Let’s face it, reselling on the Amazon platform is no walk in the park. As a reseller with over 5 years of experience, there is always something to learn and mistakes are still made.
With the continuous growth of resellers on the platform it is critical to have a firm understanding of not only the marketplace, but also your outreach strategy.
Automation is essential so that you can maximize your time on more labor intensive tasks, which are equally as important to nail down.
Here are 6 tips that will give you an edge when selling your products on Amazon.
1. Diversification, Diversification, Diversification
Did I mention diversification? Nothing hurts your business more than going all in on a few products while they are good just to find that they are negative after they hit the fulfillment center.
Just like a good stock portfolio, diversifying your products across multiple brands is a safe way to guarantee a steady source of daily revenue. If one product fails or goes negative for a day, your other products will carry it.
If you are wholesaling, you should be reaching out to as many potential brands as you possibly can, so that you have a wide selection of products to choose from. Choosing niches with a wider variety of brands will help you expand your portfolio as you grow – so don’t go too niche either!
If you are not a big reseller just yet, don’t worry, it is much better to establish these relationships in advance so that you are ready, a PO is one email away.
2. Automating product analysis
To continue with the idea of onboarding more brands, you now need to be able to evaluate each product list. Some brands carry thousands of SKUs that would make going in by hand and correlating the correct ASIN a very tedious and annoying challenge.
If you are at a point where you are overwhelmed with brand lists, you should try an auto fee updater like Sellonaut. Not only will it take care of storing your data, but it will constantly be updating it 24/7 so that you never miss out on a good item.
One way or another, some level of automation needs to be done with your product lists. There are over 300 million listings on Amazon, so it is essential you can identify the opportunities.
3. Understand shipping and purchase timelines
If you carry brands that have seasonal influence, it is critical you are thinking about them at least a month in advance.
When a major holiday comes around every seller has the same idea: get as many units as possible to maximize return.
If a holiday is 2 weeks away, you are already too late and will lose money. Expect at least 1 week lead time from wholesalers, 3 days of prep time, and 1-2 weeks of Amazon handling and processing. If you want a bit more predictability, you can use the Inventory Placement Service program, however, we recommend factoring in the added cost before opting for this.
Unit availably usually trickles in overtime so you want to give yourself enough room to account for that.
This is not only true for seasonal items as well. In general, if an item is doing well you want to make sure that you have identified it well in advance.
4. Use a Repricer
We have all been on a listing where it was low competition, good margin, a no brainer pretty much. You hop on however and join the buy box price, and notice at the end of the day that you had 0 sales.
After checking the listing you see that you have been undercut by 1 cent. You try again, and 5 minutes later once again you are undercut by 1 cent. This is known as a “race to the bottom” reseller and is using a repricer to constantly hold the buy box.
This is not the only form of repricing that could happen on listings and if you are managing multiple you can’t keep your eyes glued on the prices 24/7.
Your success on Amazon is only as good as how long you hold onto the buy box so it is crucial to have a repricer that can hang on to the buy box for as long as long as it’s profitable.
5. Target and Understand Best Seller Rank (BSR) Ranges
To stay cashflow positive you need to sell out of an item before the bills are due. This all boils down to how much demand a listing has, which is determined by the best sellers rank.
Categorically the number corresponds to different sales velocities, so you need to pay attention to how quickly your units are selling at their respected ranks.
Not only will this make purchases easier in the long run, but it could also give you insight on the ideal range to go for.
Sometimes listings with low BSRs has very high competition and very thin margins. On the other hand some higher range BSR numbers may not lead to any sales at all.
Sellonaut allows you to filter by BSR so you can only evaluate listings that meet the criteria you are most comfortable to sell in.
6. Know your fees outside of FBA
While it is important to understand FBA fees and a variety of tools show you them, you need to also factor in all outside fees when purchasing.
An item on the fee calculator may have an insane margin at quick glance, but if it is overweight or heavy that margin shrinks quickly. You also need to factor in the cost per unit to ship from your wholesaler or supplier.
On average wholesale shipping is 9% of your total unit cost, but it could be more depending on the item. Understand how much shipping and prep adds onto your total fees to see the true margin of your items. Opt to negotiate freight discounts when available.
Since buying wholesale are usually in bulk purchases, make sure you are hitting any sort of price break if it makes sense to. Sometimes you may only be a few cases off from getting free shipping which will greatly affect your profitability.
If you see some resellers that are selling at low price on a listing that would be negative for you, it’s most likely because they have hit a price break with the wholesaler.
Cheaper wholesale purchases equates to more listings available for you to sell on.