April was one of my best months and then May was my worst month. What caused the May drought? I don’t know.
But to bounce back in June, I decided to switch strategies and lower prices on most of my items. The results are that my inventory is selling, but at a lower selling price than what I initially planned for when I purchased the items. However, I’m getting rid of old inventory and happy that I can move on to better inventory.
Here’s a screen shot of my monthly units sold from June 1 to June 22. You can see that I’m selling much more in June than I did in May:
How to Get Through a Bad Period
You will have bad periods and to get through them, here are two tips:
Have an “emergency” fund in place: Just like you should have an household emergency fund, it’s smart to have an Amazon FBA emergency fund to get you through those low sales periods. For me, I keep a minimum of $500 in my business checking account at all times. This covers over two months of my monthly subscription fees and all of my sales tax obligations.
To be honest, I didn’t start keeping a $500.00 minimum balance until earlier this year. The reason why I started doing this was because in mid-January, I wasn’t paying attention to my checking account balance and four days before my next Amazon payout, I went a little crazy and:
- paid off my business credit card two weeks before the due date
- bought almost $200.00 of inventory from WinCo with my bank debit card (WinCo doesn’t accept credit cards)
- paid higher than normal sales tax payments as I had monthly, quarterly and annual returns due
My checking account balance went down to $36.87 and at the point I told myself that I won’t let the same happen again.
Being so careless with my business account still surprises me. This is because I went through a tough financial period several years ago and to avoid that from happening again, I spent the past four years building up my household emergency account. Believe me, having one reduces stress because you don’t have to worry so much about the unexpected. Why I didn’t apply what I learned in my personal life to my business is a mystery.
My advice to you is that if you don’t have a household and a business emergency fund, start working on that and here’s a blog post with some helpful tips.
Lower prices to be more competitive and to get more sales: My massive price lowering strategy was not only to get sales going again, but to also free up extra cash to purchase new and better inventory.
Here are a couple of pricing rules that I followed:
- I never went below the Buy Box price – sometimes I priced the same but in most cases slightly higher. The last thing I wanted to do was trigger other people’s automatic repricers to go lower if I were to go lower.
- I never went below the my minimum price – I’m not ready to take a loss on any items, so I made sure that I didn’t go too low. For a few older items, I matched my minimum price but for most items, I was higher. You can read more about minimum pricing in this post.
The cool thing was that I finally sold this Puzzle 3D game that I found at a thrift store last August.
By all means, I’m not claiming to be a pricing expert. I don’t monitor prices as often as I should and so far I haven’t had any luck figuring out repricer settings. But I do believe that lowering my prices got my sales going again.
Good luck with your selling and are you prepared for slow periods and how do you handle them?
As always, I would love to hear from you. Please leave me a comment below or on my Facebook page!