You know how it works. You sell products at a profit. Simple.
But do any of the following apply to you?
- you have old inventory hanging around
- the selling price has tanked
- you have high value stock that isn’t moving
If so, let’s take a look at how to turn those to your advantage.
I had two main problems when I first started selling on Amazon FBA ( I had lots of problems, but these were the main ones) – panicking and dropping my prices if something hadn’t sold for two weeks, and buying something only to find out when it got into stock at Amazon that I had bought when AZ’s price was artificially high for whatever reason, and I was never going to sell mine. So I held onto the stock in the desparate hope it would go back up in price. Does any of this sound familiar to you?
Which brings me to my third problem (where did that come from, I thought I said I had two?). Months later I was still sitting on that stock, and I never had enough cash to buy as much stock as I wanted to (is that a fourth problem? I’m starting to lose count).
Now, I will cover how to avoid the first two problems in other posts. But what I want to talk to you today about what I did about problems three and four.
I fought every natural instinct, and I identified which products I should sell at a loss. We’ll come to how I did that later.
I had to argue with myself about this, which I think confused my wife. It’s completely counterintuitive:
It doesn’t feel right psychologically
You have failed.
You have lost money.
If you choose the right products to sell, none of the above matters.
You have learnt a lesson in making your buying decisions (call it investing in learning).
You have got rid of that nagging feeling you get when you think about your inventory.
And best of all, you have some cash coming in for you to spend on
sweets and wine more stock.
You are improving your cash flow, and you are going to be spending it on better decisions that will make you more money faster. I would rather take a £10 loss on something this week and turn it into a £20 profit next week that hold onto a product for ages and start incurring Amazon Long Term Storage Fees.
Now I’m not suggesting you should sell all of your existing stock at a loss and start again (you weren’t thinking that anyway were you?).
What I started to do was the following:
Check my prices of all stock against the Buy Box.
See how much stock the sellers have who have a lower price than me (the How Many? extension is great for this).
Check price history and sales rank. See what the three month averages are and see if I can at least break even (maybe even make a small profit).
If you don’t think you can break even, what is the highest price you could sell for.
Make the appropriate price change.
The feeling you get when the products start marching out the door and you Next Payment amount on your AZ Sellers APP starts increasing will make you get over the fact that you were (whisper it) losing money.
So go on then, check your stock and take action. Let me know how you’ve got on.