Q1 Profits: 5 Tips for Maximum Profits in the New Year

The new year is under way by now, and hopefully you’re still enjoying a feeling of success from last year’s Q4 sales and profits. Many of us Amazon FBA sellers have a tendency to put so much emphasis on the strength of Q4 that we neglect the amazing profit potential of Q1 (the months of January, February, and March).

In order to get you started off on the right foot for the rest of this year, I want to give you my top tips for Q1 success:

1. Feed the beast.

“Feed the beast” is a phrase Amazon FBA sellers use to mean keep sending inventory to the FBA warehouses. Now that the buying frenzy of holiday sales is over, it’s tempting to stop sending in inventory – but for Q1 success you want to be sure to keep sending in new inventory. The more items you have at the warehouses, the more potential you have to make great sales. Now is the time to stock up on all your replenishables that you sold out of over Q4, and now is the time to start finding fresh inventory for the new season.

2. Keep up with your returns.

January can sometimes feel like “Return-uary.” Be sure and check out this post for how to deal with the uptick in returns that comes following the uptick in sales over Q4. You don’t want to miss out on reimbursements you’re due from Amazon, so check out this blog post for how to handle when customers don’t return items on time. I also have a blog post about the six steps you should take when a customer returns an item, which should help you stay on top of your returns in Q1 and throughout the year.

Note: The holiday return window is open until January 31, giving customers an extended amount of time to return purchases from Q4.

Also note: The percentage of returns you will receive during this time period is typically the same as throughout the rest of the year. It may feel like you’re getting a higher percentage of returns than usual during January, but in actuality the number of returns is higher only because the number of sales during Q4 was higher. Don’t freak out because of increased returns – instead, you should celebrate the increase in sales!

3. Adjust your sales expectations.

You really have to adjust your mindset during Q1 so that you have correct expectations after the excitement of Q4. It’s easy during the height of the Q4 buying season to get used to seeing tons of shipment notifications from Amazon or seeing higher numbers on your daily sales graphs.

We all have to shift our expectations back to our typical range during Q1, or we can find ourselves getting discouraged when we have a “slow sales day.” I put that phrase in quotes because what you now consider a slow day was probably a normal day just four or five months ago. This is a normal phenomenon and nothing to freak out over. Instead, just keep following tip #1 above (feed the beast) and work at building your FBA business, rather than fretting over whether sales are too slow now.

4. Adjust your sourcing expectations.

Another mindset shift you need to make during Q1 is to adjust your sourcing parameters back to where they were before the increase in sales velocity during Q4. Many times sellers will expand their sales rank parameters or other qualifications to buy inventory to resell during Q4 that they wouldn’t typically buy in other times of the year. When you are sourcing inventory in January to sell during Q1, be sure to revisit your sourcing parameters and only buy inventory you expect to sell well during the non-Q4 months of the year.

My greatest tip for sourcing the right inventory for the right time of year is to use more than just the current sales rank and pricing for your sourcing decisions. The current sales rank is only a snapshot in time of how that item has been selling recently on Amazon. You need to be sure you’re looking at sales rank history and pricing history to make good sourcing decisions during Q1. You can find that information by using the free tools Keepa. For my free tutorial on this tool, check out How to Read Keepa Graphs.

5. Always be looking ahead.

If you want a successful FBA business for the long-term, you want to move beyond a reactionary business strategy and develop a proactive business strategy. You want to make sure you’re looking ahead to the next season, the next quarter, rather than only dealing with what is one week ahead of you.

For instance, I’m typing this blog post in the in January, but it’s already time to be fully stocked up for Valentine’s Day items. The next thing you know, it’s going to be time for St. Patrick’s Day, Spring Break, March Madness, and on and on and on. Your best opportunity to make the biggest profits with your Amazon FBA business is to be thinking ahead and get stocked up well ahead of time for the products folks will be buying during each season in Q1 and beyond.

If the idea of planning ahead seems really daunting to you, then there is no need to worry because I’ve already done all the hard work for you! If you’re looking for a proven plan to maximize your profits all year long, then check out my course, The Reseller’s Guide to a Year in FBA: a Month by Month Guide to a Profitable Amazon Business.

Imagine knowing exactly what to do in your Amazon FBA business every month of the year. Imagine what it would feel like knowing you were not missing out on any of the opportunities that will come your way.

Take action now and get The Reseller’s Guide to a Year in FBA: A Month by Month Guide to a Profitable Amazon Business. The package includes a 240-page ebook, monthly live webinars throughout the year, over 12 hours of video training, and 4 special bonuses.

So what about you? How are you making sure that you start the new year off on the right foot in your Amazon business? I’d love to hear from you in the comments below.
*This post has been updated for 2020