Treehouse Metrics Podcast

By Arnold Shields

Business Education for Amazon Sellers.

Providing you with the business knowledge and skills to make your Amazon Business stronger, more profitable and more fun.... more

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FAQs about Treehouse Metrics Podcast:

How many episodes does Treehouse Metrics Podcast have?

The podcast currently has 7 episodes available.

Treehouse Metrics Podcast episodes:

September 28, 2017 Episode 7: 3rd Profit Multiplier – Average Sales Value
The 3rd Multiplier of Average Invoice Value is calculated by dividing your total sales by the number of invoices.
The essential principle is once you have spent the money to acquire a customer can you increase the amount that they buy from you.
The 3rd Profit multiplier is about up sells, cross sells and increasing your prices.
The trick with Amazon is that it is difficult to measure what other products your customers buy from you, so instead in Amazon, the focus is on the average selling price.

Transcript:
Welcome to Episode 7 of the Treehouse metrics podcast
My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.
In the 3rd episode, i introduced the 5 multipliers of business and how just small increases in each of those multipliers can deliver you exponential growth
In this episode, I am going to discuss the 3rd multiplier – the Average Invoice Value or Average Price
The 3rd Profit Multiplier – Average Invoice Value or Average Price
The 3rd Multiplier of Average Invoice Value is calculated by dividing your total sales by the number of invoices.
The essential principle is once you have spent the money to acquire a customer can you increase the amount that they buy from you.
The 3rd Profit multiplier is about up sells, cross sells and increasing your prices.
The trick with Amazon is that it is difficult to measure what other products your customers buy from you, so instead in Amazon, the focus is on the average selling price.
That is not to say that you cannot do upsells and crosssells in Amazon but it is difficult to measure the effect.
The primary focus of many Amazon sellers is price if I reduce my price then I can sell more but the real focus should be profits and how those profits convert to cashflows.
The biggest obstacle and limiter to the growth and success of your Amazon business is cashflow – without sufficent cashflow you cannot restock your inventory to continue sales.
As we are applying the multiplier to Amazon businesses, the primary focus becomes a pricing discussion. If we are looking at any other business, then the discussion of the average selling price multiple includes upsells, cross sells, maximising the amount that you get from each customer and pricing strategy.
Dropping your price really should be the tactic of last resort once you have exhausted all other methods to increase your conversion rate. Your sales price is a conversion rate issue.
SO first lets look at the ways that you can cross sell and upsell in Amazon within your own products.
Cross Product Bonus Offers
You could set up a bonus offer to buy one and get x% off another of your products.
Complimentary Products – find out what people buy with your product and add that product to your product line.
High and Low Price variations – have two variations of your product where one product has a higher price (better material etc). The lower price product variation will sell more but some people will buy the higher priced variation.
Because price is such a big question with Amazon sellers, I wanted to concentrate on price and pricing rather increasing the average dollar sale.
A common characteristic the Amazon environment is price wars where a number of sellers undercut each other to gain or maintain market share.
You need to have a long term view on whether to match your competitors or just hold the price.
It is unlikely that your competitors will be able to continue selling at the lower price and reduced margins for a sustained period. The cashflow effect of lower margins will make it difficult for them to restock inventory without an additional capital injection into the business.
Most Amazon busines
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August 16, 2017 Episode 6 – 2nd Profit Multiplier – Conversion Rate
In Amazon, your Conversion Rate is the most important metric that you can measure because:
* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.
Transcript
Welcome to Episode 6 of the Treehouse metrics podcast
My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.
In the 3rd episode, i introduced the 5 multipliers of business and how just small increases in each of those multipliers can deliver you exponential growth
In this episode, I am going to discuss the 2nd multiplier – your Conversion Rate
The Second Profit Multiplier – Conversion Rate
What is your conversion rate – your conversion rate is the percentage of visitors to your product pages that convert to sales.
In Amazon, it is best measured by the Unit Session Percentage in Seller Central Business Reports.
or Number of sales divided by number of Sessions.
In Amazon, your Conversion Rate is the most important metric that you can measure because:
* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.
The conversion rate is all about your product page because you have no influence of any other aspect of Amazon’s layout, process, checkout process.
So all you can change is the product page – assuming that you have the buy box.
So lets look at the items on the product page that you can change or influence:
1. Title – Product Name – this also affects yours sessions and become a double edged sword in terms of using the title for keywords and using the title for Conversions. It becomes a tricky issue to balance the wording to avoid unintelligent keyword stuffing.
2. Main Image – this is sessions and conversions – the main image is a key player in getting people from the search results to your product page.
3. Secondary Images – Using the secondary images to highlight key benefits. Can we tell the story in pictures?
4. Price – what effect does price have on your conversion rate. Important to test both higher and lower prices. A higher price might have no effect on sales.
5. Offers – The Amazon offers – buy 3 and get 10% off.
6. Bonuses – delivered via email – eBook, how to guides
7. Bullet Points – 5 places to highlight key features and benefits. Time to start reading up on copywriting – offsetting the logical and emotional. People buy on emotional and justify the purchase with logical.
8. Product Description or Enhanced Brand Content – it’s down the page below the fold – below Amazon’s upsell’s and crosssells and below a couple rows of sponsored products ads
Then we have customer created content that we can have an influence
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July 10, 2017 Episode 5 – The Foundations of Business
Today, we are going to talk about the Foundations – these are the building blocks that you need to systematically apply to your multipliers.
So what are the foundations – I have a acronym to make it easier to remember – TIMES which stands for: Time, Innovation, Measurement, Education and Systems
So if you are going to increase your multipliers on a consistent basis, the foundations provide you with a framework and focus to do that.
Transcript
Welcome to Episode 5 of the Treehouse Metrics Podcast
My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.
In the First Episode, I discussed a framework for understanding and building your Amazon business or any business that enables you to work through and understand your business.
The framework has three components – Fundamentals, Multipliers and Foundations.
The Fundamentals of any and every business are Cashflow and Risk – they are the core of any business and are part of every business decision you make.
The 5 Multipliers are the drivers of your business and when combined propel your business to exponential growth. The Multipliers are Sessions or Leads, your Conversion Rate (the percentage of sessions that convert to sales), your Average Sale Value ( in Amazon that is your price), your Gross Profit Rate ( the profit that you make on each sale) and your Valuation Multiplier.
And Today, we are going to talk about the Foundations – these are the building blocks that you need to systematically apply to your multipliers.
So what are the foundations – I have a acronym to make it easier to remember – TIMES which stands for: Time, Innovation, Measurement, Education and Systems
So if you are going to increase your multipliers on a consistent basis, the foundations provide you with a framework and focus to do that.
The First Foundation – TIME.
Time has a number of components.
Firstly it is just allocating time to the task, putting it in your calendar to work on the task.
Secondly, it is the amount of time that you are going to have to allocate to the task whether that it one hour or one day. If you are working in your Amazon business on a part time basis, time will be a scarce resource unless you buy more time. So you will have to allocate your time in the activities that are going to generate the biggest result.
Thirdly, it is the value of that time. This is not how much you are paid but the value of the task – the value that that task is going to add to the business. Some tasks will add nothing to the bottom line others will be $10,000 an hour tasks. You need to be focusing on the high value tasks and minimising or delegating the low value tasks to someone else. The high value tasks will always directly involve the 5 multipliers.
The Second Foundation – INNOVATION
Innovation is essential in todays business because business today is so much faster than it was before even a few years ago. Markets move faster, money moves faster, information moves faster – just look at your Amazon business.
So you need to be continually innovating to stay ahead or even keeping up with your competitors. Just think about what would happen to your business if you didn’t change anything – it would go backwards pretty quickly.
Innovation is not just product innovation, it is innovation in all pa
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June 09, 2017Episode 4 – First Profit Multiplier Leads or Sessions
In your Amazon business, the first multiplier of your business is Sessions – the number of unique people that visit your product listings.
As an Amazon business owner, you are striving to continually increase the number of people who visit your product listings. The great thing about Amazon is that there is no shortage of people – there is masses of traffic – the trick is getting more people to see your offerings.
We can increase sessions by:
Keyword and listing optimisation – to get seen for more search terms and ranking higher for those search terms.
Adding more products. If you have one product, two products might double your sessions.
Advertising through Sponsored Product Ads in Amazon.
Sending traffic to Amazon through Google Ads, Facebook Ads, Facebook groups, Youtube & your own email list and website.

Transcript
Welcome to Episode 4 of the Treehouse metrics podcast
My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.
In the last episode, i introduced the 5 multipliers of business and how just small increases in each of those multipliers can deliver you exponential growth
In this episode, I am going to discuss the first multiplier – leads or for Amazon businesses -Sessions
The First Profit Multiplier – Sessions
You cannot get a sale until someone visits your listing.
If sales are falling it is either due to sessions falling (less people visiting your page)
or conversions (unit session Percentage) falling
or both. By the way – if sessions and conversions are falling then have massive drop in sales.
To find the underlying reason why sales are falling, you need to look at both because it will highlight the problem that needs to be fixed.
Sessions falling means that:
your listing is not showing up on search results which points to keywords and listing optimisation, or
your listing is ranking well, but people are not clicking on your listing which points to Price, Images, Titles & Reviews.
Sessions is the primary measure of leads for Amazon sellers.
you could use Page Views but Conversion Rate data from Amazon is on basis of Unit Session Percentage at ASIN level or Unit Session Percentage or Order Session Percentage in overall Account View.
So if using PageViews, you end up with a mismatch between the measure of the first and second multipliers as reported by Amazon.
PageViews represent each time a person views the page and A session represents the period that a person is active on Amazon before exiting. So a person may visit you page multiple times in a session before making a buying decision.
Sessions is not reported via API, so services that report Amazon sales & profitability via API will be not able to report Sessions data. It is only available through Seller Central Business reports.
Remember we discussed that your business does not need to get a massive one thing but actually just small consistent increases to acheive exponential growth – 1% increases each month rather than the big 10% increase. In the case of sessions – it culd be 10 1% increases
Having said that we are looking at 1% increases, sessions is one area that we can get big increases easily and cheaply.
What we want to make sure is that those leads actually convert but more on that later.
The First Multiplier being L
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May 26, 2017Episode 3 – Exponential Profit Growth with the Multipliers
Welcome to Episode 3 of the Treehouse metrics podcast
My name is Arnie Shields and I am your host, helping you with the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.
In the last episode, we discussed the two fundamentals of business – Cashflow and risk
In this episode, I am going to introduce you to the first stage of a framework for understanding and running your Amazon business but in fact any business because the principles are the same.
This framework will enable you to forecast where your business is heading and make the necessary changes before it’s too late to ensure that you acheive your goals.
In today’s episode, I am going to introduce you to the five multipliers of business. Understanding these multipliers and how they work together will decide whether you succeed or fail in your business.
Understanding the multipliers will help you determine where you spend your time in your Amazon business, how to focus on the most important aspects of your business that are going to have the biggest result.
The importance of the multipliers is the understanding that it is not one big thing – product, tool or marketing idea that makes a business successful, it is the gradual systematic increases in each of the five multipliers.
So lets look at the 5 multipliers and how they are connected and how they work together.
The 5 multipliers are:
We are 4 profit multipliers and one asset multiplier
Leads: or in Amazon Sessions or in Ecommerce unique visitors
Conversion Rate: the percentage that leads convert to sales
sessions x Conversion rate equals number of units sold
Average Sale Value – average price that you get for your products
Leads times conversion rate times average sale value equals sales
Gross profit percentage which is a function of costs and sale price
Valuation Multiplier – the multiple that is used to calculate the value of your business.
Increase just one of these profit multiplier and your profit increases linearly a straight line but if you increase 2 or more of these multipliers and you get exponential growth.
You can double your profit in 12 months just by just increasing each of the multipliers by 1% each month. so that is just tiny 1% increases.
Increasing the number of people that visit your product listings by 1% each month. That means increasing the number of sessions from say 10,000 sessions per month by an extra 100 extra visitors each month.
Amazon could deliver those extra visitors just by optimising your keywords and picking up another search term.
Increasing your conversion rate or unit sessions percentage – you can find your unit session percentage in Seller Central Business Reports.
We want to increase your conversion rate by 1% each month, So in the first month we increase the conversion rate from 10% to 10.1%.
An increase in your conversion rate in Amazon can be just due to getting more 5 star reviews by looking at your review follow up process. But 1% increase can be acheived by reviewing titles, bullet points and images.
An increase in the average price. Increasing your prices by 1% each month from $20.00 to $20.20.
Increasing your gross profit rate by 1% each month. Part of that increase will be from your price increase but lets assume that you decrease your costs by just 1% each month – so unit costs decrease from $14.00 to $13.86
This could be
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May 19, 2017 Episode 2: The Two Fundamentals of Business
Welcome to Episode 2 of the Treehouse Metrics Podcast.
You would have heard the saying “Work ON your business not IN your business”
This podcast is going to give you the skills, knowledge tools and business know how to work ON your Amazon business.
We are going to show you how to be the CEO of your business – the person who leads, develops the vision and navigates through the troubles that every business will encounter.
As the CEO, you need to look above the Jungle and map out your path to success, avoiding the quicksands that your competitors are going to walk straight into.
Today, I am going to introduce you to the two most important fundamentals of business – these apply to every business not just Amazon businesses. If we think about your business as a pyramid, then these 2 fundamentals are at the very tip of that pyramid.
Every business theory, idea, strategy, tactic, book or course – everything comes back to one basic fundamental- the one ring that binds and controls all – that basic fundamental is cashflow.
Everything that you learn about business, every activity that you undertake will lead back to increasing the cashflow from your business.
Some of you might say isnt profit the object – yes – profit is important especially how those profits convert into cash and in particular free cash – free cash being cash that does not have to be reivensted into the business.
Profit is just a measure – a concept – a standardised method of measuring how the activities of the business contribute to an increase the value of the assets of the business.
Cash is real – you can buy food for your family with cash, buy a new house, invest in another business with cash – you cannot buy any of those things with profits.
Profit is a measurement tool – cash is real.
So why is Cashflow so important.
Cashflow determines the winner – the business with the best cashflow wins. If what you are doing does not convert to cash at some stage then what is the point of doing it.
Businesses with a strong cashflow
– they can find and can advantage of more opportunities
– they can engage in activities that have less risk
– they have no restraints on growth.
– they can pay more to owners via dividends or salary
– they are able to Retain better employees
– the business is worth more
– they can resist change or react to change better or even enforce change
– they are more innovative
– they are Proactive – looking towards future – mainly because not trying to keep business open today.
– they have access to debt and capital markets – they can get money from banks and investors.
– they are less risky.
Businesses with poor cashflow:
– they are reactive – too busy just trying to operate from day to day, jumping from one crisis to next because the poor cashflow means that everything is a crisis that can wipe out their business.
– they cannot take advantage of new opportunities when they arise.
– they tend to take on risky projects – bet big on ventures to get them out of mess. or just left with the scraps.
– they are unable to grow because of cashflow constraints – cannot afford to launch new products or enter new marketplaces
– they will struggle to get money from banks and if they do get a loan then have to pay higher interest.
– they cannot find investors
– they cannot afford to pay owners because cash always has to be reinvested.
– the business is worth less or nothing at all.
– they are vulnerable to changes in the market.
– they are very risky.
In later episo
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May 19, 2017 Episode 1: Working On Your Business
Welcome to the First Episode of the Treehouse Metrics Podcast.
To provide you with the business education and business skills & knowledge that are essential for your Amazon Business to thrive and grow.
Amazon businesses grow rapidly, you can go from just starting to millions in just a few years. Much faster than any other businesses.
But with that rapid growth comes risks that can stop the business in it’s tracks because the business doesn’t have time to react to make the necessary changes or adjustments before they become fatal.
For many Amazon sellers, this is your first business that you are 100% responsible for – even for those who have their own business – this is their first business selling physical products.
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FAQs about Treehouse Metrics Podcast:

How many episodes does Treehouse Metrics Podcast have?

The podcast currently has 7 episodes available.