We take great responsibility for providing you with the best-sourced products for your Amazon online arbitrage business. Therefore, we want to walk you through the process of how we do the analysis of the products and which products end up in our OA lead list. It is a very thorough process and analysis, but we want to be sure that the products that we offer are of the highest quality.
*First, our team is sourcing products that are within our metrics and criteria. We are making sure that we only buy from reputable retailers, to be sure that we are selling authentic products.
We are checking the retailer’s trust score on Scam Adviser, and we are looking for reviews for those retailers on major review sites such as Trust Pilot, Site Jabber, etc.
We are also looking if the retailer has a social media presence on the major platforms. After the team confirms the retailer’s authenticity, the leads are provided to the second team who is responsible for thorough analysis of the products.
*The second team is responsible for doing a thorough analysis and going through different data points to ensure that the products in the OA lead lists are profitable and are within the criteria.
Key points that check while doing the analysis:
- Is the product sold on Amazon as a 1 pack or is it sold like a set or bundle of 2 or more items, to ensure that the cost price is the correct price?
- Is the size and count correct?
- Is the brand name under the Amazon listing the correct brand and is not listed under a different brand (We want to avoid any potential IP (Intellectual Property) claim issues)
- Is there a major seller count drop on Keepa?
This indicates that the sellers may have received an IP complaint for that brand, and we want to make sure that we don’t run into issues like that. We also use software like IP Alert and Seller Amp that give alerts of potential IP Claims for the brands.
However, those software’s are giving alerts if they have that brand in their database, but we wanted to add an extra layer of security and that’s why we also look if there is a seller count drop on Keepa. (This is a major red flag for IP Claim).
Our team also double-checks to make sure that the items and listings are NOT:
- -Meltable
- -Hazmat or dangerous good items
- -PL (Private Label) items
- -Generic Listings
- -Brand itself not selling on the listing
We are avoiding listings where the brand is a direct seller on Amazon.
Amazon Not Selling on the Listing
If Amazon sells on the listing, we want to make sure that he is sharing the BB% and has less than 50% BB share. Also, we calculate if the price on which Amazon sells is profitable for us, to be sure that we can compete.
- After ensuring that everything above is correct, we continue with the next part of the analysis.
The next part of the analysis is crucial in determining the profitability of the products we plan to sell. We dedicate this part to more technical key points.
90-day average BB (Buy Box) Price
We use this price as a reference price upon which we calculate the ROI. The reason for using this price instead of the current price is that the current price may not be the market price or can be inflated price which was inflated due to different reasons.
For example, let’s say we source a product for $20. If the current BB price is $40, we will have a 50% ROI if we sell at that price. The key word is “if”. The reason for that is that even though the current BB price is $40, the 90-day BB price may be $33 and that is the market price on Amazon upon which we calculate our ROI.
Our experience taught us that if we target the current BB price, we won’t make the targeted profit in the long run. The current BB price may be increased for different kinds of reasons, such as the current low competition on the listing.
Having low competition on the listing is a reason for the sellers currently selling on the listing to increase their prices and to make more money. However, that is not the real selling price, that is the current price because of the low competition. If we target that price as our reference price for ROI, it will appear that we would make a profit, but until the time we buy the product and list it to sell to Amazon, the competition may rise, and the price will go back to the 90-day BB price.
Therefore, if we don’t have at least 40% ROI on the 90-day BB price, the product will not pass our quality check.
In the spreadsheet where the leads will be provided to you, we also include the current BB price, but we don’t calculate the ROI on this price, we only include it as information to see what the current BB price is now.
BSR (Best Seller Rank)
We are looking for the 90-day average BSR as well as the current BSR. We want to be sure that the product is consistently in demand and is within our criteria.
However, we are also looking for trending items and that’s why we also look for the current BSR. We provide you with both information in the spreadsheet.
Variations
Some of the products we source are variations. We make sure that the variation has demand on Amazon and is selling well.
The process while doing that is that we first check the review percentage of the variation. If there are reviews, that’s the first good sign.
The next step is checking the review velocity. The reviews velocity is a term we use while checking the graph of the reviews on Keepa, we check if there is increasing in the review count in the last 90 days and how many reviews or ratings that variation generated.
The third step we take to ensure that the variation is selling, we look at the Data-Offers tab in Keepa. We are looking for sellers that currently or historically were selling at our targeted price and how much they sell. If the quantity gradually decreases on the quantity graph count, that is a good sign that the item is selling.
However, the key point is to see if they were selling on the price or on a higher price that we plan to sell on. The reason behind that is to be sure that there is a demand for that variation in our price.
If a seller sold at a lower price, it doesn’t mean that we will sell at a higher price. That information is not significant to us if we aren’t able to make a profit on the price that they were selling.
Seller With Auto-ship Option on the Listing and BB % Share
We are also demanding our team check if there is a seller that has an auto-ship option on the listing as we like to avoid those listings. Sellers that offer an auto-ship option usually have access to a substantial amount of quantity and/or a direct relationship with the brand.
Therefore, they would have a better price than us and would have more quantity than us. Amazon’s algorithm usually gives the BB to sellers that have more quantity and that are consistently on the listing.
Since we are working the OA model, we are limited to the period when the products are on sale or profitable for us, therefore we can’t control if we would be always in stock to sell the product. Those are some of the reasons why we avoid these kinds of listings.
We also check the BB% share in the last 90 days. We are looking for products where the BB is shared across all the sellers, not dominated by a single seller.
Historical View of the Upcoming Period
If a product was created more than a year ago, we would have information about what happened in the same period last year. We are looking for trends of increased price and lowered competition to increase the possibility of maximized profit.
Reviews
We are looking through the reviews on Amazon to see if the customers are satisfied with the product. If a lot of the customers are generally dissatisfied with the products and the item is a “frequently returned item” we would avoid that listing.
The reason for that is because all the expenses related to the returns would lower our ROI. We make an exception and give you a choice to make your own decision if a product has a significantly higher ROI than usual, where even if the return is high, we would still have great ROI overall on that product.
Conclusion
If a product passes all our criteria and requirements, we will include that product as part of the lead list of products that we provide you with.