PLEASE NOTE CHANGES SINCE ORIGINAL BLOG POST! Steve Lindhorst is no longer selling his book that I mention below. I’m leaving this blog post in my archives, however, because the strategy he taught is sound and I recommend that sellers consider how they can time their purchases and sales for maximum advantage:
The three most important pillars of selling on Amazon’s FBA program are margin, turnover and timing. If you get those three things working together, your business becomes a perpetual motion money machine. Easy, right? OK, maybe not always easy, but not impossible. Margin is about math and understanding the true costs of your business. Turnover is about economics – supply, demand, price – mixed with intuition. Timing is about logistics and planning.
Some of you are wondering “what about inventory? Isn’t that important, too?” It is, but if you take care of margin, turnover and timing, finding the right inventory takes care of itself.
Over the course of the summer, I’m going to revisit these topics regularly to help get you ready for the big holiday shopping season which begins in August…no pressure. Since I’ve not covered it as much as other topics, I’m going to start with timing.
On my “Helpful Books and Websites” page I list several authors/big-time online sellers from whom I have learned including Steve Lindhorst. Recently he put out an ebook called Retail Flipping where he focuses on the role of timing in his business success. I bought it last week and immediately wanted to tell everyone all about it. Although the premise is simple enough, the fact is most people don’t do it in an organized way – including me! In the book he talks about how your real success in selling on Amazon really comes when you buy to sell on Amazon. It is like real estate that way. If real estate is about “Location! Location! Location!”, then buying new Amazon inventory from retail stores is about “Timing! Timing! Timing!”
If you buy items at their very lowest possible price and sell them for a good margin, then you are going to make money. Also, if you know in advance when the peak demand for a certain product or category is going to hit, then you can have your goods up there a month or two before the peak and giggle all the way to the bank. The trick is knowing when you are most likely to get those rock-bottom prices and when they will sell for the higher prices. That’s what Steve’s book is all about.
For those of us who aren’t as familiar with the inner cycles of retail, he explains sales and how they work at most stores as well as some specifics from places like Target and Walmart. He explains when new models come out for certain categories of goods and why retailers will suddenly dump perfectly good merchandise for amazing prices. He tells you how to know if that item you are interested in will be 50% off tomorrow based on the store’s sales policies which is a really good thing to know. Over the years, he has built a calendar for himself that tells him when certain items are most likely to be at their cheapest prices of the year. For example, did you know that January and most of February (except Valentine’s Day) are the least popular times of the year for weddings? That’s also when wedding-related items are at rock-bottom prices.
What Steve’s calendar has done for him is allowed him to make his sales more predictable. He not only knows when he should buy, but also when will be the peak time for selling which is important so you don’t leave money on the table, either. Off-season an item might sell for $50, for example, but during peak time it sells for $75. While you may be happy to sell it off-season at $50, you’d be sad to miss out on the peak selling season and leave $25 on the table, right? That’s what your calendar can do for you – tell you when stuff is going to sell at top dollar.
We all know that toys sell the most from November through the end of December, for example, but what about all those other categories? The worst time to jump in to sell something is when it is already “hot,” because your window is rapidly closing. I sell textbooks and what I know is that June, August, September and January are the peak months for textbooks with the August/September time-frame being the busiest. So when should I buy textbooks (whenever the price is right – gotcha, trick question in this case), and when should I make sure they are all up at Amazon? (July, December, May).
Steve gave me permission to share his calendar for July so you can do some planning of your own for next month:
- This is a big month to buy toys. Retailers need to clean the shelves to get ready for this year’s holiday season. Many Christmas shoppers begin buying in earnest after Labor Day, so watch for big, often lightly advertised, clearance deals in July
- Watch for wedding-related items around this time of year. June is the most popular month for weddings followed by a lull in July. By this month, most brides will have purchased what they need for their weddings. Retailers will begin dumping this year’s inventory.
|Computers:Intel and AMD start ramping up for new stuff in July. Back-to-school sales get pretty good here, too, because kids are getting their first and/or replacement computers.|
|Furniture: August is the second time of year that new furniture comes out so you can get good deals the month before as manufacturers are trying to get rid of the old stuff.|
|Grills: This is an example of a product demand that dies off during the season of its use. By July, the folks who are going to buy a grill have probably gotten theirs. So the stores are now going to make room for fall items. Grills and grilling accessories will begin to be marked down – but people are still going to be grilling for a few months so buy up!|
|Music Players:iPods are refreshed around the end of August/beginning of September. The old models suddenly become boring to many shoppers. But as with cameras and other electronics, a lot of people like the established versions since the bugs have been eliminated.|
|Toys:This is the big clearance to get ready for the fourth quarter, holidays. If you haven’t seen what kind of profit toys bring at the end of the year – you really need to work at this one. It pays off big time.|
His calendar is a great foundation upon which for you to build your own. Because it focuses on general categories like “baby” and “wedding,” you will want to add specifics for yourself as you learn more about your local stores. For example, our Half-Price Books has several big sales every year at the same time where not only is everything 20%-90% off, I can also stack coupons to get an even better deal. There is also a special fall sale on textbooks that takes coupons as well as the category discount. You better believe those sales are on my calendar. Babies R Us and Toys R Us have certain sales every year to spur holiday shopping. Big Lots has several 20% off sales a year that have saved me hundreds of dollars each time. Tuesday Morning has yellow sticker sales where you can buy new items for pennies sometimes and re-sell for $15. Find out the sales patterns and put them on your calendar.
I shop for used as well as new so my calendar includes more than retail outlets. When are the best book sales in your area? When will students at your local university most likely be ditching all their textbooks? Does your state offer a sales-tax-free weekend or month for energy-efficient appliances? There will be sales during and after that time-frame to clear out inventory. Scouting with a strategic plan can make a huge difference in your sales results. Steve also talks about how he leverages coupon stacking as well as frequent shopper programs to get the best deals. He has a list of several couponing sites that he uses to find great bargains on new merchandise.
Unless you are one of those super-organized people who already have your own calendar and strategic scouting plan (how I envy you!), this book will be helpful to you. He offers a 30-day guarantee like I do on my ebook and I wholeheartedly recommend it. It is short and smart.
Since Steve is no longer selling his book, I strongly suggest you spend some time thinking about what you buy, and/or what you’d like to buy and when would be the best time for you to shop for those items. Create your own scouting calendar so your inventory acquisition trips will be more hits than misses. Think outside your normal categories so you can sell all year round. We just had Father’s Day. What do you think is on sale in most stores today? Yep. Manly gift items and every golf-related or tool-related thing you can imagine.
Strategically planning your scouting expeditions like this will help make sure that you are at the right place at the right time for profitable scouting and big discounts.
What about you? Do you have a process or tool that you use to time your retail purchases for maximum profit? Please share in the comments below!