In this article I am going to answer some of the most common questions that are asked by new FBA sellers. When will I start seeing sales and how can I get more sales?
First, here is the real deal about Amazon FBA:
Amazon FBA is NOT a get-rich-quick thing. Just like any business it does take time to ramp it up. You have many different options available to you when sourcing inventory. Plus you have varying amount of risk involved. There are no guarantees of sales – even WITH low ranking items. Rank shows that the item has sold recently, it does not guarantee that the item will sell again soon. It is an indicator, not an absolute certainty. The best advice I can offer is … Don’t spend money that you can’t afford to have tied up in inventory. And also know that it is OK to start small if that is what you are most comfortable doing. When you are buying inventory, go with the BEST bang for your buck.
Especially when you are first starting out there is a learning curve and you WILL make mistakes. This is one reason why I like selling thrifted items so much – when I make a poor buying decision I loose $0.50 or a few bucks – not hundreds of dollars. And I have the opportunity to find many different low cost items that give me a high profit WHEN they sell. Some sell quickly and others are more long-tail and I’ll have to wait to see profits from them. That leads us to our first question…
How many items do I need to send in before I start seeing sales? And, How soon after I send in my items will I see sales?
There is no definitive answer on this one. There are so many factors that it is virtually impossible to give a straight answer.
- What kind of items are you selling?
- How competitive are you with your pricing?
- Are there other FBA sellers?
- Are your items long-tail?
- Did competition increase after you sent your items in?
- Is Amazon selling the item too?
- Even looking at rank is a part of the puzzle.
What happens when you have money tied up in inventory and you are seeing slow sales?
This is a question that almost every FBA seller has asked. Don’t panic yet if your sales are slow and you need some cash flow. There are things you can do to turn that cash spicket on again.
Please note: This response is aimed at sellers who are sending in primarily one-of items like many of the items we find at thrift stores. Many of these items may also be long-tail.
You’ve spent money on inventory, you’ve sent it into Amazon and…. voila! little or no sales. You need to have at least some of that money back to put towards more inventory….but just how do you get it back?
Realize that some of your items might be “long-tail” (learn about “long-tail” items here: http://www.wired.com/wired/archive/12.10/tail.html). This usually means that you have much less competition for that item (if any at all) so when that buyer comes along – you get the sale. The key here though is “when that buyer comes along”. On a good note, Amazon storage fees are low and ideally you are buying very low cost items that you can sell at a large profit (like thrifted items).
I have a lot of long-tail items and I’ve built up my inventory over time to the point where I have continuous sales of one-of long-tail items. My inventory contains a very broad range of items that appeal to a very broad range of customers.
So there are long-tail items that you may want to keep at the warehouse…but you still need some cash flow – here are some options that may help:
Match the Lowest FBA Offer
Lower the price so you match the lowest FBA seller if there is one. Yes, you’ll get less profit, but you should get the sale. Usually when there is more than one FBA seller at the same price Amazon will rotate which FBA seller shows up first on the item page. I don’t think there is any rhyme or reason to this so I can’t tell you exactly when your item will be front and center. This pricing strategy will attract Prime Buyers and Free Super Saver Shipping Buyers.
I have avoided lowering prices on my items for a long time. I’d rather hold out and get my higher price. But there comes a point when I just want to get it sold! Sometimes I’d rather make a much lower profit for my item so I can at least get my money back and invest it in better inventory. That is when I lower my price to match the lowest FBA offer. That way, when the next buyer comes along, my item is right there to be purchased.
Match Lowest Merchant Fulfilled Offer
If there are no FBA sellers then you could match the buy box price for the Merchant Fulfilled seller (their price plus their shipping charge). This is not recommended to do this regularly – this is just a strategy for when you want to cash-out. As an FBA seller you can command a higher price for your items than the Merchant Fulfilled seller. With this strategy you are leaving money on the table, however, right now you are aiming at getting the sale sooner than later. This pricing strategy will attract Prime buyers, Free Super Saver Shipping Buyers and those who purchase based on price.
Please note for both of the above options you are “Matching” the lowest price, you are not going below that. The danger in under-cutting the lowest price is that you will inadvertently start a spiral downwards in price. Many people use automatic re-pricers that will lower the price below yours within minutes or seconds. It is better to just match their price and avoid a price war.
Keep in mind that these strategies may not produce instant sales every time. Even though your item may be front and center, it still could take a while until that buyer comes along looking for your item – this can be especially true with “long-tail” items.
It can be disappointing to sell an item for much less than you anticipated and down right discouraging. We’ve all been there. As long as we learn from our mistakes and make better buying decisions in the future then it was worth it.
Improve the Product Page
Take a look at the product pages for your items. Are they missing crucial info? picture, description? If so, add it in there. The more information the product page has, the better.
I’ll be completely honest and tell you that I usually do not do this for one-of items. Does this hurt my sales? – I’m sure it does. That being said, I still DO have sales of items that don’t have pictures.
Sell It Elsewhere
Consider selling those items on eBay using Multi-Channel Fulfillment. You item is at Amazon’s warehouse but you sell it on eBay. Then you put in a multi-channel fulfillment order to have that item sent to your eBay customer. This is not something that either of us have done, but we do know others have been successful with this.
Have it sent back to you (@ $0.50/item) and sell it on Craigslist. If it is a book you may be able to sell it to a used book store or trade it in for credit. Some places may even allow you to return the item.
So there you have it, a few strategies to help you get your inventory moving!
But Wait! Is It Worth YOUR Time?
One thing to think about before you take the time to sell it somewhere else or even sit down and jiggle prices, is to weigh whether it is worth your time to do so. Would your time be better spent cutting your losses and looking for better inventory? Debra and I talked about when and how we get rid of stale inventory on our podcast from Friday, February 1, 2013 you can listen to it and read the show notes HERE.
Do you have other strategies you’ve used to get more cash flow from your inventory? We’d appreciate you sharing them with us below or in our Facebook Group.