SURVIVAL OF THE FITTEST: Strategies to Use When Amazon Pounces on Your Listing
Truth be told, selling on Amazon can be a cut throat competition. Not only do you have to go head to head with a multitude of other sellers, but you also have to take on the beast itself: Amazon. Competing with Amazon on their home turf and on their terms rarely works in the favor of an FBA seller, and those who try to play that game are almost always forced to sell product below cost.
(It doesn’t always have to end badly for the little guys if they play it smart)
The safe bet is for FBA sellers to avoid competing directly with Amazon, but keep in mind that they may come in and commandeer a listing at any time. To put it bluntly, squaring off with Amazon is inevitable for us FBA sellers. If this happens to you, know there are additional strategies we can use other than simply liquidating product. Calm that knee-jerk reaction for now; it may not be as bad as you think. Don’t panic, we’re here to help you through it!
It is important to understand that Amazon has a low risk tolerance. As a core principle of their business model, they won’t usually carry large amounts of inventory. Keep an eye on their stock and when they run out, take full advantage and get your product moved ASAP! You may also want to take a tip from Amazon and keep smaller amounts of inventory on each product to avoid crisis-mode if this should happen to you. A smaller, diverse selection of inventory is a much safer bet…you can then stock up on re-buys once you’ve noticed a selling pattern. Always buy wide, not deep.
Additionally, it may make sense for you to utilize demand fluctuations to move product. Many products see changes in their sales velocity throughout the year, and if we are currently being suppressed due to Amazon’s appearance on our listing, we might be able to outsmart them. For example, we can increase our prices during slow periods to prevent selling low, then when the season starts and demand is up, we can slash prices to sell the product quickly from underneath Amazon. It isn’t a perfect strategy, but it may help us gather some profit from a potentially dead product.
Finally, always remember that cash flow is your friend. If Amazon suddenly becomes the reason your inventory turned stale, you should always have a backup plan in place to liquidate and move that money into more profitable product. Selling on another platform is always an available option. Better to move on to the next potentially lucrative lead than to continue crying over what might have been.
Something to note: While trying to compete with Amazon is often ill-advised, it is perfectly acceptable to sell on the same listing as long as you target colors, sizes, or styles not carried by Amazon. Don’t give up on that great lead if there is a way to stay in the game.
So, don’t despair when Amazon decides to get on a listing you are selling on. Keep calm, and evaluate your options using the strategies mentioned previously. With proper execution and timing, you may just pull the rug from underneath the giant, and profit off of a lead others would have given up on.
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