My Pivot Plan on the Arbitrage on Amazon Environment

Well, I’ve gone back and forth on how to talk about this, whether to talk about this, whether to ignore it.  And honestly, I cannot decide at all.

Because really I am not sure there is anything to decide.

And, for the clear cut record, I DO NOT HAVE ANY INSIDE INFORMATION OR SOURCES OR ANYTHING OTHER THAN AN OPINION.  MY OPINION.

So here goes:

RA/OA on Amazon will never be as easy as it is right now.

Further….it is not as easy NOW as it was one year ago.

Lets be honest, if you are a seller of over a year, you are most likely making money, and you had no idea at the beginning just how easy it would be.  So many people heard the Jessica Larew podcast on SPI a few years ago, and came jumping in the river.

Let's dive into Amazon, the water looks warm!
Let’s dive into Amazon, the water looks warm!

During this time, we have at FBAM been (and continue to be) large fans of the RA/OA way of purchasing products.

But during recent times, it seems to have become increasingly clear that if we looked at a chart, Amazon is trending downward for RA/OA only merchants.  Some recent changes include:

1.  Brand restrictions

2.  ASIN restrictions

3.  Stricter ungating requirements

To be clear, I am not saying it is not possible, and I still am buying like crazy for Q4.  I feel that I recently RAVAGED a sale at Toys R Us, and I am at this point doing much of the same as always in terms of what I’ve bought thru RA/OA.

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There is always a butt.

And in this case, while I am still making purchases from Toys R Us and Walmart and Target, I am slowing down on my shoes from Marshall’s.  And by slow down, I essentially have stopped.  It is not that I am worried about losing my account or anything like that, it is more because I am calculated.

And while I am able to slow down the Marshall’s purchases for myself, which I am still not certain is right or wrong, it is simply MY CHOICE based on the information I have read and my own level of comfort, I have stepped up my purchases in the grocery category specifically, as well as Walmart purchases.

Holy run on sentence.  I managed to get 57 words in that sentence.  Score!

Anyway.

I must make clear that I am not stopping RA and OA.  But I am getting smarter at it.  I am sourcing from much cleaner places.  Last year I wrote a blog about product sourcing and made mention of Goodwill as an FBA source.  Now, however, I wouldn’t use it a sourcing spot for FBA.  To me, not worth it.

So what am I going to do?

First and foremost, let me reiterate.

THE SKY IS NOT FALLING.  THE WORLD IS NOT ENDING.  FBA WILL NOT STOP NO MATTER WHAT CURRENT AND FUTURE CHANGES OCCUR.

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Now that we have that cleared up, here is the approach I am personally taking:

1.  Take existing replens and find wholesalers/distributors

When I first started selling, in my head I had wholesaling built up to be something greater than myself.  It was intimidating, simply because I didn’t understand it.

Now, however, it is not.  Get ready for the secret sauce.

You want to buy wholesale, ask.

Yeah. That’s how you start.

Send an email.  Call a supplier.  Ask.

Some will deny you, some will sell you, some will take convincing.

But quite simply, the more you ask the greater your chance of finding a wholesaler.

And if you cannot find suppliers, try this quick tip.

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2.  Go deeper on items

Instead of filling up a cart with 44 units of 27 different items at Walmart, I have been focusing on solid items.  I always have, of course, but “back in the day” I would be willing to buy anything that had a profit attached and met my rank qualifications.

Now I am more selective, and I love when I find 3 or 4 items that I can grab at every Walmart.  I can quickly end up with 100 – 150 units in one trip, with only 2 MSKU’s.  It is safer in my eyes, as I am lowering my overall exposure to claims.

3.  Find bundles and jump on

Last year as I realized the full potential of bundling, we at FBAM helped commission a course to teach bundling.  From item selection, to suppliers, to making it your own, and so on.

Then, this blog by Cynthia Stine, who is plugged in and more aware of Amazon ripples than I am, changed my mind on it.  

So we didn’t release it, because we would never want to spread mis information, and the simple confusion about UPC codes is enough to cause me pause in creating new bundles.

HOWEVER, there are 1000s of existing bundles that are bad ass that you can jump on.  Using Amazon Flow makes it even easier to find new bundles.  But however you do search them, they exist.  And while I am not certain on the new rules for UPC, as nobody seems to be super duper clear (CAN SOMEONE PLEASE EMAIL JEFF@AMAZON.COM ALREADY), I do know that it’s easy to sell on existing ones.

So I do.

I find bundles that are profitable, and I find ways and means to get the items cheaper, and I do.

I now have a dozen solid bundles that I can source retail and make me 100% ROI or more.  And really all I did was search them out, doing my product research like normal.  (Here is a great beginner breakdown by Mike with some product research tips inside it)

4.  Private Label

This is not exactly a new concept.  There are countless resources to teach the process, including Andy Slamans and Amazing Freedom to Scott Voelker and The Amazing Seller community.  The potential on this avenue is great, and has been repeated over and over and over and over.

I have one PL item right now, it is an item I bought as an existing item from a seller several months ago.

Beyond that I do not have one, but I am partnering up with another seller and we are in research mode now for the right item/niche/category that we want.  We have it narrowed down, and I am very excited about moving ahead with this.

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And that is my plan b for FBA.  More or less.

But what I am comfortable doing as a business owner is accepting that there are inherent risks to running a business, and that I must be able and ready to pivot when it becomes necessary.

There are some non FBA moves I am making as well, but for now I am over 1100 words.  And if you are still reading…well….I want to stop while I’m still ahead.

We can talk about other moves some other time.

Main point for me is this:

RA/OA is not dead.  Arbitrage cannot die.  We all are well aware of other platforms and avenues to sell on.  But this is not a blog about eBay or Mercari, as much as I enjoy those platforms.  This is specifically about FBA, and as such, I am making my pivot plan public.

And now we are on the same page.

Cheers.

One thought on “My Pivot Plan on the Arbitrage on Amazon Environment

  • October 5, 2016 at 1:31 pm
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    Excellent post. It is great to see someone post a sensible, calm post in regards to Amazon policy decisions. Amazon has made major policy shifts in the past and will in the future, get over it, expect it, prepare for it. While Im a proponent of multichannel selling, it is what I do for a living, I will leave that alone today. Present any successful businessman with a difficult scenario and more times than not they will immediately be able at least sketch out a response. This usually comes from planning, experience or both. I cant tell you how many times I’ve come across ecommerce sellers with no backup plan, leaving themselves with no options in the event of major change or catastrophe. In times of turnmoil or upheaval, you can always tell who has a backup plan because they rise to the top, do not get flustered, take control and lead the way. I find myself often asking clients if their families survive and depend on the revenue to survive and live comfortably, following up with then why would you risk something without a backup plan. Maybe next time it is not Amazon, maybe its the next jackass president who signs an internet tax bill and everyone stops buying on the net over it….be prepared! Im an optimist, but in my life, Ive learned to always plan for a worst case scenario, then when anything less happens, I take it with a grain of salt. At the very least, you have to consider available options before there are non. Great thought process on the pivot John. Im sure knowledge, understanding, time and experience all played a part. facing it the way you do ensures that if there is a next time, you will much better prepared for it.

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