank because:

The way Amazon portrays sales rank is not indicative or representative of cumulative sales (or even of overall sales volume).  Instead, it is indicative of how a product has been selling recently, compared to others in its category.

Does that make sense?

Now let’s throw a curve ball at you here.  An Amazon sales rank is not ONLY a simple case of how long it has been since the last sale was made. No. We’re not dealing with a singular-criteria kind of formula. The bottom line is dependent on recent sales and sales frequency.  So it gives hope to those sellers who don’t have consistent sales…but do see occasional movement of product. Now, (and we’re back to the book example here) a book which, on any given day, doesn’t GENERALLY sell many copies, but which RECENTLY sold a copy, will bear a sales ranking of 100,000 or so. (This refers to print versions.)   This is not bad at all, but it reflects that there aren’t frequent sales.

By now, you’re saying: “But I don’t want the ranking of 100,000.  I want my book to rank “way low”, figure-wise (or very high on the ladder of sales rank)! Tell me EXACTLY what will make that happen.” Well, for a book to rank in the 10,000’s or less, it must not only have sold recently, but (to reiterate) must have sold frequently. Yep, it has had to have sold multiple copies per day. So, basically, the more copies a product sells per day, on average, the better its sales rank (i.e. the lower the number).

“Will I see my sales rank jump up right away?” is another oft-asked question.

No. Keep in mind that you may not see an immediate shift in your sales rank data. The figure is updated every several hours or so—although sometimes it may take less time.

To put a finer point on what determines your sales rank, the rank is relative to other products in your particular category!

As mentioned, an uptick in sales alone isn’t enough to increase rankings.  Your product must sell more units than other products in your category. This means that if there’s a sudden uptick in overall sales in the Nutritional Supplements category, for instance, and you’re selling nutritional supplements and everyone in that category starts to sell more product, it’s possible that you may not see your sales rank move up even a notch.

Or here’s another what-if: If your product is selling one unit per day pretty regularly, but some of your competitors start to sell more than you, your rank will fall (i.e. the number will get higher), even if you’re selling on a steady basis.  A good way to remember this is that Amazon values quantity as well as quality.

Historical Data Matters: Predictive Software

We have determined that recent sales alone do not determine your sales rank figure. We are now ready to look at another cool feature that Amazon has built into the sales rank formula.  This one can PREDICT how well a product will do, based on the historical data of a product. This is the reason that a brand new book release will suddenly sport a better (lower-digit) ranking than a book that’s been on Amazon, say, three whole years–even when the latter has had more aggregate sales.

Amazon’s predictive software can and does predict that the new release will run circles around the “older” book in a given period of time.

What this also means—to use books as an example again–is that a book that’s ranked 800,000 can see its rankings zoom (in a manner of speaking) to 200,000—with a mere couple of sales.

“….[T]he available info says that a book ranked steadily at 5,000 is selling about 11 copies per day,” says merchant Peter Valley, a large volume Amazon seller who ran a side business as a publisher and was privy to that sort of information. “A book with a steady rank of 100,000 is averaging a little more than one copy per day. – See more at: http://onlinesalesstepbystep.com/rank-risk-reward/

Determining a Good Sales Rank per Category

Remember, we still have to think about how our sales rank compares WITHIN our particular category.  Looking at the sales rank from that aspect begs the question: how does one know what a good sales rank is for a given category?  One answer is this: We can always calculate what Valley calls sales rank “safety zones” for each category. These “safety zones” are products that will sell at least a few units a day – with lower sales rank products selling the most units a day.  Perhaps you can determine your own comfort levels or “safety zones” when you learn to calculate which items are likely to sell, and which aren’t, in each category.

Here’s what Valley did to create the below table. You can do it, too. Go to the Amazon drop down menu.  Select a category and leave the field blank.  Hit “Go”.  The number of results is the number of items for sale in that particular category.  From there, you can determine the top percentages.  (I added the information on how many items would sell per day, as this is bound to help you.)

The purpose of this exercise is to help Amazon sellers of all products answer the question: Should I add this item to my inventory or should I let someone else pick it up? Put another way, will this product prove to be a good seller?

Top 15%

1 to 2 items per day

Books 1,500,000
Toys 125,000
Appliances 30,000
Arts & Crafts 140,000
Automotive 700,000
Baby 30,000
Beauty 75,000
Cell Phones 225,000
Computers 1,000,000
Electronics 1,500,000
Grocery 60,000
Health 200,000
Home 1,000,000
Industrial 250,000
Movies & TV 135,000
Music 550,000
Musical Instruments 325,000
Office 50,000
Patio 200,000
Pet Supplies 65,000
Software 20,000
Sports 950,000
Home Improvement 600,000
Video Games 25,000
Top 5%

3 to 7 items per day

Books 550,000
Toys 40,000
Appliances 12,000
Arts & Crafts 45,000
Automotive 235,000
Baby 10,000
Beauty 30,000
Cell Phones 75,000
Computers 300,000
Electronics 500,000
Grocery 20,000
Health 95,000
Home 725,000
Industrial 85,000
Movies & TV 55,000
Music 195,000
Musical Instruments 15,000
Office 85,000
Patio 65,000
Pet Supplies 30,000
Software 5,000
Sports 300,000
Home Improvement 200,000
Video Games 10,000
Top 1%

8+ items per day

Books 95,000
Toys 7,500
Appliances 2,000
Arts & Crafts 7,500
Automotive 35,000
Baby 1,500
Beauty 6,500
Cell Phones 15,000
Computers 65,000
Electronics 95,000
Grocery 5,000
Health 20,000
Home 165,000
Industrial 15,000
Movies & TV 8,500
Music 40,000
Musical Instruments 5,000
Office 20,000
Patio 15,000
Pet Supplies 8,500
Software 1,500
Sports 75,000
Home Improvement 35,000
Video Games 1,500
 

(With thanks to http://onlinesalesstepbystep.com/rank-risk-reward/)

So there you can see which items can safely be expected to sell a certain number of units per day.

As you can see, what was calculated were the top 1%, 5%, and 15% in sales rank for each of the categories. This insight might help you determine what you should be including on your list of products to sell.

The figures in this table or chart need yet a little more in-depth explanation. (And here you thought we’d ironed out all the wrinkles! Not quite!)

The separate product categories—books versus foods, for instance—have different meanings attached to their percentiles. A top 10% in Books doesn’t mean the same thing as the top 10% in Garden Pet Supplies.

Let’s borrow a book category to illustrate and compare against Health and Personal Care. Theoretically speaking, a book ranked 100 might conceivably be selling 500 copies per day. Let’s look at Garden Pet Supplies…one case of Outdoor Frisbies ranked 100 could be selling only 75 units per day. Do you see the difference? Same rank percentile but different sales volumes. You might see that the top 0.03% selling Natural Food Chews on Amazon might average 300 units a day. In the Beauty category, that same 0.03% bracket might only bring in an average of 10 unit sales per day. One conclusion you might draw from this data is that people tend to buy more dog chews than Beauty products (on a given day). Just like the stock market, this market has its ups and downs and SOMETIMES there’s a rhyme and a reason!

SalesRank: Tapping Into Your Risk Level

However, what might prove even more helpful, before you tackle that chart (or attempt to search on Amazon as described, and make your own chart), is another very simple but invaluable exercise.  This one will take you a moment or two to complete but it’s worth it.  It’ll teach you about your own level of comfort when it comes to risk-taking.

Sit down and determine how you feel about risk. Everyone is different on this score.  Do you consider yourself risk-tolerant? Are you completely averse to risk of any sort?  Once that’s been determined, you can cherry pick from the list above, based on your individual preference.

Once you narrow down whether you “need” to see immediate sales, or can handle slower-moving items, you can zero in on whether a potential purchase is likely to sell sooner.

For example, the top 1% might be considered a “safe” pick in any category.

After a quick scan of the categories, you’ll note that a sales rank of 1500 in Baby Products is in the top 1% (or was, at the moment that table was being put together), and, even if you’re the type of personality that does not take kindly to risk, you’ll be able to buy from those items without anxiety, knowing the percentage of probability as to whether it will sell is very high. Because you enjoy playing it safe each time you purchase an item and hope the product sells ultra-quickly, you’ll stay with the top 1%.

At the other extreme, perhaps you’ve determined you can tolerate risk as a buyer and lean towards purchasing items that are OUTSIDE the top 10% (or even outside a higher percentile). That’s your “style”.  Stick to a buying formula that works FOR YOU.

When successful e-commerce experts are sourcing for products, they find it too much of a distraction to have to interrupt their bargain hunting to ask themselves: “should I or shouldn’t I?” Perhaps that’s the case with you, as well. With this formula, you’ll be aware of the saleability figures—and categories–you need when you’re scouting the source markets.  (There’s more on the topic of Product Scouting in the next chapter!)

Having found your comfort level, you can apply your newfound knowledge to the table. Got your percentage area picked out?  Have you zeroed in on what sales rank is “you” in each category? Well, then, on your mark, get set…GO TO IT!

Another Chart: Actual Sales Figures

Let’s take a look at some actual sales figures to see how this applies to our favorite sample category: books. Keep in mind that these figures do not necessarily translate to any other category.

Remember, also that it’s the SALES that create the Amazon sales rank. Some people get that backwards but it’s most likely never true that a sales rank is enough, in and by itself, to cause a sale!

Amazon Sales Rank                                       Books Sold Per Day                                                  
100,000 to 1,500,000 Close to 1 book a day
10,000 to 100,000 5 to 15 books a day
5,000 to 10,000 15 to 25 books a day
3,000 to 5,000 25 to 70 books a day
1,500 to 3,000 70 to 100 books a day
750 to 1,500 100 to 120 books a day
500 to 750 120 to 175 books a day
350 to 500 175 to 250 books a day
200 to 350 250 to 500 books a day
35 to 200 500 to 2,000 books a day
20 to 35 2,000 to 3,000 books a day
5 to 20 3,000 to 4,000 books a day
1 to 5 4,000+ books a day

 

Thanks to http://www.makeuseof.com/tag/8-things-people-dont-know-amazons-bestsellers-rank-sales-rank/ for that information.

These sorts of sales figures are arrived at by e-commerce experts, front-lines vendors and site authors or bloggers who have studied the field for years; watching the thousands of items purchased on Amazon and comparing these with actual purchases. As mentioned before, sales ranks do plummet (and by now you’re aware that means increase in number) when sales are non-existent. Of course, there are exceptions…and only Amazon can pinpoint precisely when and why these occur.  By the same token, the ranks sky rocket (and THAT, you remember, means a decrease in number) a little after a purchase has occurred.

A sales rank, it’s often noticed, tends to correlated with a number that represents a product’s performance, IF IT’S CONSISTENT.  If you’re studying the history of a product—Musical Instruments, let’s say—and you’ve noticed this category sells frequently AND that its ranking increases like molasses when there are no sales, you’ll also see the situation suddenly improve without any new sales. You’ll learn that that is most likely related to the fact that other products in that category did not move at all!

Let’s go back to our favorite category: books. If a book you’ve got your eye on has been ranked at 10,000 for the last few weeks, you might see its rank start to increase slowly but then notice that even a couple of sales push its rank back down to a proper rating.  But wait:  here’s a new twist.  You notice that this book ISN’T selling as frequently as it once was, even during a one or two day period you’ll be amazed to see that the CONSISTENCY (or what you perceived to be stability) has dropped off and it’s sporting a brand new not-so-attractive sales rank.

“What just happened?” you ask yourself.  Well, this book had that CONSISTENT history of not selling very many copies.  When this is the case, AND IT STARTS TO SELL it’s not going to have an easy time of hanging onto an improved sales rank.

“Will the book I’ve been watching ever return to its stable sales rank?” you might want to know.  Sure!  Eventually.  And I’ll leave you with this thought as I close out the chapter:  In such cases, the sales rank will zoom upwards.  THEN it starts the not-so-precipitous climb downwards.   Only after a new history of FREQUENT sales has been established, will this book head to the finish line:  In this case, a more stable sales rank. A history of frequent sales must be established to reach a new, lower sales rank number—a stable one.

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