I think this may be the first guest post on Tagging Miles. I couldn’t be happier that it is Jeff, who offered to write a post on a topic that I think many who resell have thought about. You may know Jeff as he comments frequently on the blog as “Sourcing Simplifiers,” Without further ado, here’s Jeff:
Thank you Trevor for allowing me to make this guest post. Like many of you, I started out as a travel hacker and then discovered the potential of reselling for profit back when you could pull off the Sears triple dip (and then double it with the new credit card bonus!) and have been hooked ever since. I’ve always sold for a profit and think it’s crazy to resell just for points and miles when there is so much money to be made! I help run the Sourcing Simplifiers FBA Facebook group and the supporting blog, Reseller Confessions. Today I’m going to talk to you about one of my favorite places to source, AZ!
What is an AZ Flip – and why I love them!
An AZ flip is when you buy an item from AZ with the intent to sell the item on AZ. Unlike so many retailers that are anit-reseller AZ is pro reseller. You don’t need to worry about them cancelling orders because you bought too many of one product. As any AZ seller knows, AZ is also very customer friendly so if any items arrive damaged it’s a very simple process to get a full refund.
What are requirements around AZ Flips?
While AZ is pro reseller, they do NOT want you using your Prime account to buy items that you plan to resell. The AZ Prime Terms and Conditions specifically state, “Prime members are not permitted to purchase products for the purpose of resale, rental, or to ship to their customers or potential customers using Prime benefits.”
Therefore, the process I suggest, assuming you have an AZ Prime account–and who doesn’t have one of those?–is to create a second AZ BUYER account that does NOT have AZ prime. Setup that account as a business account and then you will be able to buy your merchandise tax free and also be able to get 2 day shipping for free anyway.
What items are Prime for AZ Flip?
I typically look for two types of items when looking for potential AZ flips.
- High Ranked Item AZ goes Out of Stock a lot: There are many items that AZ just can’t keep in stock. And when AZ goes out of stock many time prices will rise to 2 to 4 times the price AZ typically sells it for. These are great opportunities to buy from AZ and then resell when AZ is out of stock. Also, depending on how much AZ has in stock and if they have any quantity limit its possible for you to buy them out of stock and thus speeding up the process of you selling at your desired price.
- Item AZ does crazy price drop on: AZ loves to mess with their pricing. I’ve seen items where they sell like crazy at $150 and out of the blue AZ will drop price down to $50 for no apparent reason. Maybe they are trying to clean out stock. Maybe it’s a price mistake. Maybe it’s a repricer going crazy. Either way these are great times to sweep in and scoop up as much of AZ stock you can (or at least that you are comfortable with). AZ also will clearance out of season stuff and you can find good deals there as well. I’ve loaded up on NFL and college football stuff in June and July to sell 3 to 5 times higher prices in the fall. I’m not a big fan of buying seasonal clearance to wait 11 months to sell, but I certainly don’t mind waiting a few months for a 200% ROI.
How do you Keepa finding all these AZ Flips?
Keepa of course. Keepa is a great tool that I use every day. On the deals section of Keepa’s site you can view items that have had the largest price drops. There are various ways you can slice the data to help you find items that have had a large price drop recently on AZ. We put out a video of how to use Keepa that will do more justice then anything I can put into words so I suggest checking it out on our Facebook page.
Once you’ve identified an item with a huge price drop you want to look at the Keepa chart to determine a couple of things:
- Does AZ go out of stock frequently?
- What is the price when AZ goes out of stock and will that give you the returns you need?
- If there isn’t a history of AZ going out of stock, but they are executing a crazy price drop, what is the typical average selling price? Can I achieve the returns I want when selling at that price? Do I have some wiggle room if I need to lower my price to try to obtain sales?
- If available, what is the sales rank when at the price you want to sell at? This is important because just because AZ goes out of stock and 3rd parties have item priced at a much higher price, that doesn’t mean it sells at that price.
Next week I’ll be releasing part two on Reseller Confessions that will go into greater detail in reading the chart of various AZ flips I’ve done.
Pricing your AZ Flips
I always price at my desired price or greater to start out. If AZ is still in stock at a low ball price you don’t want to be matching that price as you’ll be losing money. If AZ is in stock at your desired price you want to match their price. If you try to undercut them, they likely will just match your price. One of the reasons they may have executed a crazy price drop is their repricer may have battled with another 3rd party seller. For example, another 3rd party seller may have had their repricer setup to price 1 penny less than the next seller and AZ’s repricer may have been set to match the lowest price which set off a battle in which no one wins (well except for us AZ flippers in this case!!).
In many cases AZ WILL share the buy box. They make money either way and sometimes their margins may even be higher when a 3rd party makes a sale then when they make the sale themselves. I typically give it 30-45 days and if I’ve got no sales when matched with AZ then I may experiment with some price drops to see if that spurs some sales. In many cases, at some point AZ will go out of stock or share buy box. My understanding is they will NOT share the buy box if selling a book in new condition so keep that in mind.
Closing it down
Hopefully, this helps provide some clarity on how to expand your sourcing toolbox by including some AZ Flips. If you have any questions do not hesitate to reach out via Email or post in comments below. Next week I’ll be releasing Part 2 on Reseller Confessions which I’ll go through in detail with multiple examples of AZ Flips and how to read the Keepa Charts. Additionally, within our Facebook group FBA Sourcing Simplifiers we frequently post free AZ flips so feel free to join and check them out and learn further about AZ Flipping.