10 Things You Need to Know For A Profitable Q4

Q4_logo_on blackQ4. For an online seller, it’s the most wonderful time of the year. Sales and profits seem to go through the roof as more and more people buy stuff online for the holidays. If you’re just assuming that Q4 is going to be great for you but you’re not doing anything differently, then you might miss out on some amazing opportunities to increase your Q4 profits. The following are 10 things you need to know about Q4.

1. For those of you experiencing your first Q4, you might be worrying that your sales have not yet really increased as much as you thought. This is because while the business world sees Q4 as October to December, Q4 for the Profit-graph-260x259Amazon sales world is actually November to January. Don’t worry… Amazon Q4 really starts to gear up in November and will go absolutely crazy in December.

2. While the bulk of Q4 sales happen in December, many sellers (including myself) have found that January can be almost as profitable as December is. As long as you still have lots of inventory, you will still sell a lot in January. Why? Because people are finally going to Amazon and getting what they actually wanted for Christmas. Not only that, but everyone will be using their Amazon gift cards they received on Christmas day. Be sure your inventory is still well stocked for January, so you don’t miss out on the last month of the Amazon Q4.

Screen Shot 2014-10-27 at 5.41.50 PM3. What I deem as acceptable sales ranks for inventory purchases changes a lot during Q4. While I might shy away from a toy ranked 200,000  to 300,000 during the summer, I’ll almost always buy that item as Q4 is approaching. Why? During Q4, the sales velocity increases exponentially. So while a toy consistently ranked 250,000 might sell only twice a month… come December of Q4, that same toy might sell once a day.

4. Many Amazon sellers start to freak out a bit when they get an email from Amazon about their “Holiday Selling Guidelines for the Toys & Games category.” For those who don’t know, Amazon decides which sellers are eligible to sell in Toys & Games category during the holiday season. Sellers worry that they might not be approved to sell toys during the holidays and begin to stress out. One thing that Amazon needs to do a better job of is communicating that these guidelines only pertain to Amazon sellers who are selling MERCHANT FULFILLED toys. If you are selling toys via FBA, then you are automatically approved to sell toys during the holiday sales season. Again, these guidelines only apply if you are mailing your inventory directly to the buyer (merchant fulfilled).

ID-10044546-resize-380x3005. If you reprice your inventory on a regular basis (either manually or with an online repricer) then I might suggest stopping, or at least slowing down. Sales start to increase during Q4 so much that an item that sells for $14 today (early October) might potentially sell for $30 a month from now. Take a moment and research your item on CamelCamelCamel and see if the price of that item tends to go up during Q4. If it does, leave your price alone and make more profits than if you lowered your price. You might even want to raise some of your prices.

6. Many of you wonder if you should try to focus on reselling the toys from each store’s “Holiday Hot Toy” list. My personal plan of attack is to avoid most of these toys. My reasoning is this: If a store tells you what toy will be the “hot” toy this holiday season, then it’s reason enough to assume that the store will be heavily stocked with those particular toys. The toys that you want to find to resell during Q4 are the toys that will be harder to find come December. If you’re interested in learning more about the Q4 strategy that I’m learning and implementing this year, then check out Jim Cockrum’s Proven Q4 Plan.

images-37. Want to save even more money on the stuff you want to sell in Q4? Buy discounted gift cards. I personally love raise.com and cardpool.com, but there are other sites out there that do the same thing. I’ve bought $100 Walgreens gift cards for $75… that’s $25 in free sourcing money! Find other great gift cards from stores like Target, TJMaxx, Tuesday Morning, Big Lots, Walmart, and more! If a store offers gift cards, then most likely you can get some free money to source with by purchasing discounted gift cards.

8. Stock up on supplies! When everyone is in the thick of Q4 madness, you don’t want to suddenly discover that you have run out of 3-inch packing tape, Dymo labels, suffocation warning labels, or any other supply that is necessary to run your business. Stock up today while you have the time.

returns.jpg9. Nobody likes returns, but just remember this: With increased sales come increased returns. There is no avoiding it. There will also be an increase in warehouse and distributor damaged items, as well as warehouse lost items. It’s ok. For most situations, Amazon will reimburse you for the items they lose or damage. Important: Don’t just assume that these reimbursements will be automatic. Make sure that Amazon not only reimburses you for items they lose, but that they also reimburse you for items your customer never actually returns.

10. When Q4 hits, some resellers go into overdrive and spend every waking hour sourcing, buying, prepping, and shipping. They sometimes forget about what’s really important: family. Don’t let the dollar signs blind you. Look around and spend quality time with your family. Remember what the Thanksgiving and Christmas seasons are truly about and reflect upon God’s great gift to us all. When we remember what’s truly important, it gives us the right perspective. And that’s more important than any Amazon payout could ever be.

I hope these ten tips will help you have a profitable and meaningful Q4. If you’d like to share more tips about this most wonderful time of the year, please feel free to comment below. I’d love to hear how you make the most of Q4.

31 responses to “10 Things You Need to Know For A Profitable Q4

  1. This is my first Q4 and I am doing everything I can to have enough stock. This article is really great.

    Thanks for the great tips.


  2. Thanks for these tips. I never knew about the Gift Card discounts . Great idea!
    My first Q4 as well. I’ve been on Amazon FBA for 2 months know and I am amazed. I wish I found it sooner. I’m in the bobbing in weaving mode right now trying to navigate to profitable sourcing and sales. It’s hit and miss but I can see it getting better as I learn.
    Thanks for all your useful information you share with us.
    Freddy D

    • Keep up the good work, Freddy! The more you work at it, the better you’ll become. I’m living proof of that. It’s a great time to be selling on Amazon. Glad my posts can help!

  3. Another great post. 2nd Q4 here and still worried if I have enough inventory.

    • Dave,
      Like I said above: I could have a million items in stock at Amazon and still wish I had more inventory. Don’t worry about it. Just get as much as you can in to Amazon and you’ll be fine. Then take the profits from Q4 to build towards an even more amazing Q4 for next year!

  4. Great advice. I appreciate hearing from folks who have been through this time of year before. Thanks so much.

  5. Stephen,
    While I know 50% ROI would be good on any product. If that cannot be obtained, what is a good range to look for? $6 to $7 profit margin?
    Of course naturally I should set my sites higher, but I am trying to figure (with your expertise) if a consistent $6 to $7 would be just as good as a one time 50%. Let me know your thoughts. Thanks.

    • I try to aim for a return of at least $10 on most of the items I sell. This is to give me some wiggle room in case other sellers come in and the price is lowered. If I expect to make $10 profit, then I can still lower my price to be competitive and still make a decent profit. If I only looked for $5 profits, then I’d have less room to lower my price and still get the next sale. Overall, find what works best for you, and stick with that. If $6 to $7 works for you, then use that!

  6. Great tips as usual Steven, I especially like the gift card idea- more money to buy board games!

  7. Stephen,

    You are the best out of all my bloggers on FBA. This is my first Q4. I’m excited and having a blast.
    Thanks for the great ideas.


  8. Good stuff! I am converting from Merchant fulfilled to FBA. I am concentrating on books and VHS right now, but your info is still quite good. I appreciate your comments about God and family. “What does it profit a man if he gains the whole world, but loses his soul?”

  9. Stephen,
    Agree with everyone that this is a great post. Your comment about lost or damaged items made me think that sometimes if it happens during Q4 it is better than having it any other time of the year. I know Amazon bases reimbursement amount on sales so hopefully you can recoup the initial cost. I liked what you said about family too. Very important and that is a big reason I do FBA so I have more time with my girls. Good luck on a great Q4 to everyone!

    • Yes! I had a few items I was hoping to sell during Q4 get lost last month, and Amazon only reimbursed me the current sales rate… but I was hoping to get a higher price during the thick of Q4. So, yes, it’s soooooo much better to get items lost or damaged for reimbursement during Q4 than any other time of the year.

  10. Stephen,
    I have been following both you and your wife’s blogs for a couple of month’s now and in spite of selling about 50 items over the past 4 month with FBA, I have pretty much broken even, so with this being my first Q4, I am taking advice from your wife’s blog about using online arbitridge and am going to go with that for Q4 as I would like to use it year round. Like her, I have got to “wade in slow” in order that I stay within my budget and try to know what I am doing to try to minimize my risk. I trust that there will be several others in the group who will be using this “model” so that we can interact with each other.

  11. Stephen, what do we do with the major retail’s hot toy list? I mean most likely we can’t get those items at discounted price now. so what’s the strategy with this list? are we buying those hot items are regular price and hope that most AZ sellers sold out and price start to go up to profit from it? I am new at this so any suggestion is greatly appreciated.

    • John, I usually use the hot toy lists to find other toys that are connected to the hot toy…. Say the “hot toy” is a certain hot wheels track set… well, I look at other hot wheels track sets that are not advertised, but would still be profitable. If the “hot toy” is a Fisher Price Talking Zoo, then I’ll look for all the animal toys that are extensions of the talking zoo. Look for anything connected to the “hot toy.”

  12. Do you have a link to check the up to date sales rank per category?

  13. Stephen, we are new to FBA and wonder when do we start shopping for Q4 inventory? Also, what are your thoughts on buying from wholesalers rather than retail? Thank you.

    • I’m shopping for Q4 inventory all the time. I’ll send in my inventory all year long and if it sells before Q4, then great… if not, then it should sell come Q4. As for wholesale, I’m still working on my first order, and will blog about it once we get our wholesale purchases going.

  14. Stephen, Thank you so much for your info. I found some steeply discounted toys today (lots of them!!!) at about 75% off. Tons of great stuff that I want to scan with FBA scan to check for profitability, but I was warned by someone who does FBA that I wouldn’t make any money because basically they aren’t going to be the “hot” toys for this Xmas and that everyone else would be finding those deals and sending them in, thus lowering the price dramatically so I wouldn’t make any money. I’m talking dolls for instance that are selling for $60 on Amazon that I can get for $7 right now. I have limited money, so I want to make good decisions about this. If this is a huge no no I would like to know if I’m making a typical newbie mistake.

  15. Hi Stephen, Just want to say “thank you” for all the help you give. We are fairly new FBA sellers. How do you handle finding products that when scanned are “restricted”? It seems that most name brand toys, or anything for that matter comes up as being restricted. Looking into getting permission to sell we found that it is either a fairly large dollar amount, and/or a very lengthy process. Do you have any comments on this? Thank you in advance for any help you can offer.

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