Sales Rank

Definition

A sales rank is a marketplace’s ordering of products within a category by recent sales, where rank 1 sells the most. It is relative and changes often; it is not the number of units sold, and the same rank in two categories can mean very different sales.

In plain terms

Many marketplaces display a rank for each product within a category. The exact formula is not published, but recent sales weigh most. Rank is ordinal: it says who is ahead, not by how much. Moving from rank 10 to 20 costs far more sales than moving from rank 10,010 to 10,020.

Studies of online booksellers found that sales fall roughly as a power of the rank, which is why a rank can be turned into a rough sales estimate for one category, but only with a curve fitted to that category. Treat rank as a proxy for sales: record it with its category and time, and do not average ranks arithmetically.

Example

Two synthetic categories, a large one and a small one:

The same rank, a very different business. And ranks do not average like quantities: a product at rank 10 on one day and rank 1,000 on another has an arithmetic mean rank of 505, yet its typical position is better described by the geometric mean, √(10 × 1,000) = 100.

Common misunderstandings

• “Rank is the number of units sold.” It is a position, and the sales behind a given position differ by category and over time.
• “Rank 1,000 means the same everywhere.” Only within the same category, and only roughly.
• “A better rank means sales rose.” The rank can improve because competitors sold less.