AMAZON FBA RACING TO THE BOTTOM
This video may come off as a rant but honestly there is a lesson to be learned here. I made this video back in December 2015 while I was looking at items to buy and I couldn't believe how fast the price tanked on this item. I was selling this item steadily when Amazon was out of stock for $30 - $70 and when Amazon finally came back in stock the sellers on the listing just went crazy! As an experienced seller, I would never contribute to the race to the bottom, especially for a complete loss and you shouldn't either.
Racing to the bottom on retail arbitrage items is very common, it is hard today to find items at retail stores where the race doesn't happen unless you are looking at gated categories but even those are getting flooded. Now I have no explanation to why this is happening other than people aren't educated in math and have no clue they are losing money. This really isn't my problem because I don't lose money on Amazon FBA, I will stick it out for as long as I can but honestly I don't go deep on items so it really isn't a concern for my business.
Here are some tips to avoid this problem.
- Don't buy items when you see a long list of competition
- Never go below Amazon's price, don't contribute to the race
- Understand your costs so you know your bottom line, in this video I guarantee these sellers didn't care. They wanted to sell it now and that carelessness will equal a loss
- Research the products you are buying, plenty of opportunities exist when new toys like this hit the market, my tip is to get in quick, sell high and move on.
- If you happen to be on a listing where this is happening, raise your price where you will make a profit. You can play the waiting game but I would consider multi channel fulfilling this product on another platform for a profit.
- Don't be STUPID - understand every purchase you buy at put yourself in a chance to win. Never sell for a loss, it is not good business and will eventually lead you to the poor house.