A step-by-step guide to what sells on Amazon during the holidays, and repricing for maximizing profits during the Amazon sales explosion.
Settle in: Here’s the top 4 things I’m going to cover on how Amazon sellers (that’s you) should prepare for the holidays (that’s now).
- What sells on Amazon during the holidays? (non-obvious list here)
- My Amazon holidays pricing (and repricing) formula
- Why FBA sellers rule the holidays
- The Golden Rule of repricing for the holidays (not boring)
Video: Prepping For The Holidays – A Guide For FBA Sellers
I put together a video version of this article (but the article is more in-depth). Here it is:
What sells on Amazon during the holidays?
If your answer is “everything,” that’s not quite accurate.
While it’s true that everything sees a surge in Amazon sales, one category explodes far and above the rest: New items.
People during the Holidays want the new stuff. That’s pretty much it. Amazon buyers give new items as gifts, not old textbooks.
Ask yourself if you’ve ever ever purchased a used item on Amazon as a gift? Giving someone a used item is kind of a faux pas, and not considered “normal.”
If you’re primarily an Amazon bookseller, you’re going to focus on
- New condition books
- “Giftable” used books (collectibles, box sets, etc)
An exception to “new books” are collectible items that are our of print and have no “new” option. It’s true that sales of everything go up during the holidays, but inventory outside this list will not be a significant driver of Amazon sales. It’s much higher-impact to focus on this list: Specifically, new condition books, collectible books, and “gift”-type books (box sets, etc).
At the time this post is going live, it’s a little too late to adjust your Amazon sourcing for the holidays, and this is the time to focus on the only thing you can control that directly translates to maximum profits on Amazon: Your pricing (and repricing).
My Amazon holidays pricing (and repricing) formula
Here’s what you’re going to do, just before Thanksgiving (that’s now, as of the time I’m posting this):
Tear through your Amazon inventory and reprice everything “unreasonably high.”
Remember the logic here: Amazon sales are going to explode starting the day after Thanksgiving, and all pricing rules are going out the window. Amazon buyers are going to be running wild through Amazon, buying up (almost) everything, which makes it pricing-suicide to not adjust your prices accordingly.
Amazon turns into a stampede riot of biblical proportions. That means your normal prices just before Thanksgiving are probably too low.
Don’t be the Amazon seller getting November 20th prices for their Amazon inventory on November 30th.
Why Your Amazon Repricer May Not Save You For The Holidays
Your automated Amazon repricer (or at least the repricing rules you have set) are (probably) going to be more of a liability than an asset during the holidays.
To modify a statement from above: Don’t be the Amazon seller applying November 20th pricing formulas on November 30th.
What do I do? I reprice my medium-to-high-demand inventory with the expectation it’s all going to sell out fast when Thanksgiving hits. I don’t want to be the Amazon seller with a $20 book with a Best Seller Rank of 30,000 while thousands of Amazon customers would gladly pay me $35 for it.
Like the saying goes: “If it sells too fast, you priced it too low.”
So, just before Thanksgiving (like, the day before), I’m going through all my inventory and repricing every item, one at a time, to a price that is appropriate in an environment that resembles feeding time at a starving piranha tank.
Since your repricer almost definitely can’t pull off the gymnastics required for this (e.g. “price me 10 cents below the 5th lowest FBA offer, if its more than 15% above the lowest four”), you’re going to want to reprice each item in your Amazon inventory manually.
It’s not fun. It’s not fair. But it is mandatory for maximum profits on Amazon during the holidays.
So, how should you price on Amazon during the holidays?
It’s above what you’d price your FBA offer at the rest of the year, as you attempt to hit the highest point someone might pay when they really need the benefits of FBA.
You learn this type of pricing – and all pricing – through observation and experimentation.
For every item you reprice, you’re looking at it through the lense of “what is a realistic price for this, assuming my Amazon competitors will mostly sell out.” There’s no crystal balls with Amazon pricing, but this is the basic repricing formula I follow during the holidays.
Using Amazon Sales Rank (“BSR”) To Inform Your Holiday Repricing
As always, Amazon Sales Rank (“BSR”) is the largest factor in knowing how much to price. Nothing groundbreaking here.
Expect that something “giftable” (as described above) that has an average Amazon Sales Rank of 100,000 during the rest of the year, is going to have vastly higher demand during the holidays.
Notice I didn’t say that 100,000 ranked book on Amazon is going to have a Sales Rank of 15,000 during the holidays. The Amazon Sales Rank for your inventory won’t increase to scale with the increase demand. Why? Because if sales for everyone on Amazon are going up (or almost everything), then sales rank during the holidays means something completely different.
As a hypothetical to illustrate, if sales for every item on Amazon exactly tripled (exactly), then sales rank would be unchanged. The reason? Amazon Sales Rank is a relative calculation.
Why FBA Sellers Absolutely Own Amazon For The Holidays
There’s a lot of “hype” around Fulfillment By Amazon generally, but I don’t think the role of FBA during the holidays gets enough hype.
Being an FBA seller is essentially mandatory during the holidays for three reasons:
1. ITEMS MUST ARRIVE BY CHRISTMAS: Imagine ordering a book on Amazon and getting the “estimated delivery date” they give to Merchant Fulfilled orders, where the arrival date is like 3 weeks out. Then imagine what its like to not have a gift for someone on Christmas. That makes Merchant Fulfilled simply not an option for all but the biggest risk-taking Amazon buyers.
2. MANY GIFTS ARE GIVEN BEFORE CHRISTMAS: When you factor in friends, coworkers, etc – maybe most gifts are given before Christmas. That increases the urgency for Amazon buyers even more, where is “two to three weeks” delivery estimate isn’t just out of the question, it’s super duper extra out of the question.
3. CUSTOMERS NEED TRUST – THE STAKES ARE HIGH: It’s not just delivery time that matters. Amazon buyers need to know they are going to get the exact item they ordered, in the exact condition they ordered it. The trust required is something Amazon buyers only have for Amazon (and by extension: FBA sellers).
These three things conspire to create a nuclear-level explosion for Fulfillment By Amazon (FBA) sellers.
Amazon Seller Holiday To-Do List
- Just before Thanksgiving (and every day after), identify all “giftable” items in your inventory.
- Reprice them “unreasonably high.”
Remember: Egg nog tastes better when your Amazon deposits are so big it feels illegal.
PS: Feel free to drop a comment below.
PPS: I made a video version of this article here. It’s less in-depth, but jump over there if you want to see me wave my arms and yell a lot.
PPPS: Also subscribe to my YouTube channel. Lots of videos coming…
Timur Yakubov says
Hey Peter. Good article, and you are absolutely right about the new items, but, isn’t it kind of risky to sell new books if you don’t have proper invoices or permission from the rights or brand owner? If you sell new items, Amazon can ask for an invoice, or the brand owner, or the publisher may complain to Amazon, if they did not give you the permission to sell their products as new. In any case, that is what I thought, but maybe I am missing something.
Peter Valley says
I’ve been selling new books forever. You hear these stories about requests for invoices from Amazon, and I believe they’re real, but the internet tends to exaggerate small things into big ones.
“The job of the internet is to make everyone’s problem, your problem.”
I don’t have anything new in my inventory except a couple of DVD’s, and definitely nothing I’d consider as a “Christmas collectible;” but, I’m still going through today and raising my prices on just about everything.
Peter Valley says
Good move. You’ll still sell way above normal amounts of everything this time of year.
Timur Yakubov says
OK, but try entertaining this possibility. A customer buys a new item from you, but he is not a regular customer, he’s a crook, or someone who is trying to get something for nothing. So they complain to Amazon that the item they received is opened, and therefore is not new. Amazon, naturally, does not know whos telling the truth, so the first thing they’re going to do is ask you for the invoice, which you will not be able to produce. They don’t care about your receipts . At this point, two things happen, first, you lose the a to Z claim. And second, you are caught RAing. Retail arbitrage is no longer permitted on Amazon, as far as I know. So, your account may get disciplined. And even if it does not get shut down, it may get downgraded. Once your good standing with Amazon is tarnished, they may re-introduce the restrictions on your account, such as not being able to sell many recent text books, not being able to win by box as often, etc…. Again, maybe I’m just being overly paranoid, but these are the fears that kept me from listing any item as new on Amazon.
I’ve never seen such price tanking going on here in early December, including tons of Prime offers that match—or are even lower—than the Merchant offers. I suppose there must be a ton of fire sales going on in dread of next month’s fee increases. I’m not taking part, but am leaving my prices moderately to very high in anticipation for January—even if I don’t sell a single book in December. When are FBA book sellers ever going to realize that even a moderate percentage of one’s books sold at higher prices—and hence much greater profits—is more than enough to offset any increased fees on everything else?
Peter Valley says
I agree this is likely driven by sellers trying to clean out inventory before new fee increases.