4 Questions to Ask Before Making Easy Money on an Opportunity

by Colleen Quattlebaum, on December 30, 2014

The Amazon gods must be happy with you. Your existing supplier informs you that they are running a closeout offer on hundreds of popular items. What could be better? Dramatically discounted products + Your amazing Amazon selling skills = Vacation to Europe this year.

But before you book your tickets to Florence, there are some things you need to consider.

What is an Opportunity Buy?

An opportunity buy occurs when you have a unique, time-sensitive offer to buy products. Like the example above, it might be a notice from an existing supplier about some discontinued items. Other suppliers specialize only in closeouts. It might be the result of an overproduction from the manufacturer. An opportunity buy also includes times when suppliers offer you better pricing for buying extra quantities.

Opportunity buys sound like great opportunities to cash in quickly, and some Amazon sellers make these types of buys the main focus of their business.

But opportunity buys are not a simple science. They take a lot of wisdom, and often a lot of mistakes before you realize what’s worth it and what isn’t. Before you make your next big order, make sure you ask these four questions.

1. Why Are They Selling It?

Were there profitability issues? Was there no demand for the product? The more you know about why a supplier is trying to offload its inventory, the better decision you can make.

How does your positioning on Amazon enable you to sell what a larger distributor was unable to? If the item is discontinued, can you still sell it at a price that yields a decent profit? Is this a niche item that will play well with your customers?

2. What Does the Past and Future of This Item Look Like?

Just because an item had high demand yesterday doesn’t mean people will still be clamoring for it today. Is the item seasonal? Is it tied to a style that is out of vogue? An online tool like CamelCamelCamel can help you get an idea about an item’s historical price and if it is trending down.

If the item is in a field you don’t have a lot of experience in, especially electronics, you need to research if there is a new upcoming version of the product. Buying a truckload of discounted iPhone 5 custom cases in early September 2014 was probably not a smart move.

3. How Much Should You Buy?

Just because you have a closeout item that looks like it will sell well doesn’t mean you should buy a warehouse to store as much as you can get. Use a smart tool like MarketScout to look at the current demand for thousands of items across all of Amazon. You can then evaluate the category and sales rank to get estimates on typical volumes. As an intelligent seller, this kind of research is critical before you commit.

4. Who Else is Selling This?

Are there many others selling these items FBA? If there are already 10 other FBA sellers, it might not be worth your time. However, if it turns out that you're the first to offer this item on Amazon, then you might have found a great opportunity.

Opportunity buys can be fantastic opportunities for smart Amazon sellers, but they can also leave you holding onto a lot of worthless products. If you practice good evaluation skills, you might just be able to justify browsing for the best café in Paris.

Try MarketScout today to evaluate your opportunity buy and get 100 credits free!

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