Diversity is King!

When I first started selling on ebay, I followed the advice of the so called ebay "gurus".  I found a niche and began selling in it.  I rarely ventured out of my niche.  Over the years I changed niches and finally settled on one that had a ready supply of inventory in just about every thrift store and yard sale around.  Life was good.  I averaged about $8k a month in sales, and was profiting about $5k.  Then I started hearing about amazon.  I started seeing these huge sales figures and decided to see if I could pull that off as well.  I took a leap of faith and jumped right in.

I took me about a month to get a real grasp of how amazon worked, but once I got it, I was off to the races!  I can still remember watching my sales for one day climb by $100 every 30 minutes or so.  I hit $1,200 in one day!  Life was good, and I was finally on my way.  I had found the secret to huge sales on amazon and life was never going to be the same again!  At least that's what I thought.  Reality was a much bigger bummer.

I cruised along for a year with amazon and kept a comfortable $15k/mo sales flow rolling right along.  As my previous post stated, I was not looking at the real data, just the sales figures.  I had cash in the bank so I figured I was profitable.  I was, but not to the extent I thought.  After getting a rude awakening with the assistance of Inventory Labs, I had to completely rethink what I was doing.  But that wasn't the only reality check I was to get.  No, my next one was the biggest hit yet.

I joined some online selling groups, and started seeing a trend that really picked up steam in Q4 of last year.  People were starting these BOLO groups.  Be On the Look Out, or BOLO groups were sharing items they had found at a deep discount that were selling for nice profits on amazon.  As these lists grew in popularity, they got the attention of the usual suspects who know how to turn anything into a way to make money.  Enter in the BOLO paid groups.

These groups charged a monthly fee and provided BOLO's daily.  Of course any time you out a deal, the inevitable is going to happen.  A ton of people are going to buy it, list it on amazon and then compete for the buy box.  If you didn't get your inventory in quick enough, you were caught in the tail end of price wars we call a race to the bottom.  There were instances that by the time my inventory hit the warehouse (2 days usually), the prices had already tanked and I was loosing sometimes $5 - $10 an item!  That is huge when you are scanning product and find a deal that gives you a $15 gross profit only to see it evaporate in 2 days!  But that was not the end of it.  It was about to get worse.

The next wave I should have seen coming.  People were outing BOLO deals so fast that a lot of the time they were gone before most people could even get to the store.  But never underestimate the power of an enterprising mind to find a new way of generating income from an FBA seller.  Enter the new wave of Online Arbitrage!  The art of retail arbitrage only shopping via online stores.  Not to be outdone, these industrious individuals figured out how to hire people from overseas (usually the Philippines) for a few dollars a day to do nothing but scour the internet for deals.  They would put together spread sheets and sell these to their subscribers.

I say all of this to show that it was hard enough to find deals only to see your profits evaporate with these people pushing out their finds to hundreds if not thousands of other buyers.  Not only does it shrink your profits, but now you have to source from more and more venues just to get enough inventory to keep your sales numbers up.  I was getting burned out.  I had to start expanding my product sourcing to more and more categories just to keep my sales up.  In addition, I was having to travel farther and farther just to get enough inventory of what I was finding.  This was not going as well as it had when I had started.  I decided to head back to ebay.

When I started ramping ebay back up, I sat back and thought about what I had done with amazon.  I had learned that with amazon you want to have as much inventory in as many categories as you can.  It's what they refer to as going wide, not deep.  I had always done the deep, not wide and have a niche.  So what would happen to ebay if I followed the same formula as amazon?  Well, it turns out I was getting the same results!

I expanded my inventory to include categories I had never really sold in over the last 15 years.  As I expanded, an amazing thing happened.  I was increasing my sales once again.  I know there were other factors involved, but I fully believe this was the biggest change that affected my sales.  I was no longer niched down.  By expanding my inventory I was exposing my products to more and more potential buyers.  It mad perfect sense.  If you think about it, imagine going to Walmart and only finding clothing and shoes.  Or going to Kohl's and finding only jewelry and housewares.  There is a reason these stores sell such a diverse set of inventory items.  They want to appeal to the broadest segment of the purchasing population as they can.  And now I was doing the same thing!

It took selling on amazon to teach me that diversity is king.  Keep your inventory as wide as possible.  Sales are going to come from all sorts of different buyers with different sets of buying habits.  The more you can appeal to the more sales you are going to generate.  Be adventurous.  Don't be afraid to try something new.  Get out there and get the sales you have been missing and increase your revenue!

If you want to read my whole story, I have written a kindle book about my journey.  I might release an updated version later this year which will include my journey back to ebay, but I haven't decided yet.  If you have kindle unlimited, it's free to read.  Otherwise it's $.99 cents.

How I sold six figures on amazon in 9 months.