Tag Archives: Retail Arbitrage

Top Retail Arbitrage Tips for Clearance Sourcing for Amazon FBA

In my last post I covered 5 retail arbitrage (RA) sourcing tips for Amazon FBA success. Today I want to narrow the focus a bit to talk specifically about clearance sourcing at retail stores.

Clearance sourcing is always a lot of fun because you can find items at super low prices that you can potentially sell on Amazon for great ROI – and there’s the bonus of potentially finding multiples. With that kind of profit potential, I’m always on the lookout for great clearance sourcing opportunities.

Here are my best tips for helping you with your clearance sourcing strategies:

1. Know where to look for clearance.

Pretty much every store you can think of to do RA is going to have clearance items; you just need to know where to look for them.

  • Some stores will have a clearance aisle, where the entire aisle is filled with clearance items.
  • Some stores put their clearance items on an end cap at the end of an aisle. The front-facing end caps are pretty noticeable if they have clearance items, but you want to make sure to check out the back-facing end caps as well.
  • Some stores leave the clearance items on the regular shelves, but mark them with special price tags or tags on the shelves.
  • Some stores, like Tuesday Morning, use special color-coded stickers to label their clearance items.
  • In general, stores don’t tend to give their clearance items shelf space in high traffic areas, so you might need to be diligent in searching out the clearance location in some stores.

2. Ask employees about clearance items.

Another strategy I use is to just ask an employee if they have clearance items. Even if you have already found the clearance section and scanned it (I recommend scanning with the Scoutify app from InventoryLab), it doesn’t hurt to ask an employee if they have more clearance somewhere.

Several times I have asked employees where I can find clearance or if they have more clearance items, and they have replied, “We have even more clearance in the back – do you want to check it out?” Yes, please!

One time I asked an employee if they had more clearance, and they told me they have an entire storage container in the parking lot full of clearance items. They were eager to get rid of this container, so they let me go through it and pull out thousands of dollars worth of profits to resell on Amazon. It was a win-win situation – but it never would have happened if I hadn’t asked for more clearance.

3. Look up and down.

This is a good tip whether you are on a clearance aisle or a regular aisle. Always look at the bottom shelves and on the tops of the shelves to make sure you aren’t missing inventory that isn’t in plain sight at eye level. It’s easy to overlook great inventory on those top and bottom shelves – sometimes inventory that is dusty from sitting there for weeks or months without anyone touching it.

If you need help getting stuff off the top shelves, don’t be shy about asking an employee for help. For those bottom shelves, don’t be afraid to get down on the ground to look all the way towards the back, where inventory might have been pushed out of sight and hard to reach. Going this extra step to look for inventory in these locations will help you find great profits that other resellers have passed up.

4. Don’t make assumptions.

Have you ever had these thoughts when you’re out sourcing clearance items? “I’m not going to scan that piece of junk. Who would ever buy that?” Or “The clearance price is still $24? There’s no way I could make money on that.”

I know I’ve been tempted to think that way, but those are assumptions that could cause me to miss out on some great FBA profits. When you have those thoughts, scan anyway. Just because you wouldn’t pay good money for an item doesn’t mean there’s no one who would. And just because an item’s clearance price is still what you might consider high doesn’t mean the percentage off isn’t steep enough to make the ROI on Amazon fantastic. Scan anyway!

5. Check the condition of every item.

Clearance items have a tendency to be older items that have been handled quite a few times, either by potential customers or by employees who have moved them around the store shelves. Other times the reason an item is on clearance is that it was a customer return, and the box is opened or some pieces are missing.

Do not neglect to check that each item you source from clearance is in pristine, gift quality condition – or prepare to sell it in the appropriate used or collectible condition on Amazon if it’s a complete item but not in new condition. Please remember, scratched up and damaged boxes do not qualify as new condition on Amazon. For more information about condition guidelines, you can visit the quick link www.fulltimefba.com/conditions to go directly to the Amazon guidelines.

You especially want to be careful to check condition if you are buying multiples of an item. Sometimes we can get a little over zealous when we find a home run item on the clearance shelf that has several multiples, and we start loading up the cart quickly out of eagerness – only to find out after we get the items home that one or more of them aren’t in new condition like the other items. We can save ourselves the time and effort of having to fix that situation down the road if we just check the condition before we load the cart and pass on any items that we can’t sell in new condition.

6. Check the stock in other stores.

Let me give you an example to illustrate this tip. One time I found a LeapFrog video game clearance priced at $5 at a store where I like to source, and the game was selling consistently on Amazon for $35. Great, add it to the cart.

Later that day I was at another branch of the same store, and I found that same LeapFrog game on the shelf without a clearance sticker on it. It appeared to be selling for regular price at this second store. Just out of curiosity, I took the game to a price checker to see if it had the clearance price also. Sure enough, the store just hadn’t updated their prices on the shelf, but the clearance price was already in the computer system. I was able to buy more of the game at the clearance price, at that store and others throughout the day, even though the casual customer would not have known that the game was on clearance. Score!

If you find an item on clearance at one store but it’s not visibly on clearance elsewhere, always double check the price at a computer, just in case.

7. Watch the prices while you’re checking out.

As we’ve noted in the tips above, stores can sometimes have incorrect information on their price tags or in their computer system. It’s possible for the price sticker or the shelf sticker to say a lower price than the price in the system, so you want to keep an eye on the screen while the cashier is scanning your items.

Don’t be afraid to stop the cashier and question a price if it’s higher than the sticker or the shelf. It may require a manager to override the transaction so you can have the lower price, or it may mean having to put an item back if they won’t honor the price on the sticker or shelf. Either way, you definitely do not want to pay a higher price than you intended, or you will lower your potential ROI and lose out on profits.

Hopefully you have found some useful suggestions in my tips that will help you increase the amount of inventory you can source at great prices on your next RA clearance sourcing trip!

Do you have any tips you would add to my list? I would love to hear what you would suggest in the comments.

If you’re ready to finally get serious about your Amazon FBA business, then I invite you to check out JumpStart Amazon: Build a Successful Amazon FBA Business.

JumpStart Amazon is a combination video course and ebook. The ebook is over 220 pages filled with the content and graphics you need to start a successful Amazon business from scratch. The video course features 5 main sections, 19 content-packed modules, and over 40 videos adding up to over 10 and a half hours of video training. This training is set up to help you build a solid foundation and then know how to find growth and success on top of the basics. This course is packed with more results-focused knowledge than any other ebook out there centered around starting an Amazon business.

Right now, the course is on sale for $50 off the list price, so click this link and find out more about JumpStart Amazon today.

5 Retail Arbitrage Sourcing Tips for Amazon FBA Success

Although my FBA business has transitioned to become more focused on wholesale over the past couple of years, retail arbitrage (RA) is still one of my top methods of sourcing. I’ve shared some of my favorite RA sourcing strategies with you in blog posts in the past:

The 2 Best Retail Arbitrage Sourcing Strategies

How to Find Profitable Inventory for Amazon FBA Sourcing

Our Favorite Amazon FBA Sourcing App

Today I want to give you my top 5 RA tips that don’t really relate to buying, but have everything to do with success.

1. Retail arbitrage is not illegal, so source with confidence.

Sometimes new Amazon sellers can be timid when sourcing in retail stores. They are shy about scanning items in public and worry they could get in trouble for what they’re doing. Now, some stores frown upon resellers, so the store policy might prevent you from scanning freely — but retail arbitrage is not illegal. You are not doing anything against the law by scanning inventory in a retail store, so scan with confidence. Respect the store policy, but don’t be afraid that you’re breaking the law.

2. Just tell the truth if another customer asks you questions.

If customers ask you why you’re scanning items or why you have a cart full of toys, don’t be afraid to briefly and truthfully answer their questions. You don’t have to elaborate if you don’t want to, but you can always give a short statement like, “I have an online store, and I’m buying toys to sell on Amazon.” There is no reason to be deceitful; sometimes people are just curious, not judgmental. A short, truthful answer is much better (and less suspicious!) than acting weird, evading the question, or just running away and hiding.

3. Be open with store employees about what you are doing.

The same thing goes with employees — if a store employee asks what you’re doing, give them a short, honest answer. Again, some stores are not reseller-friendly, so be careful about sourcing in those stores.  Many stores, however, are more than open to the idea of Amazon sellers sourcing their inventory from their shelves. Many times I’ve had a store employee ask what I’m doing, and when I answer that I’m looking for deals to sell on Amazon, I get the answer, “Oh, we have more stuff in the back you can look at.” They actually help me find even better deals!

4. Develop good relationships with store employees and managers.

Along the same lines as the last point…

If you make it a habit to be truthful and friendly with store employees and managers, you will begin to develop relationships with them and have even more opportunities to buy amazing RA deals. I’ve had store managers ask for my contact information so they can let me know when a new round of clearance is coming up. I’ve had opportunities to ask store managers if they can give me an even better discount on already low clearance prices if I buy out all of a certain item. Being friendly and personable can go a long way in this business!

5. Leave the store better than you found it.

Believe it or not, a little kindness can go a long way when you’re sourcing in retail stores. Some stores don’t like resellers because they come in and trash the clearance aisle, and store employees have to clean up after them. Don’t be that way! Always straighten up after yourself, and offer to help organize inventory or clean up an aisle if you see an opportunity. Whether you get anything out of it or not, it’s just the right thing to do to be helpful and not destructive.

Hopefully these tips will help you have a more successful and pleasant experience the next time you are out doing some RA sourcing for your FBA business.

Again, I do want to mention that there are a few stores out there (Target and Kohl’s come to mind) that are not reseller friendly. In these types of stores, you could still discreetly make purchases in small amounts, but you wouldn’t be able to use your tax exempt certificate as a reseller. Personally, I don’t spend a lot of time in stores that aren’t reseller friendly because I’ve found too many other stores in my area that love for me to come and buy up lots of inventory at a time.

What tips would you add to my list above? Have you found some strategies that help you have a great day of RA sourcing, tips that don’t necessarily relate to actual buying decisions but can make all the difference in your long-term success? We would love to hear from you in the comments!

If you’re ready to finally get serious about your Amazon FBA business, then I invite you to check out JumpStart Amazon: Build a Successful Amazon FBA Business.

JumpStart Amazon is a combination video course and ebook. The ebook is over 220 pages filled with the content and graphics you need to start a successful Amazon business from scratch. The video course features 5 main sections, 19 content-packed modules, and over 40 videos adding up to over 10 and a half hours of video training. This training is set up to help you build a solid foundation and then know how to find growth and success on top of the basics. This course is packed with more results-focused knowledge than any other ebook out there centered around starting an Amazon business.

Right now you can save $50 off the cost of the course for a limited time. Use the coupon code SAVE10 to save $50 today! For more information on JumpStart Amazon, click here.

Easy Way to Track your Mileage for Retail Arbitrage Trips

Am I the only reseller out there who has ever done a great day of retail arbitrage and forgotten to write down my mileage?

I am? Really? Hmmm. I thought surely I wasn’t the only one who’s done this before.

OK, thanks for finally admitting it. You’re just like me…you don’t always remember to track the tiny details of your Amazon FBA business without a little assistance.

Tracking your business mileage may seem like an inconsequential part of your Amazon business, but in reality those miles can really add up over the course of a year. You don’t want to miss out on a single mile if at all possible! Your CPA or tax preparer is going to want to see those miles at the end of the year, and you need a way to smoothly record all of your business trips.

What qualifies as a business trip for an Amazon FBA seller? Any trip in your vehicle where you are adding miles for a 100% business purpose, including but not limited to:

  • Driving from store to store for retail arbitrage
  • Driving to the UPS store, FedEx, post office, or wherever you need to drop off packages for shipment
  • Driving to Staples or wherever to pick up office supplies
  • Driving to The Home Depot, Lowe’s, or wherever to pick up shipping boxes
  • Driving anywhere to do errands or tasks related to your Amazon business

Over time you can save a lot of money in your business by writing off the mileage on your tax return that comes from these business trips. Always speak with a CPA or tax professional to make sure that the types of trips you are recording qualify to be written off.

In the past I’ve used a number of different solutions for recording my mileage, some of which worked better than others. I started off by carrying a little notebook and pen in my car to write my details down for start mileage, end mileage, destination, and purpose of the trip – but who knows how many times I forgot to write it down over the course of the year! I even left a sticky note on my dashboard for years with the word “MILEAGE” in all caps, in an attempt to remind myself to record my trips. If I didn’t manage to remember, I would have to go to Google Maps and try to recreate my trip and estimate my mileage.

Then I progressed to using a couple of different smart phone apps to help me record mileage, and they were just OK. They were more convenient than trying to jot things down in a notebook, but they still didn’t help me solve my main problem: remembering to record my miles!

Finally I found the MileIQ app, and I landed on an automatic solution that saves me time in recording my mileage and (more importantly!) saves me from having to remember to record it.

The way the MileIQ app works is by running in the background as you drive to different destinations throughout the course of your everyday life. The app tracks each trip you make in a vehicle, logs it, and learns how to categorize it.

The app knows when you start and stop a trip, and all you have to do is review your trips at the end of the day and tell the app whether it was a business or personal trip – all with one swipe classification. Swipe one direction for personal, the other direction for business. After a while, the app will start to learn which destinations you usually classify as business, and it will automatically classify those trips for you.

Now, I’m sure you’re wondering, just like I did at first, what happens if you’re riding in someone else’s car? Does MileIQ know the difference? No, it doesn’t know the difference and will still track the mileage even if you’re not in your own vehicle, but you can easily cancel those trips during your review of your mileage. You can also choose to turn off tracking if you want to… just remember to turn it back on when you’re back in your own vehicle.

Another handy feature of MileIQ is that at the end of each month you receive an email from them with your stats for the month. At the end of the year you can quickly download a report with your mileage numbers for the year, and all you need to do is pass this report along to your CPA and presto – you’ve efficiently tracked your business mileage without having to remind yourself to log any numbers!

I’ve been using the app for almost a year now, and the app hasn’t been a battery hog for my iPhone. It’s always running in the background, but it doesn’t affect my phone’s usage in any way.

If you go through this link, MileIQ offers a free trial of 40 drives per month and a 20% discount off an annual subscription if you decide to upgrade. The subscription comes out to a few dollars a month, but it could add up to hundreds of dollars saved by logging miles you would otherwise forget.

The MileIQ app has been extremely helpful for my business, and I hope you find it helpful too!

Any other MileIQ users out there? Share with us in the comments if you love the app as much as we do.

Selling Shoes on Amazon FBA – Should You Do It?

Many of you know that Rebecca and I are a team when it comes to our Amazon FBA business. While I mainly focus on retail arbitrage and wholesale sourcing, she is the specialist when it comes to online arbitrage… and specifically sourcing and selling shoes on Amazon.

Since Rebecca has such a wealth of knowledge about sourcing and selling shoes, I decided to sit down with her and record a Q&A interview video focused on the biggest lessons we learned when we first started selling shoes on Amazon.

In the video below, you’ll learn:

  • Why we added shoes to our Amazon business model
  • How adding shoes impacted our Amazon FBA business
  • How shoes helped our ASP increase substantially
  • What the competition is like in the Shoes category
  • Why brand restrictions in shoes don’t have to be a problem for FBA sellers
  • How selling shoes has changed our lives
  • Why we choose to source shoes via OA instead of RA
  • How sales ranks of shoes are different than most other categories
  • … and more!

Enjoy! Leave us a comment below the video if you have a specific shoe question and we’ll see about addressing that in a future blog post or video.

Want to learn more? Rebecca and I recently hosted a FREE webinar all about how to get started with selling shoes on Amazon and added it to our YouTube channel. Just follow the link above to see the webinar in its entirety.

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!

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If you’re looking to learn more about how to make smart sourcing decisions while doing retail arbitrage, 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

Overcoming Your Fear of Leaving with an Empty Shopping Cart

Empty Shopping CartWe’re well into our second round of blog posts in our series on Overcoming Your Amazon FBA Fears. If you want to catch up on the previous posts, click here to read through them.

Today we’re going to discuss a fear that can strike deep in the heart of anyone who spends time doing retail arbitrage (RA). Sometimes the fear can strike as soon as we walk through the doors of a retail store. Sometimes it takes a few minutes into scanning the clearance aisle before we feel it creeping in. Other times it can mess with our heads after an hour or more spent scanning items, and it can cause us to throw our sourcing parameters out the window and start making ridiculous choices.

It’s the fear of leaving a store with an empty shopping cart.

No one who does RA likes to spend 30 minutes, an hour, two hours in a store scanning items and come up empty. We can feel like the time has been wasted or that we are inadequate as resellers. It’s easy to start thinking that the problem must be with me, that I am not good enough to find something to resell in this store.

While it’s true that the more you scan the more you can find and the longer you’ve been in the business the more quickly you’ll be able to load up a cart, we all need to remember that there are days when the stars just don’t align and we can’t find anything worth buying in a store. Sometimes you hit home runs. Sometimes you strike out. It’s all part of the game.

Everyone has a different business model when it comes to Amazon FBA. When you head into a retail store (or garage sale, thrift store, online store, wholesale marketplace, etc), you should know your business’s unique buying parameters: the categories you’re interested in, your maximum buy price, your minimum sell price, your expected return on investment (ROI), and your maximum sales rank percentage per category. In certain categories you will have other criteria as well, including number of sellers, number of reviews, or number of variations.

You should set up these parameters well before you head into a store so that you can make the best decisions possible for your business and so that you are equipped to handle just such a situation as the empty cart scenario.

Here are 3 truths to remember when you are tempted to buy something, ANYTHING, rather than leave a store with an empty cart:

burning_money11. You don’t want to waste your money.

If you spend your capital on items outside your sourcing parameters, you are using up capital you might need later that day or that week. You don’t want to buy items outside your parameters and then not be able to buy that amazing home run at the next store because you ran out of money.

shutterstock_373325772. You don’t want to waste your time.

It may seem like you’re wasting your time by scanning for an hour and then just leaving the store empty handed, but that’s the short sighted way of looking at this situation. Think about how much more time you will waste by not just walking away. You will waste the time spent arguing with yourself that it’s OK to forget your sourcing parameters. You will waste the time standing in line to check out with your less-than-stellar purchases.

And then for weeks and months you could potentially be wasting time dealing with dead inventory at the FBA warehouse. I’ve found that often times the items I had to convince myself to buy in order not to feel like a failure at RA are the exact items I regret buying 8 months later when no amount of repricing will get those suckers to sell. Then I have to spend more time and mental energy deciding whether to remove the items or destroy them to avoid long term storage fees. Why didn’t I just walk away in the first place?!

IMG_15713. You don’t want to fall into the comparison trap.

If you spend any amount of time in Facebook groups for Amazon sellers (and I recommend you do join some groups for the camaraderie and education; ours is found here), you will see that some sellers like to post pictures of their latest RA haul: a receipt stretched out for yards, multiple shopping carts attached in a train, the back of a van packed to the ceiling with shopping bags. These photos can be inspirational, but they can also come back to haunt us when we we are standing in the store aisle with an empty cart.

comparison-is-the-thief-of-Please, please do not compare yourself to any other FBAer when you are sourcing. You don’t know what their parameters are, you don’t know how far in debt they may be in order to make those purchases, you don’t know if that inventory is going to sit languishing on a warehouse shelf never selling or selling at a loss. Please do not spend one moment comparing yourself to anyone else. Do not be discouraged by walking out of a store with an empty cart. It does not mean you weren’t successful at sourcing. It means you were wise in your choices.

I hope these truths have helped you understand how you can fight the fear of the empty cart. It’s my desire for you to have a successful Amazon FBA business and be prepared with the knowledge you need in various sourcing situations. Next time you’re in a store and can’t find anything to buy, no matter what you scan, know that you need to stick with the sourcing parameters you set up ahead of time. It’s OK to walk away. It’s OK to leave an empty cart. Move on. You have better buys around the corner.

 

Overcoming Your Fear of Buying High Ranked Items

Fear of High Ranked ItemsI’m like any other Amazon FBA seller out there – if I could source and sell only low ranking, fast turning items at 100% ROI (return on investment) or higher, I would choose to do that every day, all day. That’s what we all want to do, right? Maximize our ROI and maximize the speed with which we get that return back in our bank account.

Today I want to share with you 5 times that I don’t shy away from buying high ranked items to resell on Amazon. Through careful research and critical thinking, it is possible to turn high ranked items into big profits on Amazon FBA. In some instances, you don’t have to fear that a high ranked item lacks potential value for resale.

First, let’s talk through a few points related to sales rank so that we can get on the same page for the rest of the conversation:

  • Product DetailsThe sales rank (also known as BSR for “best seller rank”) of a product on Amazon is number that represents a snapshot in time of how recently and how many units an item is selling compared to other products within the same Amazon category.
  • A low sales rank means more sales. A #1 best seller is selling really well.
  • A high sales rank means fewer sales.
  • Low ranking items are more likely to sell faster than high ranking items.
  • Screen Shot 2014-12-11 at 11.20.05 AMSales rank is relative to the number of items in a category. A rank of 1 million in books is in the top 2%, which is very different from 1 million in toys, the top 15 or 20%. (Be sure to subscribe for our free sales rank chart in your email inbox every month, so you can keep track of the sales ranks for each Amazon category.)
  • High sales rank might mean fewer sales, but don’t skip over one crucial piece of information in that statement: An item with a high sales rank has had sales. If something sells once, it could potentially sell again.

So back to our topic for today…here are the 5 times you don’t need to be afraid of buying high ranked items to resell on Amazon:

1. When an item’s sales price is artificially high

Many times when an item on Amazon is priced artificially high,the sales rank also becomes very high. By artificially high, I mean those items that you pick them up, you scan them, and your jaw drops at how incredibly high the sales price is. I know, that’s not a very specific definition.

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You can get a clearer definition of an artificially high sales price by looking at the CamelCamelCamel or Keepa data for an item. If the historical data for an item shows that the sales rank is much lower when the item is priced much lower, then you know that the current high price is artificially high. Customers aren’t willing to buy it at the higher price, and it may or may not ever sell again at that high price. If I can source the item at a low buy cost and still make a good ROI by lowering the sales price back into a reasonable range, I am not afraid to buy this type of high ranked item.

2. When an item is out of stock on Amazon

Screen Shot 2015-09-14 at 5.43.57 PMAgain, the longer time passes from an item’s last sale on Amazon, the higher the sales rank of that item will go. If an item is out of stock or “currently unavailable” on Amazon, the sales rank will continue to creep upwards until it might eventually go back to N/A or zero sales rank. If I can source an item with a high rank that is currently unavailable on Amazon and the data on CamelCamelCamel shows that it was once selling at a good rank and price, I will buy that item in a heartbeat!

3. When Q4 is approaching

CCC Q4The closer it gets to Q4, the more I’m willing to expand my sales rank parameters when sourcing for Amazon FBA. Sales velocity during Q4 increases to such an extent that higher ranking items will sell at a faster rate than they will during other times of the year. A toy that sells once a month throughout the rest of the year could sell once a day during Q4. Once again you will want to look at CamelCamelCamel for the historical data in Q4 of previous years to see if you can expect the sales rank to pick up at that time of year.

4. When the product page needs improvement and it’s worth my time to improve it

116_1409831933There are some really crummy product pages in the Amazon catalog. Sometimes the reason an item has a high sales rank is because the picture stinks, the title is awful, the product description is nonexistent, or the keywords are pathetic. One or two little improvements can make a huge difference in how quickly a product will sell on Amazon. For an outstanding resource on creating and improving Amazon product pages, check out Amazon Advantage by Karon Thackston.

The key in making a smart sourcing decision in this situation is to decide if it’s worth your time to attempt to make those improvements. Sometimes a product page can be easy to change, and other times it can take a lot of back and forth with Seller Central to make the change. Sometimes you need to submit multiple photos and screen shots in order to get approval for a change. If you find a high ranked item with an outstanding ROI or you find multiples of an item that will bring you a hefty profit, go for it with making those product page improvements! (If it’s a one-off item with low ROI, I would pass.)

5. When I can source the item for free

If I don’t invest any money in an item and I only have one that item to sell, I will only need to pay pennies per month for storage at the Amazon warehouse. I’m willing to wait it out for these type of items to sell if their rank is high.

Note: I do not send in multiples of high ranked items because I want to avoid long term storage fees.

Hopefully these 5 scenarios have given you some ideas of high ranked items you should not be afraid of finding while you’re out sourcing. I want to emphasize that in general I prefer to source low ranking items; the scenarios above are exceptions to my usual sales rank parameters.

Also, many people ask what I consider to be a “good” sales rank for FBA sourcing and, conversely, what would constitute a “high” sales rank. This is a question that each seller needs to decide for themselves based on their experience, their available capital, how quickly they need to make their money back, and several other factors. Some sellers like to stay in the top 1% of sales rank for a category. Others prefer 3% or 5%.

Do you have any other scenarios you would add to our list above? Are there other times that you would buy a high ranked item to resell? Let us know in the comments!

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Sales rank is easily the most misunderstood aspect of selling on Amazon. What is a good sales rank? What does a sales rank of zero mean? What do I do with sales rank for sub-categories?

Why does sales rank have to be so confusing so much of the time?

I’m here to tell you it doesn’t have to be that way! You can finally get the clarity you need on the issue of understanding Amazon sales rank numbers. We at Full-Time FBA have launched a mini-course called The Reseller’s Guide to Sales Rank: Understanding Amazon Best Sellers Rank for Maximum Profits. The mini-course is a combination ebook (30+ pages) and video course (almost 2 hours). 

Check out The Reseller’s Guide to Sales Rank mini-course to see how you can master the concept of best sellers rank and be on your way toward smarter sourcing decisions for your Amazon FBA business!

How to Read & Understand Keepa Graphs

Keepa TutorialHopefully you enjoyed our earlier blog post (with screen capture video) introducing the Amazon price tracker CamelCamelCamel. We use CCC throughout each day as we work on our Amazon FBA business, whether it’s out sourcing retail arbitrage, at home doing online arbitrage or wholesale research, or in repricing our inventory.

Keepa is another great tool that, when used by itself or in harmony with CamelCamelCamel, can provide you with the information you need to make smart sourcing decisions. Toward the end of this blog post I’ll show you a video walking through how to understand these graphs directly on the Keepa website.

Take a look at a Keepa graph for a product on Amazon.

Screen Shot 2016-05-05 at 12.36.58 PM

At first this graph can look like nonsense – just a lot of blue and green squigglies with some orange and white shading, and then a few black lines and dots thrown in for good measure. But all of these colors and lines will make sense to us shortly.

If you look to the right of the graph, you’ll see a box with a key to the colors on the graph:

  • Amazon = orange
  • Marketplace New = blue
  • Marketplace Used = black
  • Sales Rank = green

Screen Shot 2016-05-05 at 12.39.53 PMBelow this key, there’s a list of date ranges where you can select the period of time you wish to look at: day, week, month, 3 months, or all the data Keepa has ever tracked on this item.

Along the left side of the graph are dollar amounts, with the lowest amount at the bottom and the highest at the top. Along the bottom of the graph are the dates you have selected for the graph, with the most recent date on the right and the oldest date to the left. Along the right side of the graph are the sales rank numbers, with the lowest at the bottom and the highest at the top.

You can click to remove each of the sets of data in the color-coded key to the right of the graph. If you click Amazon, Marketplace New, Marketplace Used, and Sales Rank, you’re left with a plain white graph with no lines or shading.

Screen Shot 2016-05-05 at 12.43.55 PMIf you click to add back the Amazon data, now you will see orange shading that indicates when Amazon has had the item in stock. If the area is orange, Amazon is in stock. Wherever you see white gaps on the graph, Amazon is out of stock. Watch what happens to the graph when you click on the different date ranges to show the bigger picture of how often Amazon is in or out of stock on the item.

If you move your cursor over the orange shading, the graph will have a small box that pops up at the top of the graph to tell you Amazon’s price and a box that pops up at the bottom to tell you the date. As you slide your cursor across the graph, you can see where the price goes down or up over time.

Screen Shot 2016-05-05 at 12.41.58 PMIf you click to take all of the pricing data off the graph, you’ll see a green line come up on the graph to show the changes in sales rank over time. This data is presented the opposite of CamelCamelCamel – notice that the higher sales rank number is at the top of the graph, lower number at the bottom. Instead of an uptick in the graph to indicate a sale (like on CCC), the Keepa graph has a dip in the graph to indicate that the sales rank has lowered when a sale occurs. Be sure you make the mental shift on the sales rank graph when you go back and forth between CamelCamelCamel and Keepa.

Be sure to check out this screen capture video we made to show a basic walk-through of how Keepa works. Also, don’t forget to subscribe to the Full-Time FBA YouTube channel for notifications when we add new videos (1-2 times a week).

I want to encourage you today if you’re making sourcing decisions without using historical sales rank and pricing data from Keepa or CamelCamelCamel — there is a better way to buy Amazon FBA inventory! You can make smarter sourcing decisions. Your business will hugely benefit if you take the time to learn how to use both Keepa and CamelCamelCamel.

Book & DesktopThis blog post is just scratching the surface on what I can teach you about Keepa. To find out everything there is to know about using Keepa to make smart sourcing decisions, be sure to check out our course, The Reseller’s Guide to How to Keepa Camel: Using Amazon Sales History to Make Smart Sourcing Decisions. This course is a combo ebook and video course where I walk you through everything you need to know to make sense of both CamelCamelCamel and Keepa in ways you’ve never thought of.

How about you? Do you use Keepa? What is your favorite thing about Keepa? I’d love to hear from you in the comments below.

The Most Harmful Amazon FBA Sourcing Decision You Could Ever Make

Harmful Sourcing Decision
Did you know that a book on Amazon ranked 10 million yesterday could be ranked 500,000 today?
All it takes is one sale. Just one. One sale of that book on Amazon could change the sales rank drastically overnight.

Would you buy a book ranked 10 million on Amazon to resell? Would you buy a book ranked 500,000 to resell?

I know there are lots of other factors at play in how you might answer that question, but my point in asking it is to get you to look at the sales rank. You view a book ranked 10 million much differently than one ranked 500,000, right?

Yet every day many, many Amazon FBA sellers are making their sourcing decisions based on today’s sales ranks and low prices. They find a book ranked 500,000 and snatch it up, without checking to see that it was ranked 10 million yesterday. Or maybe it’s a toy ranked 100,000 that was ranked 1.5 million yesterday.

There are two main reasons why you shouldn’t base your sourcing decisions on today’s sales rank and pricing data:

  1. Amazon changes their prices often.

LC_OFF_Body_NLPAmazon is known to change their prices across their website 2.5 million times per day. That’s just Amazon’s prices – that doesn’t include 3rd Party seller prices, which are also being changed constantly throughout the day with repricers. Now, Amazon has hundreds of millions of products, and they’re changing those prices 2.5 million times per day, which is mind blowing if you try to think about what that means. The low price on items also change throughout the day when a seller sells out of an item and the low price bumps up to the next seller. If prices are changing constantly on Amazon, why would you make a sourcing decision based solely on this one snapshot in time of the current low price?

  1. Amazon updates sales rank often.

Seinfeld Scene It RankAmazon recalculates their sales ranks every hour. That’s 24 times a day that sales ranks change on Amazon! If I’m looking at an item to resell, it’s too much of a gamble to base my buying decision on what the sales rank looks like on this one hour of this one day. The current sales rank is just a snapshot in time of how this item has recently sold. I need to make my decisions based on broader information than this one snapshot.

Whether you are in a store doing retail arbitrage or you are at your desk doing online arbitrage or looking at a wholesale catalog, you need more information than this one snapshot in time. You need more than just the current low price and the current sales rank in order to decide if you want to buy 1 of an item, 10 of an item, or 100 of an item. Your hard-earned inventory money is at stake here! You want to make your decision based on the best information available.

Making this type of decision on how to spend your sourcing money without using historical data from CamelCamelCamel or Keepa is the most harmful sourcing decision many Amazon FBA sellers are making.

I would be willing to go so far as to say that making sourcing decisions without CCC or Keepa is one of the top reasons Amazon FBA sellers quit their business. They spend all their sourcing money on inventory without looking at the historical data, the prices tank, the inventory never sells, and they throw their hands up in despair and say, “I quit! I tried Amazon, and it just didn’t work for me.” Now, there may be other factors at play, but for many resellers using CCC and Keepa could be a huge game changer in their business. They could find profitable inventory that will sell in a reasonable amount of time and won’t lower quickly in price.

I’m especially disheartened when I hear resellers saying they want to quit Amazon FBA over these types of inventory problems because this problem is so easily fixable. You can learn to read and interpret CamelCamelCamel and Keepa. The graphs can make sense, and you can use them to make smarter sourcing decisions.

CamelCamelCamel & KeepaBoth Camel and Keepa are free, easy-to-access programs that you can use on your computer or your mobile device, either in a web browser or from your 3rd party scouting app like Scoutify, ScanPower, or Profit Bandit (Amazon Seller app does not have links to CCC and Keepa, however). It only takes an extra 20 to 30 seconds (if even that!) to look at the sales rank and sales price history of an item when you’re sourcing. You can take a quick look at how often this item has sold and how it’s been priced in the past, and you can make an educated prediction about how it will behave in the future.

I want to encourage you today if you’re making sourcing decisions without using historical sales rank and pricing data from CamelCamelCamel and Keepa — there is a better way to buy Amazon FBA inventory! You can make smarter sourcing decisions. Your business will hugely benefit if you take the time to learn how to use these powerful free resources.

Book & DesktopTo find out how to use both CamelCamelCamel and Keepa to make smart sourcing decisions, be sure to check out our brand new course, The Reseller’s Guide to How to Keepa Camel: Using Amazon Sales History to Make Smart Sourcing Decisions. This course is a combo ebook and video course where I walk you through everything you need to know to make sense of both Camel and Keepa in ways you’ve never thought of.

How about you? Do you use CamelCamelCamel or Keepa? Do you have a favorite? What are you favorite things about Camel or Keepa? I’d love to hear from you in the comments below.