How to Make Selling on Amazon this Holiday Season Even Better
In my spare time, I like to make a few extra dollars selling on Amazon. Last year I Made $100,000 Selling on Amazon. The majority of this money was made during the holiday season.
Steps to Prepare for the Holiday Season Selling on Amazon
Preparation is key to being successful and making money on Amazon. If you are an Amazon seller, here’s how I prepare for Q4 and the holiday season. I like to break my preparation into four distinct categories including planning and organizing, maximizing product profits, minimizing time, and maximizing secondary profits.
Plan and Organize
Set your Goals. Before I made $100,000 Selling on Amazon Last Year, I set my goal and made a six figure action plan. In order to set profit goals, you need to know your expenses and markup to determine how much inventory you’ll need to buy.
Look at your Calendar. Review your calendar for 4th quarter. Determine when all of your products must be shipped in for the holiday season and put together a plan based on your available time. Last year I had purchased 70% of my inventory during September and October since that’s when my kids are in school. This year we’re taking the kids to Disney World right in the middle of my “prime” purchasing month! No problem, I’ll just block out that week and adjust my purchasing requirements below.
Calculate Purchase Requirements. Review how much inventory you purchased each week last year. Then adjust it to match the amount you need to purchase to meet your goals. For instance last year I purchased about $30k worth of inventory in September and $100k in October. If I wanted to keep my goals the same, I’d make a point to purchase $130k in the next 6 weeks before we leave on our trip. That’s roughly $4k in purchases per day if I want to stick to my schedule.
Reorder Supplies. What Supplies Do You Need to Sell on Amazon? Make sure you have all of your supplies. Replenish any supplies. Here’s my list of closet supplies I check: Orange-Sol De-solv-it, Dymo Labels, 3 inch tape, Boxes, Poly bags and printer paper and ink.
Maximize Product Profits
Review your Most Profitable Items. Don’t reinvent the wheel and look for new products. I start by reviewing my best selling and most profitable items from last year. I use Quickbooks to track all of my inventory and produce these reports. These are the first items I will plan to reorder. There’s no need to look for new products until you’ve reordered all your proven money makers.
Expand on your Most Profitable Items. In addition to reordering your most profitable items from last year, use them for inspiration. Look for other size, colors and variations of your product. In addition, look for accessories that go with your product. Amazon makes this easy, since they recommend items that are frequently bought together further down the page. For example, people who buy a Spirograph also buy colored pens. Amazon also suggests pages of other items customers bought who bought your product. Review the suggestions for ideas.
Expand in Most Profitable Stores. I also like to review where I bought my merchandise and how well it performed. If one source consistently delivers profits on the inventory you buy, it makes sense to expand some of your shopping there!
Eliminate Least Profitable and Troublesome Items. If I never see another Lalaloopsy Fairy Fern Doll in my life it would bring me great pleasure. Sometimes you have to Cut Your Losses Selling on Amazon and dump terrible products. Just learn from it, and don’t buy any more. And think very carefully about buying additional products in the same line of a bad performer. In addition to eliminating items with poor profitability, I also eliminate any products that caused a lot of headaches with higher than average returns.
Document Repeated Tasks. I keep a log of workflow processes. That way, when I have to repeat it, I have a system in place. For example, I keep a spreadsheet for the inventory I order. I record the order number, date, purchase price, quantity, ASIN, credit card used, cash back earned, tax exemptions, rewards to redeem, when it’s received and when it’s shipped to Amazon. I also record any follow up items, record it in Quickbooks, upload it to Amazon, and determine the initial selling price, profitability, break even point, and ROI.
Identify Tasks for Automation. I look for ways to automate any of the repetitive tasks and replace my documentation system. Any way that you can minimize time spent on repetition is opportunity to spend time on more profitable tasks.
Outsource. I outsourced all of the inventory processing last year. I used My Inventory Team to receive, prep and ship all of my inventory to Amazon. This was a major improvement in process that allowed me to scale the business.
Eliminate Time Consuming Tasks with Low Value. Just like eliminating unprofitable items, I also review time consuming tasks that earn very little return. Then I eliminate them.
Utilize Tools. Many of my task automation involves using tools. I mentioned some of the basic tools and a few books I bought when I started (including Retail Arbitrage and Selling On Amazon: How You Can Make A Full-Time Income Selling on Amazon) in How to Make Money on Amazon. Over the last few years, I’ve added many tools. The three tools that added the most lift were Seller Engine, Keepa Alerts, and Feedvisor.
Maximize Secondary Profits
While making money selling the products is the primary source of profit, earning indirect profits (including things like online cash back, credit card rewards, free trips, etc) is a big contributor to my bottom line. Since it’s also the link between many of the free money offers at My Dollar Plan, it’s one of the most enjoyable parts of selling!
Plan Application Spree. You’ll notice I usually plan a fall credit card application spree to take advantage of credit card sign up bonuses and 0% on purchases. It’s easy to Meet Spending Requirements for Sign Up Bonuses buying inventory. The bonuses also provide a large secondary profit!
Maximize Cash Back Rewards. In addition to the sign up bonuses, I’ll make a list of target cards for holiday shopping to maximize 5% Quarterly Rotating Cash Rewards.
Stack Bonuses. Taking advantage of the Discover it $100 Sign Up Bonus & Apple Pay 10%-20% Cashback for a $2,000 savings on buying inventory is obviously at the top of my checklist this holiday season! I keep track of all the bonus offers to make sure I meet all the requirements.
I’ll use all the steps above to create my action plan for the holiday season. In addition, I’m always on the lookout for new ideas and ways to innovate. Last year I bought a used copy of Online Arbitrage. While I was already buying the majority of my inventory online, it opened my eyes to buying inventory directly from Amazon! In addition, it gave me some ideas that I used to brainstorm other ways to innovate and automate my purchasing.
What are your plans for Amazon selling this holiday season?
More on Amazon Selling
- How to Make Money on Amazon
- How I Made $50,000 Selling on Amazon
- Examples of Profits from Selling on Amazon
- How I Made $10,000 Selling on Amazon
- How to Get Started Selling on Amazon
- How to Cut Your Losses Selling on Amazon
- Reader Shares His $12,000 Amazon Success Story
- Can You Make Six Figures Selling on Amazon?
- Tips to Make Money Selling on Amazon: Reader Q & A
Hi, you mentioned reordering the same items?!?!? What if they are not deeply discounted again? Are you buying some items @ retail prices and marking them up on amazon?
I’m nervous about going so deep in quantity per item with how much competition shows up on amazon with the exact same inventory from the major retailers.
100K on amazon is great but you also carried close to 100K in unsold toy inventory after the holidays which is not good, especially when demand for toys falls off a cliff after Christmas.
How long did it take you to clear the 98K in inventory you carried over?
Thanks for posting your experiences on Amazon
As far as reordering the same items, I have a few different strategies. I will bookmark the pages and watch for sales. Anytime the items drop below my buy price, I order more. I use the Keepa Alerts for some of these items to notify me when they go on sale. For other items, like hard to find items, I will reorder at retail prices if the Amazon prices support it (however, this is a much riskier strategy and needs to carry a much higher potential profit to compensate for the added risk).
As far as carrying over the inventory at the end of the year, that was due to multiple factors, some which were intentional and some which weren’t! I purposely decided NOT to drop my prices just before the holidays this year to sell out. Instead I held my prices high throughout January and February to work on maximizing profits. In addition, I had quite a bit of merchandise that was not shipped to Amazon in time for the holidays (I had a problem with a contractor). Finally, I bought quite a bit of inventory on Black Friday and during holiday sales with the intention of holding it to sell later (like discontinued Lego sets).
Selling that 98K looked like this: Q1 – 26k, Q2 – 18k, Q3 (July/Aug only) – 24k. I started September with about 30k of inventory. I cleared out all the junk in August before the long term storage fees and what I’m holding now is for the holidays.
As far as your nerves, I like to look at it almost like a portfolio of stocks. Just like I’d never put 50% of my investment money into one stock, I won’t put 50% of my inventory funds into one product. I keep track of my “investments” in each product and usually limit investment in any one product to 2-3% of my inventory portfolio.
As far as the competition, I have found a few successful strategies. I find that the majority of the competition is looking to make a fast buck. Last year I focused on patience and holding prices higher. It paid off on many products, as my products still sold for a higher price once many others sold out. Another strategy I’ve found is to make my own bundles when competition is too fierce. Finally, nothing beats searching for products that have very little competition. For example, in toys, if you drop back to items that are in the top 5,000-10,000 sales rank range, there is much less competition that the top 100, or even 1,000 toys.
Thanks for the detailed response…
You changed your strategy a lot from year 1 & 2. I remember back then you went up to 100K rank in toys.
All this time, I thought you were going 100+ units deep at a higher % of capital than 2-3%. I’m a big risk management guy, so your strategy makes more sense to me now.
Wow! you bookmarked pages and constantly checked previous sale items you bought? I can see why you said hunting deals took so much time last year. Searching clearance/sale sections and also rechecking previous sale items can take up a ton of time.
The price alert plugins are interesting, but I assumed you needed another retailer source at equal price or for the buy box to be a merchant seller with massive quantity for it to be useful for reselling. Have you been able to automate your buying via these alerts?
Do you have a cut off for total sellers before buying an item?
You mentioned that you simply wait out the lower priced competition. Have you had any success getting the buy box & selling above the recent historical keepa/camel price charts for items?
Do you worry if Amazon is one of the prime sellers below you? From my experience Amazon does sell out, but waiting them out could take quite some time.
How long are you willing to go without a sale without price adjusting?
Thanks again for being so open about your experience with Amazon.
A lot of work, but big payoff … best of luck this season!