Ever wonder why sometimes a products appears to be unprofitable or why some products seems to generate all of the sales?
If you're selling products with a number of product variations, such as clothing (T-shirts, leggings) or home goods items (storage baskets, sheets), you may be confused on how Amazon is reporting data.
In Sponsored Products, this confusion is due to 'Same SKU vs Other SKU' attribution.
What is Same SKU vs Other SKU attribution?
Amazon attributes ad sales and ad spend to the first sku that is clicked on, rather than the item that was purchased. Sales are reflected on the first SKU, but the orders are for a different product.
For instance, you sell Women's Leggings, which has many size and color variations. Amazon may place your ad showing the your 'black Leggings, size small', the consumer clicks on this ad, but ends up purchasing the 'blue leggings, size medium'. Ad sales is being attributed to the click and not the sale.
What does this look like in Flywheel?
In Flywheel, you may sometimes notice total sales are lower than ad sales for a particular product, this is an example of Amazon's attribution model.
Total sales lower than ad sales example:
These products may also reflect a low or negative gross margin due to high ad spend, and at first glance you may think you need to discontinue advertising on these products. In some cases this may be true, but more often these products are helping you secure sales on other product variations.
Pro tip: Review product metrics at the 'parent asin' view to get a better look at the product performance and avoid the discrepancies caused by the attribution model.
Before adjusting your advertising strategy review the 'Advertised Product Report' in Amazon. Pausing these products could result in a decline in sales.
What is the 'Advertised Product Report'?
The Advertised Product report, found in Amazon, will show the breakdown in the purchase behavior, i.e. what portion of the sales went to that SKU and what went to other SKUs. It will not show which SKU was actually purchased, but knowing the percentage of other SKU sales will indicate the overall impact this product has on your business.
If other SKU sales, as illustrated in column W, is higher than same SKU sales, column V, pausing advertising on the SKU shown in column G, would cause you to lose sales.
Takeaway: You should never make the decision to a pause advertising on a product that may seem unprofitable without first understanding its impact on other sales.