Keepa Putting It All Together

This lesson runs the whole check in order, on one product. The order matters: each step is cheaper than the one after it, so you spend your time only on products that have survived everything before.

Step 1: is there any profit at all

Do this first, before opening a single chart. Most candidates fail here, and analysing the history of a product you cannot profit from is wasted work.

Three ways to get the number:

• Arbitrage Hero shows the estimated profit in the results.
• The Amazon Seller app. Scan the product from your screen, enter your buying price, read the profit.
• The Amazon FBA calculator. Search for it, enter the ASIN, your purchase price and the sale price, and press calculate.

One caution the lesson makes explicitly: the FBA calculator does not account for VAT. Run the same product through the calculator and through SellerAmp and the two disagree, because SellerAmp applies VAT on top of the Amazon fees and the calculator does not. If you are VAT registered, use a tool that knows it, or the profit figure is flattering. Whatever the tool, treat its output as an estimate: fees change, and the sale price you eventually get is not the one on screen today.

Step 2: is Amazon on the listing

Look at the chart for orange shading. Shading means Amazon was selling. Shading at the right-hand edge means Amazon is selling now, and that is normally the end of it.

If Amazon has been on the listing in the past, do not judge it by eye. Go to the Data tab and read Amazon out of stock in the last 90 days.

The threshold is 60 percent. Amazon must have been out of stock for at least 60 percent of the last 90 days. In the example it reads 100 percent, which is ideal.

Step 3: is the sales rank suitable and consistent

Still on the Data tab, read the 90-day average rank. The example shows about 19,000, which is good for Toys.

Two conditions: the average must be inside the range you accept for that category, and the averages across 30, 60, 90 and 180 days must be close to each other. A rank that is good only in the most recent window is not a rank you can plan around.

Step 4: is the Buy Box price consistent

Read the average Buy Box price over 90 days and compare it with the current price. In the example the 90-day average is around £203 against a current price near £205, which is close enough to be confident the current price is normal rather than a spike.

Then look at the shape of the line. You want a price that sits steadily inside a band, not one jumping about. And the band should sit between your break-even price and the maximum you would charge, so that even at the bottom of its range the product is profitable.

Step 5: how much competition, and how well stocked

The offer count on its own is not very informative, because it does not tell you what those offers are priced at. So go to the listing and open new and used offers, and read it properly:

• How many sellers are near the current Buy Box price? Those are your real competitors. In the example there are two close to the Buy Box and two more slightly higher, which is a manageable position.
• How much stock do they hold? In the example most competitors hold few units, which is favourable: they sell out and the listing opens up.

Sellers priced far above the Buy Box are not competing with you for it and can largely be ignored.

Step 6: how often does it sell

Back to the statistics for the drop count. The example shows an average of 44 drops a month, meaning at least 44 sales.

Now combine it with step 5. Roughly 44 sales a month shared between about four active sellers is around 11 sales a month each, and the competitors are lightly stocked. That is what turns the purchase into a reasoned estimate rather than a hope, and it is what tells you how many units to buy.

It does not make it certain. Sellers arrive, Amazon can return to a listing, prices fall and categories get restricted. What this process does is put the odds on your side and size the purchase to what the evidence supports.

The finished verdict

The example product passes every step:

• Good return on investment and a worthwhile absolute profit.
• Amazon out of stock 100 percent of the last 90 days.
• Consistent sales rank around 19,000, inside the acceptable range for its category.
• Consistent Buy Box price around £203, sitting inside the profitable band.
• Only a few competitors near the Buy Box, and none holding much stock.
• About 44 sales a month.

Every one of those is necessary. A product can have an excellent margin and fail on Amazon's presence; an excellent rank and fail on price stability; both, and fail because six well-stocked competitors are already sharing the sales.

The checklist

1. Is there profit, calculated with your tax position included?
2. Is Amazon out of stock at least 60 percent of the last 90 days?
3. Is the average rank inside your range, and consistent across periods?
4. Is the average Buy Box price consistent, and does the whole range sit above break-even?
5. How many sellers are near the Buy Box, and how much stock do they hold?
6. How many drops a month, divided by the sellers who will share them?

Run it in this order. Most products fail at step 1 or step 2, which takes under a minute, and only the survivors are worth the rest.

Putting It All Together