The Most Harmful Amazon FBA Sourcing Decision You Could Ever Make

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, in every Amazon category, many Amazon FBA sellers are making their sourcing decisions based only on today’s sales ranks and today’s 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 130,000 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 updates prices millions of times per day.

Amazon is known to change their prices across their website over 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 over 2.5 million times per day, which is mind blowing if you try to think about what that means.

The current prices 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?

2. Amazon updates sales ranks 24 times per day.

Amazon 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 sourcing decisions based on more information than just this.

The Right Information

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 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 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 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.

Keepa is the Key

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 Keepa. The graphs can make sense, and you can use them to make smarter sourcing decisions.

Keepa is an easy-to-access program 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. (Note: the Amazon Seller app does not have links to Keepa).

It only takes an extra 15 to 20 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 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.

How about you? Do you use Keepa? What are you favorite things about Keepa? I’d love to hear from you in the comments below.
*This post was updated for 2020

You know how I use Keepa? Not only does Keepa show me the sales rank history and pricing history, it also shows me other important data, like buy box history, used item history, Amazon in stock history, competitor’s stock levels, and so much more.

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 Keepa: Using Amazon Sales History to Make Smart Sourcing Decisions.

This course will walk you through everything you need to know to make sense of Keepa in ways you’ve never thought of. With this course, you’ll make better sourcing decisions, better pricing decisions, and you’ll grow your Amazon business to the next level by selling your inventory faster and at higher prices!

I can’t wait to share all of this info with you in our updated course, The Reseller’s Guide to Keepa.