I. Target Audience

Operations, Finance

II. Feature Introduction

In the Amazon business, product is king, making product profit calculation especially crucial. However, there are always some costs and fees that exist outside of the product itself, yet are inextricably linked to it.

These include: Sponsored Brands Ads Spend, Sponsored Products Ads Spend, Sponsored Display Ads Spend, Monthly Store Subscription Fee, Lightning Deal Enrollment Fee, Vine Enrollment Fee, Other - Service Fees, Shipment Label Purchase, Other - FBA Inventory and Inbound Service Fees, Payment Processing Fee.

These fees exist independently in Amazon reports and cannot be directly attributed to specific product ASINs. This leads to inaccuracies and deviations when calculating product profits.

To address this issue, SellerSpace has launched the 【Cost Allocation】 feature to help sellers rationally and accurately allocate these fees to corresponding products, making individual product profit calculations more precise.

III. Use Cases

- Accurately allocate costs like Sponsored Brands Ads Spend and Monthly Store Subscription Fee to individual products.

IV. Operation Guide

There are a total of 11 fee types for allocation calculation: Sponsored Brands Ads Spend, Sponsored Products Ads Spend, Sponsored Display Ads Spend, Monthly Store Subscription Fee, Lightning Deal Enrollment Fee, Vine Enrollment Fee, Other - Service Fees, Shipment Label Purchase, Other - FBA Inventory and Inbound Service Fees, Payment Processing Fee.

The allocation calculation logic and setup methods are as follows:

1. Sponsored Brands Ads Spend

1.1 Allocation Method

For Sponsored Brands (SB) Ads Spend allocation, the system will default to evenly distributing the ad spend to the promoted products of the corresponding brand ad based on different targeting methods of the brand ad. For example:

Product collection: Up to 3 advertised products can be set, so a maximum of 3 products will evenly distribute the ad spend.

Brand Store: Evenly distribute ad spend based on the 3 products returned by the Amazon system.

Video Ads: The ad spend is borne by the single product in the video ad.

If there are multiple SKUs under one advertised product ASIN, the SKU with the highest sales volume will be used for allocation calculation.

1.2 Source of Ad Spend

There are two sources for Sponsored Brands Ads Spend allocation: Advertising Invoices + Advertising Business Reports.

Advertising invoices refer to our payment data, which is the advertising fee paid to Amazon periodically, and is financial data.

Advertising business reports refer to the real-time advertising data we see in the backend, and is business data.

In the SellerSpace system, these two are calculated separately, meaning:

The ad spend seen in the 【Finance - Monthly Profit】 feature is calculated and allocated based on "Advertising Invoices."

In other places other than 【Monthly Profit】, the ad spend is calculated and allocated based on the ad spend data in "Business Reports."

Therefore, the profit results of the two may be inconsistent.

1.3 Set Allocation Ratio for Products

Once we understand the allocation logic, the next step is to set the product allocation ratio to make cost allocation more precise and reasonable.

There are 2 ways to set the allocation ratio for Sponsored Brands Ads Spend: Default Rules + Manual Setting.

In addition, you can also correct historical allocation results, which is "Re-allocate."

① Default Rules

If we do not set the allocation ratio for products, the system will default to evenly distributing the Sponsored Brands Ads Spend to the ASINs promoted in the current ad creative. If there are multiple SKUs under one ASIN, the SKU with the highest sales volume on the date corresponding to the advertising invoice will be selected and configured as the allocated product for the brand ad.

Therefore, if the above conditions meet your allocation needs, you can directly enable 【Automatic Allocation】 without setting the product allocation ratio separately.

② Manual Setting

If the system's default allocation rules do not meet your allocation requirements, you can manually modify the settings.

For example, we have a brand ad A that has brought more orders for product B, so we want to allocate 20% of the cost of brand ad A to product B.

At this time, we can manually set the product allocation ratio to achieve this allocation requirement.

Enter the "Promoted Products" page and click 【SB Ads Spend Allocation】 to enter the brand ad spend allocation settings page.

Enter the "SB Ads Spend Allocation" settings page,

In the 【Current Allocation Configuration List】, we can see all brand ad products with allocated costs.

Use the search bar above to find brand ad A, and click the 【Edit】 button on the right to enter the editing page.

Enter the "Edit Allocated Products" page,

Find the product B to be newly allocated, and click the add button 【+】 on the right to add a new allocated product.

We can add multiple allocated products for one brand ad.

After adding the product, set the allocation ratio by clicking on the right.

Tip: If you want to evenly distribute directly, you can also click the 【Evenly Distribute】 button, and the system will directly calculate the average value.

One more point to note here: clicking on the allocation ratio, the "clicks" here refers to Clicks.

Although we are evenly distributing based on brand ad products, the performance of each product is different, and ad spend is directly linked to clicks. Therefore, we need to further calculate the corresponding ad spend based on clicks, combined with the allocation ratio, to ensure more accurate allocation results!

The following is an example of product allocation for Sponsored Brands ads:

First, calculate the allocated clicks (round to the nearest integer when there is a decimal point).

Allocated Clicks = Clicks × Allocation Ratio, which is: 5 × 0.33 ≈ 2

Then, calculate the allocated spend based on the allocated clicks.

Allocated Spend = Proportion of Allocated Clicks × Ad Spend, which is: 2 / 5 × 1.45 = 0.58

So far, we can clearly calculate the spend of the corresponding product for our brand ad!

(Example: SB Ads Spend Allocation > Non-Financial Module Allocation Records)

After setting the allocation ratio, click 【Save Allocation Configuration】 to complete the setting.

After completing the allocation ratio setting, return to the "SB Ads Spend Allocation" page,

We can see that the allocation ratio for the top 3 SKUs has been updated.

Sponsored Brands Ads Spend after the setting time point will use the new allocation ratio for allocation calculation.

Therefore, if you want to recalculate according to another allocation rule after allocating for a period of time, just reset the allocation rule. (This logic is the same as the product cost setting)

Will historical data be automatically allocated?

Historical data will not be automatically allocated. We can use the 【Re-allocate All Costs】 function to manually allocate historical ad spend according to the current allocation rules.

The re-allocation function will be explained in detail next.

③ Modify Historical Allocated Costs - "Re-allocate"

Re-allocation refers to correcting the calculation results of historical allocations. For example, if the allocation calculation of a certain brand ad spend last month was incorrect, and we want to modify its calculation results, we can use the "Re-allocate" function.

There are 2 ways to re-allocate: Re-allocate a single ad + Re-allocate all costs.

Re-allocate a single brand ad

This refers to correcting only the historical allocation results of a single brand ad.

Taking the correction of the allocation calculation of brand ad A last month as an example, adding 1 allocated product C with an allocation ratio of 10%, and the remaining products evenly distributing the remaining spend.

Enter the "SB Ads Spend Allocation" page, find brand ad A, and click 【Re-allocate】 on the right to enter the allocation rule configuration page.

Enter the "Re-allocate Spend" page,

Filter and find product C, click the add button 【+】 on the right to add it to the allocation calculation.

After adding, set the allocation ratio according to your needs.

According to our example requirement, set the newly added product C to 10%, and the remaining products evenly distribute the remaining costs.

After setting the allocation ratio, at the bottom, set the time range for the allocation calculation to be corrected.

According to the example requirement, select the entire month of last month.

After confirming that the information is correct, click 【Confirm Re-allocation】 to complete the correction.

After saving, the brand ad spend for the corrected time period will be calculated and updated in real time, and synchronized to various profit statistics features.

Re-allocate All Costs

This refers to correcting the allocation results of all brand ad spend for a certain time period. For example, allocating brand ad spend for which historical allocation was not set, clearing allocation results for a certain time period, etc.

Before using this function, please note:

- Each marketplace can only perform a full re-allocation once per day.

- If only a small number of ads need to be re-allocated, you can perform single ad re-allocation in the list.

Assume that we only started using the allocation function at the beginning of this month, and the brand ad spend for last month was not allocated. Now we want to allocate it according to the current allocation rules.

Enter the "SB Ads Spend Allocation" page and click 【Re-allocate All Costs】 to enter the settings page.

Enter the "Re-allocate All Costs" page,

First, select the allocation method: Re-allocate all costs according to the current configuration, or do not allocate.

According to the example requirement, here, we choose the first one.

Tip: If you choose "Do not allocate," the allocation calculation results will be cleared.

After selecting the allocation method, select the allocation time period.

According to the example requirement, we select the entire month of last month.

Confirm that all information is correct and click 【Confirm Re-allocation】 to save.

After setting, the allocation results for this time period will be calculated and updated in real time, and synchronized to the corresponding profit calculation results.

④ View Allocation History

After the cost allocation has been applied for a period of time, we can view the corresponding allocation history. There are 3 places for allocation history: configuration records of a single brand ad, allocation history of non-financial modules, and allocation history of financial modules.

Configuration records of a single brand ad

We can set different allocation ratios for brand ads according to different time periods, and historical allocation calculations can also be corrected. Each time it is set, the latest obtained brand ad spend data will be allocated and calculated according to the latest set allocation ratio.

And each allocation configuration will be recorded and saved by the system.

Enter the "SB Ads Spend Allocation > Current Allocation Configuration List" page, find the brand ad for which you want to view the configuration records, and click 【Edit】 to enter the configuration editing page.

Enter the allocated product editing page, click 【Allocation History】 in the upper left corner to enter and view the historical allocation configuration of the brand ad.

Historical Allocation Configuration List:

Allocation history of non-financial modules

Non-financial module allocation refers to the cost allocation based on advertising business reports. It is data statistics at the brand ad campaign dimension. This allocation calculation method is applied to other profit statistics places other than the 【Monthly Profit】 feature, such as: Profit Analysis, Dashboard, Product Analysis, etc.

Enter the "SB Ads Spend Allocation" page and click 【Non-Financial Module Allocation Records】 to view all allocation records of this module.

Enter the "Non-Financial Module Allocation" page,

We can use the search bar above to filter and view the cost allocation records of different brand ad campaigns in different time periods.

Hover your mouse over the "Allocated Spend" value to further view the allocation details of the spend and how this spend was derived.

Financial module allocation history

Financial module allocation history, corresponding to non-financial modules, refers to the Sponsored Brands Ads Spend allocation records of the 【Monthly Profit】 feature, which is data statistics at the product dimension.

Its data is taken from advertising invoices and is a real financial income and expenditure item.

Enter the "SB Ads Spend Allocation" page and click 【Financial Module Allocation Records】 to view all allocation records of this module.

Use the filter bar to find the product for which you want to view the Sponsored Brands Ads Spend allocation.

View the specific allocation fee details, including: advertising invoice information, various amounts calculated for allocation, etc.

Hover your mouse over the ad spend ratio to also view the corresponding details.

If multiple products are allocating spend, the details here will show the calculation results of the corresponding allocation ratio.

2. Sponsored Products Ads Spend + Sponsored Display Ads Spend

You may have a question, aren't Sponsored Products (SP) and Sponsored Display (SD) ads already attributable to specific products? Why do they also need allocation?

This is still due to the inconsistency between "Advertising Business Reports" and "Advertising Invoice Report Data."

In 【Finance - Monthly Profit】, our ad spend comes from Advertising Invoice data, but in advertising invoices, we can only see the total spend of a certain ad campaign, and cannot get down to the product level.

Although we can see the ad spend corresponding to products in advertising business reports, there are inconsistencies between the spend in business reports and advertising invoices. Therefore, in order to see the single product profit including ad spend in the financial dimension, these two ad spends also need to be allocated.

2.1 Allocation Method

Sponsored Products and Sponsored Display ads use the system's built-in allocation rules by default, without needing to be manually set separately.

In SellerSpace's allocation calculation, we take the spend of SP ads and SD ads from advertising invoices, and then calculate the financial type ad spend corresponding to the product based on the proportion of ad spend for the corresponding product in the advertising business report.

For example:

In the same time period, for SP ad campaign A, the spend in advertising invoices is: 100, and the spend in advertising business reports is: 120. There are 2 advertised products, the spend for product 1 is 80, and the spend for product 2 is 40.

Then, its financial ad spend allocation calculation is:

Spend for product 1: 80/120×100=66.67

Spend for product 2: 40/120×100=33.33

(Example: Finance > Monthly Profit)

3. Monthly Store Subscription Fee + Lightning Deal Enrollment Fee + Vine Enrollment Fee

3.1 Source of Fees

These three fees are store-level fees. We can choose to manually upload them to the system in the 【Store Other Costs】 feature, or we can enable automatic synchronization in this feature. The automatic synchronization data source is the Payment report.

If you choose to manually upload, the uploaded fee title needs to be consistent with the fee title in the prompt text in the 【Automatic Synchronization】 pop-up window.

3.2 Allocation Method and Settings

There are 3 allocation methods for these three fees: Specify SKU Allocation, Automatic Allocation by Sales Volume Ratio, and Automatic Allocation by Sales Amount Ratio.

① Do not automatically allocate, specify SKU allocation

This refers to manually setting the allocated products, and then evenly distributing the fee.

Taking the Lightning Deal enrollment fee allocation as an example, for example, only a few product ASINs may generate orders during this Lightning Deal. The Lightning Deal fee can be allocated to these few ASINs. At this time, you can specify SKU allocation.

First, in the 【Cost Allocation】 feature, find "Lightning Deal Enrollment Fee" and select 【Do not automatically allocate, specify SKU allocation】.

Then, enter the "Store Other Costs" feature, filter and find the Lightning Deal fee, and click the allocation button on the right to enter the settings page.

Enter the "Allocate to Specified Products" page,

Find the product to be allocated, and click the add 【+】 button on the right to add it with one click.

After adding, click 【Confirm】 to complete the allocation.

Tip: After saving, the fee will be evenly distributed to the selected SKUs, and the fee in 【Store Other Costs】 will be deleted.

② Automatic allocation, allocated by sales volume ratio

This means that when these three fees are obtained, the fee will be allocated in real time based on the product sales volume or sales amount ratio of the previous month in the Payment report.

For example, if the sales volume ratios of 3 products last month were 70%, 20%, and 10% respectively, then the above three fees will be allocated to these 3 products according to this ratio.

③ Automatic allocation, allocated by sales amount ratio

This is the same as 【Automatic allocation, allocated by sales volume ratio】.

4. Other Service Fees

Other service fees refer to: Other - Service Fees, Shipment Label Purchase, Other - FBA Inventory and Inbound Service Fees, Payment Processing Fee, which mainly appear in Payment report data and are store-level fees.

They can also be allocated, but only manual allocation is supported. The setting path and method are consistent with the manual allocation of the three fees such as Monthly Store Subscription Fee.