Knowing which of your products are contributing the least or the most to your growth is the best way for you to take control of your Amazon sales performance.
Whether you're selling multiple products of several brands across different Amazon marketplaces, or simply have a small range of products in a single category, knowing when, where and how to use Contribution to Growth can be the first step in the right direction for your business analysis.
What exactly is Contribution to Growth (CTG) and how is it calculated?
For the sake of simplicity, CTG on Amazon is intended as a means of comparing the sales performance of different products or groups of products. This is done by selecting two different date ranges and seeing which products did better or worse during one period as compared to another. CTG is generally calculated as a percentage (also basis points) in order to establish what share of growth (or decline) each product or group of products had generated as compared to others.
Making a simple comparison of two products over two different periods
Below is an example of a simple comparison calculation.
Imagine you are comparing two products:
- a Bar of Soap
- a Bottle of Shampoo
The Bar of Soap had $1000 sales in November 2019 as compared to $800 sales in December 2019
The Bottle of Shampoo had $2000 sales in November 2019 as compared to $200 sales in December 2019.
Let's break it down.
The total sales was $3000
Bar of Soap sales = $1000 (33% of total)
Bottle of Shampoo sales = $2000 (67% of total)
Total sales was $1000
Bar of Soap sales = $800 (80% of total)
Bottle of Shampoo sales = $200 (20% of total)
Therefore, if we do some simply comparison calculations between December 2019 and November 2019, we can see that:
- Sales are down a total of -67%
- Bar of Soap's sales are down -20%
- Bottle of Shampoo's sales are down -90%
The CTG calculation
Since we were able to quickly conclude that sales are down, we actually want to go to a deeper level of analysis. In the end, we want to understand exactly which product actually contributed the the most to this overall decline in sales. For this, we need to make a CTG calculation for each product:
For the Bar of Soap, we need to do the following calculation:
[Bar of Soap total sales November 2019 MINUS Bar of Soap total sales December 2019]
[Total Sales November 2019 MINUS Total Sales December 2019]
If the result is is greater than 0, we multiply it by -1 and then by 100 to formulate a percentage
The Bar of Soap CTG calculation is
(1000 - 800) / (3000 - 1000) = 0.1 * -1 * 100 = -10%
Having established that the CTG for the Bar of Soap was -10% we are safe to say that the calculation CTG for the Bottle of Shampoo is -90%.
This seems banal when comparing two products, however, inside Seelk Studio, we've automated the CTG calculation to handle any number of product comparisons (or even groups of products). You can easily compare the CTG of hundreds upon thousands of different products 🤩!
Check the case study below.
Need help with contribution to growth? Get in touch with Seelk's Amazon Experts to better pilot and strategise your Amazon business.
Muki - an Amazon vendor CTG case study
A quick reminder, the basics of CTG are simple:
We want to compare our products' sales performance between two different periods in order to see which products either contribute the most or least to from one period to the next.
A CTG calculation can work with individual products, however it works just as well when comparing groups of products, for examples the brands of a manufacturer.
As an example, we chose Muki, a fictional Swedish pharmaceutical manufacturer and Amazon Vendor. They have five different brands:
- Coyote (dental care)
- Runner (men's hair products)
- Beep (nail polish)
- Rubber (obstetrics)
- Eson (nasal spray)
In order to establish the basis for our CTG calculation we asked ourselves:
Which of these five brands has contributed the most to growth over the last quarter as compared to the previous quarter?
In this case we're comparing Q4 2019 with Q3 2019.
How do I calculate my CTG inside Seelk Studio?
Good news 🤓: Seelk Studio's Business Intelligence dashboard (BI) automatically calculates your CTG for you. In order to calculate the CTG for Muki's "Custom Brands", we took the following three easy steps:
1. Select a grouping
Select Muki's "Custom Brands" in the Group By dropdown at the top of the BI interface
2. Compare two date periods
Open the date picker at the top right of the BI interface turn on vs mode and using Months and selecting October 2019 → November 2019 for our A Period and Prev. Period for B Period (giving us July 2019 → September 2019 by default). Don't forget to click Apply 👍!
3. Order by CTG
To see the CTG calculation for "Custom Brands" scroll down to the data table and click on the "[A] vs [B] CTG (%)" column in order to order it from either ascending or descending - depending on whether you want to see your losers or winners first 🧐.
We saw the following:
As you can see Muki's Eson brand contributed to the most to growth with Runner as a close second. One is able to extract all types of analysis from this, but the quickest way to get an idea of where the real sales growth is happening, is to dive a little deeper to the product level.
Deep-diving at the product level
In Seelk Studio we've made deep-diving from Brand analysis to product-level analysis as simple as one click.
In the above case we want to identify which products in the Rubber brand (Muki's brand which contributed the least to growth). It order to do so we simply:
- Click on Rubber in the Custom Brand data table and select "ASINs" from the Deep Dive by dropdown.
- Your list of ASINs will now load inside the data table and a "Custom Brand: Rubber" filter will appear in the filter bar at the top. You can now see a list of your products in the Rubber brand and do an order by CTG (click on "[A] VS [B] CTG (%)" to find out which specific products are contributing the most to your sales.
CTG, at any level
The data table inside Seelk Studio's BI Dashboard will automatically calculate your CTG when comparing two periods.
So, whether you're comparing Year over Year data or simply two unique date ranges the "A vs B CTG %" column will always be there for you to order.
This applies to any dimension of your Catalog - custom attributes, markpletplaces (countries) or ASINs.