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  • ALGO™ Team

An Amazon Seller's Checklist For The Product Research Process: 8 steps to guarantee good inventory

Updated: Feb 19, 2020

A Checklist For Your Amazon Ordering Process.

Routine can be a wonderful thing. We can sometimes get emotional about a product. Maybe you get a product list from a supplier filled with things that you might enjoy, causing you to look at them with a little more value than they might actually possess. Following a system when deciding what product to buy is an essential step that you should be getting in the routine of doing.

8 Steps To Guarantee Good Inventory:

Here is a simple checklist that we follow whenever we are in a buying decision:

1. Collect cost per unit from your supplier, buy box price, and amazon fees to calculate profit and return on investment (ROI).

2. Gather best seller ranks to determine how many units you can sell per month.

3. Compare the units sold per month to the amount of units come in a pack from your supplier.

4. Quantify how many qualified sellers there are on each specific item by sorting all possible sellers by New and the Amazon Prime check. When looking for qualified sellers be sure to determine if Amazon is selling the item in question.

5. Calculate your share of sales per month by dividing the average sales per month from the BSR by the number of qualified sellers. Be sure to include yourself!

6. Calculate the number of months to sell out by dividing your order amount by your share of sales per month. Your numbers should typically be under 1.5 to be considered a good buy. If your "months to sell out" number is very low then you can also tweak your order amount to get it closer to 1.0. All you are doing here is adding more quantities of a specific product. the closer your sales per month get to 1.0 means you can sell that much of that product per month.

7. Calculate estimated profit by multiplying profit by order amount.

8. Calculate monthly ROI by dividing ROI by months to sell out.

All that's left now is to pick the best items. This checklist will provide a scientific method, eliminating emotion, to determine the best products for you. Try to diversify your products as much as you can. Having a multitude of products in your inventory doesn't leave you at the mercy of any single trend or dip in sales for a particular item. Keep an eye on the kinds of product you are purchasing to ward off this potential pot hole.

Keep on selling!


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