The Most Harmful Amazon FBA Sourcing Decision You Could Ever Make
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Did you know that a toy on Amazon ranked 10,000 today could have been ranked 500,000 yesterday? All it takes is one sale. Just one. One sale of that toy on Amazon could change the sales rank drastically overnight.
Would you buy a toy ranked 10,000 on Amazon to resell? Would you buy a book ranked 500,000 to resell?
I know there are lots of other factors at play in how you might answer that question, but my point in asking it is to get you to look at the sales rank. You view a toy ranked 10, 000 much differently than one ranked 500,000, right?
Yet every day many, many Amazon sellers are making their sourcing decisions based on today’s sales ranks and low prices. They find a toy ranked 10,000 and snatch it up, without checking to see that it was possibly ranked 500,000 yesterday. Or maybe it’s a book ranked 100,000 that was ranked 1.5 million yesterday.
There are two main reasons why you shouldn’t base your sourcing decisions on today’s sales rank and pricing data:
1. Amazon changes their prices often.
Amazon is known to change their prices across their website 2.5 million times per day. That’s just Amazon’s prices – that doesn’t include 3rd party seller prices, which are also being changed constantly throughout the day with repricers. Now, Amazon has hundreds of millions of products, and they’re changing those prices 2.5 million times per day, which is mind blowing if you try to think about what that means. The low price on items also change throughout the day when a seller sells out of an item and the low price bumps up to the next seller. If prices are changing constantly on Amazon, why would you make a sourcing decision based solely on this one snapshot in time of the current low price?
2. Amazon updates sales rank often.
Amazon recalculates their sales ranks every hour. That’s 24 times a day that sales ranks change on Amazon! If I’m looking at an item to resell, it’s too much of a gamble to base my buying decision on what the sales rank looks like on this one hour of this one day. The current sales rank is just a snapshot in time of how this item has recently sold. I need to make my decisions based on broader information than this one snapshot.
Whether you are in a store doing retail arbitrage or you are at your desk doing online arbitrage or looking at a wholesale catalog,you need more information than this one snapshot in time. You need more than just the current low price and the current sales rank in order to decide if you want to buy 1 of an item, 10 of an item, or 100 of an item. Your hard-earned inventory money is at stake here! You want to make your decision based on the best information available.
Making this type of decision on how to spend your sourcing money without using historical data from CamelCamelCamel or Keepa is the most harmful sourcing decision many Amazon FBA sellers are making.
I would be willing to go so far as to say that making sourcing decisions without CCC or Keepa is one of the top reasons Amazon FBA sellers quit their businesses. If you’re in this same boat, you might be spending all your sourcing money on inventory without looking at the historical data, the prices tank, the inventory never sells, and you throw your hands up in despair and say, “I quit! I tried Amazon, and it just didn’t work for me.”
Now, there may be other factors at play, but for many resellers (you included) using CCC and Keepa could be a huge game changer. You could find profitable inventory that will sell in a reasonable amount of time and won’t lower quickly in price.
I’m especially disheartened when I hear resellers saying they want to quit Amazon FBA over these types of inventory problems because this problem is so easily fixable. You canlearn to read and interpret CamelCamelCamel and Keepa. The graphs can make sense, and you can use them to make smarter sourcing decisions.
Both Camel and Keepa are free, easy-to-access programs that you can use on your computer or your mobile device, either in a web browser or from your 3rd party scouting app like Scoutify, ScanPower, or Profit Bandit (Amazon Seller app does not have links to CCC and Keepa, however). It only takes an extra 20 to 30 seconds (if even that!) to look at the sales rank and sales price history of an item when you’re sourcing. You can take a quick look at how often this item has sold and how it’s been priced in the past, and you can make an educated prediction about how it will behave in the future.
I want to encourage you today if you’re making sourcing decisions without using historical sales rank and pricing data from CamelCamelCamel and Keepa — there is a better way to buy Amazon FBA inventory! You can make smarter sourcing decisions. Your business will hugely benefit if you take the time to learn how to use these powerful free resources.
- Are you a CCC or Keepa user? Tell us how these great programs helped your business out with a comment!
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