My formula for paying $7 an hour to do the boring but necessary job of outsourcing my Amazon FBA repricing.
The urgency of outsourcing my repricing
You have many tasks as a Fulfillment by Amazon seller. And there is one that has the worst ratio of “boring” to “profitable“: Repricing.
When an item has a price that is not optimized (note: That doesn’t mean “lowest”), it may as well not be for sale on Amazon at all. And when you multiply this times thousands of items, there’s a lot of money at stake.
Recently, I became desperate to unburden myself of the task of repricing my Amazon inventory.
Why FBA repricing software is not the answer
For FBA sellers, repricing software is unusable, and I abandoned it awhile ago. I’ll be doing a whole post on this soon, but the gist of the issue is:
FBA repricing software can’t see many FBA offers, making it functionally unusable for people who sell media with FBA.
(I single out media specifically for a reason that I’ll explain in a moment.)
(PS: And if this “FBA blindspot” with software is news to you, see my article “Sorry, but your scanning app isn’t showing you FBA data anymore.” The reasons that scanning apps aren’t showing FBA data also apply to repricing software. It’s not the developer’s fault, Amazon just won’t allow it.)
So I stopped using FBA repricing software. And I started doing something a lot more powerful and precise.
What is a virtual assistant?
You may or may not be aware of virtual assistants. These are people, often overseas, who can perform just about any business task in the world that you’d rather not do yourself. If you can teach it, you can pay someone to do it for you.
Sites like Upwork.com offer an endless supply of talent, who can do tasks from the mundane to the specialized.
For $3 an hour and on up (depending on the country and skill level required), you can have just about anything done, allowing you to dedicate your time only to parts of your business (or life) where you are truly indispensable.
How does this apply to outsourcing Amazon FBA tasks?
I recently handed over what I believe is the most sensitive facet of a Fulfillment by Amazon business: repricing.
My journey into outsourced labor
I first hired someone on Upwork earlier in the year to do basic internet research for 5 hours a week.
I had a thousand “to do” lists laying around, most of them filled with various ideas I had that I just didn’t have time to pursue. Many of these were directly related to my FBA business (emailing sources to arrange bulk buys, researching unpublicized book sales, etc). Others were about miscellaneous other things I didn’t have time for (the best software to record music on a PC, planning my travels, etc).
I had no idea what I was doing, I just knew I had a lot more plans than time. So I got a book called Virtual Freedom that broke down all the ins and outs of outsourcing various facets of your life and business.
I went on Upwork and hired someone to handle basic internet research. I started at 5 hours a week and $7 an hour.
How I hired and trained a virtual assistant
This isn’t meant to be an exhaustive look at how to hire a virtual assistant, but the basics were pretty simple: I emailed him (his name is Martin) what I wanted and when I needed it by, and if it was something mildly complex, I would make a quick Camtasia video (screen capture software) showing him how to do what I was asking. Pretty simple.
(Loom is a free alternative).
I was amazed at what I could get done for $35 a week. This small investment was yielding massive returns.
So I began to ask…
Was it possible to outsource Amazon FBA tasks even more?
I had heard of people outsourcing their Amazon sourcing. And I was open to it, but I wasn’t there (and still am not) just yet.
I had also heard of people outsourcing their Amazon listing, but I was even more resistant to this. Listing is where the rubber meets the road, and it freaked me out for two reasons:
- Grading improperly could get you banned from Amazon
- Pricing is where the money is made. And my pricing formula was so dynamic, fluid, and complex that I didn’t think it could be taught.
I decided repricing software was toxic for FBA sellers
I’d always done most of my Amazon repricing manually, but some bad experiences (and deceptive claims from repricing software companies) led me to pull out from all FBA repricing software. This is a subject for another article.
So I went back to the caveman approach: Repricing my FBA inventory manually.
Manual repricing isn’t practical for many Amazon sellers. FBA is a lifestyle business for me (vs. a full time job), and it’s a rare week where I’m working more than 25 hours. So I’m nowhere on the level of many sellers (including a lot of you reading this).
Yet even at my level, repricing manually is not practical. But with the limitations of the existing software, there really was no choice. Or was there?
My old approach to FBA repricing
With the low price I pay for most of my Amazon inventory, and the high FBA prices I set, it’s easy to neglect repricing. I’m almost always tripling my investment very quickly, and letting Amazon inventory that doesn’t sell in the first 30 days just sit back and bide it’s time, waiting for a sale.
So I never gave repricing much thought. I get to it when I get to it. That includes periods where I’m consistently repricing the majority of my Amazon inventory every week, and (longer) periods where I’m repricing every month or two.
As I say about a lot of things: “High margins = the luxury of not caring.”
My main obstacle to outsouricng Amazon FBA repricing
When considering outsourcing, I went back to my original sticking point: I didn’t think my FBA pricing formula could be taught. There are so many variables and scenarios that factor into my pricing decisions that I’d never consciously broken it down into a formula.
Variables such as Amazon sales rank, sales rank history, the type of book, existing FBA offers, and several more all factor into the price I set. Even if I make these decisions in a split second, there’s a lot that goes into them.
Merchant fulfilled sellers have it easy. They just match the lowest offer and they’re done. Bottom-feeder Fulfillment by Amazon sellers have it just as easy. They match the lowest MF offer and they’re done. And less aggressive FBA sellers who simply match the lowest FBA offer also have it easy.
I’m none of the above.
I don’t believe in high turnover. I’m into high profits.
Creating an air-tight (& teachable) FBA repricing formula
This is where it gets complicated. The trick to working with virtual assistants is being very, very clear and precise about what you need done and how, down to the smallest detail.
So I sat down to do the impossible: Take my FBA pricing formula and put it to paper. Make it so clear, it could be taught to a robot.
It was hard. There is so much to pricing FBA offers, I almost gave up many times.
I decided there were six variables that factored into FBA pricing, and an additional six different ways to price.
This created a virtually unlimited number of pricing scenarios, each of which must be handled differently.
Even if there was no “right way” to price, I knew I made a lot more off my FBA inventory than other Amazon sellers with inventory 3x as large as mine. So while there was no such thing as a “perfect” FBA pricing formula, I felt mine was pretty close.
I had a pretty good rapport going with my virtual assistant Martin (he was in the Philippines), so I decided to test the outsourcing of my repricing. There was a lot of money on the line if he handled this poorly, so I had to leave no uncertainty as to how to price in every possible scenario.
How I taught a virtual assistant my FBA repricing formula
I created a Google Slides presentation where I explained virtually everything imaginable relevant to pricing. I explained Amazon sales rank, sales rank history, how to tell if a book was a textbook or not, and literally dozens of other details.
Then I filmed myself pricing 100 books and narrated the entire thing. This extracted a lot of things in my head that had been subconscious up to that point. I added about 10 more slides to my Google Slides presentation.
My presentation was literally 2 hours.
Then I created a 7-step process to go through with every single item.
“Is the sales rank better than 1.2 million? Make sure it’s not a textbook, and click over the Amazon. Then look at the sales rank history. Has it ever been ranked worse than 2 million? Reprice to match the lowest FBA price. If it’s a textbook, look at the average rank during late-August and early-January….”
And on and on and on….
Then I filmed myself (using Camtasia) manually repricing using the 7 steps. How to login, go to the Preferences page in Manage Pricing, and what boxes to check. How to go through my inventory and in what order to look at the variables (type of item, Amazon sales rank, etc etc). Then how to set the right price and save the changes.
Example: Teaching a virtual assistant to reprice based on book type
To give you an example of how complex my formula got, I instructed that just among books, there were six different books types to consider, and each must be repriced slightly differently.
- New books.
- Books slated to become obsolete quickly (directories with a year in the title, travel books)
- Everything else.
And I probably missed a few. That’s just one example of the six data points I instructed my virtual assistant to consider when determining a price.
And did I mention all the miscellaneous rules to consider before even looking at those data points? “Don’t reprice anything that hasn’t been in inventory at least 30 days.” That was one. (I include the date in the SKU so it was simple to determine).
And did I mention the 3 PDF tutorials I put together?
I couldn’t even begin to go into all the details I put into my video + instructions here. When I was done, all I could think was that I had no idea I had this much to say about Fulfillment by Amazon pricing.
It was brutal. But if I could pull off outsourcing Amazon FBA repricing, this would be huge.
Putting my virtual assistant to the test
I sent over all my videos, and asked Martin to reprice one page of FBA listings. He recorded the entire process for me to review.
I watched the recording, pointed out where I would have priced differently, added a few things to my training materials (I was preparing for the possibility of another virtual assistant handling this at some point), and had him repeat the process with another 50 items.
After 7 to 10 tests, we had pretty much weeded out the possibility of any serious errors. I knew I had to be comfortable with no one every getting it perfect, but I knew the huge benefits of having my FBA inventory consistently “price optimized” more than offset the errors.
Six weeks into the outsourcing Amazon FBA repricing experiment
Martin has been doing awesome, and I’m getting a return of way, way more than the $7 an hour I’m paying him.
He’s great about sending me an email or video any time he is uncertain how to price something, and I immediately correct whatever ambiguity there was to my instructions that caused the confusion, so my tutorials are consistently being refined.
I set up a priority scale for my FBA inventory – some tiers of items I want repriced between daily and weekly (books with a poor Amazon sales rank), and others I’m fine being left alone for weeks at a time (high-demand FBA inventory for which the pricing is volatile).
And being able to sit back and watch the results has been amazing.
A word of caution: outsourcing Amazon FBA repricing is extremely delicate
If you have an FBA pricing formula that can be explained in one paragraph, its not nearly nuanced enough, and you’re leaving a ton of money on the table.
And if you’re trusting your media items to repricing software, you’re taking a flamethrower to your profits. (sorry to repeat, but you simply must read and understand my article on the FBA blindspot).
The Outsourcing Amazon FBA Repricing Experiment: A Success
The good news is when your items are repriced both properly and consistently (remember: in a way that no repricing software can offer), you’ll see a huge spike in your revenue.
I’m fond of saying “the money is in the pricing.” And it is.
But since outsourcing Amazon FBA repricing to a virtual assistant, I’ve gotten to focus on where the money really is: Sourcing.
PS: If you have any questions about how to implement this yourself, leave a comment below.
Peter, you’re such a tease. What do you have up your sleeve? 😉
Awesome information, as usual, btw. Thank you.
Do you give the VA access to your Amazon account? That sound risky. If not how do you do it
Peter Valley says
I had a working relationship with my VA for several months prior to allowing him access, and there would have to be a malicious motive to do anything with the account access – there is very little personal information visible to him (no CC info, etc).
Hopefully your virtual assistant doesn’t have access to your seller account and isn’t making the pricing changes directly on Seller Central.
How does your Virtual Assistant get you the pricing changes? An Excel spreadsheet that you upload?
Have you caught any manual pricing mistakes so far?
Peter Valley says
Tracking each change would be time-prohibitive. I check samples of his work regularly.
AZ Mike says
Man, I’d love to see a copy of that Powerpoint, Peter.
Peter Valley says
I’m thinking about how I might revise it for public consumption now…
Yes please! 🙂 This is a major sticking point in my business.
Todd E says
With the ability to set user permissions and only limit his access to pricing I don’t really see much of a risk. Many people have hired others and given access to Seller Central, there is always a risk, but you have to weight the risk vs benefit and it seems clear in Peter’s case.
Hey Peter, congrats on the hire. My entire book business is outsourced. I don’t buy books, list, ship, reprice them or not involved in any aspect of day to day operations at this point. It’s freeing up my time to pursue other businesses. For $7 hour, you should be getting a high-end Filipino VA. My overseas VA’s are paid $1-$3 an hour.
Peter Valley says
I agree $7 an hour is much more than one needs to pay for basic tasks. For the sake of simplicity I didn’t mention I initially was looking for someone who had video editing skills, and liked him so much I had him do less specialized work (like repricing) as well.
KENNETH EDEN says
Hi Ashley, Re. your comment-
I have been looking into total outsourcing for some time, but cant figure out how to deal with the listing quandary! Any advice would be treasured. I am based in U.K incidentally. Blessings.
And I will disagree with you on point – the money isn’t in the sourcing. The money is in outsourcing the sourcing.
a long says
Genius. Love how your mind works, Peter.
I’ve been trying to figure out the same thing. But I’m less concerned with hard parameters than with the fact that a human being with human judgement looks at my listings regularly. I figure, many times, it will be a judgement call one way or the other; the trick is to help my VA develop a judgement that is as similar as possible to mine (probably easier than teaching my husband to mirror my judgement, who would be the other candidate for this job.)
I like your idea of having your VA record the repricing and then you tell him how you would have done it differently. That’s probably easier than trying to explain things in text.
Great article Peter. Is any of your take on FBA repricing outlined in any of your publications, ie. AZ Autopilot? I would be interested if you decide to publish any of your tutorials, just to even understand for myself where you are coming from with repricing.
Peter Valley says
I cover pricing in Amazon Autopilot and my free pricing report, and will be covering it more in-depth in something I have coming up.
Dave Stewart says
Peter, I would like the Power point also just to see the fine points to see what you do differently than I. I find that the analyzing part, for me is a slower process. But my analyzing processes, have slowed with age. Determining listing price is easy compared, to repricing which can change before the item reaches a warehouse.
Pat G says
Greatinfo as usual
Can I ask you a quick question if not to personal
Was size inventory balance do you average at The almighty Amazon warehouses
Of of the inventory balance how many avg sales a month
Reason for asking is I price everything very high as per most of your guidelines , then set it and forget it. I have very Little sales averaging about 20 books a month on a 3500 piece inventory avg balance ?
Any thoughts or numbers you could share would be great
Thanks for all you do
Peter Valley says
I would say 20 books a month on 3,500 items would indicate a problem. In most instances, this indicates someone has a lot of books that have very low demand / poor sales ranks.
The other possible issue is having too many other FBA offers below yours.
Umm, this is awesome and totally needed. You’re so right. The repricers aren’t there yet for books. If you’re ever feeling generous I’d love to know more about the training you sent them so I can delegate this task. Thanks!
Peter Valley says
I’ll be sharing this soon.
I’m very excited to learn more about this process. It seems that this is a great solution. Does your VA have time for another client?
Peter Valley says
I’m keeping him pretty busy, but there’s a lot of qualified people out there.
Peter – As usual, thanks for the invaluable insight. I await further tidbits – maybe a PowerPoint – or a section of your pricing tidbits.
Bethanny Parker says
I’d like to see that Powerpoint…and the videos…and, oh yeah, you might as well throw in the .pdfs too! 🙂
Peter….awesome info and thank you for giving us a glimpse into your brain. You know that we Valley-ites are going to be beating down your door for more of your wisdom on this topic!
Peter Valley says
Oh my gosh. You said “Valley-ites.” I don’t know whether to laugh or hide.
I love it – I also wonder if you aren’t over stating your case slightly for re-pricers being USELESS to FBA sellers.
I shared this blog post on certain groups because I thought it needed to be heard. From many people I got a ‘so so’ reaction. Something along the lines of “well my sales have increased 3 fold since using a re-pricer, I may not make so much per sale but i’m still making 500- 600% ROI and i’m happy with that for not having to go through the pain of manual rep-pricing” They kind of have a point with the accepting 500% ROI since in most businesses people would sell their own grandmother to get that kind of ROI. The fact that they COULD have maybe got 9000% ROI on that books is another matter of course.
Peter Valley says
Thanks for sharing.
I’ve referred to this as the “cult of turnover.” The views you mention are predicated on a false dichotomy: That it’s either use a repricer to sell items for less than what they’re worth, or don’t sell them at all. But there’s another option, as my article described.
Wow, this was a fantastic look into the multi-layered world of re-pricing, I love how your mind works. Count me as a member of your fandom and among those eagerly awaiting the opportunity to peruse the tutorial/powerpoint/video/pdf “pricing formula production” should you decide to grace us with it. That would be golden!
Just curious… has Peter put out the power point yet?
Peter Valley says
Not yet. It’s coming in January.
M Scott says
Hi Peter – Checking to see where you have the powerpoint available…
Peter Valley says
I’m working on this as we speak. I’ll announce it soon.