The Biggest Amazon FBA Sourcing Mistake You Can Make

Sourcing MistakeAs Amazon FBA sellers, we have all made this sourcing mistake at one point or another. Especially as we’re just getting started in the business, without much experience to give us confidence.

Typically, we start out selling items that are familiar to us. Many sellers come to Amazon as book lovers, looking to get profits for the extra books around the house. Others get their start in FBA when they have growing kids with an abundance of toys around the house and a familiarity with the popular characters for certain age groups.

We start off selling what we know. And what we know is the perfect place to start.

But the biggest mistake I can make the further I go in my FBA business is this: to source as if I am the Amazon customer. 

Here are a few examples of thoughts we can entertain that will shut us down as we’re sourcing:

  • “Why would anyone ever buy this item?”
  • “Why would anyone ever pay this price for this item?”
  • “Why would someone buy this on Amazon would they could just go down the street to get it at the grocery store?”

Your sourcing progress will come to a halt if you continue to source as if you are the customer. You have to change your perspective, think like an Amazon customer. Now, Amazon has millions of customers, so you can’t think like every single one of them. But you can get out of your own brain and do a few things to start thinking less like an Amazon seller and more like an Amazon customer.

9abc344489ef43c0203642845017a0701. Expand your categories.

If you have been selling for a while (by “a while” I mean a few months) and feel like you’ve got a good foundation in toys or books, try branching out into some new categories. People come to Amazon to buy just about anything, so as you’re out in the retail world, thrift stores, or garage sales, expand your thinking to include different types of items as potential inventory.

There’s no need to get hung up trying to get ungated in a bunch of new categories before you start expanding your inventory. Arts and crafts, home and kitchen, sports and outdoors are all categories that don’t require Amazon approval for new sellers, and you can find inventory for these categories in a ton of places.

We hear sellers say all the time, “I went to [fill in the blank with store name] and looked at the clearance, and there was nothing there for me to buy.” Granted, sometimes this may actually be the case, but often the problem isn’t that there is nothing to buy — the problem may very well be that the seller is overlooking items that don’t fit in the categories he normally sells.

Selling items in the categories we are unfamiliar with can be uncomfortable for some people, but don’t let the fear of branching out to new categories hold you back. Get out of your regular pattern, out of the regular aisle where you shop, and scan something completely new and different.

Carl-Richards-false-assumption-sketch2. Don’t make assumptions.

Last spring we found a $3 item on clearance. It’s oversized. It’s basically a piece of plastic with a sticker on it. No moving parts. No fancy decorations. It’s just the kind of thing you would naturally skip over as you’re scanning. But we scanned it just in case and found that it had a low rank in the toys category. Not only that, but it was selling for over $40 at the time. Buy for $3, sell for $40 — that’s awesome ROI! Over the next several months we bought dozens of this item in various colors for $3 to $7, and we sold them for $40 to $60 each.

We’re certain that one reason we’ve sold this item so well for so long is that most other resellers skip over it thinking, “It’s just a piece of plastic. No one’s going to pay $50 for that thing.” But customers know that the item is hard to find in stores and Amazon is the easiest place to get it. It’s worth it to those customers to pay that amount for it.

barcode-scan-icon3. Scan everything.

If you have time, scan everything. Just do it. Scan to see what’s in the Amazon catalog, what prices things are selling at, what items have a low rank. If you don’t have time to do that, maybe you have the money to hire someone to do it for you, to just scan an entire aisle in a store and see what’s out there. You might find some amazing replenishable inventory just by taking the time to scan everything on an aisle, even at full retail prices.

81E6gtwEqXL._SL1500_4. Don’t only focus on hot items.

Star Wars and Frozen are not the only toys out there. People are making big profits on items that are off the beaten path. Don’t get stuck always chasing the next big trend, looking for the toys that everyone else says are the hot items of the day. These popular items may go up in price quickly, but unless you’re the first one in as a seller and can sell out quickly, you’re likely to be stuck with inventory that has a growing number of competitors and a sharply dropping price.

Not every Amazon customer is looking for the most popular toy out there. You can be the seller who brings unique, hard-to-find, quality inventory to the Amazon market, and customers will flock to you.

CCC Q45. Check the Camelcamelcamel data.

When you’re out scanning all these new items in new categories that you’re not used to, be sure to check the price history and sales rank history on Camelcamelcamel or Keepa. You may look at the Amazon product page for an item and doubt that a customer will pay that amount of money. But the history on Camelcamelcamel doesn’t lie. If the low price for an item is steadily high and the sales rank stays consistent (or has consistent peaks), then that item really does sell for that price. Even if you doubt it. Even if you personally wouldn’t buy it. Even if you personally wouldn’t pay that much for it.

Do your best to get out of your own brain when you’re making sourcing decisions. Do your best to think like Amazon customers. If you do, you’ll increase your inventory level, lower your competition, and make strides in growing your FBA business.

Do you struggle with your mindset when it comes to sourcing inventory? Do you have any strategies you would add to this list? We would love to hear from you in the comments!

18 responses to “The Biggest Amazon FBA Sourcing Mistake You Can Make

  1. Hi Stephen,

    Thank you for another great post about selling on Amazon. I am a seasoned seller and every once in awhile it is good to go back to the basics. I always learn at least one thing new from your posts. Thank you for taking the time to write about your experiences, they have been very motivational.

  2. Hey Stephen,

    What are your thoughts on buying retail items that are not in the Amazon database? Is it worthwhile to create a new product page for a RA flip?

    • John, great question. I like to create new Amazon listings if either:

      A. The ROI on what I think I can sell the item for is worth my time to create a listing, or

      B. There are enough multiples of that item that the combined ROI of selling the items would be worth my time to create the listing.

      I like to research eBay and Google to see if it’s selling on other platforms before I try and create a listing and sell it on Amazon. Also, I’ll usually only create listings of popular brand names or keywords that I know people are searching for. I did a blog post before all about overcoming your fear of creating listings, and that could help you out too.

  3. Great tips, Stephen! I’ve been working to look at different categories since I started my business last November. First attempts at getting ungated in grocery and health/beauty didn’t work, so I’ve been focusing on the things I can sell currently.

    Probably my favorite sale for an “out of place” item was the end of November. I was at the ReStore, which is a salvage shop that specializes in home furnishings, i.e. countertops, sinks, building materials salvaged from previous homes but still in usable condition. I looked at their wall of small items, which typically includes things like light switches, hooks, etc. In the midst of it was a Weight Watchers Points calculator. It was scannable through the plastic bag, so I saw on Amazon that while there was a newer model, this one had a reasonable rank and price. I thought “well, people might be joining WW in January, why not?” so I bought it on 11/28, for $8, and sent it in 12/1 with other items.

    I was wrong, the calculator didn’t sell in January. It sold December 10 for $45, and I netted $27.50. Pretty exciting for a newbie who stretched beyond the toys and books!

    Thank you for your generosity in sharing FBA experience and and strategies with others. I am blessed to learn from you.

  4. Thank you for this post! I am a fairly new seller (September 2015), and I am trying to “expand my horizons” in sourcing. I recently purchased a tech-type item and I had no idea what it really was. It was not restricted, had a great rank, and was selling at about 100% ROI. It was a little pricy so I didn’t buy very many. I wish I had bought more! They sold almost as soon as they hit the warehouse. Gives me confidence to keep expanding.

  5. Great post guys. Good to open up your eyes a little more even after doing this for a while.

  6. THANK YOU for this and all you share with those of us who are still newbies! Stepping out of my “comfort zone” has also been very profitable for me. One day, I couldn’t find any deals in my comfort space and I wandered into the auto/tools aisle. It was a sourcing gold mine! I would have never guessed so many people wanted to buy toilet repair kits on Amazon!

  7. Great post! Thank you! I am a newbie (11/15) and have just started branching out beyond media (95% books) and sent my first toy shipment this week. I’m waiting on a shipment of non media items to arrive too. One question I have is in regard to camelcamelcamel. I don’t know why but it always freaks me out when it pops up on my Iphone when I’m using Profit Bandit to scan. I don’t understand what it is or does or how to use it and I was wondering if there is a post or youtube or webinar somewhere that you could direct me to so I can use it as you suggest in this post. I would like to stop being afraid of it. It reminds me of a jack in the box which was a toy that freaked me out as a kid. I still don’t like clowns either.

    • Kay, you’re cracking me up… but I want you to know that it’s very common among Amazon sellers to be a little weirded out about the CamelCamelCamel graphs. I hear it all the time. But, I do think it’s something that is a fear worth overcoming. I don’t currently have any official training about understanding Camel or Keepa graphs (but stay tuned for something special coming soon), but I did do a little CamelCamelCamel walk through on one of my previous Q&A sessions. If you go to this YouTube video and jump to the 17 minute mark, then you’ll hear me explain about CCC, and see me walk you through what a basic CCC graph looks like and how to read it.

  8. Thanks for this great post and the video link to the snippet about CCC. Quick question? What does a steady line on CCC mean? Like if an item is at 40,000 all the way across the graph. And are all items with a rank of zero not worth looking at for selling? Thank you for all you do Stephen.

    • If there is a straight line, that usually that means that CCC stopped “mining” for data for that item for that time period. CCC can’t look for the data on every single item in the Amazon catalog, so they keep looking for data on items that people are actually looking for, so if CCC doesn’t get a inquiry for an item, they may eventually stop getting the data for that item (until someone asks again, then they start up again).

      As for items with a zero sales rank, I have a whole blog post on what a sales rank of zero means. I share my thoughts about zero sales rank and which items I’ll buy even though they have a zero sales rank.

  9. This was a great article Stephen. Thank you and God bless!

  10. Great info as always Stephen, keep up the good work, T-rex

  11. Thanks for the great info! You mentioned the one item had several different colors. How does this work? I have kept away from sending in anything that could come in different colors with the fear that a customer cannot choose the color and may be dissatisfied with what they receive.

    • Rebecca Smotherman Rebecca Smotherman

      Hi Cindy, thanks so much for commenting! That’s a good question about colors. The particular item we mentioned above is in the toy category, so each different color of the item has a separate product page with the color reflected in the title — for example, “Fancy Plastic Toy, Yellow” or “Fancy Plastic Toy, Red.” That way the customer knows exactly what they will receive. On some toys, the title on the listing will be “Fancy Plastic Toy, Colors Will Vary,” so the customer knows they don’t get a choice. You just have to make sure when you’re buying something to resell that comes in different colors, your item must match the exact color in the title, description, and photo on the Amazon product page. (Colors and sizes get a bit more complicated when you’re talking about shoes and clothing, but that’s the basics for toys, kitchen, home, etc). Hope that helps!

  12. My wife and I are brand new to FBA (and all things eCommerce). We recently purchased the Proven Amazon Course by Jim Cockrum. We’ve been going through the various training videos. We were planning on doing our first RA trip tonight. There is a Target, Walmart, Big 5, and Big Lots near our house. We’ll see how it goes. One thing I’m a little concerned about is saturation. I know some people say there’s always enough to go around. But I’ve read other people saying that they’ve tried RA with zero results. I don’t know if they just gave up or didn’t try very hard. But I was curious what your thoughts were on RA and how realistic it is to make money (even good money) doing it? Is the Amazon market too saturated for new FBA sellers to really have a chance?

    • Russ, this is a great question and I’ll do my best to summarize, because I think I could maybe do a whole blog post on this topic… But here goes.

      Yes, I totally think that someone can make really good money focusing on RA. I think it’s good to expand to OA once you “get into a groove” with RA, but RA is the best place to start really building up some good income.

      I’m not sure why others have “tried it with zero results” but I can only assume that they went into RA with a scarcity mindset, and didn’t work very hard at all. Too many people are sold a lie that selling on Amazon is a “passive” income and that it’s easy. Sure, there is some part of the business that are passive, but (like anything else in life) takes hard work to be done right. The ones that succeed have an abundance mindset that there are more items out there to source than they have money for… and that’s where I am. It took a little while to get there, but I’m now at the place where I will run out of money before I run out of profitable inventory to buy.

      Yes, there are more people coming into the business, but there are people who “tried it and it didn’t work” and are leaving, too. It’s the mindset that is the deal breaker when it comes to success or failure in this business. The abundance mindset and the growth mindset will help keep you pushing past the failures and speed bumps along the way.

      I hope this helps, and I’ll probably do a complete blog post on this topic sometime in the future. Thanks for your question!

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