I get this question a lot on the blog and in the Facebook groups. How deep should I go in a certain product. Instead of giving the standard answer of “It depends” (which is always my go to answer), I am going to lay it out for you in plain terms that you can follow. This is not an answer that will always be correct or will make you the most money. You will have to find that balance yourself. I am simply giving you a starting point and you can adjust as you see fit. If you have any questions, feel free to ask them in the comments below or in our Facebook group.
Now let’s see how deep you should go?
Level 1 – Possible New Replenishable Item
Oh the wonders of relpens! You are at the store and you are so excited that you finally found one of these magically items and you think that your business is going to take off. You slowly take your hand and start shoveling every single unit of that item into the your cart…
STOP RIGHT THERE!
There is a reason that these things are called replenishable items. You can easily go to the store and pick them up each time. Buying them all will just tie up your money into inventory that you can go pick up when you need it. In my opinion, you should buy:
This will allow you to test the item and only send in enough to get you through until the next shipment. You don’t want to run out of inventory, but you want to make sure you have the capital to invest in other inventory.
Level 2 – A Super Awesome Item With A Out Of This World Return
This one is a little tricky. I could say “it depends,” but that would be a cop out. Here is how I would do it”
1 unit – If the rank is over 300,000
2 units – If the rank is between 200,000 and 300,000
All the units – If the rank is 200,000 or lower.
Now there must be some conditional statements that have to be included:
If this is a clearance item with a limit quantity, check the price history on CamelCamelCamel or Keepa and then make your choice.
If there are only 10 items and they fall into the 1 unit or 2 unit category, look at your capital and make your choice for there (if you have the funds and can hold out, I would pull the trigger).
Level 3 – An Item That You Aren’t Sure On
Now think about this. If you aren’t sure on an item, why would you go deep on it? I know that sometimes you have gut feeling, but make sure to always follow your business rules. I would buy:
I would test, test, test. If it sells, go buy the reset.
It’s really that simple.
Level 4 – An Item That Meets Your Business Model
There is only one conditional statement I have on this one.
Does the price and sales rank history support the current price and demand?
If the answer is yes, CLEAR THE SHELF!
If the answer is no, revert to LEVEL 2.
Level 5 – All Other Items
Use your gut feeling. 90% of the time, you will be right. Try to fit the item into one of the categories above, but always follow your gut.
I hope the above guide helps. I want to stress again – This is a starting guide. Please make adjustments and make it your own 🙂