too many books

Dealing with “Dead” Inventory

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The Situation:  After the recent ASIN limitation debacle, which has thankfully been resolved for now, Amazon decided to free up room in their warehouses in another way.  Fortunately for us as sellers, Amazon has switched courses from using negative incentives to using positive incentives to bring about their desired end result.  What are these incentives?  For the entire month of April, FBA sellers can choose to have their active inventory disposed of or returned to them at no charge.  This is great news!  Disposing of inventory normally costs 15 cents per item, and returning inventory back to your home normally costs 50 cents per item.  Amazon is waiving those fees for the whole month in hopes that they can entice us to free up more room in their fulfillment centers to make way for new inventory.

Even if you haven’t been selling on Amazon for very long and you think your inventory couldn’t possibly be dated (or dead) yet, I urge you to follow the steps in today’s blog post to see if you can free up a bit of room in the fulfillment centers.  If everyone pitches in and removes a few items, it will go a long way toward alleviating these storage problems, and make it less likely for the dreaded ASIN limitations to be implemented again.

The Problem:  No matter how good you are at scouting for quality books, or how closely you adhere to a conservative sales rank strategy when buying books, let’s face it: some of your inventory is by now obsolete.  It’s no longer relevant.  The sales rank has skyrocketed while the price has tanked.  Oops!  But don’t fret – it happens to everyone.  Amazon is such as fluid marketplace and the prices are constantly changing to the point where I only expect to be able to sell 70-80% of the books I send into the FBA program.  Although being wrong 20-30% of the time may seem quite high, keep in mind that it’s at least 2-3 times better than the accuracy of the average weatherman!

All kidding aside, it’s a wise business practice to go back and analyze your inventory from time to time and remove books with a high sales rank and a low price.  The basic rule to follow is this: if you wouldn’t buy a book today based on its sales rank and price, then you shouldn’t leave it in your inventory.  Sure, it only costs 2 cents a month to store it, but if it has a 9 MM sales rank and there are several penny offers for the book from Merchant Fulfilled sellers, it’s time to cut your losses and remove it.  Once a book’s rank drifts higher than 3 MM, I no longer take advantage of “FBA Leverage”.  The next buyer for that title isn’t likely to come around in the near future, so I price my FBA offers closer to the MF offers in hopes of catching that next sale.  For books ranked under 3 MM, I ignore MF offers (mostly) and price based on other FBA offers, since books with a higher sales volume are likely to have at least one customer who places a high value on books that are Fulfilled By Amazon.  (Side note: This pricing and sales rank philosophy is why my eFLIP software only shows books with a sales rank less than 3 MM, because after that point books aren’t likely to sell again soon.  If you want to add another revenue stream to your book flipping venture by buying cheap MF books and selling them FBA, sign up for a 3-day free trial of eFLIP today!)

If you try to identify “losers” in your inventory using the Manage Inventory page within Seller Central, your sorting options will be extremely limited, as you can see here:

Screen Shot 2016-04-07 at 12.06.50 PM

Amazon doesn’t give you the option to sort your items by category or by sales rank right from Seller Central.  Fortunately, there’s another way.

The Solution:  There’s a report that contains immensely useful information for identifying and eliminating duds from your inventory.  It’s called the Inventory Health Report, and you can see how to download it and filter the data by watching the video below:

As a side benefit, the Inventory Health Report will show you the actual lowest MF and FBA prices for new and used items for EVERY item currently in your FBA inventory.  Not only can you remove duds, but you can also find well-ranked books that could sell quickly if you tweaked your pricing a bit.

An Offer to Help:  If your eyes glaze over at the mention of the word “spreadsheet” or you don’t have Excel installed on your computer, I’d be happy to help you analyze your inventory, identify duds, and even discover some quick winners where you could bump up your sales with a  few pricing adjustments.  If you’d like to enlist my help in analyzing your inventory to fully take advantage of Amazon’s free offer to dispose of your inventory, send me an email at thebookflipper@gmail.com.  For $15, I’ll filter and analyze your inventory for you and provide you with a form that you can upload to Amazon to quickly remove your “dead” inventory.  Simply tell me your criteria to follow, and I’ll filter your data according to your specifications.

Remember: you only have until April 30 to take advantage of this free offer from Amazon.  Be sure to take full advantage of this incentive!

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Thanks for reading – until next time, fellow flippers!

16 Comments

  1. Great post and video. Thank you.
    One thing I noticed is that you didn’t mention different values for different conditions of used books. The spreadsheet presumably takes the lowest price of all used.
    I price a book differently if it is in Good condition versus Like New condition.
    When you’re going through your inventory using this spreadsheet to determine what to dispose of, do you factor in condition of book, and if so, how?
    Thanks again,
    Zach

    • Good question, Zach. In general, I’ve found that condition doesn’t matter as much as people think it does… perhaps on a book that is selling often it can earn you a few extra $$$ for a LN vs. G. Regarding outdated inventory, where the rank has drifted up to 7 or 10 million and there are competitive Merchant Fulfilled listings at one penny, that book isn’t worth leaving in your inventory whether it’s Acceptable or Like New. At least that’s how I view it – feel free to disagree and share your rationale if you do!

      • One of the challenges I am seeing is the growing number of penny book sellers. I’m one the My Silent Team Facebook Forum and that has grown from 13,000 members to 22,000 in the last 8 months. What appears to be happening is with outsourcing and the dearth of good paying jobs, people are looking for new opportunities. With scanners, anyone can be a bookseller today and it appears that a growing number of MF sellers are selling books for a penny, use mass shippers that cost them $1 and are actually making $3 profit because of the $3.99 amazon charges.

        The problem that that is creating is a lowering bar of value and it appears today that almost every book out there has a number of penny sellers listing it MF.

        So when I viewed your above video, I had noticed you making a decision to dump dead inventory based upon the relationship between Prime sellers, MF sellers and your own listing. Yet with the explosion of penny sellers, how do you navigate?

        • I have to disagree with you on this one, Mark. New sellers are always coming to Amazon and there is the mentality that “the sky is falling”. But that’s just not true. Many of them will quit or burn out, and move on. Out of books ranked less than 3 million right now, roughly 40% of them have MF offers at one penny. Although that seems high, it’s the same as it was a year ago. With my rules, if the book is ranked north of 3 MM and is selling for less than a few dollars MF, it’s time to dump it. Does that help?

  2. Thanks Caleb. This was a great video

  3. I know Amazon provides all of the data I need in their reports, but they’re often hard for me to muddle through. Thanks for the video. I’m going to give it a shot!

  4. caleb-i have been selling since feb. 2016. i am sure that i have many books that meet this criteria. i do not feel competent to go through this process myself and would like to take advantage of your offer to do it for me for $15. Since i am new could you just use the same criteria for my inventory as you did in the video. please tell me what steps i need to take to make this happen

  5. Caleb, Thank you for this information! I was able to handle the excel instructions. My only question is where in Seller Central do I find the bul upload feature for inventory removal?

    Thanks!

  6. Caleb,

    What would you do with books under 3 million and are penny books?

    Thanks

    Jamie

    • It depends on how often they have sold in the past and what the competitive FBA offers are priced at. In general I’m starting to ignore penny books that are ranked higher than 2 million.

  7. This is great info, thank you. What do you end up doing with the duds that you have returned to you?

    I am looking to get started selling books, your site is very helpful. I just can’t find anything anywhere about what sellers do with the dead inventory. Just destroy it?

    • Hey Mike – if I return duds to my house, it’s either because I want them for my own collection or I think I can sell them locally (on Craigslist or Facebook). If I don’t want them, I’ll just pay Amazon 15 cents for them to “destroy” the books. Amazon usually sells those rejects to auction companies who then sell them back to other Amazon sellers and the cycle continues all over again…

      • Thank you for the reply. In my area I’m not sure how well they would sell locally. I’m pretty far from having to return or destroy anything yet – getting ahead of myself a little. Thanks!

  8. Hi Caleb, are you still offering to review ones inventory for duds? If so, please let me know what you need to get this started.

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