Shifting Gears Like a Trend Follower


The past few weeks have been a pretty wild ride for me. For those who don’t know me very well, I have a tendency to dramatically overreact to things, which is why I made an absolutely terrible discretionary trader.

Because of the pace that my Amazon business is growing, pretty much everything that happens with it feels like I either conquered the world or ruined the rest of my life. Obviously neither is true, but it has been a very interesting journey thus far.

The business really got going when I subscribed to a repricing program called AppEagle that automatically checks and adjusts the price of each of my items every hour based on my preset specifications and limits. This has allowed me to make tons of sales over the past week, which feels fantastic.

On the negative side, Amazon is now selling all of the Frozen toys that I had been making a killing on. Even worse, they are selling them at the suggested retail prices, so I won’t even be able to dump what I have left without taking a hit. Luckily, I have already banked tons of profit here, so what happens with the rest is really no big deal.

However, losing my biggest cash cow has left me very concerned about where I can make consistent profits going forward. Having products that you know are going to sell for a decent profit as soon as they hit the warehouse was very reassuring.

With my biggest trade now in the rearview mirror, I was forced to do what any good trend follower does: look for the next big wave for my business to ride.

While I am not confident that I have found anything comparable to the Frozen toys, I have found quite a few really good leads in the past week. Many of these leads are a result of a new way of thinking that I have implemented.

After a bad experience with some of my early purchases from Dollar Tree, I had given up on low cost items. Why waste my time buying $1 items that sell for $5-6 and only bring back $1 if  I’m lucky after fees. I decided I would much rather grab $20-30 items that will sell for $80-100.

The problem I have found is that those bigger ticket items take longer to sell and they are much less predictable. I have a ton of these items in stock now, and some days they sell….some days they don’t.

I now believe that I need to find a middle ground where I combine high and low priced items. High items will give me the big chunks of profit, while lower priced items will provide consistency.

I have also come around to a new way of thinking about these lower cost items. I am now targeting lower cost items that I can package together as multiples.

This concept started when I quickly sold three different four-packs of Old Spice deodorant over the past week. I sold it merchant-fulfilled at a low-ball price just to test the market, and was shocked at how quickly it sold.

This was a lightbulb moment for me where I realized that combining four low priced items can create one medium-priced item. By combining four $3 deodorants, I now had a $12 item that sold in the mid-to-high-twenties. Big difference.

This opens up possibilities like combining mutliple $1-5 items and ending up with a single item that has the same profit margin, but is also more significant to the bottom line.

With that in mind, the Frozen craze is behind me, but the future of my Amazon business remains brighter than ever.