If you’ve been a reader of the Marketing Words Blog for very long, you probably remember past articles from Stephen Smotherman. I love interviewing him because he always shares extremely valuable and detailed information. This time is no different!
I’ve invited Stephen back for his third time to discuss the ins and outs of successfully selling shoes on Amazon. I was privileged enough to get a preview copy of his newest ebook “The Reseller’s Guide to Selling Shoes: Kick up Your Profits with New Shoes via Amazon FBA” and was highlight impressed. Welcome back Stephen! Let’s talk shoes 🙂
Honestly, as much of a shoe horse as I am, it seems like selling shoes would be a pain. I know from experience that people (read: ME!) are picky about shoes. If the size is wrong or the color is off, back they go. Can you give me 3 good reasons to sell shoes?
I could probably give you 30, but here are the 3 best reasons:
- Less competition – Since the Shoes category is gated, there is less competition for selling shoes. When it comes to books, toys, home & kitchen, and other product categories, I’ll see Amazon product pages with hundreds of sellers all fighting for the next sale, while in shoes, there are countless shoes with only one seller, two sellers, or sometimes even no competition at all.
- Higher ASP = higher profits – Your ASP is your average selling price. Because of the way Amazon’s fees work, you can make a lot more profit when your ASP is higher. When you sell ten items at $10 each, you get $100 in sales, but you have the Amazon sales fees ten times… but if you sell one item at $100 each, you only pay the Amazon fees once. A higher ASP will help you get bigger disbursements – plain and simple.
- Higher ROI – With shoes, it’s totally possible to average over 200% ROI (Return on Investment). When we started selling shoes, we make a lot of mistakes, but after the initial learning curve was conquered, we were averaging over 200% ROI for many consecutive months. Sure, books can give you a higher ROI sometimes, but would you rather turn $1 into $10 with the occasional book sale, or turn $30 in $90 on a potentially daily basis with a shoe sale?
200% is crazy! But it can take some time to get there, right? I know you and Rebecca had a rough start when you decided to sell shoes. What 3 lessons did you learn that others can benefit from?
- Shoe sales ranks can be tricky – Just like any category, the sales rank numbers in the Shoes category translate totally differently than the other Amazon categories. The Shoes category is especially different. It took about 6 months on our own to get a handle on how to best understand sales ranks of shoes, but once we did we were able to make some great sourcing decisions.
- Shoes are more of a long tail item – While we do have some shoes sell the moment they hit the Amazon shelves, most shoes take a while to find their owner. The good news is that we’ve been able to figure out how to source the best shoes that almost always sell before the 6-month storage fees are calculated. Shoes just require a little more patience, but I believe that my patience brings me big profits.
- Stick with the popular sizes – While some Amazon shoe sellers rave about selling the really big or really small sizes, we have found most of our success sourcing shoes that are the most popular sizes. For ladies those sizes are 7, 8, 9 and for the men 9, 10, 11.
Got it! Before we jump the gun, I guess I’d better ask this: Is it hard to get ungated in shoes?
Not at all. In the past, getting ungated in shoes required sellers to go through the process of uploading flat files and other hoops to jump through, but as of this writing, it’s fairly simple to get ungated. The application process to get approved to sell shoes on Amazon requires you answering a few simple questions and to upload some pictures. These questions make sure you understand the Amazon guidelines and expectations for selling shoes.
Yeah, Amazon always has tons of rules about everything 🙂 I know sellers need to read the Seller Central pages, but what – in particular – should they be leery of when it comes to selling shoes?
Yes, it’s so important to know the Amazon guidelines so you can keep your seller account safe. Here are the top 3:
- New shoes only – When it comes to shoes, only new shoes are allowed to be sold on Amazon. You’ll want to inspect all the shoes to make sure there are no scuffs, marks, or any sign that the shoe has been used. If you do buy used shoes, then eBay is the place to sell those.
- Source from reputable sources – Obviously, you want to be sure your shoes are not counterfeits. This means sourcing your shoes from a reputable source. Some people sell shoes via liquidation, but I don’t know how they could know if it was a fake or not since it’s not from a verified manufacturer or distributor.
- Prep and pack the right way – Amazon also has specific guidelines on how to properly prep and pack shoes to be stored in an Amazon warehouse. If you don’t do it right, Amazon will charge you and your account will get dinged.
What’s your opinion? Is it better to source shoes through arbitrage, wholesale or flips?
In all honesty, all methods other than liquidation are good possible strategies to source profitable shoes. We’d love to wholesale shoes, but unless you have an actual brick and mortar store, it’s almost impossible to get a wholesale account in shoes. We have found our best success with online arbitrage, but we know of 6-figure shoe sellers who also focus on retail arbitrage shoes.
Good to know. I’m sure everybody’s selling strategies and results will be different, but what average ROI have you seen with shoes?
When we first started selling shoes, our average ROI was around 50%, but that’s because we were still trying to conquer the learning curve. After 6 months or so, we were averaging about 200% ROI on a consistent basis. Right now, we’re averaging about 70% ROI, but that’s because the confidence in our shoe sourcing decision has grown so much that we’re more confident to source shoes with lower ROI… I mean, 70% ROI is still amazing with the quantities we are selling.
Congrats on that! Can you share some tips on how you pick the best brands, styles, sizes and colors to sell?
It’s funny, we sell brands we’ve heard of and brands that are new to us… we’ve sold shoe styles that are boring, and some that are wild & crazy… and we’ve sold shoes that are the most popular sizes, and some that are the outliers, but overall, we have found our most success in sourcing the shoes that are the most popular sizes with the least “flashy” styles. But we don’t solely (shoe pun!) source those shoes. If the sales rank is really good, then we’ll buy almost any weird, crazy, flashy, huge or tiny shoe out there. If we think we can make a good ROI, we’ll pull the trigger.
How did you decide on an inventory budget when you added shoes to your Amazon business?
When we first started selling shoes, we set aside a few thousand dollars to invest in our first shoe sourcing experiment. We felt that it was enough to get our feet wet and to see how things would work. We called it an experiment because we had no idea what we were doing. While we ended up eventually selling all of the shoes in the experiment, we learned so much during the process that we were able to adjust our shoe sourcing strategies to the methods we use to find the most profitable and faster turning shoes today.
Do you follow a formula when deciding on price points?
Most of the time, we look at the price history on Keepa, as well as the prices of the other shoe variations, and then price appropriately. If we are the only seller of that variation, then we’ll price a percentage higher than the other sizes, but not too high. If there are others selling that variation, then we’ll compare our competitor’s price with the prices of the other variations and come up with a price we think is most competitive. All of these factors, included with a few gut feelings, help us come up with our selling prices when it comes to selling shoes.
Tell me about returns. Do you get a lot of returns? How often can you add those shoes back into inventory? What cost is associated with returned shoes?
Out of all the Amazon sales categories, the Shoes category is one of the worst when it comes to the frequency of returns – but one of the BEST when it comes to returns that are still sellable. It’s obvious that customers are going to return shoes more often than other categories because of the fact they might not like the fit of the shoe. But after selling thousands of shoes, I’ve only had 2 or 3 that I’ve had returned to Amazon as unsellable. It seems like almost 100% of the time, when a customer returns a shoe to Amazon, the Amazon warehouse inspects the shoes, deems it as still in sellable condition, preps it properly for sale, and puts the shoes back into my inventory as sellable. So, while I do get shoe returns, I almost never have to deal with them as they end up sold to a happy customer soon after.
Thanks so much! I always learn a lot from you, Stephen.
If you want to learn even more, take the next step and get Stephen’s new ebook “The Reseller’s Guide to Selling Shoes: Kick up Your Profits with New Shoes via Amazon FBA.”
This course is a combination ebook (over 100 pages) and video course (4.5 hours of content). The book and the videos have the same content, so it’s easily consumable in a book or video form.