Buying Decisions

You might not know what is behind the door, but if you never open it, you will never find out.

What should you consider when making buying decisions for FBA?

• Your cost of goods. Set a budget when you go out sourcing and stick with it. Try to get the most items with the highest ROI potential that you can buy on your fixed amount.
• Average buy box price. Don't just look at the buy box. What is the average price of the lowest priced five sellers? Now subtract your cost of goods. 
• Fees. You need to consider weight and size. If it's a heavy item or a large item, then it's going to cost you more in fees. Run the numbers through the FBA calculator.
• What is your potential ROI? Is it double or triple your money? Is it a slim 10-20%? How much wiggle room do you have if Amazon or another seller drops the price? 
• How many FBA sellers? And how many does each seller have available (put the item in your cart, then edit it to reflect the highest number you could purchase, then delete it from your cart). The more FBA sellers that have the product available the longer it will take to sell (even when the rank is super low).
• Rank. The lower the rank the better, but how fast a rank of 25K will move in groceries vs. how fast in home & kitchen is drastic. Ranking changes on the hour too, so if one just sold the rank will go down, but if it hasn't sold in a long time it will go up. 
• How fast (based on the above information) do you believe the item will sell, and how long can you afford to sit on it?
• Is Amazon selling it? You can sell items that Amazon is selling. Despite the popular belief, Amazon does share the buy box, but they also have tremendous buying power and can afford to drop the bottom out of your price. They also tend to run out, and when you get your turn, you can sweep up the money at a higher price.
• Is it an add on item? Add ons are known to be slow sellers, but if there is only one or two sellers, and super duper low rank, add ons do sell. Add on with caution.
• Only consider reviews if the item is one or two stars. It's possible the item is a dud, and would end up a return if you sent it in. 
• Hassle. Is the potential ROI worth the hassle? Is it oversized or heavy? Do you need to shrinkwrap, polybag, add expiration dates, etc.? Your time is also a commodity.

There is not an exact formula for success. There are many variables to making buying decisions. In the end, you have to make a quick analysis of the data, and essentially make an educated guess. You will guess right a lot of the time, but sometimes you make a buying error. Retail stores make buying errors as well. The widget they thought would be hot turns out to be not. It's part of business. Take in all of the data and make the best decision possible with the information you have on hand.

P.S. Avoid glass grocery / health & beauty products over 4 ounces, high end designer names, gated categories (that you don't have permission to sell in), any potential hazmat items, and items that fragile or easily breakable (unless you are a super hero packer).