Why Tracking Sales by SKU is Crucial for Amazon Sellers

If you’re running an Amazon business and only looking at total revenue or account-level profit, you’re missing the real story.

The truth is:

Not all SKUs are created equal — and some are quietly draining your margins.

Tracking your performance by SKU gives you the insights needed to:
✅ Scale profitably
✅ Optimize ad spend
✅ Improve cash flow
✅ Plan better inventory
✅ Eliminate waste

Let’s break down why SKU-level tracking is non-negotiable — and how to start using it today.

📦 What Does It Mean to Track by SKU?

Each listing on Amazon has a SKU (Stock Keeping Unit) — your internal identifier that maps to your FNSKU, ASIN, and fulfillment strategy.

Tracking by SKU means you know:

  • Units sold
  • Revenue
  • Cost of goods sold (COGS)
  • FBA fees
  • Ad spend
  • Returns
  • Refunds
  • Net profit or loss

This isn’t just a spreadsheet — it’s your roadmap to profit clarity.

💰 Why SKU-Level Data Matters

1. It Tells You What’s Working (and What’s Not)

You might have 5 SKUs that drive 80% of revenue — and 5 that consistently lose money.

Without this view, you’re:
❌ Spending on ads that aren’t converting profitably
❌ Reordering SKUs that underperform
❌ Making decisions based on averages

2. It Helps You Prioritize Inventory

Amazon storage fees are rising. Long-term storage hurts cash flow.

Tracking by SKU helps you:
✅ Avoid overstocking slow movers
✅ Double down on fast-turning, high-margin products
✅ Bundle or liquidate underperformers

3. It Improves Advertising ROI

Running ads at the parent level is dangerous if certain child SKUs convert better (or worse) than others.

Use SKU-level ad reports to:
✅ Trim spend on low-profit products
✅ Boost winning keywords tied to top SKUs
✅ Spot where TACoS is too high for your margin to support

4. It Keeps Pricing Strategic

Not every SKU needs to chase the lowest price.

SKU-level tracking helps you see where:

  • You can raise prices without hurting conversion
  • You’re too close to break-even
  • You need to adjust for competitive pressure

⚠️ The Risks of Not Tracking by SKU

  • 🚨 Scaling unprofitable SKUs
  • 💸 Spending more on ads than you make back
  • 🧊 Letting slow movers freeze your cash flow
  • ❌ Losing Buy Box because of underperforming stock metrics
  • 📉 Misreading account performance due to a few inflated winners hiding losses

📊 Tools for SKU-Level Tracking

🛠 Sellerboard

  • Full profit & loss by SKU
  • Tracks refunds, returns, FBA fees, storage, and ad spend
  • Alerts for low-profit SKUs

🛠 Helium 10 Profits

  • Visual dashboard
  • Easy SKU-level breakdown
  • Combines sales, returns, COGS

🛠 InventoryLab

  • Best for combining sourcing + sales performance
  • Great for retail arbitrage or wholesale sellers

🛠 Marketplace Valet

  • Custom dashboards
  • SKU-level profitability alerts
  • 3PL + ad campaign insights rolled in

🧠 Pro Tips for Implementing SKU Tracking

  1. Standardize your naming system
    Use SKU naming conventions that include size, color, variant, or fulfillment type (e.g. SHIRT-BLUE-M-FBA).
  2. Track COGS monthly
    Recalculate when supplier pricing or shipping costs change.
  3. Break down ad performance by SKU
    Look beyond ACoS — track TACoS and profit per unit sold.
  4. Segment your catalog
    Create groups: bestsellers, new SKUs, dead inventory, seasonal items.
  5. Use dashboards or tools — not just spreadsheets
    Spreadsheets get messy fast. Automate where you can.

🧪 Real Case Study

Brand: Niche kitchen tools seller

  • 14 active SKUs
  • 4 SKUs generated 76% of profit
  • 3 SKUs had negative margins due to oversized FBA fees + high return rates
  • Removed 3 losers, shifted ad budget to top performers
  • Profit increased 32% in 60 days — with lower ad spend

🎯 Key takeaway: What you don’t track can kill your margins.

🏢 How Marketplace Valet Helps

We support Amazon sellers by:
✅ Creating SKU-level profit dashboards
✅ Auditing listings for margin opportunities
✅ Managing ads with SKU-specific strategy
✅ Helping liquidate or bundle underperformers
✅ Aligning fulfillment strategy (FBA/FBM) based on SKU performance

You don’t need more products.
You need clarity on which ones are working.

Final Thoughts

Revenue is a vanity metric.
SKU-level profit is the metric that matters.

Whether you’re running 5 ASINs or 500, the sellers who win are the ones who know:

  • Where their profit is
  • Where their risk is
  • Where to focus next

📌 Track it. Own it. Optimize it.