As COVID-19 drives more people to Amazon, the right mix of data and AI tools available to Amazon’s third-party sellers can determine how well they understand their customers and effectively market and sell to them, Rohan Thambrahalli of UpstartWorks writes.


Rohan Thambrahalli

Analytics is the key to unlocking new insights into your customers, yet many businesses are not leveraging data as much as they could. In fact, it’s estimated that companies only use around 45% of the data they collect. The rest—a whopping 55%—is referred to as “dark data,” hidden away and left unused despite its massive potential.

With the cost of data storage falling dramatically in recent years, there’s simply no reason to ignore what your customers are telling you. Every time someone makes a purchase or simply interacts with your website or service, they leave a trail of evidence that could lead you to your next big campaign.

For Amazon sellers, this data is particularly lucrative. The systems and tools Amazon puts in place to visualize, analyze, and collect data are meant to spur sales on the Amazon platform—giving vendors an advantage over their competitors when applied correctly. Here are a few of the main data subtypes to keep an eye on as we move further into 2020.

Where Are Your Customers?

“Pick a ZIP code, and Amazon can pretty much tell you what people wear, buy, and do in that ZIP code,” noted former Amazon general manager Neil Ackerman in a recent interview. The level of insight available from geographic data has huge benefits for vendors, many of whom aren’t aware of the advantages in analyzing this data.


Amazon gathers a great deal of data via its regional fulfillment centers. If you’re not keeping track of what products are most popular when and where, then your marketing and sales strategy is diminished by a lack of data.

The reason some vendors ignore ZIP code data is due to a bias toward assumption. For example, a company selling winter coats knows their sales are going to be much smaller in a Texas ZIP code compared to any given region in Colorado. It’s when you combine this data with other factors that the real power of Amazon’s marketing is unlocked.

Winter gear sales invariably rise during winter months in cold Northern states. The question is which ZIP codes see the biggest rise in sales, and why. Can you time your sales to the start of ski season in areas near the slopes? Do certain higher price tag products sell better in some cities and towns compared to others? What does this region-based data look like over time?

Challenging previously held notions related to how geography affects sales can lead to a total revamp of your sales strategy—one that could spur you to take a new approach toward your marketing efforts. Start with the ZIP codes where your highest sales volumes lie, then work backward to see what insights you can gather from there. Moreover, in response to unforeseen supply chain disruptions like the COVID-19 crisis, vendors can rely on historical-geographical sales data to better prepare for supply shortages and avoid the dreaded “out of stock” message on their listings.


A Seller’s Guide to Price

Product prices on Amazon change 2.5 million times per day. When Amazon changes prices on its own products, it does so in response to shifts in the vast trove of data the company gathers day-by-day. Your business needs a data-driven approach to pricing as well.

If an ASIN’s average sell price is around $40, what might a $5 or $10 discount do to the sales figures? A quick experiment like this one is normally impactful, but becomes powerful when geographical sales data are leveraged. A timely discount in the right region could yield an increase in purchases made. Correctly utilizing analytics tools to cause added sales volume ensures increases in revenue even as profit margins become more narrow.

Timeliness is important to emphasize as well. When a forest fire occurs in California, or a hurricane hits the East Coast, buyers dramatically shift the product types, quantities, and price points of their Amazon orders. Responding to these changes in real time not only grants your customers peace-of-mind in difficult times but also builds your long-term marketing strategy the right way.

Also, remember to track your data every time you try a new approach on price. Amazon’s success is built on its ability to shift prices in line with market data—when you do the same, you’re building your business’ success for the future.


How to Handle and Approach Data

There are a number of other facets to consider when analyzing data. Variables like historical sales, Amazon Marketing Services (AMS) spend, sales rank, and out-of-stock rank can affect your marketing strategy, provided they have an impact on your overall business.

Once again, combining these variables with the demographic and geographic data you have can reveal much more than the sum of their parts. The challenge lies in interpreting this data. Relying on modern AI solves for the heavy lifting of collecting, analyzing, and displaying data, which allows you to take the most significant conclusions and apply them to improving your go-to-market strategy.

Some of these tools can save you time by automatically sending emails that get the highest open rate, based on an AI’s analysis of previous open rates. Others allow you to manipulate over 50 variables while using historical sales data to drive new profitable solutions.

Combining AI-backed tools with industry knowledge is the key to success on Amazon. As both sellers and buyers continue to sharpen their focus on ecommerce in response to COVID-19, vendors will continue to look for new, creative ways to keep their brands defined and recognized on Amazon. Forecasting tools allow a level of insight previously thought impossible given the wide volume of data. With these AI-backed tools, a deeper, more engaged marketing strategy is within reach for vendors willing to leverage the right tech.


Rohan Thambrahalli is the founder and president of UpstartWorks, a management consulting firm that, among other things, helps companies sell through