KPI Performance Assessment for Amazon Operations (Sales) Personnel
The key performance indicators (KPIs) for evaluating the performance of operations (sales) personnel include sales revenue, store performance, advertising conversion rate, and inventory turnover rate.
1. Sales Revenue
The specific targets are set based on the company's actual goals. For example, if the company's annual target is 100 million RMB, the monthly target would be approximately 8.33 million RMB. The Amazon platform must consider seasonal fluctuations, with the fourth quarter typically being the peak season. Therefore, targets should be higher during the peak season and lower during the off-season. The recommended assessment weight for sales revenue is 30%.
2. Store Performance
Store performance is critical for sustainable operations and involves meeting several key indicators. For example, the late shipment rate must be less than 4%, the order cancellation rate less than 2.5%, the valid tracking rate greater than 95%, the on-time delivery rate greater than 97%, the order defect rate less than 1%, and the return dissatisfaction rate less than 10%. The recommended assessment weight for store performance is 20%.
3. Advertising Conversion Rate
The advertising conversion rate is crucial for evaluating the effectiveness of marketing expenditures. If sales personnel are not assessed on cost-related metrics, they may prioritize sales without considering costs, as they are not accountable for them. This can lead to excessive advertising expenses without achieving the expected conversion rates. Setting performance assessments that include conversion rates can ensure that sales personnel pay attention to the effectiveness of their advertising efforts. The conversion rate targets can be set based on the nature of the company's products and industry benchmarks. The recommended assessment weight for the advertising conversion rate is 10%.
4. Channel Profit
Sales personnel must be accountable for the company's profitability, particularly channel profit (sales revenue minus variable costs). Channel profit does not account for fixed costs but includes variable costs such as product cost, first-leg logistics fees, Amazon platform fees, third-party overseas warehouse fees (if applicable), off-site advertising costs, and VAT (for Europe). Focusing on profitability encourages sales personnel to consider both costs and profit margins, rather than merely sales revenue. This prevents high sales figures with disproportionate costs leading to low or no profits. The company's channel profit targets can be set based on annual profit rate goals and broken down into monthly targets. The recommended assessment weight for channel profit is 30%.
5. Inventory Turnover Rate
The inventory turnover rate directly correlates with the speed of sales. Faster sales lead to quicker inventory movement, faster capital turnover, and reduced inventory pressure on company funds. The inventory turnover rate targets can be set based on the company's product characteristics and industry averages. The recommended assessment weight for the inventory turnover rate is 10%.