My Top 7 Holiday Season Pricing & Sourcing Strategies for FBA Sellers

Cut-Lead-Costs-in-Half-and-Increase-Sales-Revenue-by-105-PercentQ4. It’s one of the best letter/number combinations for an FBA seller. Q4 stands for the Fourth Quarter of sales for the year. In the business world, Q4 indicates the months of October, November, and December, but for the Amazon world, our biggest sales come in November, December, and January.

Traditionally, when it comes to sales, Q4 brings a huge increase. It’s not a stretch to say that a person selling on Amazon could potentially triple or quadruple their payouts in Q4.  I’ve been selling full-time on Amazon for over 3 years, and I can testify to this. In fact, I have been awarded by Amazon as a Top Holiday Seller. This meant that my sales ranked in the top 25% of all Amazon sellers and my customer satisfaction ratings were excellent (A+) during that period.

Here are some thoughts I have as we are currently in Q4. These are suggestions that helped me get awarded Top Holiday Seller. As always, there are exceptions to every suggestion, but overall, these are the strategies I put in place as we get closer and closer to Christmastime.

1. Don’t lower your prices to match the lowest price. Like many resellers, I reprice from time to time. With the number of sales on Amazon dramatically increasing in Q4, I know that the lower priced competition will eventually sell out and my higher priced item will be there for the willing buyer. In Q4 of 2012, Amazon sold over 1 billion items (yes, that’s billion with a B). That equates to 126 items sold per second, 7548 items sold per minute, 452,899 items sold an hour, and almost 11 million items sold per day. This is the best time to wait and get the price you want. The only exception to this guideline is if your inventory happens to have a higher sales rank (say, above 300,000 for Toys & Games) AND you have a lot of competition that is priced much lower than you. In this case, I might price match the lowest priced competitor, especially if they have a lot in stock (see this blog post to learn how to see how many of an item your competitors have in stock).

Price-Increase2. Raise prices on some items. Using the same thought process from above, I’ll raise my prices on some items that have really good and sustainable sales ranks. Also, when I’m first listing a product during Q4, I’ll price some of my items much higher than usual since I know the lower priced competition will sell out soon. Just yesterday, my wife (and business partner) spent some time raising the prices of many items that ended up selling later that day. Click here to read how to reprice your inventory.

3. Keep an eye on your most recent shipment of inventory. When I’m looking at my pending sales, I’m not just looking to see all of the awesome items I’ll be getting paid for, but I’m also looking for sales of items that I just sent in to FBA. If something sells the day it hits the warehouse, then I might need to look at my price and make sure I’m priced competitively. Many times during Q4, you might price an item on Monday when you ship it to Amazon, but when it gets checked in on Friday, there have been so many sales that the prices are now higher. If you get immediate sales, then check your prices… If you see that you are priced too low, raise your prices!

4. Keep an eye on multiple sales of the same item. Again, when looking at your pending orders, if you notice that all of a sudden you have many sales of the same item, you might need to check the prices on those items too. It’s the same thought process from the tip above… If you are getting multiple sales of the same item, then you might be priced too low. Check your competition and then reprice if necessary.

keep-calm-and-buy-more-inventory5. BUY! BUY! BUY! It’s simple math: You will only sell a lot of items if you have a lot of items to sell. During Q4, I’m out buying a lot more often than I usually do. It’s a fun cycle: I send more items to FBA, more items sell, and I get paid more… I take that money and send even more items to FBA, more items sell, and I get paid more.

6. Expand your sales rank limits. When sourcing, it’s always a good idea to look at sales rank history when you’re making your buying decisions. When Q4 comes, I always buy items with a higher sales rank than I usually do. If my sales rank limit for the Toys & Games category was 150,000, then I may raise that limit to 250,000 in preparation for Q4. Many items completely sell out on Amazon during Q4, so buyers start looking for other items that might not be as popular. Each category will be treated differently, but I always raise my sales rank limits for Q4.

7. Send it to Amazon ASAP! If you have product sitting around your house that you haven’t sent to Amazon yet, send it in now! What are you waiting for? Check everywhere for products that you might have forgotten about. Look in your closets, your garage, in boxes, under your work table, etc. Products sitting around your house are not ever going to sell via FBA.

amazon_gift_cardBONUS TIP – January is one of the best times to sell on Amazon. People are returning the Christmas gifts they don’t want and will use that money to spend on what they really wanted. People also have Amazon gift cards that are burning a hole in their pockets. Because of these factors, sales in January are amazing. I’ve heard some sellers say that their January sales eclipsed their December sales, though I have not experienced this yet. So continue to send inventory in to Amazon!

How about you? What Q4 tips would you like to offer the group here? I’d love to hear your thoughts on this very exciting time of the year.

9 responses to “My Top 7 Holiday Season Pricing & Sourcing Strategies for FBA Sellers

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  5. Great tips, as always! This is our first 4th quarter and we love hearing from seasoned sellers.

  6. Thanks for this blog. Curious if you (or others) had a big cyber Monday selling toys (and all Black Friday weekend). This is my first Q4 and did not sell nearly as many toys that I was expecting and I’m wondering if it’s just a matter of people buying other things and toy sales will pick up as it gets closer to Christmas or I do not have the right merchandise. Thanks!

    • David, our sales were $1,200. We typically sell $300/day. Of the $1,200, $850 was split between pedometers (go figure) and a grocery item we sell that we purchased wholesale. (Grocery item usually sells 5 daily; someone purchased 20.) Toys are starting to sell now finally for us. You have to have the buy box. Some of out items were only $.50 off so once we repriced a but we had sales. Good luck to you!

    • Cyber Monday was easily our biggest sales day of the year. It was twice as much as my biggest sales day from the year before.

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