5 Ways to measure if your Amazon FBA Brand is becoming Better for the Planet
Data is crucial when analyzing your Amazon FBA brand’s performance, because — when correctly used — data gives you an objective vision over whether you’re moving forward or not; data allows you to see. For Amazon FBA brands that means everything from checking your sales reports to monitoring your advertising spending and through to checking how much stock you have left.
Data is something that everyone, no matter how big or small their business is, can and should use — and there’s no reason that any Amazon FBA owner can’t build themselves some simple and practical ways to use data to track their brand’s progress in becoming more sustainable and ethical.
So for this part of our ‘Better for the Planet’ series I’ve written up 5 ways that any Amazon FBA owner can use to make their business more planet-friendly.
So what data can you use to track our goals and analyze our progress?
Ideally, and if this guide was only for Fortune 500 companies with significant amounts of finance and labor to spare, you would do a full accounting of the entire business and any of its vendors in areas such as pollution, waste, diversity, equality, mental health, and others.
However, for smaller businesses, where money and more likely, time, can be in short supply achieving such a comprehensive and in-depth review will likely:
- Take too much time and money
- Cause the team or entrepreneur to become demotivated
- And ultimately… reduce your chances of succeeding in making an impact
So what I will focus on in this article is achieving basic measures (i.e. a foundation) that are simple to set up and don’t require much in terms of cost or time — but can still be effective in letting you know whether or not you’re making a brand more planet-friendly. To do this, I will discuss a combination of direct data approaches (when available) and smart proxies (when direct data isn’t easily available).
So let’s get started :)
- Shipping
Airfreight is much faster than sea freight and you can get a shipment in days or weeks from Asia via plane vs a month+ or multi-month wait on a container ship. However, you pay for this speed environmentally — sea freight CO2 emissions are minuscule compared to air freight.
Key Performance Indicator (KPI): Per quarter — % of total products shipped via sea freight (if you want to add extra sophistication you could do this by cbm or total KG.
- Packaging Materials
In a perfect world, all of your packagings will be biodegradable or recyclable. However, it might take a while to get there, so in the meantime, I recommend checking the weight (or for very light items, e.g. plastic bags — the surface area or volume) of your product’s primary packaging which belongs to non-biodegradable or non-recyclable materials. In this case, primary packaging means your product’s box and anything that goes inside of it that is not the product itself.
Remember, some sustainable packaging is more environmentally friendly than others, too. For example, recyclable packaging can mean less waste overall than biodegradable packaging and in turn, biodegradable packaging can be better than non-recyclable bioplastics. Remember that although bioplastics might have a lower CO2 profile than normal plastic, they can still take hundreds of years to degrade. So do your research on this and check directly with your suppliers on what they’re able to provide/recommend.
Key Performance Indicator (KPI): Per half-year or year… Weight, surface area, or total volume of non-recyclable/non-biodegradable materials in your primary product packaging weighted by sales volume.
Or if this sounds too tricky… a simpler measure could be to track the number of non-biodegradable or non-recyclable items in a single unit of each product (or each key product) of your SKU list. For example, for packaging that is non-recyclable or non-biodegradable e.g. a box + bubble wrap + 2 plastic bags + an instruction guide = 5 items, if none of them are made from sustainable materials (and 4 if the box was, or 3 if the instruction guide was, too, and so on…) The goal would be to get it down to 0.
NB: A McKinsey & Company report also notes that “consumers are willing not only to pay more for sustainable packaging but also to buy more products that use it if they are available and clearly labeled”. So don’t be afraid to communicate your recyclable and biodegradable packaging progress to consumers!
2. B — Packaging Volume
Minimizing your total packaging per product is often the most effective packaging solution. That can mean redesigning your product’s box to make it as small as possible or finding better cushioning that uses less material to keep your product safe. A great way to do this for secondary packaging (i.e. the packaging that your product and its primary packaging get put in for transport) is by having packaging that can be ‘shipped in own container’. That means that your product can be shipped directly to the consumer without needing to be put into another box or other form of packaging. This can save considerable amounts of secondary packaging and in cost-terms can save you money, too.
Key Performance Indicator (KPI): Per half-year or year… Weight, surface area, or total volume of materials in your primary product packaging and secondary packaging.
- Climate Pledge Badges
As part of Amazon’s commitment to be net carbon zero by 2040, it has added Climate Pledge Bages to help promote any products that are certified to be sustainably made. This status can be achieved by meeting the standards for Amazon’s certification requirements (e.g. Compact by Design) or with one of a large list of its sustainable certification partners. A way to get some quick wins on this, too, is to check with your suppliers to see if they already have certification with one of these agencies.
Key Performance Indicator (KPI): Per half-year or year — No. of products or % of products with a Climate Pledge Badge (i.e that have achieved certification for being sustainably made)
- Recycling Instructions
The harder something is to do, the less likely someone will do it. Including instructions on what can be recycled from your product or packaging (along with some pointers on the positive effect that recycling the items will have) helps to reduce friction and ensure that more of your products end up where they’re supposed to go, instead of being buried in a landfill.
Key Performance Indicator (KPI): Per-year — No. of products out of your SKU with recycling instructions on the packaging
- On-Site Inspections (Not as difficult as you might think)
If you want to know whether your supply chain upholds the same values that you do for labor rights, working conditions, sustainability, and more — the best way to do this is to use an external supply chain compliance partner. Multiple companies do this, such as QIMA, Sofeast Limited (Qualityinspection.org), Asia Quality Focus, etc… Costs for an inspection can be below $1,000 and even below $500 depending on the size of the inspection and total products — so this is something that smaller Amazon FBA brands can carry out, too!
Key Performance Indicator (KPI): Per-year — No. of inspections carried out or % of suppliers inspected.
A Final Word — Giving Value to your Actions
The world needs better e-commerce companies, not just because it’s increasingly important for your consumers, business partners, and even Amazon, but because it’s the right thing to do. Businesses are in some of the best positions in society to contribute to improving the planet and for e-commerce companies that sell products at high rates, even small actions can have a significant impact.
For example, if you remove one piece of non-recyclable and non-degradable plastic from a product that sells ten thousand units per year, that means that those thousands of pieces of plastic don’t end up sitting in a landfill for hundreds of years, washing up on an ocean shore or being burned in an incinerator — because of the actions that you took. That’s something to be proud of.
The World Economic Forum (citing a 2017 policy paper from B20 Germany) estimates that small to medium enterprises (SMEs) “contribute over 50% to GDP and account for two-thirds of formal employment in many countries”. SMEs are a central pillar of nearly every national economy around the world, what individual businesses do matters, because the small decisions of all SMEs, when combined, have bigger effects on the economy than even Amazon.
Small actions made consistently by individuals trying to do better can make big changes.
And now that you’ve got the data to track your progress in making your brand Better for the Planet, you can start to see how much of an impact your small decisions are having, too. (Plus it gives you the ability to show your impact to customers, because there’s no reason you can’t make positive environmental and social changes to your Amazon FBA brand that are positive for your profit figures, too).
