When you’re new to selling on Amazon FBA, particularly with the online arbitrage model, which niche Amazon categories should you aim for, and which should you avoid?
Most new Amazon FBA business owners usually start with some RA (Retail Arbitrage), a trip to the local supermarket or toy retailer buying clearance items.
This is probably followed by looking online for OA (Online Arbitrage) opportunities which is good place to start…
…and depending on your results this trend continues as you grow your FBA businesses.
But after a short time, and as creatures of habit, we continue to buy items such as toys and games. This is because it becomes your comfort blanket and you feel safer buying in these selective categories.
And stepping out of these popular categories can seem to be daunting, the thought of stepping into the unknown.
Well, don’t panic because it’s a common and normal process.
Category Training Wheels
Everybody has to start somewhere, and learning how certain categories on Amazon work, perform in terms of sales, and the popularity of items is an important part of selling your items.
So why do we start with the obvious ones first?
There are a few reasons for this… you’ll probably see toys everytime you visit the supermarket, and they usually have clearance sales regularly so it’s an easy option.
But the other main reason is that you naturally look at items to sell that is stuff you can associate with.
What I mean by this is, when I first started my FBA business, of course I was looking for profitable items to sell, but I would find myself only searching for items that I understood or that I liked.
The point here is if you’re only looking for items you find interesting, you’re not looking for items that may be boring but may be profitable.
So changing your mindset is important, but it’s not 100% necessary at the beginning of your FBA journey.
Having some knowledge of the area in which you want to sell in can have its advantages, so don’t dismiss it.
Most of you reading this will at some point in your FBA business do, or are still doing, the obvious buying paths, which isn’t necessary the wrong path…
…if you can make money doing this then great.
But the purpose of this blog post is to open your mind to all the possibilities available to you, and the more categories you can add the more profitable items you will find.
Broadening Your Horizons
Let’s stop talking toys for a moment, and start analysing buying from other Amazon categories that we know very little about.
Learning the different categories outside of your “comfort zone” categories, little by little, is the best way forward.
You should be aiming at taking your time in each category to see if it suits your business model, and build up the categories you have knowledge in over time.
And if that means that toys and games is your biggest selling categories, and you are successful doing this then so be it and build from there.
If you are only selling in the open Amazon categories, and are not yet ungated to sell, then having the knowledge to sell in more “non-gated” categories opens up a further door of opportunity to expand your business in these niches.
Getting ungated does not mean you need to sell in these categories straight away.
But having the options to sell once your ready is better than finding a profitable item to find its in a restricted category.
A common mistake can be selling in lots of different categories too quickly, and not really understanding any of them enough to make wise buying decisions…
…this is where mistakes on buying tends to happen.
So what can we do to gain our knowledge base and make the leap into the unknown?
Working through individual Amazon categories, or even a couple of categories at a time, learning and building your confidence selling in these categories is the best approach.
You will quickly start to gain valuable experience in what to buy and what not to buy.
I use my past inventory at times in Amazon Seller Central to help my learning curve on items that I have previously sold and no longer have in stock.
By checking back on the prices I sold at, the current buy box price, and sales rank, I can then see if I did buy this item again, would it be a good purchase or not?
Hindsight is a great method to see what worked and what didn’t, and remembering here, that selling through Amazon FBA is a process, a learning curve for us all…
…and only by making mistakes can we learn and move forwards.
Making Mistakes With FBA (Without Losing Money)
A lot of prep work can be done beforehand when researching items in different categories.
This can save lots of time and money, because you can watch items and make notes or screenshots of listings to see if they are selling (without actually having to purchase the products first.)
Paper trading deals like this is a great way to find if a product you are looking at getting into sells in a category you are unfamiliar with.
Research is a key part of this, and is great grounding for if in the future you deicide to move into PL (Private Label) products, as without a lot of research in this area you can lose a lot of your cash.
The Amazon categories should be like building up a portfolio, and as you learn and profit from one or two categories…
…you can start to use some of your time researching and testing other categories.
With Amazon FBA selling there a many variations to learn, and building up slowly, at a pace that suits you will help to avoid the inevitable mistakes you make when rushing.
Remember about learning the processes, and building confidence in all individual areas of your FBA business and you will get the success you desire.
What categories outside of Toys have you found successful or unsuccessful? How do you plan to keep track of paper trades?
Share your thoughts, comments, opinions and questions in the comments section below!