After the talk show last Monday, Brad DeGraw, our guest, received a list of “Things I Learned From Brad” from his friend Bob, whom he has been teaching about FBA. Brad made some additional comments and forwarded the list to me for sharing.
Brad’s tips below are in Blue and here is a bonus tip from.
Managers can help you go deep on products. Most managers have no intention of helping your business, however there are some good ones. Yesterday an interesting thing happened at Costco. After an employee dug for the last dozen of an item I was buying, she offered me a full pallet of the item. Not only did she offer me a pallet, but the store manager asked if I would be interested in partial truck loads. Walgreens is another easy source to order cases and go deep.
Be friendly, brief, and get their number if possible. I don’t have business cards or salesy material, just make the conversation easy for them.
Make it happen, Brad
You can email Brad @ Degraw.firstname.lastname@example.org for more info or check out his new book on Amazon FBA Hot List.
25 things I learned from Brad this morning:
Scout products out first to make sure they sell. Buy 6 of something rather than an entire pallet
and see how it sells. If it sells well, restock in a higher quantity but don’t overdo it.
Yes go wide first then deep until you see the profit.
Bundle products so that you have a competitive edge over other FBAers in the market. Do
creative bundling that other FBAers wouldn’t necessarily think of.
This is an advanced strategy, don’t let it consume you in the beginning.
Don’t always place the lowest price on a product. Be the second lowest. When the lowest priced
product sells out, you’re making a better profit.
Go for 2.5% above the lowest delivered price or the middle of the herd.
Turn products quickly. Don’t worry as much about margin as turning products.
It is both margin and cash flow depending on the supply and demand. If the product is
restockable, then turn volume. If the item is not restockable, go for margin.
Find products that sell and return to purchasing and selling those products often.
Be careful with your time. Life is too short to stand in long lines. Return products as a last resort.
When purchasing, use the triple-double model. Your purchase price will likely be one third of
what the product will be selling for. Of the difference between what you purchased the product
for and what you sell it for, figure on making half of that in profit.
Not really. Selling products at three times your cost will double your money. Amazon will get
about 33% of the transaction. If you sell items for 10x your cost Amazon will take a third. If you
sell products for double your cost or below your cost, they still take 33% pf the transaction. This
is where new sellers hang themselves. Understand this before you buy anything!
Don’t always be stuck on the 50% profit margin. 30% of a lot of product can be better than 50%
of a little product.
Aim to triple-double. As a newbie you need more margin to cover newbie mistakes. Until you
are selling 100 items per week, don’t buy items if you can’t sell for triple your cost. This mistake
will put you out of business before you know it.
Obtain a retailer’s license so that non-grocery items can be purchased without sales tax.
Not essential until you know this is a business model you will thrive in. I waited until I had five
Bulk items are not money-makers.
Depends. Your time is best spent on small easy to pack and ship items. I do stock large heavy
items, but only when they pay well.
When bundling products, purchase bar codes that belong to you.
Yes, but this is an advanced strategy. In the beginning, stick to the known numbers. Custom
bundles and multipacks take about a month for the search bots to really take notice.
Exercise equipment, tea, spices, and certain hot chocolates sell very well.
They do currently, but the business is very fluid. I have products that I have sold for $40 a few
months ago and now they sell for $13.
Everything Amazon sells is ranked from one to ten million. Only purchase items that are low
ranked. (30,000 could be a high ranked selling item depending on the category)
Don’t overload your product line on a single product. Amazon may purchase a high quantity of
the same product and make it so that your product never moves off the shelf.
Amazon was the brainchild of a billionaire genius. They already outsell every retailer in the
world in part because many of the products they sell have no cost to Amazon. Amazon uses
several creative strategies to maximize their product lines.
When shopping at Walmart, find clearance products, then speak with a manager and offer a
lower price to purchase their entire supply.
This is not essential to the business. Only do this if you like.
Offer to purchase entire pallets of product at a much lower per unit cost if they have the
prospect of selling.
This is not essential to the business, I have lost my shirt on this type of deal.
When purchasing products from Walmart that could expire, always check the expiration date
and make sure it’s at least 100 days out.
Always check for expiration. Most stores sell products past expired. 100 days is razor thin, so it
needs to sell upon landing on the dock.
When buying bulk of a product, make sure to check every package for damage prior to
Yes, check multiple times.
Anticipate 2% return on all your products and factor this into your profit expectations.
My returns bounce between 2-3%, however I recover about half of the returns as resellable
When starting out, specialize in a single category or subcategory. Purchase within a product
category until you master it. Then pivot out slightly from that product category until another level
of comfort is built up.
Use grocery bags as packing for shipping products to Amazon.
You will have a sea of plastic bags. Use what works for you, air pillows and cardboard dunnage
is good too.
The UPS man will hate you and park on the other side of the complex just to avoid you.
Maybe not, but mine are like that.
Don’t buy more of something simply because it’s a good seller. Let your inventory of that
product go down before purchasing more.
It is a business decision. As the risk decreases, invest more.
Don’t necessarily purchase based on the season. Some of the the biggest sellers can be
products that are out of season.
Go online and check your product inventory often. Make a list of things that are running low and
that you specifically want to shop for before going out sourcing.
You will get addicted, this won’t be a problem.
If a product isn’t selling well, have it shipped back to you and eat the expense of the shipping.
Better to make a large chunk of your money back when returning it to the store than not make
any money off of it.
Cut the margin first, then gut the margin to break even, lastly return the inventory.