Top 5 Sourcing Strategies for Selling Shoes on Amazon FBA
Thanks to Amazon, doing business online is not as challenging as it once was. Amazon’s dramatic rise from bookstore to worldwide sales giant is proof that the platform has provided the sellers with ample opportunities to be able to sell whatever they want. Still, too many people are scared to take on selling on Amazon as a new way to do business. This is because they aren’t sure whether the product they opt to sell will be a hit or not.
In the present scenario, there is a horde of sellers approaching the shoe market. Selling shoes on Amazon is a great way to increase profit and enables the sellers to get away from much of the competition within other categories. However, not all shoe sellers on Amazon have the success they anticipated. Despite the fact that selling in the shoe category means hassle-free dealings regarding sourcing, prepping, and shipping, most sellers are doing it wrong.
Shoes are an excellent opportunity – probably the best selling opportunity on Amazon. However, where most sellers are failing is when sourcing the product. They are not sourcing correctly, as they are scanning one shoe and determining if the entire line of shoes is profitable. First of all, shoes come in varied sizes, and each size has a diverse price range – the same sales rank but varied price. In addition, there are various patterns and colors for each shoe, which means more the variations, more the opportunities will be to make profits. Finally, yet importantly, the best seller rank (BSR) should not be the only factor to consider when deciding whether to buy or not.
People are picky about shoes. If the color is off or the size is wrong, back they go. If you want to sell shoes profitably, you need to amend your sourcing strategies.
Whether you are an experienced seller or a beginner, if you plan to sell shoes on the world’s biggest marketplace, this post will you with top sourcing strategies for selling shoes on Amazon FBA.
First, we will start with THREE good reasons to sell shoes online:
1. Higher Return on Investment – it is possible to average over 200% ROI. It sounds crazy, but if you conquer the learning curve, it is possible to achieve more than that.
2. Higher Average Selling Price– when the average selling price is higher, the higher will be the profits. Thanks to the Amazon fee structure, you can make a lot more profit when your average selling price is higher. That is, if you sell 10 products at $5 a pop, you get $50 in sales; however, if you sell one product at $50, you will have to pay Amazon fee only once. Thus, a higher average selling price will help you get bigger disbursements.
3. Less Competition – Amazon is a competitive marketplace where hundreds of sellers are competing over the same product. However, as the shoe category is gated, the competition is low. There are countless shoes with no competition or say with only one or two sellers.
4. Inventory Diversification – if you want to find a category where you could consistently source products and diversify your inventory, shoes can help. Shoes are very appealing as a new category.
5. Shoes Provide an Opportunity to Source Solely, via Online Arbitrage – people are making lots of profits selling shoes doing retail arbitrage; however, those who didn’t find even one pair of shoes to resell doing retail arbitrage they can sign up for online arbitrage. This way, they can switch from doing part retail arbitrage and part online arbitrage across numerous categories to doing only online arbitrage, almost entirely in shoes.
Despite these benefits, there are several reasons people fail in making profits selling shoes. We want to take you through them and give you several points of considerations when sourcing shoes.
#1 Shoes have a high buy cost than most categories
Most FBA sellers are fearful of investing too much in one product, and we don’t blame them. It is unwarrantable, particularly when you are just starting out. Unlike categories such as toys and books, it is not possible to take a small amount of capital with shoes, buy products at an incredibly low price, and earn high ROI. With shoes, you cannot turn a quick profit to reinvest within a short period.
While shoes can give you a ridiculously amazing average selling price (ASP) and a high return on investment, the buy cost for a single pair of shoes usually ranges from $20 and above. It is common to spend $50 or more on a single pair of shoes even before the profit margin, ROI, and the rank justify it. So, you need to stay vigilant with your budget. At first, you will think that you are putting all your hard-earned money into something that is uncertain. However, if you consider the fact that a high buy cost also has a high profit per unit, a high profit margin, and high average selling price, your investment is totally worth it. Once you build confidence in sourcing shoes, you will be able to calculate the risk associated and plan your budget accordingly.
Only high-quality shoes sell well on Amazon, and if a manufacturer is offering shoes at a lower rate compared to other manufacturers, before ordering in bulk, ask for a sample. Never be deceived by the lower price tag. They are probably cheap quality shoes that if you sell on Amazon, have the potential to bring down your whole business.
So, order a decent quantity at first, and see how your campaign is going. If the response from your target audience is positive, you can go on and buy more.
- Shoes have a high buy cost than most categories
- Only high-quality shoes
- faster selling categories
- expensive shoe sales
#2 Shoes are long tail items
While it takes a more substantial initial investment to source shoes, it takes a lot of patience. Relative to groceries, books, toys, and other faster selling categories, shoes do not sell at the same velocity. Moreover, shoes are something that you cannot refill faster when required. It works in such a way that you source a style of a shoe; send it to Amazon FBA, and move on to finding the next pair.
Why most sellers selling shoes online lose hope quickly is due to the fact that they become easily disappointed and frustrated when they don’t get their return on investment as soon as they had hoped. In most cases, they eventually sell all the shoes, but it can take as long as 6-8 months and even a year. However, once the shoes start to sell, the average selling price is great. For sellers, who had needed the money invested in buying shoes back any time sooner than a year, those are the ones who find themselves in financial trouble.
Shoes are one of the few categories that doesn’t provide you with a steady stream of ASP sales unless you give yourself some months to ramp up. It takes months of sending in a steady stream of shoes and then waiting for those expensive shoe sales to start dropping in. The more you source and send them to the inventory, the will be the average selling price and disbursements. It is all about patience when you are trying to conquer the shoe category in Amazon.
As shoes are a long tail term, you are advised to not to go too deep in any one style or variation, instead buy multiple styles and variations. It is much easier to sell one pair in each size of 7, 8, and 9 than selling four pairs of size 7.
#3 Gauging the sales rank of shoes is much different than in other categories
Depending on the sizes and number of colors available, each Amazon shoe listing can have a plethora of variations. When you are looking at the sales rank of the shoe you want to source, the sales rank showed isn’t the sales rank for that particular pair of shoes but of all those variations combined. On the other hand, Amazon shows the sales rank of shoes in the general Clothing, Jewelry & Shoes category. Thus, if a product page states that this particular pair of shoes is ranked #150 in the general Clothing, Jewelry & Shoes category, there is no way you can know for sure which color and size of those shoes are garnering more sales that give it the low rank.
What makes things more complicated are the tools that you use to identify the sales rank history. Most tools don’t indicate the sales rank history for shoes similarly as they show for other categories. Although the graphs can help you determine the sales rank history of the overall parent ASIN, you need to rely on several different factors to make a buying decision.
The following are the best ways using which you can limit your risk as far as the sales rank of a shoe is concerned:
• Consider buying neutral colors because the majority of the customers prefer neutral colors such as brown, gray, white, and black. Refrain from filling your inventory with neon greens, floral prints, and other funky designs no matter how cute and vibrant they look.
• Go with shoes that have a low number of variations as it allows you to maintain your inventory. Prefer sourcing shoes that don’t have broad, regular, and narrow variety for each size and only go with a low number of color options and not 15-20. More size options and more colors mean more variations. At this point, the overall sales rank becomes meaningless as far as each variety is concerned.
- Gauging the sales rank of shoes is much different than in other categories
- Depending on the sizes and number of colors
- sales rank of a shoe
- shoes are garnering more sales
#4 Take a different approach when it comes to sourcing shoes
Every seller has their own principles and strategy for sourcing shoes, and we recommend you to find your own groove and determine what approach you want to take. Some sellers go with standard colors and sizes, while some like to provide the customers with hard-to-find sizes and colors. You need to target a specific audience and deliver products based on their requirements. The shoe market is incredibly vast, and you will find people with different needs and specifications within this niche. So, it would be a wrong move if you are considering covering the entire space. Focus on small groups of people and their requirements. Some prefer sports shoes over any other while others love formals. So you can target based on their types, size, use, or even color.
It is all about thinking different, do what your competitors aren’t doing that’s worth doing. If a certain type isn’t available on Amazon, you can consider ordering a small quantity, list them, and see how it goes.
#5 Consider customer reviews to see popular sizes and colors
Lastly, when you are working around to make a good shoe sourcing decision, you need to gain insight into what the customers who bought the product are saying. You can assess the Amazon reviews for any verified Amazon shoe purchase. There you can see what color and size the customers purchased. It is honestly safe to assume that sizes and colors with more reviews are receiving more sales.
Moreover, consider the ‘fit as expected’ percentage in the reviews section to see whether the shoes tend to run as expected, large, or small. The shoes falling under the ‘runs large’ and ‘runs small’ category will likely have a higher return rate, which is a risk that you don’t want to take, no matter how cool the shoes look. Finally, you need to look at the average price of the shoes across all variations. This is important because it is less dicey sourcing shoes that you can price competitively with other variants of the same color or size.
- Consider customer reviews to see popular sizes and colors
- Amazon reviews for any verified Amazon shoe purchase
- love formals
- how cool the shoes look
As we conclude, you must understand that sourcing shoes require a lot of capital, and wait for sales require patience. Hence, we can honestly say that shoes aren’t for everybody vending on the world’s biggest marketplace. It is all about trying and testing and see what works best for your business. If you have any queries regarding selling shoes on Amazon, you can contact us.