Stephen Smotherman truly is a success story worth following. You’ve probably seen his guest posts (#1 and #2) on the Marketing Words blog before. I’ve invited him back once again to answer some questions on how to increase Amazon sales and provide you with a bucket load of solid info to take you into the new year. Welcome Stephen!
STEPHEN: Thanks, Karon, for asking me to do this interview with you. Before I get into the answers, I wanted to say thank you for all that you do for the Amazon seller community. Your blog posts, resources, and products are all top-notch and I enjoy recommending them to anyone who sells on Amazon. Every email I get on your mailing list is filled with an actionable tip that helps me often. So, thank you for all you do. Ok, let’s get into the interview.
KARON: Thanks! I appreciate that. OK, as the fourth quarter rush comes to an end what are the top three tasks you recommend for Amazon sellers so they can start the new year on the right foot?
STEPHEN: I love this question because most people just assume they will start their new year focus on January 1 when the calendar turns. But those who succeed view the coming year like a marathon. Marathons require training and preparation… so thinking and planning ahead right now is a great way to use your time. The top three tasks to make sure you start 2017 off right are:
- Goal setting – Many of us have goals, but a goal without a plan is just a dream. Make sure your goals are specific, measurable, actionable, realistic, and time bound. A weak goal is “I will make more money in 2017 than last year.” A great goal is “I will average sales of 200 units per month by July 2017 by reinvesting as much capital back into more inventory as possible.”
- Long-Term Storage Fee Repricing – On February 15, Amazon will charge a long-term storage fee for every item you have stored in Amazon warehouses for over 6 months. It’s a good idea now to try and reprice your inventory that will cause the bulk of your long-term storage fees (I have walkthroughs on my blog and in the YFBA book that show in detail how to do this).
- Get your books in order – If you’ve been lazy about keeping track of receipts, profits, losses, sales, etc. then now is a great time to start fresh. It’s important to know your numbers so that you can see what items, stores, categories, etc. are the most profitable for your Amazon business. Maybe you thought selling grocery items was worth the time and money, but do you really know? Keeping good track of your numbers will show you in more details how well you’re doing (or not doing). Plus, keeping good records will also help you out come tax time.
KARON: You are so right! So then, tell me… once the three things above are taken care of, what are two vital tasks every Amazon seller should do on a monthly basis?
- Reassess inventory possibilities – When it comes to RA and OA, it seems like most stores have waves of when it’s profitable to source there for inventory. Some weeks one store is great while another may dry up. Ride the waves as long as you can but when a store dries up, look for other stores to see if a profit wave is forming.
- Improve your product listings – Sometimes this means repricing your item to be more competitive. Check CamelCamelCamel or Keepa to see if you can still expect to get the prices you originally set. Other times it might mean improving the product pages of inventory you have multiples of in stock but they aren’t selling.
You asked for 2, but I’m giving you 3 because it relates back to your first question:
- Go back and review your goals and action steps. If you set goals in January and don’t revisit them monthly, you’re just wasting your time. Review your goals and see if your current actions are causing you to get closer to or move further from accomplishing them. Adjust your actions if necessary.
NOTE: You can see the free webinar replay Stephen and I did on CamelCamelCamel and Keepa here.
KARON: Thanks for the bonus 🙂 Now, let’s move from monthly to special occasions. What is your approach to planning for various holidays throughout the year?
STEPHEN: It’s smart to plan ahead to take advantage of both major and minor holidays, but I wouldn’t jump on board every holiday opportunity at first. Just pick a few holidays this year and try to be in stock for those few holidays at least 3 months in advance. It might feel weird preparing for Halloween in July, but if you wait until September to start, you’ll lose out on tons of sales and might even end up with unsold inventory. People start buying holiday-related items earlier and earlier each year, so be sure you are in stock for those customers and that you’re sold out before everyone else frantically drops their prices right before the holiday. To make quality holiday-themed purchases, check CamelCamelCamel and Keepa to see what prices and sales velocity you could expect for those items.
KARON: Do you have specific strategies related to the four seasons?
STEPHEN: When it comes to buying clothing and shoes, I only source for the season we are currently in. Clothing and shoes are usually more of a long-tail item (it takes longer to sell than other categories). It might be tempting to buy sandals during end of summer clearance sales, but it’s not likely that you’ll get the sale of that shoe until next summer. I don’t want to have too many shoes that don’t sell quickly because that shoe is currently out of season and then have to pay monthly storage fees as well as larger long-term storage fees.
KARON: Are there particular times of the year you find it easier or more profitable to source inventory?
STEPHEN: The easiest time to source for profitable inventory is during Q4 (the last 3 months of the year). It’s possible to find hundreds of items you can make a quick 50% up to 200+% ROI… even when buying full price at retail stores.
Another great time of the year to source for inventory is during August clearance sales. So many stores (RA and OA) are clearing out items to make room for all the new products that will be featured in their holiday sales push. This is especially true when it comes to toys. The “old” 2016 toys are clearanced out to make room on the shelves for the “new” 2017 toys that will be in all the sales ads come November and December.
KARON: Do you find that lowering or raising prices in general tends to happen at certain points every year?
STEPHEN: From my experience, it really depends on the category. But overall, I see most prices on Amazon begin to fall in late January and early February. This might be because of the February 15 long-term storage fee. I see the same trend around late July and early August (again, possibly because of the August 15 long-term storage fee). As for prices going up, the times I see that most is the first two weeks of December. This is when the supply of items on Amazon are going down and the prices go up.
KARON: That makes sense. During all the years you’ve been selling through FBA, where have you found unexpected income in your Amazon sales business?
STEPHEN: It’s technically not income, but it surprises me how often Amazon “forgets” to reimburse me for items that they lose or damage… or items a customer forgets to return. Following up on these items and asking for forgotten reimbursements can add up to some large dollar amounts.
As for real income surprises this year, I actually had a book replen that was sold almost 300 times in 2016. A replen is an item that sells so often that inventory continually needs to be replenished. Most replens are consumable items like grocery or health & beauty items, but I would buy the book in cases from my source, and it would just continually sell for great ROI. That was a nice surprise.
KARON: Wow! Good for you! So, to wrap this up, what advice can you give to sellers on how to increase Amazon sales and stay organized with their Amazon businesses?
STEPHEN: Don’t try to organize everything on your own. Use free and paid tools like Evernote and Inventory Lab to keep your ideas, plans, goals, numbers, profits, etc. organized. Also, when things get to be too much for you, hiring help to do some of the simple aspects of your business will free you up to do more of the most important aspects, including keeping everything organized… and that almost always leads to more sales!
KARON: Thanks Stephen. As usual, you’ve provided lots of practical, usable tips that sellers can use to help create a significantly more successful new year.
STEPHEN: It was a lot of fun and I hope your readers will get a lot of actionable content from it.
Stephen has recently updated his popular ebook, “The Reseller’s Guide to a Year in FBA” with more content, Amazon strategies, profit opportunities, tips & tricks. PLUS, now when you buy “A Year in FBA,” you also get access to free, monthly webinars with Stephen!
From December 27, 2016 – January 2, 2017, you can use this special link and coupon code NEWYEAR10 to save $10. As of January 10th, the price will increase for good.