The only two reasons your Fulfillment by Amazon (FBA) inventory isn’t selling.
Let’s say you have some inventory at the Amazon warehouse, and it’s not selling to your expectations.
Some common scenarios:
- You ship a bunch of books in, have big expectations, then check your “Orders” page, and… crickets.
- You were sure you’d make X amount in X number of days, and things fell far beneath expectations.
- You’re comparing your revenue against last year, and things are down. You have the same (or more) inventory, but sales aren’t increasing to scale.
All three of these things are very common. And there’s only two (major) reasons for it. Let’s give you a two-step diagnostic test to determine what could be wrong.
Let me defend my bold statement there’s “only two reasons”
Yes there’s more than two things that would cause your Amazon FBA inventory to not be selling.
- Your Amazon feedback score.
- You condition description.
…plus many other things that don’t affect Amazon sales that much. These factors barely move the needle.
What matters is The Two Things.
The following are NOT the reasons your FBA inventory isn’t selling:
“People aren’t buying books anymore” – Absolutely not the case and there are no stats that back this up.
“Amazon changed the Buy Box” – Amazon has built such massive fulfillment warehouse infrastructure to sellers into their platform. If any change they made caused a dramatic drop in sales of FBA offers, they would implode.
“Amazon prices have gone up after new fees and people aren’t buying.” Similar to the first one. Prices have gone up, but barely. And not enough to affect sales so much that you’d notice.
“I don’t have the Buy Box” – Amazon’s Buy Box can be significant, however it’s role in sales is greatly exaggerated and probably much less important in the Books category than other categories. Sales may go down when Amazon makes your offers ineligible for the Buy Box (usually temporarily), but it should never break a business.
“Merchant fulfilled sellers offer free shipping now” – This is the weirdest one you hear, after Amazon allowed Merchant Fulfilled sellers to set their own shipping price earlier this year. It misunderstands why people buy Prime, and literally nothing has changed – shipping didn’t become “free,” Amazon sellers just moved the shipping price over to the base cost of the book.
Before we get to The Two Things: Revisiting the 30/60 Rule
This is a rule I developed over years selling on Amazon (first discussed at length here).
The rule sets out to answer two questions:
- How quickly should I expect to get my FBA inventory investment back?
- How quickly should my FBA inventory turn over?
We’re focused here on inventory turnover, and it tends to be especially accurate for that.
Here it is:
“You will at least double your investment in 30 days, and sell at least half your shipment in 60.”
You can build a whole Fulfillment by Amazon business around these projections, and the Rule will rarely fail.
So your first step in deciding if you have an inventory turnover problem is to see how well it currently aligns with The Rule. If you’re selling roughly half your shipment after 60 days, you probably don’t have an inventory turnover issue at all.
But if you do, The Two Things are the reason why…
The Two Things
Here they are:
- Low demand inventory.
- Poor pricing.
Let’s address both. (Spoiler alert: The second one is vastly more common).
#1 Low-demand inventory
If you ship in low-demand inventory, your inventory won’t sell as fast. Sounds ridiculously simple, yet sales rank is often dismissed by Amazon sellers as a merely academic distraction. You’ll hear things like:
“Well sure, lot of my inventory is poorly ranked, but still….”
Average sales rank is not a mere trivial fetishistic indulgence for Amazon mathematicians. It is literally the only thing that measures how regularly an item will sell on Amazon.
But here’s the thing: There is nothing wrong with shipping in low-demand inventory. It is in fact strongly encouraged (provided the profits are good and you won’t get killed on Amazon’s long term storage fees).
So the solution to inventory not selling as fast as you want is not to stop shipping Amazon slower-selling inventory. The solution is to adjust your expectations to align with reality.
Amazon sales rank is a huge subject (and its been covered extensively on FBA Mastery). But you must understand sales rank to be successful on Amazon.
The lower the demand of the inventory you ship to Amazon, the slower your sales. It’s not a bad thing, but it is a factual thing.
#2 Poor pricing and repricing practices
Two parts to this: Pricing and repricing.
Here are two seemingly contradictory facts that are uncomfortable to admit:
- Always matching the lowest FBA price is not a winning FBA pricing strategy. Pricing higher than the lowest FBA offer much (or most) of the time is a winning FBA pricing strategy.
- If your book isn’t matched with the lowest FBA offer (or is not the lowest FBA offer), its the same as the book not being for sale at all.
What this means is: If you want to get the most money for your FBA inventory, you must practice a pricing strategy that inherently means your inventory won’t turnover fast.
Your job is not done when you ship your books to Amazon. Remember what I said about how if your Amazon inventory is not matched with the lowest FBA price, it’s the same as the item not being for sale at all?
This means that half (or more) of your inventory effectively wont’ be for sale even after it hits the FBA warehouse and goes live. Prices change fast. They even change between when you ship and when your books hit the FBA warehouse. They may even change before you get to the UPS store.
If you’re not repricing Amazon inventory regularly and often to optimize your FBA prices (not that does not always mean drop your prices), that means at any given time the majority of your Amazon inventory is effectively not for sale.
Price smart and reprice often, and watch your FBA inventory turnover (and/or Amazon revenue) go way up.
FBA pricing strategy is a huge subject. And I have a course on it: Pricing Mastery.
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