Selling small, low-priced items: is it worth it with Amazon FBA?

$35 can be a sweet spot for things to sell because of the Amazon free shipping level non-prime.

If you sell low cost items they could end up being add-on items, which means Amazon won't ship them by themselves.

Loss leading doesn't really work on Amazon, because you don't control where the lead goes...and it's a good chance it'll be into the arms of another merchant.

One idea is to take small items and bundle them into larger items. Granted for FBA you'll need to pre-wrap the bundle, cover any exposed bar codes, put a "ready to ship" sticker on each and then the FBA product sticker. Each unique bundle you create will need its own UPC code, which you can buy from a reseller pretty cheap.

You will also need to be a pro merchant to be able to create ASINs.

No matter what you do, you should always be asking if it's worth it. Keep those that are, fire those that aren't.

One of our modules that sells product on Amazon just got double whammied in October.

1) Amazon raised their commissions in our category. We don't get any more for that raise...it's just because they can...and could do it again any time they want.

2) Two Competitors jumped on our detail pages. One didn't sell much so he thought he could get the buy box by cutting the price by 1/3. Yes a THIRD! He could have accomplished the same result by reducing his price by a penny, but he wanted to slit his own throat, I guess. Needless to say, he didn't sell any more. And now because of his freaking brain fart, whatever he does sell will be at a slashed price.

Then guess who followed suit. The other competitor - he slashed his prices that same 1/3 to meet competitor number 1. Did it increase his sales? Nope...not a single one...but it did slaughter his profit too. Another genius amongus!

Moral of the story --- Amazon and eBay are side marketplaces and should NEVER be used as your main source of business/income. NEVER EVVVVVER!

Set up your own property that you control. Use other marketplaces as lead generators and places to get rid of your liquidation stuff. Bundle your stuff at $35 or more.

And ALWAYS avoid working with (or for) or competing with morons by following them into their zombie cesspool.

There you have it.

I do sell small low cost items with very little profit that I know moves very quickly. It's mostly to improve my metrics and keep them high. Amazon FBA cares a lot about things such as turn over rate, and I want to stay higher than 30% - which means if I have 100 items at a FBA Warehouse, 30 of them will sell that month. I maintain 50%, and that is very good as I have over a quarter of a million items at Amazon.

When I went to an Amazon meeting in Seattle about a month ago, they said the most commonly sold price on Amazon was $12.51 - people are almost at the point where they don't even think about making a purchase or not.

Also, another key factor in having high sales volume on Amazon is when you contact specific companies to become a distributor, they can approve you based on Amazon metrics if your statistics are good.



Lets say you are sourcing from thrift stores and garage sales though, and you find a mid-rank item that is selling for a $2.00 profit, I wouldn't touch it unless I had a lot of the same one and could somehow speed up the packing and shipping process, and if I spent very little on the items. If you have 1 or 2 of an item, and it takes you 8 minutes to place it down, grade it, scan it into you inventory, quickly describe the condition and price it, prep it for FBA, and place it in the box - then you are really only able to process 8 items an hour at the most this way. If your average profit is $1.00 per item, then you are looking at a whoppin' 8 bucks an hour.

But lets say you don't have thousands to buy higher profit inventory in bulk, and you are buying books for 25 cents a piece and you are making a $1.00 profit selling them on Amazon this way after all of your fee's, and your hourly income is at $8.00 an hour and you have a really high turn over rate and everything is selling within the first month - then I could maybe see doing this to yourself if you are planning on doing this for 12 hours a day, 7 days a week, for 3 months so that you can eventually build up the money you need to do other things. Otherwise, you are essentially killing yourself because chances are your turnover rate is not 100% every month and chances are, your profit is less than what you think.

I agree wholeheartedly. In no way can you survive in a US economy making $2-4 per sale after all the headache and work "even if you aren't stocking it yourself".

Laws of diminishing return are always in play.