Running an Amazon business is more than just listing products and waiting for the sales to come in. To truly thrive, you need to keep a close eye on key performance indicators (KPIs) and financial metrics.
Amazon sellers track various metrics to analyse profits and performance. From our experience as eCommerce accountants, the key areas to monitor in your business reports include inventory levels and costs, advertising spend, customer satisfaction ratings, Amazon fees, profit margins, and VAT and tax.
These metrics will influence many of your business decisions, from sales and marketing efforts to where you invest your money next. Read on to discover more about tracking Amazon metrics that keep your business profitable and compliant, along with our valid tracking tips that make the whole process easier.
Need more help managing your Amazon eCommerce payments? Unicorn Accountants are happy to help! Give us a call on 0208 064 0454 or drop us a message today, and let's chat.
Key Amazon seller performance metrics to track
Amazon Seller Central has plenty of data and information to get you started. But it's important to focus on the right KPIs so that you're making the most of your time and tracking what really matters. Doing it right will help you maintain account health, improve customer experience, and focus your energy on organic sales.
We know your time is valuable, and you may not have an abundance of it to scan every drop of data. This is why we suggest selecting the top performance metrics that matter most to your business, but also make the tax season simpler.
Inventory performance and costs of goods sold (COGS)
Inventory management is a huge part of running an online business. You need to know how profitable your products are, but also how well they actually sell. This is how you know when to restock and when to change direction.
Your Inventory Performance Index (IPI) shows how well your FBA inventory is performing. It's a metric unique to Amazon FBA sellers (those who use Fulfilment by Amazon support). High IPI scores indicate better inventory management efficiency and help you avoid additional fees or storage limitations.
Here's how you can keep your IPI score looking healthy:
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Keep popular items stocked up at the right levels
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Revisit listings that aren't performing well and make conversion rate improvements
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Avoid long-term storage fees
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Maintain a good balance of inventory sold and inventory stored
You should also consider the cost of goods sold, or COGS, to get familiar with how much it actually costs to produce your products. This includes everything from product materials to labour and shipping. Accurately tracking COGS helps you work out how much profit you actually get and make more accurate decisions when it comes to pricing your goods.
Total advertising cost
When you know your total advertising cost of sales (TACoS), you can get a much better idea of your profitability and how to improve it.
Calculating your TACoS is pretty simple.
TACoS = (Total Ad Spend ÷ Total Revenue) x 100
Let's say you spent £1,000 on Amazon ads in a month, and your total revenue (including both ad-driven and organic sales) was £10,000.
Your TACoS would be:
(£1,000 ÷ £10,000) x 100 = 10%
That 10% tells you that 10p of every £1 you earn goes towards advertising.
It's also helpful to look at TACoS alongside ACoS (advertising cost of sales) to get a full picture. While ACoS shows how well your ads perform in isolation, TACoS reveals how advertising is affecting your entire business.
Advertising and marketing costs are also classed as allowable business expenses, so keeping track of them will help you when it comes to taxes.
Customer experience ratings
Your customers' satisfaction contributes to your overall account health. It means looking at things like order defect rate, shipping performance, valid tracking rate, and negative customer feedback. Keeping these metrics on the positive side not only improves your relationship with customers, but it also prevents account suspension.
Here's what contributes to a positive customer experience rating:
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React quickly to negative reviews and customer messages
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Ship parcels on time and confirm shipment
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Always provide a valid tracking number with orders
Key Amazon financial performance indicators to track
As well as seller metrics, there's also the financial side of things to think about. Now, both of these come hand in hand, especially when it comes to tax and accounting.
Revenue vs profit
Your revenue is how much you've made overall, and your profit is what's left after expenses. You should keep a close eye on how much revenue you're generating and your profit margins to keep your business on track. This means looking at factors like the cost of goods sold, Amazon account fees, advertising costs, and other operating expenses to understand your net profit.
VAT and tax obligations
If your taxable turnover is more than £90,000 (2025/26 tax year), then you'll need to track and report VAT. Register for VAT if you haven't already, keep track of your sales and expenses, and file and pay VAT on time to avoid late penalties.
Amazon fees and fulfilment costs
This is the price you pay for selling through Amazon. It can include FBA storage fees, selling plans, referral fees for the items you sell, and the cost of creating shipping labels and actually shipping the products.
Some of these fees are tax-deductible, which is why tracking them is crucial.
Operating expenses
Beyond Amazon fees, you also have your operating costs, which can be deducted from your taxable income. These are the actual costs of running your business and include some of the expenses we've already mentioned, such as Amazon fees and advertising, but they also cover software subscriptions and professional services, like accounting.
How can I keep track of all this?
Tracking Amazon performance metrics might feel like a daunting task, but with the right tools and support in place, you can get inventory reports, customer expectation insights, Amazon advertising metrics, and so much more.
Here's how you can start tracking important metrics on Amazon:
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Use your Amazon Seller Central account to get key seller metrics
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Invest in decent accounting software that integrates with other platforms, like your seller account
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Contact a professional Amazon accountant who can take care of the numbers for you
Accounting and tracking for Amazon sellers with Unicorn Accountants
Unicorn Accountants works with Amazon businesses and FBA sellers to track important metrics and identify all eligible business expenses. If you need help tracking or understanding your Amazon seller metrics, speak to our team of expert accountants today on 0208 064 0454 or book a short call to get started.