Category Archives: Inventory

How to Find Profitable Wholesale Accounts For Amazon FBA

In my previous blog post I gave you my top 9 reasons why you should consider adding wholesale sourcing to your Amazon FBA business. You may have read that post and started thinking, “Great, Stephen, I’m convinced. I definitely want to try out wholesale sourcing, make my business more streamlined, and protect my seller account. Now where do I find profitable wholesale suppliers?

That type of question is where we end up any time we want to make a change in our business. “OK, I see my sticking points, and I’m ready to press on to get beyond them. But how do I take that next step?

With finding wholesale suppliers, your possibilities are really only limited by your creativity. Ultimately, you want to find unique wholesale accounts where you can develop a great business relationship with your supplier and provide an awesome product to Amazon customers.

Let’s discuss the top four ways you can make that connection and find profitable wholesale accounts:

1. Trade Shows

All throughout the year you can find a trade show going on in areas all across the U.S. (Or in other countries! Don’t limit yourself geographically) and in all niches of products. Think trade shows for toys, bridal products, baby items, kitchen gadgets, home and garden, crafts, you name it.

Beyond those niche trade shows, you can also find larger trade shows and markets where you can find products across all categories presented in one show. The biggest trade show out there is called ASD, and it happens in Las Vegas every March and August.

If you live in a big city, chances are there are trade shows and markets happening nearby throughout the year. I recommend doing a Google search for trade shows in your town or somewhere you can travel to, and check out what’s coming up in the months ahead. Most of these types of shows are free to enter, and you can walk around the exhibits, talk with the exhibitors, and see what types of products are available at the different booths.

One thing you should keep in mind is that two different types of exhibitors set up booths at trade shows: manufacturers and distributors. A manufacturer would be a direct connection to the source of the product, without any middle man. If you get a wholesale account with a manufacturer, you will likely need to make purchases in larger amounts, but you will get a better price per unit. With a distributor, you are usually dealing with a middle man. You can make smaller purchases, but you will pay more per unit.

2. Trade Show Websites

Even if you can’t attend a particular trade show, you can benefit from signing up for the show and doing research on the exhibitors. On the trade show website you can get access to the vendor list and their contact info, which you can then use to call or email for more information on the products they offer.

Whether you attend in person or make contact through the trade show website, it’s all about making connections with the vendors, asking good questions, and developing a relationship that could lead to a mutually beneficial arrangement. You will need to have a resale certificate to open a wholesale account once you have made that connection, so be sure you have your certificate on hand before starting the process to open an account.

If you are interested in more details about how to maximize the opportunities on trade show websites, check out the book Trade Show No Show by Jim Peterson and Jim Cockrum.

3. Product Packaging

This may seem overly simplistic, but finding wholesale sources really doesn’t have to be that complicated!

Pretty much every product you can imagine is going to have the manufacturer’s name and contact info printed right on the product’s packaging. If you can only find the name or part of the contact info, use Google to find the rest of the info, and you’re one step closer to making contact and finding out how to open a wholesale account.

If you have an awesome retail find that you would love to sell more of, check out the product packaging for that contact info and see if you could start buying that product at wholesale prices.

One strategy you can use to get an edge on your competition is to think of products that are made locally to your town or area. What is your area known for? Food products can be especially profitable, if there’s a local favorite that can’t be found in other parts of the country. Find these types of products on your local shelves, get the manufacturer’s info off the packaging, and start making contact.

4. Amazon Best Sellers

Again, it doesn’t have to be overly complicated to find great ideas for wholesale sources. You can research the popular items in your favorite category by checking out the Top 100 sellers and looking up their manufacturer’s info online.

To make it even easier, we have created a quick link, fulltimefba.com/bestsellers, to take you right to the Amazon best sellers page, where you can drill down from the main Amazon categories. Once you find a product you are interested in researching, click to go to the product page, and you should see the name of the manufacturer listed below the product title. You can then do a Google search for their contact info and start the process of opening a wholesale account.

Note: I do not recommend opening wholesale accounts with companies when Amazon is selling the product. Even if you think you can get a great wholesale price, Amazon is likely getting an even greater volume discount, and it’s too hard to compete. You should also check out the sales history on CamelCamelCamel and Keepa to see if Amazon is out of stock now, but might have been on the listing in the past. There are plenty of other products out there, so move on to ones where Amazon isn’t currently on the listing or doesn’t seem like they’ll come back in stock in the future.

There you have it, my top 4 ways to find products where you can open a wholesale account. The key to getting those accounts is to just make contact. Get the door open, start a conversation, ask for a catalog, ask what you need to do to apply for an account – it really doesn’t have to be more complicated than that.

Last week, I shared with you a free video that showed you how to find amazing wholesale opportunities with a strategy unlike what anyone else is teaching. Well, today I have another free video about wholesale.

In today’s free wholesale training video, my buddies Dan and Eric will show you:

– How to recognize awesome potential wholesale products
– How to avoid purchasing bad wholesale products and wasting $100’s or even $1000’s
– How one good account could make you $1000 per month (and how to find accounts like that)
– The top 3 factors for great wholesale products to sell on Amazon
– The free tool you can use to make better wholesale decisions
– Why the number of Amazon competitors is a meaningless number (and what number you really should be focusing on instead)
– And so much more!

To access today’s free video right now, all you need to do is click here.

Remember, these free videos are only going to be accessible for a limited time, so you need to click here and watch today.

Do you have other tried-and-true places you like to look for profitable wholesale sources? If you would like to add to my list, we would love to hear from you in the comments!

9 Reasons Why You Should Add Wholesale to Your Amazon FBA Business

The more you talk with Amazon FBA sellers from all walks of life, the more you understand why each seller prefers the sourcing model used in their business.

Some folks love the thrill of the hunt, and they thrive on getting out there and scanning to their heart’s content at garage sales and thrift stores. Other sellers enjoy working retail arbitrage into their daily routine, or they love the huge profits that come from RA during the Q4 selling season. Some sellers live in a remote area or their time is limited, so they choose to do online arbitrage (OA) or wholesale. Still others like all aspects of product development and marketing, so they dive into private labeling.

Today I want to focus on one method of sourcing for Amazon FBA: sourcing from wholesale suppliers. We’re going to have a couple more posts after this one, so stick with me to learn more about where to find wholesale sources and other wholesale time hacks. But for today, let’s discuss the top 9 reasons why you should consider adding wholesale sourcing to your Amazon FBA business.

1. Profit potential

We’re all in this business to make profits, right? Well, selling items sourced via wholesale has huge profit potentials. You can find items with great return on investment (ROI) for resale on Amazon because you buy them at a low wholesale price, compared to what other sellers are getting by buying from retail sources.

2. Go both wide and deep on inventory

Buying via a wholesale account gives you the opportunity to search their catalog for several different profitable items in one product line, and you can then buy larger quantities of those items than you would be able to if sourcing via RA or OA. Once you’ve done your research on the sales history data on CamelCamelCamel and Keepa, as well as researching how much your competition has in stock (we use the How Many? extension for doing this research), you can make an informed decision and buy as many of an item as you feel comfortable buying, rather than being limited to what’s on the shelf at the retail store.

But you don’t have to worry about making a huge wholesale order of only one item to meet a company’s minimum purchase requirement. You can order a few of several different items, test them out, assess the results of your sales, and make a decision about reordering and possibly going deeper.

3. Opportunity for consistent replens

“Replen” is short for replenishable. A replenishable item is one that is profitable to buy over and over again because you can sell through the item at a decent rate. Replens can be a lovely cash cow for your business, since all you have to do is order, send to FBA, sell, order, send to FBA, sell, and repeat, repeat, repeat. Finding a replen today saves you time tomorrow by not having to repeat your sourcing research once the item sells out. You’ve already done the research – now all you need to do is reorder and send that item in again. It’s a much more time-efficient process than the one-offs that come with RA, OA, garage saling, and thrifting.

4. Potential for less competition

If an item isn’t available from retail sources at a low enough price to resell on Amazon BUT you can find it at a wholesale source, you will have lower competition. If you’re sourcing items that anyone can find at a retail store and resell for profit, it’s often only a matter of time until a ton of sellers jump on that listing. Sourcing via wholesale opens the door of opportunity to find unique items that RA and OA sellers can’t source at your buy cost.

5. Predictable cash flow

Once you have found several replens through wholesale sourcing, you can get to a place in your business where you have more predictable cash flow. Often with RA, OA, and thrifting, you will see ebbs and flows with your sales throughout the year, depending on what’s going on in your part of the country or in the stores where you like to source. Wholesale sourcing can provide more stability when it comes to ordering products to sell consistently throughout the year.

6. Saves time

Like I said above, finding a wholesale replen saves you a ton of time when it comes to not having to constantly be out sourcing for more one-off items to resell. It could take you all day to drive around town and spend $800 on RA finds, or you could spend a couple of hours doing wholesale research and find a great replen, place an $800 order, and then just reorder when you’ve sold out.

Another way wholesale saves time is when it comes to prepping your inventory. Wholesale items won’t have stickers to remove, and they often (though not always) come already poly bagged. You also can save time in listing the items. Instead of having to list and price 20 one-offs from RA clearance, you could list and price one item with 20 multiples from a wholesale source.

7. Easier to scale the business

As your FBA business grows, you will need to find ways to scale the business. Scaling your business means being able to increase your output. There are only so many garage sales in your town every week, so unless you hire folks in other towns to source for you, you can’t scale an FBA business based on garage saling. Same with retail arbitrage – you only have so many hours in the day to drive to retail stores, so you will need to hire someone else to source if you want to scale your RA business. But with wholesale, it is much easier to keep your business simple, source large amounts of inventory, and process it without needing to hire help. In fact, if you use a prep and pack center to process your inventory, you can grow your Amazon FBA business even more through wholesale.

8. Protects your seller account

Many Amazon FBA sellers experience great anxiety over the thought of being suspended because of claims by customers, especially claims of inauthentic products. As of this writing, Amazon is accepting retail receipts as proof of your source for inventory, but it’s often more difficult to prove your case with Amazon using retail receipts than using wholesale invoices – not to mention, at any point Amazon could stop accepting retail receipts altogether. Adding wholesale sources to your Amazon inventory gives you a level of protection for your seller account.

9. Become a brand approved seller

Brand restrictions on Amazon can be tricky when you’re looking for good retail sources for inventory. There’s nothing worse than finding an awesome item for resale, only to discover you are restricted from selling that brand. But with wholesale sources, you have the potential to work with Amazon and the manufacturer to become a brand approved seller. It requires some time and effort to get approval, but if you’re successful, you have the potential to make even more profits with even lower competition.

Now you have plenty of good reasons why you should consider adding wholesale to your Amazon FBA business. Stay tuned because in our next blog post, we’ll share with you how to find profitable wholesale accounts.

For the longest time I had wanted to add wholesale to my Amazon business. I have actually gone through 3 different wholesale courses to teach me how to do it. Each time I went through a new wholesale course, I would try what was taught, and I kept coming up empty. It was extremely frustrating… then I scheduled a phone call with Dan, one of the guys behind The Wholesale Formula. That conversation opened up my eyes to things about wholesale I’ve never thought about before. I took his advice and began to find multiple wholesale accounts.

Would you have wanted to listen in on that conversation? Unfortunately, we didn’t record the call, but Dan and his business partner Eric recently recorded an entire video series that focuses exactly on adding wholesale to your Amazon FBA business. The best part? It’s free! So many people think that you have to have thousands of dollars or special connections to start selling wholesale items on Amazon, but that’s just not true.

In this free video series my wholesale mentors, Dan and Eric, will teach you exactly how to find profitable items to buy via wholesale so you can experience growth in your Amazon business.

Now here’s the deal. These free videos are only going to be accessible for a limited time, so you need to click here and watch today.

Have you considered adding wholesale to your Amazon business? Have you been successful? If you have not tried it yet, what’s stopping you? What’s getting in the way of you sourcing directly from wholesale suppliers? Let me know in the comments so I can best help you in our current wholesale blog series.

Top 10 Tips For Finishing Strong in 2016

finishing-strong-2016First off, if you can see this… thank you for taking time out of your busy schedule to read today’s blog post. I know Q4 is crazy busy, and I hope my blog posts can help you take action t0 save time and increase your profits.

As we all know, the holiday selling season is in full bloom, and I hope you’ve been able to stock the Amazon warehouses with as much quality inventory as you possibly can. It seems pretty obvious to say, but you can’t sell a lot of items if you don’t have a lot of items in stock. To help you continue to make this month your best selling month ever, here are my top ten tips for finishing strong in 2016:

christmas-lights1. Reprice holiday related items. It’s crunch time. Log into Seller Central and check all of your holiday related items in your inventory. Do a keyword search for words like “holiday” and “Christmas” and make sure that all of your holiday items are competitively priced. While some of these seasonal items actually sell throughout the year, there might still be some in stock that you need to reprice. As always, double check with CamelCamelCamel and Keepa to see what prices and sales you could possibly expect. If you have multiples of higher ranked holiday items, it’s probably a good time to lower your prices to get the sale. You don’t want to hold on to these items another full year… especially with long term stores fees coming up in February.

2. The week before Christmas is a Prime spending frenzy! For items sold through FBA, hold on to your prices that you think will sell for Christmas. It’s not rare to see an item going for $15 on December 14th to be selling for $25 on December 19th. This is especially true for items where you’re the only FBA seller or one of a few FBA sellers. On the other hand, if the competition for sales is fierce, you might want to lower your price just a little to sell out before the newbie Amazon sellers freak out and lower their prices too far.

returns.jpg3. Be prepared for an increase in returns. Naturally, with an increase in sales, there is also an increase in returns. Don’t let this make you anxious or worried. It’s a natural part of selling. As you might already know, Amazon automatically refunds the FBA customer the full purchase price when the buyer requests to return an item. If the buyer fails to return the item to Amazon, then Amazon is supposed to automatically reimburse you for the item after 45 days have passed, but many times Amazon “forgets” and needs to be reminded. For more about how to make sure returned items are actually returned to Amazon, check out this popular blog post.

feedback4. Be prepared for an increase in negative and/or positive feedback. If you’re keeping to best business practices, then you’ll most likely get lots of new positive (4 or 5) feedback, but you’ll also get the occasional negative (1 or 2) or neutral (3) feedback score. If the feedback is actually about the FBA process (“my item came 2 days late”) or a product review (“this coffee maker is hard to use”), then it’s up to you to do whatever you can to get the feedback removed. Your feedback score is a huge aspect of your seller metrics. The better seller metrics you have, the more opportunities you’ll have to earn the buy box for your products. To read more about how I handle feedback issues (and how I keep a 100% feedback score), then check out this blog post.

5. Look at sales ranks differently. As you already know, the sales velocity in December shoots through the roof! This should make you look at sales rank differently than during the rest of the year. Here is an example: A toy with a sales rank of 10,000 in July might sell 25 times a week… while a toy with a rank of 10,000 in December might sell 50 times a day. This is important to know when you are out sourcing for inventory. Know that after Christmas and into January, many of these sales ranks will start to return to their normal patterns (slower sales), and it’s up to you to recalibrate your mind to what you need to expect when you’re out sourcing. Again, look at CamelCamelCamel and Keepa to see what prices and sales velocity to expect in January.

targetstore6. Be careful with sale prices at retail chain stores. Retail stores are realizing that they need to do whatever it takes to sell their stuff as soon as possible. Often, this means some outrageous clearance sales. But be careful, the items you’re finding clearanced at large national chains might be the same items hundreds of other resellers are finding. You don’t want to be slow moving on these sales. If you decide to buy, you need to get those items to Amazon as fast as possible… and I wouldn’t recommend going too deep. It’s possible that Amazon is about to be flooded with these items from other resellers sourcing at the same sales in their town. Buy fast, prep fast, and ship fast so it can sell fast.

7. Profit from selling items Merchant Fulfilled. We all love selling via FBA, but this week still provides a nice money making opportunity if you are willing to do a little more work. Selling via Merchant Fulfilled can still bring about some nice profits this week for items that buyers need to buy today. The best items to sell MF are those that both Amazon and FBA sellers have sold out of, are backordered, ones that are “Currently Unavailable” on their Amazon product page, and ones with a low rank that you don’t want to risk the extra time it takes to travel to a fulfillment center.

amazon_gift_card8. Keep sourcing for post-Christmas buyers. On the days after Christmas and well into January, many people have brand new Amazon gift cards burning a hole in their pockets. They head on over to Amazon and look for items to spend these gift cards on, and you want to be sure you have what they want waiting for them. Not only do gift card buyers show up, but so do the people who didn’t get what they wanted for Christmas. They know what they want, and since they didn’t get it, they decide to give themselves the gift they really want. Again, you want to be sure you have what they want when they go shopping for themselves.

list-of-updated-after-christmas-sales-20099. Buy Christmas-themed items at huge discounts. The week before, and right after Christmas, all of the Christmas related items go on sale at drastically reduced prices. This is a great time for you to stock up for your Amazon inventory. Like I’ve said before, seasonal items sell both in and out of season. I’ve seen Christmas ornaments sell in May, candy canes sell in March, and holiday DVDs sell in August. The stuff sells year round, but especially in July as people have “Christmas in July” parties. So, now might be a good time to buy holiday decor at 75% – 90% off. Again (I might be sounding like a broken record by now), check CamelCamelCamel and Keepa to see what prices and sales velocity to expect throughout the year.

10. Look towards the new year. Why am I talking about the new year in December? I honestly believe that if you wait until the first of January to start thinking about the new year, then you’re already behind in the game and are at a disadvantage. Imagine someone showing up for a marathon without doing any training beforehand. The runner would most likely quit before they even pass the 5 mile marker. Don’t be that guy. When January 1 arrives, we all begin a 365 day marathon, and I want to be sure you are ready for the journey. One great way is to grab my book, The Reseller’s Guide to a Year in FBA: A Month by Month Guide to a Profitable Amazon Business. This resource will help you know exactly what to do and what to avoid for each month of the year.

How about you? What strategies are you implementing to finish strong in 2016? I’d love to hear your ideas, so comment below.

 

Monitoring Prices on Your Replenishables – StockUp Review

stock-up-titleOne of the most frustrating aspects of selling on Amazon is when your competition comes in and begins to lower the prices of an item that you were once consistently selling. When an amazing source of profit seems to dry up, we often decide to sell out as fast as we can so we can reinvest that capital into inventory that will bring profits much faster. Usually once the price of a formerly profitable item has “tanked,” we don’t think about that item again.

But what if we’re missing something? What if the price goes back up? How would we even know?

Do we ever actually go back and see if the price has recovered? Usually the answer to that question is “no.”

search-computerFor a long time I searched and searched to see if there was a tool out there that would track the prices of items on Amazon and would automatically notify me when those items reached a certain higher price point, but never found one. I love using Keepa and CamelCamelCamel, but those services only notify you automatically when the prices of items on Amazon fall to a desired price point. I  just couldn’t find an easy way to keep track of prices when they go back up.

Sure, I could probably create a spreadsheet with a list of ASINs I wanted to track, then then copy and paste the ASIN in Amazon to see if the price has recovered. I could try to remember to do that once a week or once a month… but honestly, I don’t have time for that. I needed a tool to do everything for me.

online_toolsSince there was no tool, I decided to reach out to my buddy Christopher Grant who has created some awesome tools like revROI (an easy tool to maximize your cash back on OA purchases) and BrickSeek (if an item is sold out online, this tool will show you where you can buy it locally based on your ZIP Code). I told Christopher about my frustrations and my idea for a new tool and he said he thought he could make it happen. After a few months of working with developers and beta-testing, and the StockUp tool is ready!

StockUp – the only tool that will automatically notify you when the price of an item goes back up to the price you want.

stock-upWith StockUp, all you have to do is go to the Amazon product page for the item you want to track, click on the StockUp extension, put in your name and email address (don’t worry, we aren’t keeping these for later), then choose a price, any price. The StockUp tool will then check Keepa for you once an hour and if the price goes up to the level you choose, then StockUp will send you an email to notify you. There will even be a link you can click on to take you to the Amazon product page so you can double check and make sure the price really has recovered. Then, all you need to do is go and buy it again from your source. So easy! I’ll show you a video in a moment, but here’s what it looks like:

screen-shot-2016-11-10-at-1-49-11-pm

StockUp is a Google Chrome extension that you easily install into your Chrome browser. If you don’t use Chrome, the web browser is a free download and super easy to use. In fact, I formerly used Safari for my online browser, but have since moved to Chrome as it’s so much more user friendly (as well as all the amazing extensions you can install).

To see StockUp in action, check out this video where I walk you through just how easy it is.

Save today with coupon code!

Here’s the deal… right now, StockUp is available at a one time fee for a lifetime of use. Plus, if you use the coupon code SMOTHERMAN then you can save $8 off the price of the extension. Right now, we’re working on adding a texting notification as well, but that’s still in the planning stages… once the texting capabilities are in place, we’ll definitely be raising the prices on the extension. In fact, the StockUp extension might end up going to a monthly fee as we continue to add more features… so now is the best time to get this tool.

Can you imagine how awesome it will be when the price of one your replenishable items comes back up and you can add it back to your inventory again? Talk about easy sourcing!

 

Selling Shoes through Amazon FBA: Buying Decisions

selling-shoes-part-2We’re excited today to continue our 3-post series on selling shoes through Amazon FBA. If you didn’t get a chance to read the first post in the series (Why We Added Shoes to Our Sourcing Strategy), you can check it out here at this link. Be on the lookout for the next post next week on how to prep and process shoes for Amazon FBA.

Let’s get down to the nitty gritty details of sourcing shoes for FBA, shall we?

As I (Rebecca) mentioned in the introductory post of this series, I personally don’t source for shoes using retail arbitrage (RA). I tried it and came up dry. I use 100% online arbitrage (OA) for my shoe sourcing strategy. The gist of this post, however, will cover topics that apply no matter what type of strategy you use for sourcing. I won’t get into details of what types of stores to find shoes in, what brands to look for, what styles to look for, and so on. Instead, I’m going to talk about some fundamental issues related to sourcing shoes that you can apply to your own personal sourcing strategy, whether you prefer RA, OA, wholesale, or something else.

shoe-experimentOur Initial Two-Week Shoe Experiment

After we got approved to sell in the shoe category, we decided to spend a two-week period sourcing shoes through OA, track the resulting sales, calculate our return on investment (ROI) and profits, and then decide from there how we wanted to proceed with adding shoes to our overall FBA strategy.

Every day for two weeks, I diligently looked at the deals on my Your Sourced Inventory list, spent my sourcing budget, and waited for the shoes to arrive at our doorstep. The shoes came in, we processed them, and we sent them to FBA and waited for the sales.

clock-147257_1280And waited. And waited. And waited.

I didn’t source any more shoes online for about five or six weeks after that, as I waited to see how our experiment turned out. The sales trickled in soooooooo sloooooooowwwwwwwwwly from those two weeks of sourcing. I was very discouraged that shoes I thought were a low rank at the time I bought them turned out to not sell for weeks and weeks and weeks. I questioned whether I should stop thinking about buying shoes and just stick to toys, books, or another category I already knew well.

Rather than completely giving up, I decided to learn more, ask a ton of questions, reach out to people who have experience in the category, and try again. It was a slow process, but here we are a year later – and shoes are consistently our second highest category in dollar amount of sales.

For the rest of this post, I want to give you several points of consideration for making buying decisions in the shoe category that will hopefully accelerate your learning process.

What I Wish I Had Known About Sourcing Shoes Before I Started

  1. capital-moneyShoes take a LOT of capital to buy.

Unlike categories such as books or toys, with shoes it’s not possible to take a small amount of capital, buy items at a ridiculously low price and high ROI, and turn a fast profit that you can reinvest within a short amount of time. Shoes can give you a great ROI and a fantastic average selling price (ASP), but the buy cost for one pair of shoes typically ranges from $20 upward. It’s not uncommon to spend $50 or more on one pair of shoes.

  1. iguana-1441439_1280Shoes are long tail items.

Not only does it take a large initial investment (relative to other categories) to start buying shoes, it takes a lot of patience. Shoes typically do not sell at the same velocity as toys, books, groceries, and other faster moving categories. Shoes aren’t typically something that you can replenish, either. You generally buy a style of shoe, send it in to FBA, and move on to finding the next pair of shoes.

I sank a bunch of money into shoes in our original two-week experiment and became frustrated and disappointed that I didn’t get my return on that investment as soon as I had hoped. I eventually did sell all the shoes from that two weeks, but it took as long as six months for some of those shoes to sell – and in some cases as long as nine months. Once they did sell, the high ASP was nice to eventually see in our disbursement, but if we had needed that money back any sooner than nine months, we would have been in trouble.

The key with getting a steady stream of high ASP sales from shoes is to give yourself several months to ramp up. It will take several months of sending in a steady stream of shoes, and then you have to wait for those high-priced shoe sales to start trickling in. If you continually source shoes and send them in on a regular basis, after a while you will see the fruits of your labor in the form of higher disbursements and higher ASP. Stephen is always saying that patience brings profits, and that is definitely the case in the shoe category.

One item of note: Because shoes are a long tail item, it is more strategic not to go deep in any one variation, but go wide and buy multiple variations of the same style instead. It’s much easier to sell out quickly of one pair in each of size 6, 7, 8, and 9 than to sell out of four pairs of size 8.

  1. Sales rank for shoes is much different to gauge than in other categories.

screen-shot-2016-10-04-at-5-30-37-pmEach shoe listing on Amazon can potentially have dozens of variations, depending on the number of colors and sizes available. When you look at the sales rank for a pair of shoes you want to source, you aren’t looking at the sales rank for that particular pair of shoes; you’re looking at the sales rank for all of those variations combined. If the Amazon product page says a pair of shoes is ranked #568 in the overall shoe category, you have no way to know which size and which color of those shoes are receiving the sales that give it that low rank.

To further complicate matters, CamelCamelCamel and Keepa do not show sales rank history for shoes. When I’m making sourcing decisions, I don’t even bother looking at Camel for shoes. Keepa, however, does provide crucial information about whether or not Amazon has ever been in stock on any variation of shoes, and it shows price history. I highly recommend becoming fluent in using Keepa for making shoe sourcing decisions (you can get started reading Keepa graphs with this blog post).

So how can we make smart sourcing decisions if we have no way to know the current sales rank or sales rank history for a variation of shoes?

Here are two ways I can limit my risk as far as shoe sales rank is concerned:

* I stick with buying shoes that have a low number of variations. I prefer to buy shoes with only a low number of color options, not 15 or 20 colors. I also prefer to source shoes that don’t have a narrow, regular, and wide variation for each size. Tons of colors and tons of size options means more variations, which means the overall sales rank becomes increasingly meaningless as far as each variation is concerned.

* I stick with buying neutral colors (black, white, gray, brown). The majority of people are going to buy neutral colored shoes, and I prefer to buy inventory that’s more of a sure bet. I don’t buy shoes in a crazy floral print or neon green, no matter how cute they are — unless the only options on a low ranking shoe are bright colors and no neutrals; then I’ll branch out.

  1. Every shoe seller likes to take a different approach.

shoeKeep in mind that I’m trying to give you some general principles for making shoe sourcing decisions. Every seller finds their own groove, and you have to figure out what approach you personally want to take.

Some sellers prefer to stick with common sizes and colors, while some sellers like to provide Amazon customers with the hard-to-find colors and sizes. Some sellers stay away from sourcing half sizes because they find they sell less than whole sizes, but other sellers swear by sourcing half sizes because they’re harder to find and therefore more lucrative.

Personally, I usually stick to sizes 9-12 for men, 6-10 for women (but if 5 or 11 in women’s is currently unavailable on Amazon, I will consider buying it). That’s a wider range than some sellers would recommend; many will only source women’s 7, 8, 9. Also, I tend to buy more half sizes for women, less for men.

  1. screen-shot-2016-10-04-at-7-11-11-pmLook at reviews to see popular color and size.

A work-around for making a shoe sourcing decision without sales rank history is to read the reviews. Within the Amazon reviews for any verified Amazon purchase, you can see what size and color the customer bought. It’s fairly safe to assume that colors with more reviews are receiving more sales. You can also read the reviews and look at the “fit as expected” percentage to see if shoes tend to run small, large, or as expected. You can assume that shoes with a high percentage of “runs small” or “runs large” are likely to have a higher rate of return, which is a risk you might not be willing to take with your sourcing budget.

  1. shoes-high-heelsLook at the average price of shoes across all variations, not just at the price of the variation you’re considering sourcing.

This might be the biggest lesson I wish I had known before I started sourcing shoes. It’s possible that one random person will be willing to pay 3x for a blue leopard print shoe in women’s size 11.5 – but it’s not likely. It’s less risky to source shoes you can price competitively with other variations of the same size or color, rather than keeping your fingers crossed that someone will pay way above the average price listed on Amazon for your particular variation.

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Shoes aren’t for everyone selling on Amazon. The learning curve can be steeper than with other categories, shoes require a lot of capital, and the wait for sales can seem like an eternity. Even if you read every word I say above and every word in every Facebook group about shoes, it still takes trial-and-error to learn the category through your own experience. Everyone will have different results, and everyone will find different areas where they excel and prefer to source. What works for me might not work across the board.

shoesBut if you’re willing to commit the time and money…and some more time…and then a little more time to learning the category, the profits are worth it. We’ve spent the past year ramping up our shoe inventory and now have a continual stream of high-priced sales from shoes on a daily basis.

Have you found success selling shoes through Amazon FBA? Is there anything you would add to my above list of points to consider when sourcing shoes? We would love to hear from you in the comments!

Selling Shoes through Amazon FBA: Why We Added Shoes to Our Sourcing Strategy

selling-shoes-part-1Today we’re going to start a three-post series here on the blog, covering our experiences over the past year as we’ve ventured into selling shoes through Amazon FBA. This first post will start off with the reasons we decided to sell shoes, and then in the next two posts we’ll give a summary of the lessons we’ve learned about sourcing shoes through online arbitrage and prepping shoes to send to the FBA warehouse. Stay tuned over the next couple of weeks!

If you’re not familiar with our story as a couple and as business partners, Stephen is the one in our marriage with the business experience, and I (Rebecca) am the one who came into this whole FBA thing with a bit of skepticism. Now that we’ve been working on the business together for a few years, we’ve found areas where I gravitate more than Stephen (check out our post about my experience getting into online arbitrage, for example). It’s been a work-in-progress to get to the point we’re at with our current roles in the business, and I’m sure it will continue to evolve – but for now we’ve found a system of sourcing that we love and is profitable for us.

red-shoesOne key component of our current sourcing strategy for Amazon FBA is selling shoes. We added shoes in the fall of 2015 (about a year ago, at the time of this writing), and after a slow start we are pleased with the difference this category has made in our business and are continually looking for ways to expand our shoe inventory.

Here are the main reasons we decided to add shoes to our FBA sourcing strategy:

  1. time-to-diversifyShoes gave us an opportunity to diversify our inventory.

Before fall of 2015, our main categories were toys, toys, toys, books, toys, home and kitchen, toys, and a smattering of sports, grocery, and health and beauty. We wanted to find a category where we could consistently source products and diversify our inventory away from being so toy heavy. Don’t get me wrong – we love selling toys and are always super excited when Q4 rolls around. But we wanted to branch out and try something new, and shoes were very appealing for us as a new category for diversification for reasons I’ll get into below.

  1. price-tag-267x300Shoes have a high average selling price.

A relatively high average selling price (ASP) can be a step towards both saving time and increasing profits. Don’t we all want to make more money and spend less time doing it?

Think about it this way: You can sell one widget for $100 or ten widgets for $10 apiece, and you make the same amount in sales, $100. What about the prep and handling time, though? Those ten widgets require ten times the prep work, ten times the labels, ten times the handling to put into a shipping box. The FBA pick-and-pack fees will apply ten times to the $100 of sales. The one $100 widget, however, requires 1/10th of the prep work and only one pick-and-pack fee.

Shoes are a great way to increase the ASP of your FBA inventory. In 2013 and 2014 we sold a lot of $10 or $15 toys. A lot. In 2016, we’ve sold a much lower number of inventory items, but our ASP has gone up considerably because of the number of shoes we’ve sold. In the past three months, our ASP in the shoe category has been $71, while our overall ASP across all categories is now up to $34.

  1. low-competitionShoes have fewer competitors for sales.

Shoes are a gated category for Amazon sellers, which significantly lowers the number of competitors on any given item. While many low ranking books or toys might typically have 100+ sellers, it’s relatively easy to find low ranking shoes on a regular basis with only a handful of sellers – or even one or none on certain variations.

When we got ungated in shoes, the process still required applying with a flat file and photos, so the number of competitors was even lower than it currently is. Now that automatic approvals are a regular occurrence, the number of sellers in the category has increased somewhat, but not enough for us to be unable to find listings with little or no competition. And even though some shoe sellers bemoan auto-ungating as the end of big profits in shoes, we’ve found that the recent round of brand and ASIN restrictions have further kept the competition at a minimum, and we believe it will continue to do so into the future. (You can watch our YouTube video for more on our optimistic view of the recent brand restrictions.)

  1. OA KeyboardShoes provide an opportunity for me to source solely (that pun is for you, Stephen!) via online arbitrage.

I know a lot of people make big profits on shoes doing retail arbitrage, but not me. I tried it and hated it. Hated it. I mean it, seriously, I did not find even one pair of shoes to resell doing RA. Instead, I signed up for a couple of deal lists (Your Sourced Inventory and Gated List) and OAXray, and I’ve stuck with those for the past year. Over the course of that year, I’ve been able to switch from doing part RA/part OA across several categories to doing only OA, mostly in shoes with a handful of other categories. Before I started buying shoes, I couldn’t find enough inventory to buy online in other categories to spend my entire weekly sourcing budget. I would have to also go out and do RA to find enough inventory that fit my sourcing parameters.

Shoes changed everything for me as far as focusing on OA alone. My mileage records for 2015 prove it: I stopped recording mileage for sourcing at exactly the same time I committed to sourcing shoes online. Switching to only OA for shoe sourcing has allowed me to stay home more, put fewer miles on my aging car, and focus on other professional pursuits. Buying shoes through OA truly has allowed our business to make more money and spend less time doing it.

shoes-that-are-healthy-700x700I do have to say, though, I wasn’t so sure at first that we would make shoes a permanent addition to our FBA inventory. After we got ungated in the shoe category, we decided to undertake a two-week experiment of spending the majority of our sourcing budget and time on shoes and then just see what kind of sales we could get before deciding whether or not to continue buying shoes. I’ll talk more in detail in the next post about why making a decision based on this kind of experiment isn’t the best idea when it comes to learning the shoe category, but for now I’ll just say we were less than enthused about the results. We asked a bunch of questions from people who know the ins and outs of the category, and after some soul searching (or sole searching – another pun! OK, I’ll stop) we decided to keep at it.

I’m so glad we did! I was afraid all the hype about shoes was just that…hype. But for us, shoes have lived up to their incredible reputation as an Amazon FBA profit powerhouse.

Shoes aren’t for everyone, and we’ll spend some time over the next couple of posts discussing the ways we’ve run into issues and learned to overcome those obstacles. Our hope is that this series of posts will give you a way to make an informed decision about whether or not to try out the shoe category.

Do you sell shoes on Amazon? Do you have any reasons to add to our list above? Let us hear from you in the comments! We would also love to hear your questions about selling shoes as we continue this blog series over the next couple of weeks.

Amazon’s New Inventory Liquidation Program – How to Get Paid for Removing Inventory From Amazon

There are multiple situations where it’s in your best interest to remove some of your items from your Amazon FBA inventory. Here are just a few:

  • To remove dead inventory that seems like it will never sell
  • To avoid long term storage fees
  • Because the item has become restricted and you can no longer sell it
  • To lower your monthly storage fees on larger items
  • and more…

Before August 2016, there were only two options if you wanted to remove your inventory: You could have it returned to you or have it destroyed. This month, Amazon has added a new option called Amazon Liquidate. If you choose to liquidate some of the items in your inventory, then it’s possible that you will actually get paid for “selling” your items to a liquidator via Amazon. I’ll give you the details of how much money you could get later on in this post.

The Amazon Inventory Liquidation Program is still in beta, so it might not be available to every Amazon seller, but Amazon plans on trying out this program to see if it can help both Amazon and Amazon sellers make some money from sellers liquidating some of their inventory.
Liquidation screen shot 2Here’s how the program works:

  1. You chose the specific items you want to be removed from your inventory.
  2. You are given the option to return, dispose, or liquidate your items. Note: If the liquidate option is not available, then either that option has not rolled out to your account yet or that item has already been deemed ineligible for liquidation.
  3. Once you submit your items for liquidation, Amazon will spend up to 60 days looking for a liquidator who is interested in buying your chosen liquidation inventory.
  4. During the 60 days, Amazon will not charge you any Long Term Storage Fees (THIS IS HUGE).
  5. During the 60 days, Amazon also will not charge you any Monthly Storage Fees for items successfully liquidated.
  6. If Amazon finds a buyer for the items you submitted for liquidation, Amazon will keep 10% of the liquidation payment and will give you the remaining 90%. Note: It’s pretty normal for a liquidator to only offer to buy liquidation items for around 10% of the average selling price, so basic math tells me you can expect to receive around 9% of the average selling price as a liquidation payment.
  7. If Amazon does not find a buyer in 60 days, then once again you are left with 2 options to remove your inventory: return or dispose.
  8. Once an inventory item has been selected to be liquidated, there are no options for you to cancel this process.
  9. Payments for all liquidated items will appear in the “Miscellaneous adjustments” section of your Payments Report in Seller Central. You should receive the payment within 60 days from the date you submitted the liquidation.
  10. If you don’t get the liquidation payment, then it’s a good idea to open up a ticket with Seller Central and have them investigate.

Liquidation screen shot 1

So when are the best times to use the Amazon Inventory Liquidation Program?

  • If you think you can get more from the liquidation program than from any other method of selling that item (like on eBay, at a garage sale, through Craigslist, etc)
  • If you would have originally paid to dispose of that inventory, then liquidate it and possibly get paid for it instead.
  • If you don’t want to deal with returning items to your house/business.

Amazon LiquidateThe Amazon Inventory Liquidation Program is still brand new, and even Amazon says there is no guarantee they won’t suddenly pull it without warning. It’s an interesting option, however, to think about when you’re faced with removing items from your inventory.

If you’re curious how to set up a removal order (either to return, dispose, or liquidate) on Amazon via Seller Central, check out this quick video:

So what do you think about the new Amazon Inventory Liquidation Program? Do you think you’ll try it out? If you do, be sure to check back here and share your experience with the rest of us.

The 2 Best Retail Arbitrage Sourcing Strategies

RA Sourcing StrategiesRetail arbitrage can be very profitable. The feeling of anticipation when you walk into a retail store is extremely motivating. I always advise other resellers to grab a shopping cart when they first enter a store because they need to be mentally ready for a big haul. Now, the big haul doesn’t always happen, but it’s still good to be prepared in case you do find tons of potentially profitable inventory.

Retail arbitrage is a method of sourcing inventory from retail stores in order to sell it through Amazon. When you’re doing retail arbitrage (or RA, as it’s often abbreviated), you are looking for items you can buy at a low price in retail stores and sell high on Amazon. “Buy low, sell high” is the definition of arbitrage in a nutshell, and retail sources for arbitrage are a staple for many Amazon FBA sellers.

I got my start on Amazon FBA by sourcing at mostly garage sales and thrift stores, and I was able to build up my Amazon disbursements by buying inventory at a ridiculously low price (e.g. books for 25 cents or a dime) and selling it for 1000% return on investment (ROI). After a while, my disbursements were sufficiently large that I didn’t have enough time to spend the entire amount of the disbursement at garage sales and thrift stores – I was starting to have more money than time.

targetstoreThe next step for me was to scale my Amazon FBA business by transitioning to retail arbitrage. Garage sales and thrift stores can provide amazing ROI, but you typically can only buy one-off products at these sources. You can have a great day of sourcing and find 50 items, but you have to enter 50 MSKUs into your inventory as a result.

Retail arbitrage provides the ability to scale the business by buying multiples. It’s possible to find 50 items at one RA stop, and it’s possible to have a much smaller number of MSKUs because of multiples. Fewer MSKUs means less hassle down the road in maintaining your inventory in Seller Central – fewer times to reprice, fewer chances for listing issues, etc.

And the even better thing about finding multiples at a retail source? The potential for replenishing. If you can find a replenishable item through RA sourcing, you automatically know how you can spend part of your capital the next time you have it available. The more replens you can find, the less time it takes you to source each disbursement cycle. Buy a replen, send it in, sell it, get a disbursement, buy that replen again. Lather, rinse, repeat.

walmart-superEvery seller likes to do RA a little differently, and it’s really a matter of trying out different things to see what you prefer. Everyone also has a different schedule, different family commitments, different number of stores available within driving distance. Some sellers like to go out to do RA for a couple of hours every day while their kids are in school. Others can only go on the weekends or evenings when they’re off work from their 9-to-5 job.

For me, I typically spend one full day doing RA every 1 to 2 weeks. I would rather spend all day driving to different stores and get all my sourcing done in one day, instead of breaking it up and doing a little here and there each day.

When I spend a day doing RA, I have two main strategies for how I spend my time:

Store Signs1. Source all the stores in one area

One strategy I use is to choose an area of town where I will focus for the day. The benefit of using this method is that I can hit a large amount of stores in a small amount of time with minimal driving. I use this strategy when I don’t have very much time to spend driving, and I don’t have any good leads on items that I already know I want to buy.

After I decide on the neighborhood, I plan out a route on Google Maps where I go to that neighborhood’s WalMart, Target, Kohl’s, TJMaxx, Marshalls, Walgreens, etc, one after the other. The next time I’m doing RA, I’ll pick a different neighborhood and plan a similar route.

Target Route2. Source multiple locations of one store

The second strategy I use for RA is when I have a good lead on some items to source at one particular retail store. Maybe there’s a big sale going on at a chain of stores, or maybe I have some replens that I need to restock.

In these instances I plan my driving route for the day to cover a larger radius from my home, but I only put one or two stores in the route. For example, I might go to every Target in a 30 mile radius in one day. Depending on where you live, a 30 mile radius might be too many Targets for one day – in that case, using this RA strategy could give you several days worth of work.

I also use this method when I know a chain is doing a big seasonal clearance. I’ll even call ahead to the store branches to make sure that each one in the chain is already doing the clearance before I drive all the way out there.

Walmart ManagerBuilding relationships with managers is a helpful way to plan for sourcing days in this second strategy. I have the names and phone numbers of managers at certain stores in my area, and I give them a call from time to time to see if they know anything about the timing for upcoming sales. If I can be one of the first to know about a clearance event, I can plan my sourcing schedule so that I’m one of the first shoppers to see the clearanced products. I even have managers in some stores who know that I buy a lot of items at a time, and they text me to come clear out their inventory for them!

Using these two strategies doesn’t have to mean that you choose one over the other on any given day. More than once I’ve set out for the day with the goal of using the first strategy, but I found a couple of really awesome deals early on in the day at one store. At that point I rerouted my day to only go to that one chain for the rest of the day. Sometimes you gotta ride the wave and go where the deals take you!

Do you have any retail arbitrage strategies you use that are different from these two? Do you prefer to go to many stores in one area of town for RA or to go to one store in multiple parts of town? Please share your experiences with us in the comments!

7 Ways to Save Money So You Can Spend More on Inventory

Save Money Spend MoreWho doesn’t love to save a little time and money?

I would prefer to save a lot of time and money, but hey, every little bit counts when we’re trying to make a profit at Amazon FBA. Any time I can save money on shipping supplies or other areas of my business, I can use that saved money to buy more inventory – and buying more inventory is how I would prefer to spend my money in my business!

All of the tips I’m going to share with you in this post should be either free or next to free. I hope you find these tips super practical and easy to implement right away in your Amazon FBA business, no matter what stage of business you’re in.

Before I get into my tips, I want to invite others to add their advice to the comments at the bottom. Let’s make this post our most-commented post ever! We all have knowledge and experience that others can benefit from, so please share your wisdom and be a blessing to others in the Amazon FBA community today.

Also, if you want to see these tips in action, scroll to the bottom of this post to watch a video of Stephen demonstrating them.

Now…here we go…my top Amazon FBA hacks to save money:

brownbox21. Use free boxes from grocery stores for Amazon FBA shipments.

Especially in the early stages of your FBA business, there’s no need to pay for shipping boxes when you can get them free from grocery stores, friends who have recently moved, or other places who are just going to recycle their old boxes. Find out from store employees when they’ll be restocking the shelves, and stores are generally happy for you to come take the empty boxes out of the aisles for them.

2. On a similar note, use the boxes from online arbitrage purchases to send in Amazon FBA shipments.

We do a significant amount of our sourcing through online arbitrage, so we just turn around and send our shipments to Amazon in the online stores’ boxes. Just make sure you remove or cover up any previous barcodes before putting on the Amazon and UPS label.

AirPouch-Open-Box-w-EarthAware-Biodegradable-Pillows3. Use free dunnage for your Amazon FBA shipments.

Dunnage (isn’t that a weird word?!) is the stuff you put in a shipment to pad the items and keep them from touching the sides of your shipping box. Here are a few ideas for things to use for dunnage:

  • air pillows from online arbitrage purchases
  • blank newspaper
  • plastic grocery bags filled with printed newspaper and tied off (do not let newsprint come into contact with your inventory in the shipment)
  • small cardboard boxes

3117TC++78L4. Use lighter fluid to remove residue from price stickers.

I usually recommend using Goo Gone for removing price sticker residue, but if you don’t want to rush out and buy a new bottle of Goo Gone, you can use lighter fluid if you already have it at your house. (If you want to see how I remove price stickers, check out this video.)

board game closet5. Get FREE inventory from around your house.

We all have items sitting around our house that are brand new or barely used – prime candidates for sending to Amazon and turning into profits. Check out your bookshelves, your kitchen cabinets, your game closet, and your kids’ rooms (with their permission), and you might be surprised what you can find that you don’t use and would actually turn a profit on Amazon.

freecycle_logo6. Get FREE inventory from Freecycle.org.

You can join a group for your area of town on the Freecycle Network and keep an eye out for items that people are giving away for free. I’ve been able to source free board games (new and used), boxes of books, and other items. If you claim an item on Freecycle, the person will leave it on the porch or sidewalk for you to drop by and pick up on your own time. It’s way easier to coordinate than Craigslist purchases, but please still use safety practices and don’t make pick-ups alone.

facebook-twitter7. Join Amazon FBA Facebook groups to get tons of free FBA business information.

One of the easiest ways to absorb free information from the FBA community is to join Facebook groups, search and read the archived posts, and ask questions. We have a Full-Time FBA Facebook group that we would love for you to join, and there’s tons of other groups you can search for on Facebook as well.

Those are my top tips for getting FREE items so that you can use the money you save on buying inventory instead. Let me know in the comments if you know of any other awesome ways to save money on supplies for your business.

Here’s the video (Amazon FBA Hacks to Save Time and Money) with these tips in action:

How to Use Inventory Lab to Track Supplier Profitability

Inventory Lab, Track, Supplier, Profitability

Let’s talk profitability, shall we?

You’ve likely heard us mention that we use the Inventory Lab software package to streamline our process of listing inventory on Amazon FBA and for sourcing inventory through the Scoutify app. Today we want to share with you another feature of Inventory Lab that we’ve come to depend on: the ability to track supplier profitability through Inventory Lab reports.

175_InventoryLabSometimes it’s easy as a reseller to get caught up in the rush of sourcing for inventory, sending it in to the FBA warehouse, and seeing the pending sales in Seller Central. Honestly, isn’t the thrill of the hunt and the excitement of the sales one reason we all do this business?

But if we stop and dig a little deeper into those sales, would we still be as excited about the raw numbers? Sales numbers can be deceiving at times, and if we don’t take the time to look at and think about our actual profit, then we don’t really know if our business is as successful as we want it to be.

Inventory Lab allows you to enter the total cost of an item when you list it on Amazon. Inventory Lab then takes that cost, your sales price, and associated fees to calculate profit and return on investment (ROI). You can see the projected profit and ROI for a batch when you’re listing through Inventory Lab, but you can also run reports to show you the actual profit and ROI based on payments from Amazon for your inventory items.

Supplier Profits

The circled area is where you input the data to help Inventory Lab calculate supplier profitability. Some areas of the screen shot have been blurred out for business privacy.

Prices may change from the time you enter a batch to when the item actually sells – it’s fun to think about a batch having 150% ROI when you send it to the warehouse, but it’s more useful to look at the ROI when you are actually paid for the sale of those items. From time to time we need to stop and analyze our numbers and ask ourselves, “Am I making the ROI I want/need on my inventory? How do I need to tweak my business to get the ROI I want?”

You can take the profitability question a step further by entering not just your total cost for each inventory item, but also the supplier. Then the question becomes, “How do I need to tweak my sourcing from each supplier to get the ROI I want?”

We currently use the supplier profitability report in several ways:

  1. To track how much commission on sales we need to pay our helper who sources for us
  2. To track the profitability of our online arbitrage subscription services
  3. To track the profitability of our wholesale sources

Enter Supplier ProfitsIn order to run the supplier profitability report, you will first need to enter a supplier at the time of listing an item. Inventory Lab comes with many retail sources already listed as options for supplier, but you can easily add your own. For instance, we use our helper’s initials as the supplier when we’re listing items she has sourced for us. We use other abbreviations for tracking each of the OA subscription services we use (e.g. Cyber Monkey Deals is CMD, Gated List is GL, Your Sourced Inventory is YSI, OAXray is OAX, etc).

After this info is entered and enough time has passed to have generated some sales, you can run the supplier profitability report by following these steps:

  • Go to the top menu on Inventory Lab.
  • Click on Reports.
  • Choose Supplier Profitability.

(Note: You will see there are several other useful reports you can run to analyze your inventory’s profitability.)

The default selection will be for the last month, but you can click Advanced Search to choose more date range options. You can choose within the last 1, 3, or 6 months or the entire date range since you started tracking. You can also choose a specific date range from a drop down calendar.

Reports menu

Once you’ve pulled up your report, you can sort by supplier, units sold, revenue, % of revenue, profit, ROI %, and on hand (number of units currently on hand in your inventory).

Suppliers all dates

Depending on the circumstances, each of the fields might carry a different weight for you as a seller in your decisions for how to adapt your business to improve those numbers. Some sellers like to have 100% ROI on everything they sell; others have a business model that supports 50% or even 30% ROI. The point of running these reports isn’t to compare your numbers to someone else, but to look at your own results and see if they meet your own business model’s criteria.

Let’s look now at two practical ways that we use our supplier profitability report.

  1. To track how much commission on sales we need to pay our helper who sources for us

At the beginning of each month, we run the supplier profitability report and look at the line with our helper as the supplier. We look at the dollar amount for the previous month under the Profit column, and we pay her commission out of that amount.

  1. To track the profitability of our online arbitrage subscription services

We also look once a month at the lines for each of our subscription services as the supplier. First, I look at the profit and make sure it’s more than the amount we’re paying for the subscription. This is an easy way to put solid numbers together to show yourself whether or not it’s worth it to pay for that particular subscription.

roiI also will look at trends as far as profit and ROI go. I don’t rush to cancel a long-standing subscription if I randomly have an off month, but I do look at whether a service seems to be deteriorating for me over time and make my decision whether to keep subscribing or not.

I also don’t rush to cancel a subscription if I think that I’m the problem rather than the service. For example, a while back I saw in my monthly report that my units sold and ROI for OAXray were not what I would prefer. A quick look back over my schedule for the previous weeks reminded me that I hadn’t been spending the same amount of time using OAXray each day as I had in the past. Of course those numbers are going to go down! If I’m not prioritizing my time to use the product as often as I should and actually send in items I sourced with it, the problem is me, not the product. So I made some adjustments to my schedule, made more time each day to use OAXray, and the numbers the following month were back up where I wanted them.

We’ve also started using Inventory Lab to track supplier profitability for wholesale sources, and many people use it to track their retail arbitrage sources. Are there other ways you use the supplier profitability report in Inventory Lab? We would love to hear your ideas and experiences in the comments!