What to consider moving into the next year
Scott Needham here. I'm the founder of SmartScout, but before that I was and am still an Amazon seller. After experiencing 2020, I thought that this year would be a bit more normal. Whoops. Wrong there. The quantity limits early this year hit us all.
But that's in the past. What's in the future?
FBA fees are changing in January. While they are only increasing fees across the board at 5.2% there's a few ways that this makes it uncomfortable. It's almost 10% in some of the smaller size categories. Since those products are less expensive overall, shipping will be a larger portion of their margins.
The long term storage fee was changed from 365+ days to 270+ days. This doesn't happen until May but will be uncomfortable for those that like to leave inventory there for a bit longer. Sometimes we see Christmas as a great chance to purge through our stale inventory. This makes that strategy not as optimal. That said, I think this is quite smart for Amazon to force efficient seller behavior. I had to write off over $100k of inventory this summer, message received.
Bill D'Alessandro showed that the aggregators may be in a bit of a bind if they don't perform very well this Christmas. Your Q4 strategy had to be implemented by August/September, so we'll see what happens. But if some of them under perform with their brands, I'd expect to see a few of these aggregators not growing or even having to sell out to another one.
I'm currently selling my private label brand and the word is that Aggregators are getting a bit more cautious than buying just any brand. Yes, multiples are up a notch or two, but they have to reduce the risk in their portfolio's and sellers need to continue to have a defendable brand.
I speak with many professionals on a weekly basis. What I'm testing out and what I'm hearing is that off Amazon traffic is leading to better organic rankings. I'll likely do a future podcast episode on ampd.io as it really simplifies this process so anyone can advertise. I'm awaiting on results before I discuss. But it's fun. Plus there is the bonus of the 10% brand referral bonus.
It's an exciting time of year to be on Amazon. I wish you the best of luck. I'm sure you have big bills to pay and this is the time of year to do well. We're committed here at SmartScout to build innovative tools. We're super excited how far we've come in a year and AdSpy is looking pretty good.
If you're ready to try it out, you can start your free trial now.