Category Archives: Inventory

Top Benefits of Using Ebates in Your Amazon FBA Business

Let’s talk about Ebates. But first I want to give you a hypothetical sourcing scenario. Let’s say you have a BOLO list of great items to buy from Walmart, and all you need to do is get to the store and buy them to send in to FBA. You only have time and money to go to one Walmart today and get this shipment sent in, and there are two Walmarts equal driving distance from your house. Both stores have the exact same items in stock in sufficient quantities for you to buy and make a great FBA shipment. The catch: One Walmart has prices 5-10% cheaper than the other. Which store would you choose? No question, you’d choose to source at the Walmart with the cheaper prices.

Now, we all now this is a hypothetical situation because Walmarts in the same geographic area typically have the same prices, so set that component of this scenario aside. I’m just trying to get you thinking about this concept: if all other factors are the same, every one of us FBA sellers would choose to source items at a lower price. If we didn’t, we would be wasting money and leaving profits on the table.

This exact scenario is the choice you face every time you make an online purchase and don’t use Ebates as you complete your purchase. If you use Ebates, you can be earning a percentage of cash back on every purchase – so essentially, if you don’t use Ebates, you’re paying a higher price for your purchases than you need to.

How Ebates Works

Ebates is a cash back website that allows you to earn a percentage of money back on every online purchase you make when you visit websites through the Ebates link. Online stores pay Ebates a commission for sending customers their way, and Ebates shares that commission with you, the customer.

It’s so simple – you shop at your favorite stores (over 2000 to chose from), you accumulate cash back in your account, and you get paid through a check or PayPal once a quarter. You don’t need to do anything differently with your online purchases other than make sure you’re visiting online stores through the Ebates link. It doesn’t take long for your cash back total to start adding up to a nice Big Fat Check (the name Ebates gives the checks they send out once a quarter). Be sure to read to the end of this post to find out about a welcome gift for new Ebates users.

Benefits of Using Ebates

  • Increase ROI on OA purchases – For us, the number one way we earn cash back from Ebates is through our online arbitrage purchases. We do a significant portion of our FBA sourcing through OA, so we get a large chunk of cash back every quarter on those purchases. Earning cash back is one way to increase your ROI (return on investment) and make more money in your FBA business.
  • Cash back on your business supplies and travel expenses – Even if you don’t do OA as a sourcing strategy, you can still use Ebates to earn cash back on business expenses, such as office supplies and travel expenses. Rebecca uses Ebates to book our hotels and flights on websites like Travelocity and Priceline, and the percentage discount for our travel can add up quickly.
  • Cash back on personal shopping – We also use Ebates for our personal online shopping as well, whether we’re looking for clothes for the kids or gifts for various occasions. This time of year (November, as I write) is when Ebates can be golden – all your holiday gifts and Black Friday purchases can be earning you cash back!
  • Simple process if you use the Chrome extension – The Ebates concept is already pretty easy – just go to the Ebates site, search for the store where you want to shop, then click their link to begin shopping. But the process becomes even easier if you use the Ebates Chrome extension or Safari button. With one click of the extension, you can activate Ebates on your purchase directly from an online store, without having to navigate to the Ebates website first. What could be easier?!
  • Coupon codes when available – Ebates also does the boring work of looking up coupon codes for you. Once you’ve activated the Ebates extension and you’re getting ready to complete your purchase, Ebates will give you a notification if there are coupon codes available for that online store. You can save even more money with Ebates’ help with coupon codes!
  • Double cash back opportunities during special events or holidays – During certain times of the year, stores will offer an even higher percentage off for Ebates customers, as a way to encourage shopping on their site. You should be on the lookout for percentages as high as 15% cash back around Black Friday, Cyber Monday, and other big online shopping days.

There really is no good reason not to sign up with Ebates and start earning cash back now. The cash back process really works and is so simple. Our family loves earning cash back from Ebates and saving it to go towards our family vacation each summer. You can see a video about how we used Ebates to take our kids to their favorite vacation spot in the Davis Mountains last year. This summer we used our Ebates cash to take them on an unforgettable trip to the Grand Canyon.

Are you already using Ebates? If not, you should sign up today! Don’t let any more online shopping get by you without starting to earn cash back. As a welcome to the program, Ebates is offering a $10 gift if you sign up through this link. That’s free money on top of free money, and you can’t beat that.

Are you using Ebates? If so, let us know in the comments below how much you’ve enjoyed your Big Fat Checks!

How to Find Profitable Inventory for Amazon FBA Sourcing

In the course of just one week (or even a day!), it is possible to come across thousands of items you could potentially resell on Amazon. Obviously, not all of those items are going to make the cut and end up in your shopping cart. Some items are a no-brainer purchase. Some are definitely NOT something you should buy for resale. And some items are kind of iffy – should you buy it or not?

How do you know whether to buy an item or just pass and move on to the next item?

For the rest of this article, I want to talk with you about how to find profitable inventory to sell on Amazon – more specifically, I want to show you my thought process when I’m deciding whether or not to buy an item.

First things first: I want to make sure you are using the right tools when you are sourcing. When I am doing retail arbitrage (RA), I always use the Scoutify app on my smart phone to scan inventory and see all the necessary numbers to make a smart sourcing decision:

  • Sales rank
  • Price
  • Fees
  • Profit
  • Number of competitors
  • Historical sales rank and pricing

Some sellers choose to use only the Amazon Seller app for doing RA, but I have found the info it returns to be incomplete. I prefer to have more information at my fingertips when I make a sourcing decision, so I use the Scoutify app that comes bundled with the listing software Inventory Lab.

OK, now that we have that covered, let’s look at my thought process when I’m making a sourcing decision. This process works whether you are doing RA, OA, wholesale purchasing, or any other type of sourcing for Amazon FBA.

I typically ask myself 4 main questions when I’m making a sourcing decision:

  1. What is the ROI? We’re all in this business to make money, so we want to make sure the items we’re sourcing have a good ROI, or return on investment. When you are first starting out at Amazon FBA, I recommend finding items that have a 100% ROI. If you have a higher percentage ROI, you have a lot more wiggle room to make some mistakes and adjust your price if necessary. As you gain more experience and confidence, you can begin sourcing items that have a lower ROI. Some sellers stick with 75% and above, while others stick with 50% or above. If you find an item that will sell very quickly, you can even go as low as 30% ROI. The main point here is to find items that have a good ROI, whatever the parameter is that you’ve set. If you can’t make money on your investment, you want to move on and look for different inventory items.
  1. Am I approved to sell the item? Some categories are gated for certain sellers, and some brands are restricted to sellers. The second thing I look at when I’m making a sourcing decision is whether or not I am approved to sell an item. If I can’t sell it, there’s no point in continuing to consider it. You can see whether or not you are approved to sell an item from within the Amazon Seller app, but Scoutify also has a link to show you whether or not you are restricted for the item.
  1. What is the sales rank? The sales rank of an item is how I can tell whether or not the item will sell quickly on Amazon. Amazon tells us the current sales rank of every item in their catalog, and we can see that information when we scan an item with a sourcing app. You want to make sure, though, that you are considering the average sales rank when you make a sourcing decision, not just the current sales rank. Amazon updates sales rank frequently throughout the day, so you need to know how much that sales rank varies over time. You can look at graphs on CamelCamelCamel and Keepa to figure out the average sales rank in a glance; both Camel and Keepa have quick links through the Scoutify sourcing app. I recommend checking out an Amazon sales rank chart to make sure you know what is a low or high sales rank for the category of the item you are looking at. Our blog offers a monthly updated sales rank chart for subscribers. You can use the chart to see if an item’s average sales rank falls in the top 1%, 3%, 5%, 10%, or higher for its category.If you’re interested in learning more about sales rank, we offer an affordable mini-course called The Reseller’s Guide to Sales Rank: Understanding Amazon Best Sellers Rank for Maximum Profits. I’ve included in the mini-course everything I know about sales rank to help you get started with making smarter sourcing decisions.I make my sourcing decision based on how high or low the sales rank of the item is. If an item has a low average sales rank, it is a faster selling item. If the average sales rank is high, the item will sell more slowly.
  1. What is the competition?Unless no one else is selling a particular item, you are going to have competition if you sell that item. There are two main competitors you need to consider: Amazon and other third-party sellers. When it comes to competing with Amazon, I generally choose not to buy items that Amazon sells. I always look to see if Amazon is in stock on an item or has been in stock recently. If so, I typically pass on that item unless I can price it significantly lower than Amazon. As a general rule, Amazon does not tend to share the buy box, and since the buy box is where over 70% of Amazon sales come from, I don’t want to risk buying inventory where I will never have a chance to get that buy box. To see the history of Amazon being in stock or out of stock on an item, I check the Keepa graph for the item through the Scoutify app. I also like to look at the other third-party sellers who are priced competitively on the item. I’m only interested in those sellers who are priced within 1% or 2% of the buy box price. Anyone priced higher than that isn’t truly going to be my competition.I want to make sure there’s a relatively low number of sellers priced competitively, so that I can be assured of getting time in the buy box. The higher the sales rank, the fewer competitors I want on the item. If the sales rank is lower, I am more willing to tolerate a relatively higher number of competitors – with a low sales rank, the item will be selling fast enough that I can still get time in the buy box and make my sales.

Those are my four main deciding factors when I am making a buying decision for my Amazon FBA business. As with anything, there are some exceptions that come up when I’m looking at this criteria. The more comfortable you are with your experience at making these decisions, the more you will be able to see when there are exceptions to the buying parameters you set up for yourself.

There are other less important factors I sometimes consider, as well, such as number of reviews and whether or not they are positive. I tend to use other factors in my decisions when I’m on the fence about a buy.

Do you use similar buying criteria as the ones I’ve covered above? Is there anything else you absolutely must look at before making a buy for your FBA business? We would love to hear your ideas in the comments!

Money Saving Post-Long-Term Storage Fee Strategy

As you’re probably aware, twice a year (February 15th and August 15th) Amazon charges a long term storage fee (LTSF) for all items that have been stored in a FBA warehouse for 6 months or longer. This fee can be very high as it’s currently $11.25 per cubic foot for the 6-month fee and $22.50 per cubic foot for the 12-month fee.

With Amazon charging this big fee twice a year for any item in their warehouse over six months, it’s a good strategy to possibly wait until after long-term storage fees are calculated on February 15 to send in items you think might take longer than six months to sell (or sell out if you have multiples). Here’s my thinking on why:

When Amazon calculates long-term storage fees on February 15 and August 15, they look at all of your inventory and charge you a fee for anything that’s been in an Amazon warehouse over six months. But here’s what many people forget: If you send your inventory to Amazon right after August 15, then when Amazon calculates long-term storage fees on February 15, they will only charge you the fee for any items that were stored in Amazon since before August 15 (the long-term storage fee calculation date). Here’s an example:

Scenario 1 – Sending inventory to Amazon right before August 15:

Send an item to Amazon FBA on August 10. When February 15 comes around, if you have not sold that item, then you’ll be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for over six months (6 months and 5 days to be exact).

 Scenario 2 – Sending inventory to Amazon right after August 15:

Send an item to Amazon FBA on August 17. When February 15 comes around, if you have not sold that item, then you won’t be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for under six months (5 months and 29 days to be exact). You won’t be charged a six-month long-term storage fee until August 15 of the following year.

In summary, the few weeks after Amazon calculates long-term storage fees are the absolute best days to send your potentially slow moving inventory (long-tail items) to Amazon, since you’ll be buying more time to sell your items without incurring long-term storage fees.

Keep this strategy in mind as you source for inventory throughout the year. During the summer, if you come across some items  you think might take longer than six months to sell, or if you find multiple items you think might not sell out in six months, then consider holding on to them and don’t send them to Amazon until after August 15. That way, you’ll be buying even more time before the long-term storage fees are calculated. You could even merchant fulfill these items you are storing at home before you send them in after the long-term storage fees are accessed.

Of course, this strategy is not for everyone. Hopefully, your sourcing skills have gotten so good that most of your inventory sells within the first few months of hitting the FBA warehouses. If you’re looking to learn more about how to know exactly how long it might take for an item to sell on Amazon, be sure to watch my free tutorials on how to understand Keepa, and how to understand CamelCamelCamel or check out my book/video course, The Reseller’s Guide to How to Keepa Camel: Using Amazon Sales History to Make Smart Sourcing Decisions.

Now, I’d love to hear from you. Do you have any strategies that help you gain more time to sell your inventory without long-term storage fees? Do you have some helpful tips on quickly selling your inventory so that long-term storage fees aren’t even an issue?

The Biggest Mistakes I Made With My First Wholesale Order

About 12 months ago, my very first wholesale order was delivered to my house… Of course, I had to take a picture. We worked as fast as we could to prep and send this huge wholesale order to Amazon. As soon as our wholesale shipment arrived at Amazon, we started to see some sales… but then things started to go terribly wrong. Sales started to slow and prices began to tank.

To make a long story short, I ended up actually losing money on my first wholesale order. Sure, I was able to get almost all of the capital back, but overall it was a massive failure.

If you know me, then you know that I’m a “glass half full” kind of guy, and I was able to turn this epic failure into a learning experience. Since mistakes were made, I thought I’d share with you the 6 biggest mistakes I made in my first wholesale order (and the last mistake was the biggest) so that you can set yourself up for successful future wholesale orders.

1. Ordered too many items

When ordering products from wholesalers, the items you buy usually come in cases, so buying only one of an item is usually not a possibility. I knew I was going to need to buy multiples, but I must have had my head in the clouds because I bought way too many items.  I honestly should have known better.

Any time you try something new, it’s usually best not to jump headfirst into the deep end… but instead to wade in slowly until you get used to the water. In my first wholesale order, I went way too deep and ended up with plenty of inventory that took forever to sell. Some of them I may even be paying long-term storage fees for soon.

2. Spent too much money

I mean, waaaaaaaaaay too much money. When you’re dealing with a wholesale supplier, they’ll usually have what is called a Minimum Opening Order amount. Different wholesalers will have different minimum amounts that they’ll need for your first order. They have these so the wholesale supplier knows that the buyer is a serious buyer and will be worth the time and energy to work with.

For my first wholesale purchase, the Minimum Opening Order was around $350, but I think I got caught up in the excitement and totally blew past that minimum. I ended up tying up a lot of my sourcing capital that could have gone to my retail or online arbitrage sourcing.

When you make your first wholesale order, be sure to not go too far above the minimum. Not only do you not want to use too much of your sourcing capital on a method you’re not yet confident in, but you’ll also want to make sure the items you order meet your expectations. Once you find success in your opening wholesale order, then you can go back and get more.

3. Ordered time-sensitive goods

I ordered items that were focused around a specific season, and for the wholesale order to be successful, I needed these items to sell quickly. It turned out they didn’t all sell in time and when the season passed, I had to drastically lower my prices in order to get the sales and to avoid any additional monthly or upcoming long-term storage fees.

It’s probably best to order items that should sell well all year long when it comes to your first wholesale order. I ended up putting all of my eggs into one basket hoping that all these items would sell by the end of that season, and I ended up paying for it.

4. Didn’t Negotiate

I’ve negotiated deals to get a better price most of my life. I can do it at garage sales, thrift stores, and at retail stores with store managers. Most of the time I’ll say, “If I buy all these items, will you give me a discount since I’m buying so many?” Most of the time I can get a small percentage off of the overall total. That one question has saved me thousands of dollars… but for some reason, I just never thought about it with this order.

Now, don’t get me wrong, I understand trying to negotiate a better deal on the first order isn’t always the best way to introduce yourself to a supplier, but remember mistake number 1 and 2 from above? I ordered way too many items and spent way too much money. If I was ordering the minimum, I would not have asked for a discount, but since my first order was a great deal higher, I think I could have negotiated a better deal.

5. Made faulty assumptions

I made two very incorrect assumptions that cost me both time and money. My first assumption was assuming that my shipping was going to be free. I guess with all of my online purchases in the past, I assumed an order this big would qualify me for free shipping. I had no basis for this assumption, and when I saw the final shipping costs, it ended up eating into the profits I had calculated.

I also assumed that the items I was buying would not come poly-bagged. My first wholesale order had many items that were going to need poly-bagging in order to send to Amazon. I ordered a ton of poly-bags and suffocation warning labels so that when the items arrived, I could bag them up and ship them to Amazon quickly. As it turned out, the items were sent already poly-bagged and had a printed suffocation warning label on them. So now, I have what seems to be a lifetime supply of poly-bags in my office.

When you are making your first order, don’t be afraid (or too proud) to ask your supplier questions. Even if you think the questions are elementary, go ahead and ask so you are able to make knowledgable decisions.

6. Didn’t realize difference between a manufacturer and a distributor

This ended up being my biggest mistake. If I could have known this and applied that knowledge to my wholesale sourcing strategy, then most of the other mistakes from above could have been avoided.

When you purchase from a manufacturer, you’re buying directly from the maker of the product. You’ll be able to buy your inventory with the highest possible discounts. You might have to go a little deeper when buying from a manufacturer, but knowing you’re getting the best deals usually outweighs how deep you might have to go.

On the other hand, when you purchase form a wholesale distributor, you’re working with a middle-man who needs to take his cut of the profits. The distributor buys directly from the manufacturer and then marks up the inventory so that he can make a profit. Then the distributor offers up these wholesale items to us with smaller minimum orders than the manufacturer requires.

As you may have guessed by now, my first wholesale order was purchased from a distributor. When I got my huge wholesale order processed and sent to Amazon, I immediately began to see some sales come in, but after a short time the competition started to come in (who probably got their inventory from the manufacturer at better prices) and the prices tanked quickly.

In the end, I was able to recoup almost all of my capital back from that first wholesale order. I know some people will think that it was a waste of time and money, but I don’t see it that way at all. While the order ended up not meeting my expectations, it did provide many valuable lessons. I have taken these lessons and applied them to future orders and have seen great success.

Aside from my first wholesale order, I simply love sourcing and creating wholesale orders.
I’ve found some great companies to work with and have reordered many items over and over again. I’m most thankful to my wholesale mentors Dan and Eric from The Wholesale Formula. After taking three different courses on selling wholesale items on Amazon and not finding the success I was looking for, finally the teachings from The Wholesale Formula just plain worked!

Right now, the the free video series from The Wholesale Formula is about to close dowb, but you still have some time to sign up and watch the free training videos.

Do you have any worries about making a wholesale order mistake? Have you ever placed a wholesale order before? Did you make any mistakes? What did you learn from your mistakes? I’d love to hear from you in the comments.

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.

Bonus Tip: Once you get a wholesale account, try to ask for an inventory spreadsheet from the company that includes the UPC and price. With this spreadsheet, I save it as a CSV file and upload it to OAXray. Then OAXray crunches all the numbers and finds out which items on the spreadsheet have the best rank and highest ROI. OAXray literally saves hours of time going through a wholesale company’s inventory list. If you want an extended 10-day free trial, then click here and sign up for OAXray today.

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 2017

First 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 2017:

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 2017? 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

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

As I (Rebecca) mentioned in a previous 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 paid sourcing subscription 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!

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Our hope for this series on selling shoes is that we’re able to help you make informed decisions about whether the category is right for you and to help you find success in sourcing and prepping shoes.

If you’re ready to step up your game with selling shoes on Amazon, check out our course,The Reseller’s Guide to Selling Shoes: Kick up Your Profits with New Shoes via Amazon FBA. It’s a combination ebook (100+ pages) and video course (over 4.5 hours of no-fluff content) that will help you avoid all the mistakes we made and get your shoe selling off on the right foot.

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

In 2015, Stephen and I (Rebecca) decided to add shoes to our Amazon FBA inventory. Since our very first initial experiment with shoes, we have learned so much about how to source and sell shoes on Amazon. In fact, right now, shoe sales are accounting for about half of our Amazon sales. Since we’re finding such great success with shoes, we thought we’d share with you our experiences over the past 18 months as we’ve ventured into selling shoes through Amazon FBA.

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 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, 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 deal list (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 and 2016 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 post and others to come 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 to focus on shoe tips and tricks over the next couple of weeks.

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Our hope for this series on selling shoes is that we’re able to help you make informed decisions about whether the category is right for you and to help you find success in sourcing and prepping shoes.

If you’re ready to step up your game with selling shoes on Amazon, check out our course, The Reseller’s Guide to Selling Shoes: Kick up Your Profits with New Shoes via Amazon FBA. It’s a combination ebook (100+ pages) and video course (over 4.5 hours of no-fluff content) that will help you avoid all the mistakes we made and get your shoe selling off on the right foot.