Today we talk about the nuts and bolts of increasing your average selling price (ASP) to create long-term success in your Amazon FBA Business. We share practical tips on how to progressively raise your ASP through setting a minimum selling price parameter, selling multipacks or bundles, and sourcing higher-priced items.
These changes require a different mindset when it comes to sourcing and pricing. Drawing from our own experience, we’ll equip you with some amazing tools to raise the bar and find longer-term success with higher profits. Listen today for all the details.
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Key points from Episode 122:
- Why you have to be very intentional about setting a minimum selling price parameter.
- Another strategy to up your ASP: sell multipacks or bundles.
- The difference between multipacks and bundles.
- The mindset adjustment needed to source higher-priced items.
- Why you may want to consider buying items that are higher quality or higher price in general.
- The story of how selling shoes raised our ASP considerably.
- Check a Keepa graph to see if you can expect a high price to remain high.
- And more!
Links and resources mentioned in this episode:
- How to Increase Your ASP (blog post)
- Where to find your ASP (Seller Central login required)
- Keepa (Amazon price and sales rank tacker)
- How to Read and Understand a Keepa Graph
- Wholesale Bundle System
- The Full-Time FBA newsletter
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Episode 122 Transcript:
[0:00:01.8] ANNOUNCER: Welcome to The Full-Time FBA Show. In each episode, it’s our goal to help you turn part-time hours into a full-time income, selling almost anything on Amazon. Now, your hosts of the show, Stephen and Rebecca Smotherman.
[0:00:21.2] REBECCA: Hello there and welcome to this episode of the Full-Time FBA Show, we are on episode number 122 and we’re going to be talking today about how to raise your average selling price or your ASP. We talked a little bit about last week, how we think that raising your ASP is a great idea to give you long-term success in your Amazon FBA business. This week, we’re going to get into the nuts and bolts of, well, how do you do that?
With me today to talk about that is my podcast co-host and my husband, Stephen Smotherman. Hello, Stephen.
[0:00:54.4] STEPHEN: Hey there, I’m excited to talk about raising your average selling price and some of the nuts and bolts. How to actually get that done so that over time, maybe six months from now, you can check your ASP and see like, “Oh hey, I raised my ASP 10 bucks or 20 bucks and you know what? I’m seeing the results of my disbursements and it’s an awesome thing.” So that’s what we’ll talk about today on The Full-Time FBA Show.
[0:01:19.4] STEPHEN: Last week on the show, we outlined why you should be raising your ASP. I mean, come on, it’s going to help you save a lot on your Amazon fees, it’s going to save you a lot of time and money and effort when it comes to prep and shipping and all the fees, especially with that. It gives you more wiggle room for pricing fluctuations and it’s going to raise your disbursements. That’s win-win-win-win and so I love that. Let’s talk about actually how to raise your ASP.
[0:01:43.7] REBECCA: We’re going to give you a few tips here for how to go about getting your average selling price be higher and this is an excellent episode I think for if you’re going to take notes, be sure and check out the transcript at the end if you want to refer back to it but these are some practical steps that you can take to make sure that your average selling price increases over time.
The first point that we wanted to give you is that if you’re going to raise your ASP, you need to be very intentional about setting a minimum selling price parameter. You need to only look into selling inventory that has a certain minimum selling price.
For example, if in the past up to this point, you’ve been selling items that typically have a $10 selling price on Amazon, you might look into going forward saying, “I am only going to source inventory that will sell for $12 as a minimum” or “$14 as a minimum” and this is different for every business model or for your different comfort zones. Stephen and I both have different minimums. His minimum is actually lower than mine.
I tend to look at more in the 20 to $30 range, typically is what I’m aiming for as a low point and his is a little bit lower than that. This is really your own choice here, whatever fits with where your goals are and what your business is modeled for. We kind of touched on this in the last episode as well that basically, what you’re going to end up doing is looking at, “Should I change all of my sourcing parameters at once or should I start off with a percentage of my sourcing capital dedicated to lower priced items and a percentage dedicated to higher priced items so that I can slowly transition into that new model?”
Again, this is up to each person with your comfort zone in your own business model but we would encourage you to sooner rather than later, transition all of your sourcing capital towards higher selling price items because that is a way that you are going to spend less money on fees, you’re going to have higher disbursements and you’re going to be making higher profits on fewer items that you have to sell on Amazon.
[0:03:47.8] STEPHEN: Another strategy to raise your average selling price is to focus on selling more multipacks or bundles. Multipacks are items that are sold on Amazon that are multiples of the exact same items. Instead of selling one light bulb, you’re selling a multipack of 10 light bulbs of the exact same item.
Bundles on the other hand are different items that are grouped together that all connect with a theme. For example, instead of just selling one action figure, you’re selling a bundle of 10 different action figures that are all from the same movie or television show and so you kind of bundle them together.
Now, here’s the difference: Multipacks can only be created by the actual brand, so you just find a multipack that’s being sold on Amazon, you can join that listing and sell a multipack on that listing. Bundles on the other hand, you can create yourself. There’s a whole different rule, we’ll put a link in the show notes to talk about the bundle rules but it just gives you an opportunity to instead of just selling a one-off item, you are selling multiple items on the same listing.
You’ve got one item that’s a $5 item, that’s not going to get you much money but if you do a multipack of 10 for a bundle of 10 of them together, you can sell them at a much higher price and you can actually make your good sales, make money whereas your ASP.
If you’re interested in wanting to learn how to make bundles, because bundling is a whole other world, a whole other skillset, we recommend the wholesale bundling system. You can find out more about it, fulltimefba.com/wholesalebundles and you can learn how to make bundles with wholesale items or items that you retail arbitrage and online arbitrage together. That course walks you through all of that. Selling multipacks or bundles is a great way to increase your ASP.
[0:05:29.3] REBECCA: The next thing that we want to bring to your attention when you’re looking into how to raise your average selling price is that you need to be aware you’re going to be sourcing higher priced items, higher buy cost items than you were when you were focused on those lower selling price items.
You’re going to be as you are setting your minimum selling price parameter, you’re also going to be having to raise your buy cost and you might still be able to find some really great clearance deals or some sale deals that will have a low buy cost but in general, as you’re raising your ASP, you’re also going to be having a higher investment going into those items before you can sell them.
You’re likely going to need to be looking into selling more regular priced items. If you’re doing retail arbitrage or online arbitrage and you’re used to looking for clearance items, you might need to consider looking more into the regular priced items and those are a treasure trove. When you’re first getting started, I know that clearance items are just kind of low hanging fruit in a lot of ways but regular priced items can sell really well on Amazon if you’re willing to do the work and the research to find them.
[0:06:42.4] STEPHEN: Yeah, that’s my favorite thing to sell in Amazon is regular priced items that you can find at multiple stores anywhere that all the other resellers are just walking by.
[0:06:51.1] REBECCA: Right, they’re not even paying attention to it because it just looks like all the rest of the things on the shelf. It doesn’t have that yellow sticker or something else that’s calling their attention, saying, “Scan me, scan me.” Look into those regular priced items that are going to have a higher buy cost.
You’re also going to want to consider buying items that are higher quality or higher price in general. Items that are not necessarily just small consumables necessarily, you might be looking into more clothing or shoes, other items that typically are going to have a little bit more value to them and are not as disposable for instance. I mean, that’s kind of a vague way of saying it, I don’t know how else to say it but that’s what you’re looking for, are items that are going to be selling for higher on Amazon, it might also be selling for higher in places that you are sourcing them.
One example that we like to use is the way that we raised our ASP tremendously, several years back, was that we began sourcing and selling shoes. We found that for us, those types of shoes that we were looking into, we were able to get an average selling price of around 60 or $70. That is much, much higher than what we had been used to when we were primarily selling books and toys. That can really increase your average selling price if you look into selling shoes or other similar types of items like that that are just in general, people are looking for higher quality items on Amazon.
[0:08:22.8] STEPHEN: Now, for some of you who are listening, you might be thinking, “Wow, putting a lot of money into buying an item is kind of scary. I mean, sure, I can sell it for a lot but I’m so used to buying items at a much lower price” and yeah, that’s your comfort zone but you’re not going to find any growth in that comfort zone.
I really recommend trying to find items that are costing more than you can sell, that you’ve looked at a Keepa graph, you’ve seen the pricing trends, you’ve seen the sales rank trends and you know, “This item is going to sell for much higher and I’m going to be able to make so much more selling Amazon.”
For example, there was a toy that we purchased just under $400. That was our buy cost, just under $400 but we were able to sell it on Amazon for almost $600. We ended up making $70 on that particular item and we’re able to sell multiples of them. Just that example, totally obviously raised our ASP but also put $70 in our pocket from one sale so that wasn’t a good experience and we keep looking for items like that.
Maybe not as high as $400 but if we find it and we see a Keepa Graph that shows us that we can predict the price to remain consistent and the sales rank remains really good, then definitely go for it if you have that capital available to invest in that inventory.
[0:09:36.2] REBECCA: Yeah, the $400 example is very rare but we were willing to do it because we had the data that proved, “Oh, we could sell this and make this amount of money in this amount of time. Okay, we’ll do it” but be aware that most of us are going to be looking at items that are under a $100, under $50 a lot of the times for your buy cost.
[0:09:56.0] STEPHEN: Absolutely, so those are some of the strategies that we’ve been able to use to raise our average selling price and then over time, continually raise our disbursements as well. It helped us to make more money, help us to reinvest that money into more inventory and it’s just been a really good experience. Definitely, look into how you can raise your average selling price.
If you are curious about how to figure out how to – what your average selling price is right now, be sure to listen to last week’s episode at fulltimefba.com/121 for that episode but raising your ASP, you will definitely be glad. I don’t see any downsides to raising your ASP.
[0:10:31.6] REBECCA: I mean, who doesn’t want to raise your disbursements and pay less in fees?
[0:10:35.0] STEPHEN: Exactly, so that’s it for this episode. I just want to remind you, if you want to make sure you don’t miss out on anything that Full-Time FBA puts out, be sure to subscribe to our newsletter. Go to fulltimefba.com, there will be a little thing on the sidebar where you can sign up for our newsletter, get some free eBooks and some other freebies that we send out as well as upcoming blog posts, courses that we offer, coupon codes, other free items we’ve got for you when you subscribe, so be sure to subscribe at fulltimefba.com.
[0:11:08.1] REBECCA: Thank you so much for joining us for this episode of The Full-Time FBA Show. As a reminder, the links that we’ve mentioned in this episode and the transcript can be found at the show notes for fulltimefba.com/122 because this is episode number 122. And one last thing, we wanted to be sure and give a reviewer shoutout to Tommy H, who says, “Thank you so much for putting together The Full-Time FBA Show. I started listening two months ago and I’ve caught up on your entire library of episodes.”
We really appreciate that. We hope that there are many out there who can benefit from all the episodes. If you know somebody who you think would enjoy and learn from our episodes, please be sure and share with them. We love getting reviews online whenever you listen to your podcast player but also just directly sharing and telling your other FBA seller friends about our podcast really means a lot to us.
[0:11:59.8] STEPHEN: Next week on the show, we’re going to start about a two or three-week series focused on wholesale, so wholesale sourcing, wholesale profits, things like that to buy items at wholesale prices to sell on Amazon. Next week, we’re going to start talking about the pros and cons of different wholesale sourcing strategies and we invite you to join us next week on The Full-Time FBA Show.
[0:12:21.5] ANNOUNCER: That is all for this episode of The Full-Time FBA Show. So head over to fulltimefba.com/podcast, where you will find the show notes and links from this episode. While you’re there, subscribe to our newsletter where you’ll get several free downloads of our popular and helpful Amazon FBA resources. Now, take action on what you have learned today so you can find success at turning part-time hours into a full-time income with Amazon FBA.