The Impact of Reviews and Ratings on Amazon Business Value

When valuing an Amazon business, the impact of reviews and ratings should not be overlooked. Together, they have a significant influence on several other key metrics that ultimately determine how much your business is worth. 

In this article, we’ll be discussing how reviews and ratings affect the value of your Amazon business. We’ll also provide actionable tips to help you manage reviews and feedback in order to stay compliant with Amazon’s Terms of Service. 

Reviews and Value

When viewed as a standalone metric, reviews may not have a large impact on the value of your business when compared to sales, growth trends, and other important factors. Your online review quantity and overall review rating can greatly influence your business performance. This will ultimately have a very large impact on the value of your business. 

How can Amazon reviews and feedback help or hurt your business value?

When looking at reviews, it is important to look at both review quantity and the overall rating. On Amazon, the rating is out of five stars. The combination of review quantity and rating can influence a variety of very important factors, including:

• Traffic
• Conversion rate
• Ranking
• Credibility

Put simply, the quantity and quality of your reviews will heavily influence how a potential customer interacts with your product listing on the Amazon marketplace. If your review score is subpar, this will make potential customers less likely to click on your listing. In turn, your listing will receive less traffic. 

Even if they do click on your listing, the customer will be much less likely to purchase. As more similar decisions are made by many potential customers, your product ranking can suffer. This will further reduce your traffic.

In addition to being bad for business, prospective buyers will take note of these numbers. Ultimately, they will likely not be willing to make as high of an offer when you choose to sell your business.

The Importance of Selling High-Quality Amazon Products

One of the key factors that smart buyers look for is product quality. A quality product is one that is not likely to go out of fashion anytime soon. It also has consistent manufacturing standards and performs as advertised.

Just as a consumer uses your reviews to determine the quality of your products, so too will a potential buyer. By reading through your reviews they can see if there are constant complaints about product defects or if the product is liable to break or malfunction. If they see something that they don’t like, they will take note of that when deciding whether or not to make an offer on your business. Having reviews that indicate that your products are in fact of high quality could serve to increase the value of the offers that you receive for your Amazon FBA business. 

Reviews and Sales

One of the key metrics that buyers look at is sales. The quantity and quality of your reviews will have a large impact. 

How can reviews impact sales?

We have already covered how the quality and quantity of your reviews can influence your ranking and traffic. From there, it is not a large jump to understand how your sales figures can be impacted. 

For example, if a lower review score leads to less traffic and a lower conversion rate, sales will naturally be affected. When sales decline, your product ranking will suffer. Conversely, a better review score will likely have a positive impact on traffic and conversion rate, boosting sales. 

A drop in a review score from 4.5 out of 5 to 4 out of 5 stars can lead to a decline in traffic and sales of 20%-30%. This can have a dramatic effect on the value of your business. If this change occurs while an offer is on the table for your business, it could lead to the offer being rescinded and the deal falling through entirely. 

Review Quantity and Quality

Both the review quantity and quality have an impact on the overall performance of your business. As an Amazon business owner, you may be asking yourself what you can do to optimize both of these factors. 

It is worth mentioning here that some Amazon entrepreneurs choose to engage in “black hat” methods. These are techniques that are both disingenuous and against Amazon’s policies. In addition to being morally objectionable, it is highly advised that these techniques be left out of the equation. Amazon pursues and punishes sellers who go against their policies. Punishments include withdrawal of selling privileges, delisting, and even legal action.

Fortunately for you, there are perfectly acceptable steps that you can take to both gain more reviews and improve the quality of your reviews. 

Gaining more reviews

There are several different ways that you can rightfully gain more reviews from your sales. Some of these methods include:

• Amazon Vine
• Request Review feature
• Package inserts
• Chat marketing tools like ManyChat

Amazon Vine

While you are not allowed to give an individual your product in exchange for a review on your own, you are allowed to participate in the Amazon Vine program. With Amazon Vine, your product is given to a high-quality reviewer hand-picked by Amazon to give an unbiased and fair review. While this may cost some money initially, it can be a great way to gain traction when starting out

Request Review Feature

The Request a Review feature sends out an email to a specific customer asking for both a product review as well as seller feedback, which will also impact your overall Amazon Seller Rating. The Request a Review feature can be a useful tool to prompt the customer to leave their feedback.

Package inserts

Including a card or insert into your product packaging that thanks the customer for their purchase and requests a review can also improve your review response rate. 

Chat marketing tools

In addition to the above steps, chat marketing tools like ManyChat can serve to boost your customer engagement and drive reviews. There are many different ways to use these chat marketing tools, with some being more accepted than others. Remember, it is important to use approved methods when driving reviews. 

Improve the quality of reviews

In addition to driving your review response rate, there are several things that you can do to drive positive feedback and improve your average review rating. These include:

• Removing false or fake reviews
• Addressing review concerns

Removing false or fake reviews

If your listing receives a truly false or fake negative review, you can petition Amazon to have this review to be removed. Obviously, this should only be done if the review is in fact false in some way. By systematically doing so, you can help to ensure that you maintain a higher rating and present an accurate depiction of your product quality.

Addressing review concerns

Additionally, don’t underestimate the power of reaching out to concerned customers and rectifying the situation if possible. For example, if they were shipped a defective product, it may make sense (in addition to being the right thing to do) to ship them a replacement for free. This creates goodwill between you and your customers and will help to drive higher quality reviews.

This brings up a more general point. Unsurprisingly, providing stellar customer service and ensuring customer satisfaction in all situations typically leads to happier customers, more reviews, and better quality reviews. 

In some cases, reviews can provide you with valuable insight that helps you improve. If you consistently receive negative feedback on a specific aspect of your product, you can make use of this information by iterating your product in order to address the concern.

One of the most important things that you can do to both drive more reviews and ensure that you receive good reviews is to sell high-quality products. No tips or tricks will replace simply selling a quality product that customers love.

Summary

Product reviews are a key component of any successful Amazon business. By taking care of your review process, you can help to ensure that you are optimizing your traffic, conversion rate, ranking, and credibility. All of this will help you drive more sales and increase your revenue. 

By selling quality products, engaging in stellar customer service, and using the proper techniques, you can maximize your reviews and drive the value of your Amazon business now and into the future.