Debunking 8 FBA myths

Despite our tireless efforts, it seems like every day I see someone give out some morsel of misinformation about selling products on Amazon.   It seems like these myths are so prevalent that they take on a life of their own.  Let’s call them, collectively, the big green FBA Monster.   All too often I see that new sellers are becoming discouraged at their perceived lack of success.  There are so many of these inaccurate, canned responses that I would like to set the record straight on a few things.

 

  1. The myth that sales rank charts actually do anything:

 

This is probably the biggest myth I see on a daily basis.  This so prevalent that I wrote an entire post about it.  For more information in a good amount of detail, see my previous post, Why I Hate Sales Rank Charts.  If you haven’t read it already, take a few moments to read it now.  We’ll be referring to it several times in this post.  Plus, it’s really good.  It has bar graphs of my favorite pies, and pie charts of my favorite bars.  Not really, but it has some really helpful visuals.  I’ll wait…

 

  1. The myth that you can predict monthly sales using a website:

 

Did you read that post yet?  Good, you’ll need it to understand this myth debunkment, too.

 

This is another huge myth.  There is a website (I’m sure we all know what that website is) that claims to predict how many of an item you will sell daily based on the sales rank of an item.  They call it an “estimate.”  Here is the problem… it’s simply wrong!  A few reasons you can’t predict the sales volume of an item based solely on the sales rank —

a) Sales rank changes constantly.  Remember that comparison we used to the speed of your car during a trip?  You don’t travel 15 MPH the whole time, nor do you travel 70 MPH the whole time.  Usually you’re traveling at some rate in between.  Using that sales rank alone to try to predict sales volume is instantly a folly.  Read the post I mentioned earlier for more information.

b) It doesn’t take into account the amount of competition on a product.  Let’s face some unfortunate facts.  If there are 1,000 sellers competing for the buy box on an item, you are less likely to get it than if there are only 3 sellers.  The above site does not take that into account.

c) It doesn’t take into account the price you’ve set.  If an item is selling at $100, and you set your price to $90, you will probably sell more of that item than if you set your price to $110.

d) Let’s not leave out that good ol’ anecdotal experience.  I have used this website to predict sales volume of items in which I’m the only seller, and the estimate has been way off. Estimates have been both way high, and way low.

 

  1. The myth that you absolutely can’t compete against Amazon:

 

This myth is a tough one to debunk, because it’s partially true.  If Amazon regularly sells an item very inexpensively, and it never goes out of stock, you probably shouldn’t try to compete against Amazon, unless you can undercut their price.  However, if you are able to profitably sell below Amazon’s price or match their price (which is very common), you could easily compete with them.  Personally, I’ve find that if I match the Amazon price, I will hold the buy box about 25% of the time.   Another time when it could be a good idea to compete against Amazon is around Christmastime.  If Amazon happens to go out of stock on a desirable item, the price of it can skyrocket.  Using this model, I sold 25 Pie Face games for nearly $50 a piece.

 

  1. The myth that you shouldn’t sell clearance items:

 

Honestly, I have no idea where this myth began, but I see it all the time.  Sellers who allege you shouldn’t sell clearance items use the following logic:  If an item goes on clearance, that means the price will soon tank, all over the country.   The problem is, that’s not how it works!   I have had great luck selling items on Amazon that I’ve bought at stores on clearance.  Just because an item is on clearance at one particular store, in one particular location, that does not mean that item is on clearance everywhere.  Selling clearance items can be great for your business by expanding your shopping options.

 

It’s important to make sure that there is enough of a margin when you are looking for items to sell, so that you can lower the price to be competitive, if need be.  Also, keep your eyes peeled for expiration dates on applicable items, and note the condition of the item as well.

 

  1. The myth that you shouldn’t shop at Store X, Y, or Z:

 

Very often, I hear sellers say things like, “Oh, you should really avoid Store A.  I never find anything there when I shop,” to other, usually less experienced, sellers.  When I hear this, I know that the real, deep-down meaning is, “I buy so much stuff at that place, I never want anyone to find out what a gold mine this is.”  I have shopped at, and found items to resell on Amazon at, every kind of store.  From a local independent grocery chain, to Nordstrom and every Target, Walmart, and Mom-and-Pop place in between, I have purchased something at each one.  On the other hand, I have found individual stores in which I can never find anything.  My local Toys’R’Us, for example, is the absolute worst.  I have never spent a dime there.  However, most larger chain stores can vary so greatly store to store that all I do is drive on to the next one and try it again.

 

  1. The myth that if a store bans re-sellers, you shouldn’t shop there:

 

I think that this myth exists because people are afraid they might be arrested from shopping, or they think that something bad can happen simply because you are out sourcing.  I routinely shop in the big stores that “ban” resellers, and I have never had an issue.  I find that employees are usually too busy doing employee things to bother you.  Plus, the average employee doesn’t get paid enough to care (trust me, I’ve been there before).  And, on the off chance you are actually shoplifting, in many cases they would get fired for even approaching you.  While shopping at any store, you might be subjected to the occasional, “Wow, why are you buying all of this?  Do you have 94 parakeets?  You must have an insatiable peanut butter appetite.  Do you have a blueberry candle fetish?”  I promise this is solely due to how boring it is being a cashier.

 

If you are worried that a higher up, such as a manager, might be dubious about large transactions, consider breaking up your haul into smaller transactions to look less suspicious.

Super simple and ultra helpful tip coming up:  Don’t look like you are up to anything.  I know of people suggesting putting items in their carts, then walking those full carts all over the place, then scanning the items they picked out in a different part of the store.  Then, if the items aren’t any good, walking them back across the store and putting them back.  Not only is this is a huge waste of time, but it also will result in store employees of all levels thinking that you are shoplifting.  Just scan your items right where they are located, as long as you’re not in anybody’s way (we’ll still encourage courtesy, guys).  Both Target and Kohl’s, not to mention any stores that adopt this idea in the near future, created apps that encourage customers to scan bar codes in the store with their cell phones.  If anyone were to ask what you were up to, just say you are price comparing.  You are!

 

  1. The myth that you should keep your business a secret:

 

This myth probably exists due to the stigma of what we do.  When I first started selling on Amazon, it took me over an hour to convince my grandmother that buying things from Walmart and selling them online was even legal.  And I’m pretty sure she still reported me to the authorities.   Of course what we do is perfectly legal (provided you follow the rules), and is pretty much how all businesses are run.  Additionally, the advantages to telling people what we do, whether it be our friends and family or the employees of stores, are numerous.

 

Telling our family and friends what we do can be a huge help with both buying and selling items.  You just never know who might have something laying around, or they might know someone that can be a big help in your business.  Many of my own business contacts have been found this way.  I have also bought numerous things from family and friends to sell, and I’ve also sold things to my friends and family.  This way I cut out the hassle of using Amazon in exchange for fast money.

 

Telling employees and managers of stores exactly what you’re up to is a little bit riskier.  For me, there was a store locally that actually raised their prices storewide to all of their customers because I was buying so much there.  They figured that if I could buy things there and sell them at a profit, then the store had its items priced too low.  This lasted about a month before the prices returned to normal.  I went back in and continued shopping like I always had.   That was the only time that telling someone what I do was detrimental.  Every other time the results are positive.  I have a few people that actually contact me when they have something they need to sell, because they know I will buy just about anything to sell online.  I have made contacts with a few Target and Walmart managers, which proved to be a huge help right before Christmas.  I was able to ask a Walmart manager who I’m very friendly with to hold some items for me.  He obliged and put aside several really hot items for me, and then he called me when they were ready.  I went to the back of my local Walmart and there were 3 carts full of case-packed toys, just ready to go… talk about a connection!

 

  1. The myth that you can’t sell used items, or items with damaged boxes on Amazon:

 

You usually can sell a used item or an item with a damaged box on Amazon.  Check a few things before you proceed, though.  First, make sure the category is one in which you can sell used items.  There are a few categories that don’t allow used items.  If you click on the selling eligibility link in the Amazon Seller app, it will tell you what conditions are acceptable for that particular item.   It’s also important to make sure that your used item fits the Amazon selling guidelines.  If it does, used items can be great!  I have sold a lot of electronics that came in damaged boxes.  If the item is brand new and undamaged, but the box is in bad shape, a lot of people will jump on that deal.  I purchased some very expensive items at a small discount in that condition.  I was able to pick them up for huge discounts because the box was damaged, but the item inside was as good as new.

 

As a word of slight caution, I do find that used items might not sell as fast as new items.  There have been several times that I have had a product listed in both used and new condition, and the used item sold a little slower.  It wasn’t terrible, though.  I still made good money, pretty quickly.

 

Now that we’ve slayed the Big Green FBA Monster that is this slew of myths and mistruths, we can carry on in newfound FBA bliss.  Maybe not; it’s still a tough world out there.  You can, however, conquer some misinformation that’s been floating around for the most accurate and profitable business possible.

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