Top Tips from a successful new user
We’d like to share some top tips from one of our most successful sellers. Christine started with ProfitSourcery in December 2015, and managed to make 40% net profit, some £6000 in 3 months or so.
Over to Christine…
After trying to sell a load of DVD boxsets on eBay for several weeks without much success, I decided to take the plunge and set up an Amazon Pro-Seller account so that I could try out their FBA service.Within a few days of the stock being booked-in it was all gone! This was my first wake-up call to the selling power of Amazon. Eight months in and it hasn’t always been a bed of roses, there have been many ups and downs along the way and I am still learning new things every day, I hope that by sharing some of my experiences it will help others to make a success of their business and avoid some of the pitfalls…
1. Not all marketplaces are equal
My first mistake as I touched on earlier was to assume that Amazon was pretty much the same as eBay, I would often compare prices on Amazon and eBay and make buying decisions on that basis. I now know that these are two very different animals – often prices for the exact same new products on Amazon can be much higher and still sell extremely well. So my first tip is to check the stats on CamelCamelCamel and make buying decision based on the facts rather than comparing prices to other websites.
2. Perceived value
This second tip is similar to the one above in that it highlights the importance of checking and trusting in the stats – sometimes an item can have a perceived higher (or lower) value based on your personal opinion towards that item. For example, a DVD box set that you have watched and enjoyed can seem like a really good buy as you naturally assume others will love it and want to buy it too. Try to put these emotions to one side when making buying decisions as they may cloud your judgement!
3. Compare suppliers and search for voucher codes
It may seem like an obvious one but before you commit to making any purchase put the item description in to Google, click the “shopping” tab and seem if there are any better deals out there. When you have decided on a supplier also search for “[supplier name] voucher codes” as there could be an extra 10% or so to be knocked off with a code if you are lucky! Some suppliers limit the quantity they will sell to a single customer so a quick Google search may show another supplier without any quantity restrictions (price matching amongst the big retailers is quite common so there’s a good chance you will be able to get the same price too).
4. Avoid over-stocking
Having a good cash flow and stock turnover will be critical to the success of your business as cash tied up in slow moving stock could have been earning money elsewhere. My advice is to study the sales rank trends carefully, look for the “heartbeat” of regular sales and calculate the monthly sales figure by counting the peaks or checking Jungle Scout. Only purchase 2-3 months’ worth of stock at any one time and keep in mind that the more sellers there are for a particular item the longer it might take to shift your stock.
5. Spreading the risk
Try to avoid investing too heavily in a single product, by building a portfolio of products across a wide range of different categories you will be more resilient to seasonal trends and there will be less chance of getting caught with all your eggs in one basket. Having a good mix of “fast moving but low profit margin” and “slow moving but high profit margin” products will also help to spread the risk.
6. Patience can be a virtue
From time to time you will see sellers engage in a price war, some sellers use re-pricing software that will undercut the competition by 1p to win the buy box , this practice often quickly results in a race to the lowest price with no real winners along the way (other than the buyer). Try to avoid getting drawn in to these types of situations if you can, I recently waited out a price war and after a couple of weeks I was the only seller left with FBA stock, I was then able to command a much higher price for my product.
7. Sharing the buy box
To avoid triggering a price war of your own try to price match the competition rather than undercutting them, if there are several FBA sellers with the same sell price the buy box is usually then shared between them with everyone getting a fair chance to sell their stock.
8. Buying tools
When I first actively started to look for more products to sell on Amazon my strategy was to spend hours scouring the sales and offers pages on big retail websites and checking the top price drops on CamelCamelCamel. After a while I found that this was becoming unsustainable as the business was growing fast and I needed to focus my time on other areas. Subscribing to Profit Sourcery shouldn’t necessarily replace all these other buying tools but in my experience it made a big difference to the amount of time I now spend on sourcing products.
9. Managing expectations
If you do sign up to Profit Sourcery stick with it for at least a month or two before making a judgement call on or whether or not it is worth the money. The reason for this is that you definitely will not want to purchase every product you are sent – thorough due diligence before every purchase is critical and this will identify the higher risk products such as products reaching the end of a seasonal high, or in some cases the price differential has been caused by Amazon running out of stock and marketplace sellers making hay with inflated prices. Some days, you will find that elusive perfect product only to find that the potential supplier has already sold their stock! Keep at it and it will pay back (in my personal experience one deal alone has paid the monthly subscription several times over but this did not happen on day one).
10. Good luck!
Your success as an Amazon seller will be directly proportionate to amount of effort (and money) you put in. For me personally it supplements the income I get from my day job with a relatively small commitment of spare time, I cant think of any part time job that would deliver the same results and work 100% around my own schedule in the same way that being an Amazon seller does. I know that it takes a lot of courage to take the first step and set up an Amazon pro-seller account and then make your first FBA shipment, it seems like a daunting prospect but once you make those first steps and see the sales rolling in I hope you get the bug like I did. Good luck!
Written by Christine Leighton