A seed planted today is a harvest for tomorrow.
This is Part III of a three part series. Today we will explore buying deep versus buying wide.
Deep - In the world of selling on Amazon, going deep means buying more than 10-12 of one product. A seller might buy 100 widgets if they create the listing, test it out, and discover that it's a winner. The deeper you go the more risk you take.
Unless the product is an original creation of yours, then it's inevitable that someone will come along and discover your listing. If your listing skyrockets to the top of Amazon's list, then there is a strong chance that Amazon will come in on the listing as well. If you play the wholesale game, and manage an exclusive contract, then you have a higher chance of keeping the listing to yourself. The risk of going deep is lessened when you can control the listing. You need to keep all of this in mind when you decide how many of one widget you should buy.
If you come across a hot seller with a low rank and fairly small number of sellers, but there are not many on the shelf, then you might want to make a route to other stores where you can pick up more widgets. If you live in the city, then this is a fairly simple strategy. There are 9 Walmart stores within a 12 mile radius from my home. I could go further out and reach many, many more. If I were on a mission, and I had the time and sourcing money, then I could determine a route and hit several in a few hours. The goal would be go in and get out.
The deepest I've gone on any one item is 20. My cost is super low, and my ROI is very, very good. The rank is low enough to keep these products turning a few a week. I would not go deep on a widget with a cost of more than a few dollars unless I have the sourcing funds to take that kind of a risk. It's all about risk factor. Only you can determine what you can and can't do. If you're new to the game, I would recommend not buying more than 10 on anything until you get a handle on sourcing, ranking, pricing, and selling.
If you find an item that is easy to replenish -test it out first! Buy 3 to 6 and send them in. See how fast they sell. Sometimes ranking can be deceiving. If you happen to scan after an update when a sale just happened, then the rank might be lower than normal. Test, test, test!
Unless the product is an original creation of yours, then it's inevitable that someone will come along and discover your listing. If your listing skyrockets to the top of Amazon's list, then there is a strong chance that Amazon will come in on the listing as well. If you play the wholesale game, and manage an exclusive contract, then you have a higher chance of keeping the listing to yourself. The risk of going deep is lessened when you can control the listing. You need to keep all of this in mind when you decide how many of one widget you should buy.
If you come across a hot seller with a low rank and fairly small number of sellers, but there are not many on the shelf, then you might want to make a route to other stores where you can pick up more widgets. If you live in the city, then this is a fairly simple strategy. There are 9 Walmart stores within a 12 mile radius from my home. I could go further out and reach many, many more. If I were on a mission, and I had the time and sourcing money, then I could determine a route and hit several in a few hours. The goal would be go in and get out.
The deepest I've gone on any one item is 20. My cost is super low, and my ROI is very, very good. The rank is low enough to keep these products turning a few a week. I would not go deep on a widget with a cost of more than a few dollars unless I have the sourcing funds to take that kind of a risk. It's all about risk factor. Only you can determine what you can and can't do. If you're new to the game, I would recommend not buying more than 10 on anything until you get a handle on sourcing, ranking, pricing, and selling.
If you find an item that is easy to replenish -test it out first! Buy 3 to 6 and send them in. See how fast they sell. Sometimes ranking can be deceiving. If you happen to scan after an update when a sale just happened, then the rank might be lower than normal. Test, test, test!
Wide - To go wide means to buy lots of different products in lots of different categories (all of the categories open to you). I suggest focusing and learning one category at a time. Once you get the pulse of a category, then try out another. I started with toys, then moved to office products, then onto groceries, home & kitchen, sporting goods, and patio & lawn. I'm venturing into baby products now. I've explored the first three categories in depth. Specializing is for doctors. Sellers need to keep expanding inventory possibilities.
Going deep means that you'll have a variety of inventory. When one category stalls out, then another category will keep the cash flowing. Start with the categories you know best as a buyer. Spend time in different stores scanning the category to see which stores offer the most opportunity.
Recap on The Long and Short Of It
Low & High - Take the average FBA price, or the merchant fulfilled price + shipping, and price at market value. Try to hold your price. If there is competition, then look to price somewhere within the ten lowest prices in order to get your turn at the buy box. Avoid setting off a price war which will cause a downward spiral, and cut the price for all sellers.
Long & Short - Balance is key. Build a foundation of long tail items that will add icing to your cake, but focus most of your energy on products that will turn over within a month. Look for a rank below 10K, little or no competition, and a price that gives you a high ROI.
Deep & Wide - Keep in mind that going deep means taking a higher risk. Do what you're comfortable doing, but avoid going too deep in the early stages of your FBA journey. Learn the ropes first, so the mistakes won't be so expensive. Study one category at a time, but continue to expand your knowledge and scanning in a variety of categories. The wider you go the better your chances of making consistent sales as the seasons and buying patterns change.
In the end, you're the only one who can determine your business model. I prefer balancing low & high, long & short, and deep & wide. I want to spread my oars in as many boats as possible, and not depend on one boat to keep me afloat. Try things out. Watch. Pay attention. Notice. And take notes.
Going deep means that you'll have a variety of inventory. When one category stalls out, then another category will keep the cash flowing. Start with the categories you know best as a buyer. Spend time in different stores scanning the category to see which stores offer the most opportunity.
Recap on The Long and Short Of It
Low & High - Take the average FBA price, or the merchant fulfilled price + shipping, and price at market value. Try to hold your price. If there is competition, then look to price somewhere within the ten lowest prices in order to get your turn at the buy box. Avoid setting off a price war which will cause a downward spiral, and cut the price for all sellers.
Long & Short - Balance is key. Build a foundation of long tail items that will add icing to your cake, but focus most of your energy on products that will turn over within a month. Look for a rank below 10K, little or no competition, and a price that gives you a high ROI.
Deep & Wide - Keep in mind that going deep means taking a higher risk. Do what you're comfortable doing, but avoid going too deep in the early stages of your FBA journey. Learn the ropes first, so the mistakes won't be so expensive. Study one category at a time, but continue to expand your knowledge and scanning in a variety of categories. The wider you go the better your chances of making consistent sales as the seasons and buying patterns change.
In the end, you're the only one who can determine your business model. I prefer balancing low & high, long & short, and deep & wide. I want to spread my oars in as many boats as possible, and not depend on one boat to keep me afloat. Try things out. Watch. Pay attention. Notice. And take notes.
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