Q&A: Does it make sense to sell a cheap product?

This question comes up quite a lot, and the answer is…

Yes. Of course.*

As a general rule you can assume it makes sense to sell a cheap product, whenever you see someone selling it because… why else would they be selling it?

*There are weird fringe cases where a person might sell something at a loss, but Occam’s razor suggests that most people are selling things because it makes them money.  In business, it’s safe to say that profit is everything.

The question with Amazon is actually never about the price of a product, the real question of worthiness is about the profit. Selling a $100 item 20x a day seems great because that’s technically a $730,000 a year business.

However if that item costs them $94 after shipping, manufacturing, Amazon’s commission, sales tax, PPC advertising, etc, it’s really a $43.8k a year profit business.

Compare that to an item that you sell for $12 but actually only costs you $5.  At 20x a day that item actually generates more profit than the $100 item.

Beware the Add-On Badge

Items below a certain price (generally under $10.00) fall under the auspices of the “Add On Item” program.  Amazon won’t ship these items by themselves because the cost of shipping might eat into their profit margin.  Again, profit is everything.

This means that no one can really buy your product unless they purchase another product in the same order. This can greatly affect your sales, unless it’s the type of product that people frequently by multiples of, or with another item.

NOTE: I’ve heard a rumor that if you start your price at $9.99 and gradually lower it, you can bring the price lower and avoid add-on status, than you could if you were to just set it at a low price to begin with.

So, set your price to $9.99, then $9.79, then $9.59, etc, and inch your way to your lower price and see what happens.

Perk: Fewer Returns!

There’s an added upside to selling a cheap item.  Fewer returns.  If you buy something that costs $50 and it doesn’t work, you’ll likely return it.  $12? Meh.  You won’t even bother.

Now, we are of the opinion that you should never knowingly sell a mediocre product, but there are some wheels that will always be squeaky no matter how much grease they receive so it’s nice to cut back on the number of times you have to interact with them.

So, to recap. Check your costs, find your profit, make sure your price isn’t too low, and go for it.

Happy Selling!

I’m running out of stock what should I do?

First. You should be very very very quiet with this complaint or else someone that’s still sitting on 2,000 fidget spinners might spin all of them at your face in jealousy. Fidget spinner deaths are never pretty.

Second. Rejoice. This is the best problem to have in FBA.

First: Here’s what you shouldn’t do…

Gradually raise your price to slow down your sales to stay in stock.

Please don’t do this.

Amazon is a little bit like a bitter ex- and that they never ever forget, which is why if you ever get back together with them they will 100% remember the last thing you did.

So, if you were selling 200 items a day and then broke up with them (went out of stock) and then got back together they’d _assume_ you were selling 200 items a day and put you right back on page 1 with all the other winners.

If you were selling 200, then 100, then 20, then 2, Amazon says “Wow, this item really was getting unpopular at the end right before they went out of stock, so let’s just…place this here. On page 17.  Page 17 is nice.  It’s a fixer-upper.  It has charm.

Step 1.  don’t muck with your price by raising it.*

(*you can muck with it a little. sometimes by raising the price you might discover that you sell more.  So, feel free to raise it until it has an adverse affect on your sales)

(i’m not sure the word muck is nice.  It feels wrong when I say it and also when I type it, so maybe keep that in mind too.  It’s the least important part of that step though)

Step 2You can screw with your price by lowering it.

Screw just seems worse than muck but we’re stuck with it now gang.

If you lower your price as you are running out of stock, your sales velocity will actually increase (go figure) and then instead of going out of stock with a 200/sale a day item, you’re going out of stock with a 250/sale a day item.

It’s like if you’re breaking up with someone and then on the very last day you buy them a Tesla as a break-up gift.  “I can’t be with you but here, it’s basically a huge battery with wheels I hope you love it.”

The current reigning theory is that when you come back in stock, Amazon will honor the 250/day rate and rank you accordingly.

Step 3. When you go out of stock close your listing.

To extend the broken relationship metaphor, imagine you break up with your ex- but in a great way. “Honey I love you but I’ve been invited to go to Botswana to help with the starving kids and I just can’t do long distance but I’ll be back in 2 months because you’re the love of my life. Please wait for me.”

“But honey Botswana looks a LOT like the bottom of the ocean. Bottomoceanswana.”

Leaving your listing open is like… occasionally texting your ex during that 2 month period, every couple of weeks… but instead of sending a sweet I love you, you’re just texting them this:

“Hey you kinda suck.”

Then when you get back after 2 months you wonder why they Hey Kinda Dont Like You Any More.

This is because while you’re out of stock for 2 months while your listing is OPEN, there’s the chance that your product will get returns.  And when Amazon gets a return that it thinks it can resell, it will put it on the shelf.  And then that one item will sell.

So now suddenly you’ve got 200 sales a day for a year and then nothing, and then 1 sale on one day.  Nice. You Kinda Suck in Amazon’s eyes and they’re not gonna forget it when you get Backswana.

Step 4.  Don’t forget to raise your price when you’re sending your inventory in.

It’s a dumb thing but Amazon loses things all the time, basically Amazon will look at your historical price for a product, and sometimes (but not always) they’ll just look at your list price.  So if you send in 2000 items with a list price of $20 and Amazon loses them, they’ll give yoU $40k.  If you forgot to raise your price from $10, you’ll only get $10k.

JK it’s $20k I just wanted to give you that brief moment of satisfaction from having caught me in a mathematical error, because I love it when I catch other people in theirs.

Summary

If all this feels like a lot of work to have to do with one product, imagine doing the same thing with twenty products.  Yeah you don’t want that life and I don’t want that life for you either.  The best thing to do is keep an eye on your products inventory.

If you have 5 products and it takes you three minutes each to check their sales vs inventory and predict their stock out 3 times a week, that’ll mean you’ll spend (5*3*3*4, show your work) 180 minutes a month just checking inventory.  That’s THREE HOURS every month, that’s 36 hours a year.

Or you can just sign up for Amachete and we’ll give you an easy page where we’ve done all the math and accounted for how long it takes your manufacturer to ship it so that you’ll know exactly how many days you need before you press that buy button.

You can just glance at it.  And we’ll let you know if it’s getting kinda close.

CLICK HERE FOR A FREE TRIAL.

 

SuperURLs and How (not) to use them.

By the end of this article you will learn how to make SuperURLS that

  1. minimize your chance of breaking Amazon TOS, and
  2. don’t affect your items conversion rate negatively like traditional SuperURLs and
  3. increase your item sales by increasing your keyword rank.

First off. SuperURLs might be against Amazon TOS.

Historically we’ve told people NOT to use them because there’s a (slim) chance that Amazon might frown on their usage as being rank manipulation and then decide to ruin your day/week/life as a result.

So, if you don’t want to risk it, go ahead and skip everything else and go back to whatever you were doing before.

That said, we think there might be methods which are less of a violation, and certainly less detectable.

But first:

What is a SuperURL?

TLDR; a SuperURL is a link to your product that, when purchased, will increase your product’s Keyword Rank.

What is Keyword Rank?

TLDR; Keyword Rank is a measurement of how “right” Amazon thinks your product is for customers typing in a certain keyword.

e.g. If a customer types in “ninja turtle” and your Ninja Turtle Sheets show up as the 458th result, that means

a. that you’re. not making any money from people typing ninja turtle, and b. there are 457 items that people are _more likely_ to buy when they type in the word ninja turtle.

How do SuperURLs work?

Amazon tracks pretty much everything.  So, if you go to Amazon.com right now and type in “ninja turtle” (sorry for this example it was the first thing that popped into my head)

Amazon will bring you somewhere like this.

If you look closely at the URL that your search brought you to, you should notice something.

https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=ninja+turtle

Your keyword has been stuffed into the URL. That’s Amazon’s way of keeping track of what brought you to these items.

If you click on the second item, it’ll take you to a URL that looks like this

https://www.amazon.com/Nickelodeon-Teenage-Turtles-Pillowtime-Raphael/dp/B00BMU0TFS/ref=sr_1_6?ie=UTF8&qid=1509822998&sr=8-6&keywords=ninja+turtle&dpID=41TSJrK90WL&preST=_SY300_QL70_&dpSrc=srch

Amazon is still tracking the keyword that brought you here.

If enough people purchased this item from this URL, Amazon would think “Wow, a lot of people are typing in Ninja Turtle and buying this” and eventually “Maybe we should show this item FIRST when people type in Ninja Turtle?”

That URL is called a “SuperURL”, or more specifically a 1-click SuperURL. Because a person clicks ONE URL and then purchases the item.

1-Click SuperURLs are kind of bad.

Why are they bad?

Glad you asked.

Remember when I said that Amazon measures everything? They measure EVERYTHING. They are like…meth heads when it comes to compulsive measurement.

One of the things they measure is your conversion rate.  Your conversion rate is the # of times a person looks at your product and says “You know what, I DO want to buy this.”  They get converted from a shopper to a buyer.

So if 10 people look at your listing and five of them buy, you have a conversion rate of 50%.

Remember back when we said Amazon takes a lot of things into consideration when showing your items to shoppers? You can probably bet that conversion rate is one of them.

1-click SuperURLs can tank your conversion rate

So what most Amazon FBAers do is generate one of these SuperURLs using a service like AmzTracker, and distribute them to fifty gazillion (approx) people who then all go straight to the page and then 1 percent of them buy the item, which now means your conversion rate is 1 out of 50 gazillion, which is, you know. Low.  Like. Flo Rida low.

The conversion rate for this album has dropped in recent  years.

So…what then?

Enter 2-click SuperURLs. Or SuperDuperURLs

Yes. I’m a grown man that used the word SuperDuper. We will get through it, together.

A SuperDuperURL (oh my god the POWER) is a new type of SuperURL which carries the benefits of SuperURLS but with extra Duper in it, (drunk on power), because it doesn’t carry the risk of destroying your conversion rate.

Instead of taking a person directly to the product, a SuperDuperURL takes you to your storefront, as if the user had typed in the keyword.

Now if a person clicks decides they don’t want to buy it, and browse away, your conversion rate stays intact, but if they click through, and purchase, it will be as if they typed in the word “ninja turtle” and decided to purchase it.

Best of both worlds.

How do I make a SuperDuperURL and Can I please call them 2-click SuperURLs I have dignity.

Amachete makes it really easy.

First click on My Products on the menu.

Then open the product you wish to create a Super(duper)URL.  Make sure to choose the right marketplace as, obviously, Super(Duper!)URLs are marketplace specific.

Once you click on the SuperURL button on the right-hand side you’ll be prompted with a window.

This window is where you choose the keyword you want to rank for 

It will generate a Super(Duper)URL which you can then distribute to potential buyers, increase your keyword rank, and increase your sales.

Happy Selling!

Q&A: What do I do when the 999 trick won’t work?

This is a good question without a lot of public answers on the internet so I figured I could help.

Why The 999 Trick Won’t Work

Some sellers restrict the number of items a person can buy.  There are a number of reasons to do this, but the primary reason is probably to prevent having your inventory cleared out through a misconfigured coupon code.

The second reason is to keep your competitors from knowing when you’re running out of stock.  There are a number of things you can do to take advantage of your competitors stockouts, we’ll save that for a later post, but for right now I’ll explain how to fairly accurately track the inventory of an item. that has this blocked using it’s BSR.

What is BSR, in this context?

While no one knows exactly how Amazon’s ranking method works, it’s safe to say that one of the strongest determining factors is sales per day.

So if an item with a BSR (Best Seller Rank) of 10 sells 20 per day, and an item with a BSR of 20 sells 10 per day, it’s safe to assume that an item with a BSR of 15 sells somewhere between 10 and 20 per day.

However it’s a little more specific than that, because Amazon calculates this number _per_ category.  That means an item with a Best Seller Rank of 20 in PETS might sell far more than an item with a BSR of 20 in “Industrial & Science” because it’s like 99% more fun to buy a dog a pet than it is to buy a pocket protector. That’s science.

Use Neighbors

Because of the “category specific” ranking you can use the category neighbors of an item to find the rank.

Let’s use an example

This Zilla Premium Reflector Dome has a BSR of 818 in Pets.  Lets pretend the 999 trick isn’t working.

What you would do is try to find a BSR of AROUND 818 in the Pet Department and track that item instead.   You could either click on one of the sub category links or browse through the main category.

By browsing through the main category, using the extension we see that there’s an item with a BSR of 811 right above it.

And using the sales estimate for this item we can see that it appears to sell 1 – 2 more items per day on average.

By clicking *track* on this item, Amachete will automatically perform the 999 trick on this *neighboring* item every day, and we can use *that* items BSR/Sales per day to very accurately predict what the daily sales are for the heat lamp.

I hope that helps, Chris.

Sincerely,

Phil