On today’s episode we follow up on last week’s episode, the most expensive sourcing mistake you can make with the second most expensive sourcing mistake as an Amazon seller. We go through a quick summary about last week’s episode and then quickly pivot to talking about the second most expensive sourcing mistake. This huge mistake revolves around the topic of pricing. We go deep into the number of times Amazon updates prices daily, and how automatic repricer tools play a key role in avoiding expensive mistakes. We also reveal exactly what the second most expensive sourcing mistake is and share tips on how to avoid it. For all this, and much more, listen today!
Listen on the podcast player below.
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Key points from Episode 157:
- A build-up discussion towards the second most expensive sourcing mistake you can make.
- How many times Amazon updates its prices.
- How third-party sellers influence pricing on Amazon.
- More about the automatic repricer tool: BQool.
- How you can use Keepa to help you avoid making an expensive mistake.
- Why Keepa is a must-use tool.
- The negative impact this mistake also could have on your IPI.
Links and resources mentioned in this episode:
- The Reseller’s Guide to Keepa: Using Amazon Sales History to Make Smarter Sourcing Decisions
- Use code SAVE20 to take $20 off the price of the course
- Price going up very soon (Wednesday @ midnight)!
- Keepa – Amazon Sales Rank and Price History Tracker
- How to Read and Understand a Keepa Graph
- BQool Automatic Repricer
- BQool Review – With instructions on how to get our personal repricing rules that doubled our sales the first month we used Bqool
SAVE20 coupon code expires and the price going up very soon
Have you heard about Keepa? It’s a tool (with both a free and a paid plan) that can dramatically lower the risk of sourcing inventory items that end up tanking in price. I’m sure you know how it feels to buy an item expecting it to sell for a high price only to see the price tank soon after you send it to Amazon. With using Keepa the right way, you can protect yourself from that happening!
Basically, Keepa tracks the vital data on almost every item on Amazon. It can quickly show me the sales rank history, pricing history, buy box price history, used item history, Amazon in stock history, competitors’ stock levels, and so much more. With Keepa, I can easily look at the data from the past and better know what to expect in the future when it comes to price and sales velocity.
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.
With this course, you’ll make more confident 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! Use the code SAVE20 to take $20 off the cost of the course.
Coupon code SAVE2o expires AND the price goes up in only:
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Episode 157 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.
[00:00:23] STEPHEN: Welcome to episode number 157 of The Full-Time FBA Show. Today, we’re following up on last week’s episode of the most expensive sourcing mistake you can make with the second most expensive sourcing mistake. We want to save you from making expensive sourcing mistakes, and with me to discuss this is Rebecca. How are you doing, Rebecca?
[00:00:38] REBECCA: I’m doing great. I was just wondering how many times you were going to say sourcing mistake, expensive sourcing mistake. It’s hard to say.
[00:00:45] STEPHEN: It is kind of hard to say. But I say it a lot. So yeah, the second most expensive sourcing mistake, if you haven’t listened to last week, be sure to go listen to that. So, you know what the most expensive sourcing mistake is and I probably say it a lot in that episode too.
[00:00:59] REBECCA: So, as Stephen alluded to, last week, we talked about the most expensive sourcing mistake that you can make as an Amazon seller. And that is by basing your sourcing decision only on today’s sales rank, rather than on something more substantial. Just a little quick summary, sales rank changes 24 times a day on Amazon. So, a single sale of an item can dramatically improve the sales rank. And that makes sales rank pretty deceptive, if you’re only looking at the current sales rank information. If it’s pretty deceptive, it could also end up being pretty costly if you use that information only in your buying mistake, and it could end up being an expensive mistake. You can find out more on that topic. If you want to go back and listen to last week’s episode. It was episode number 156. You can find it at fulltimefba.com/156.
[00:01:54] STEPHEN: So, the second most expensive sourcing mistake is really very similar to the number one most expensive sourcing mistake. Amazon sellers making their sourcing decisions based only on today’s price. Last week, we talked about today’s sales rank. Today we’re going to dive into prices, because since sales rank update every 24 hours, that’s 24 changes, but prices can change even more often than that. So, let’s look at Amazon alone when it comes to pricing their products on Amazon. Amazon, as a seller, updates the prices of the items that they personally sell over one million times a day. That’s right, a day. Their prices are going up and down all the time. So, for perspective, Walmart updates their prices on their website about 100,000 times a month. Amazon, a million times a day, changing their prices up and down all over. Walmart a whole lot less. So, that’s a lot of change when it comes to Amazon, just Amazon as a seller of their own products on Amazon changing their prices.
[00:02:54] REBECCA: But of course, Amazon’s not your only competition as a seller. You’re also going to be dealing with the price changes that come from other third-party sellers. And some third-party sellers are going to choose to manually reprice their inventory. But the third-party sellers who are serious about making the most profits on Amazon are using an automatic repricer and that can be kind of challenging to deal with when you’re making pricing decisions or buying decisions based on prices. We like to use the auto repricer called BQool. And we’ll put some links in the show notes about BQool and why we love it. And you’ll also find out how you can get our free personal repricing rules that doubled our sales the first month we used it.
[00:03:35] STEPHEN: It was awesome.
[00:03:36] REBECCA: Yeah, it was. It’s still awesome. So, those links will be in the show notes for this episode. But just know that third-party sellers using automatic repricers means that the price is not just from Amazon as a seller, but from all sellers, is going to be changing all the time.
[00:03:53] STEPHEN: Right. Again, for perspective, when it comes to sales rank changing on Amazon, once an hour, that’s a lot of changes. 24 times a day, the sales rank changes. But the automatic repricer that we use, BQool, updates our prices every 15 minutes. And there’s even an upgrade setting that you can choose with BQool to update your prices every five minutes. So, it’s possible that even just us, as an Amazon seller, our products on Amazon, the prices are changing every 15 minutes. So, you think about other third-party sellers with their automatic repricers, they could have it set up to change every 30 minutes, 15 minutes, 5 minutes. So, that just means prices are changing all the time. If you’re not using an automatic repricer to keep your prices competitive. I mean, you’re missing out of a lot of opportunities for sales, not just with lowering prices, but raising prices too. Your items could sell at higher prices thanks to an automatic repricer.
[00:04:44] REBECCA: But getting back to sourcing, since the point of this episode is the second most expensive sourcing mistake you can make. If you’re making your sourcing decision based only on the current price, it can be a really expensive mistake. But there’s a way around that. We talked last week are using Keepa to show you sales rank history. But Keepa, also will show you the pricing history on almost every item on Amazon. It is so cool to be able to see all of the different price history data points that you can look at on Keepa. You’re going to be able to see things like historical information on the lowest new price. You can see lowest prices for other conditions used or collectible prices.
But the one that is probably the most important is going to be looking at the Buy Box history line. You can see with Keepa, how prices are trending, whether they’re trending up or down, and especially looking at that Buy Box price, whether it’s trending upwards or downwards, is really important when you’re making a sourcing decision. So, if you don’t look at Keepa, before you source an item to sell on Amazon, you might buy an item and think that the Buy Box price looks great, but you don’t know that actually it’s trending down. It’s great right now, but by the time you’ve bought that item, sent it into Amazon, and the item is live and available for purchase, your ROI is going to have disappeared as that Buy Box price continues to go downwards. You could have avoided that if you’d looked at Keepa and seen maybe this isn’t as great of a buy as I thought it was.
[00:06:17] STEPHEN: Another really valuable piece of information that Keepa shows you is the historical information when it comes to how many competitors you might have on a particular product. You can see right on the Keepa graph, the trends of your competition as well when it comes to the number of other people selling that same item in new condition. What are the trends with that? If the number of competitors are rising, you can almost be confident that the price will go down. I mean, this is simple supply and demand in action. If the supply goes up, the number of competitors, if the demand does not meet that supply increase, then the prices are going to go down. So again, this is lost profits and potential loss for you that you could have completely avoided by looking at a Keepa graph of the competitors’ trends, whether they’re holding steady, going up or going down, it totally changes the decision-making process when it comes to sourcing an item to sell on Amazon.
[00:07:09] REBECCA: Yeah, we’ve talked about before that a good way to think about sales rank on Amazon is that it’s a snapshot in time on how an item is selling on Amazon. The current sales rank is just a snapshot in time. And really, you can look at the current price on Amazon the same way. You have no way, if you’re just looking at the product page without looking at the historical data, you have no way to know whether that price is going up or down over time. You have no way to know without looking into Keepa at that sales rank in price history, whether there are trends that would make it so that you wouldn’t want to buy an item or that would make it, so that you would really want to buy an item.
Not using Keepa to look at those pricing trends can be really an expensive mistake for more than just one reason. You might buy an item where the price is trending downwards. And eventually, you would even say that the price “tanks”. If you continue to reprice your item to be competitive on Amazon, you would end up losing money on that sale if you don’t have a really great buy cost on it. You could end up so that your buy cost in the current price don’t match up to make profits for you. Or if you decide to hold your price and not reprice downward to be competitive, and that price tanks, you might end up having to pay months of storage fees. If it’s Q4, you would have to pay four times the amount of storage fees. And then also you could get into potentially having to pay long term storage fees for an item that’s just never going to sell at the price that you’re wanting it to sell at — and that gets really expensive too.
[00:08:48] STEPHEN: Yeah, and that’s expensive when it comes to just one product. I mean, imagine if you went to a store and you cleared the shelf on a product thinking it’s going to be a great moneymaker for you. And the prices have gone down and now it’s not profitable anymore. And now you have all this excess inventory in Amazon, because it’s not selling at a profitable price. And that sourcing capital is tied up in inventory that’s not going to sell you have to, like we talked about before storage fees that are just going to multiply, and then maybe you just joined the race to the bottom to get that inventory item sold, and make a sale and at least try to get something back for it. So, not looking at the pricing history on Keepa is a very expensive sourcing mistake.
[00:09:27] REBECCA: And we mentioned this on the previous episode too. It’s not just about the money that you are losing, you’re also affecting your inventory performance index. Your IPI will be affected if you are attempting to sell too many items that end up in excess inventory and you don’t have a fast-enough turn rate.
[00:09:44] STEPHEN: Yeah, and also, from last week we talked about the impact it has on your mental abilities to handle everything. It’s a one more thing you have to deal with, one more thing that zaps energy from you. You want to be able to streamline your energy to be able to make the most of your time as well as your money, and so it can be an expensive mistake to make.
[00:10:03] REBECCA: Yeah, that’s mental clutter that you don’t need to have to deal with.
[00:10:06] STEPHEN: Yes.
[00:10:07] REBECCA: So, just to recap, today, we’re talking about the second biggest sourcing mistake that you can make for your FBA business, and that is making your sourcing decisions based only on current prices on Amazon. But you can avoid this mistake altogether by using the historical data you find on Keepa.
[00:10:25] STEPHEN: And we’ll put some links in the show notes to some resources that we have about Keepa, as well as links to Keepa, and for you to learn how to get started with that. But for those of you who are listening to this right now, as we are releasing this episode, we have a great deal for you. We have a course called The Resellers Guide to Keepa, Using Amazon Sales History to Make Smart Sourcing Decisions. You can find it at fulltimefba.com/keepacourse. The first two lessons are free. There’s going to be a price increase coming up very soon. We’ll also have a coupon code. We’ll put that coupon code on the show notes page as well, for you to save a little bit of money on this course.
But this course, it’s a video course that walks you through Keepa, how to use it. If you’ve ever seen a Keepa graph, it can be kind of confusing. So, I record my own computer screen, walking you through reading multiple different types of Keepa graphs, how to read it, how to understand it, and how to get to the point where you can just look at a Keepa graph for maybe two or three seconds and know whether or not, “Yeah, this is a winner, I’m buying this.” Or, “Oh no, this looks good, but it’s actually not good. I’m going to leave it on the shelf.” So, we walk you through that.
Again, that link, fulltimefba.com/keepacourse. You can watch the first two lessons free and there’s a price increase coming up because we’ve been updating the course for a while and have not increased the price. And it’s time, it’s just such a valuable course to help impact your Amazon business.
[00:11:44] REBECCA: Thank you so much for joining us for this episode of The Full-Time FBA Show. As a reminder, that you can find the show notes in the link for this podcast at fulltimefba.com/157. In the show notes, you’ll find the transcript for this episode, as well as any links that we mentioned. You can find the clickable link there to get to it very easily.
[00:12:05] STEPHEN: Next week on the show, we’re going to be talking about our top q4 pivots that we take in our Amazon business. I mean q4, it’s a whole new ballgame. It’s unlike selling on Amazon during the rest of the year, and there are certain things that you might need to do in how you source and how you run your Amazon business that are a little bit different during these three months of the year, October, November and December. We’ll talk about that next week on The Full-Time FBA Show.
[00:12:30] 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 including a free eBook. 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.