The Amazon Flywheel Effect

1. A heavy wheel for opposing and moderating by its inertia any fluctuation of speed in the machinery with which it revolves.

2. A heavy revolving wheel in a machine that is used to increase the machine’s momentum and thereby provide greater stability or a reserve of available power during interruptions in the delivery of power to the machine.

Businesses use the term the “flywheel effect” to demonstrate how it may be difficult to start a business, but eventually you get enough momentum where you can sustain yourself with minimal extra effort.

Jeff Bezos interpreted this concept as a circular wheel, where if you feed any part of that wheel, you gain momentum and it accelerates that loop!

Lower Prices = More Customer Visits, More Customer Visits = More Sales, More Sales = More Commission-Paying Sellers.

You are in the business of selling more products on amazon. We are in the business of increasing the conversion rate of your products. Let me ask you a few questions:

  • If you were to increase the conversion rate of your products by 1 percent, how many more units would you sell every month?
  • If you were to increase the conversion rate of your products by 1 percent, how would that effect your PPC ACOS?
  • If you were to decrease your PPC ACOS, how would that affect your margins?
  • If you were to improve your margins, How much could you lower your price?
  • If you were to lower your price, how many more sales would you generate each month?
  • If you were to generate more sales each month, how would that affect your buying power with your suppliers?
  • If you were able to buy more units, how would that affect your shipping rates? Could you then send full containers to your warehouse?
  • If you were to make more sales every month? How many more reviews would you get on your products every month?

So you see, conversion rate is KING as it applies to the amazon seller flywheel and it is largely overlooked by many sellers. If you want to calculate how this effect can change your business, simply check out our payback period calculator below…

A ‘Payback Period Calculator’ is a tool that we like to use to demonstrate the huge impact that Conversion rate can have on your business. Click the button below to give it a try!

If you have any questions about using the payback period calculator, just send us a message and we can walk you through it!