Do you want to know if an item is worth selling on Amazon or not but are struggling to come up with concrete answers?
The Amazon Bestsellers Rank (sometimes called “sales rank”) is a metric published by Amazon that factors how strongly an items sells within its given category (calculated hourly.)
A product that is selling very quickly will have a low sales rank (the best hitting the best seller at #1) and products that aren’t as popular will have a higher sales rank.
This gives us as resellers a benchmark to how quickly we can expect to sell an item if we decide to send it in to Fulfilment by Amazon (FBA).
Where do I find the Bestseller Rank?
The sales rank for each product is published in the additional information section of an Amazon listing.
If an item doesn’t have a sales rank it usually means one of two things;
- The item doesn’t sell enough units to warrant a sales rank; or
- The item is listed in a subcategory (usually electronics) which doesn’t have a sales rank in the main Amazon category
The first scenario I would advise to ignore as there is enough arbitrage opportunities around without risking buying inventory without a proven sales rank history.
The second scenario is a little more complex, and will be covered in a future blog post.
What’s a good sales rank… and what isn’t?
Before we deep dive into what makes a good sales rank and what doesn’t, the single most important thing to remember is consistency.
Only this morning before writing this guide I researched an item in the Toys & Games category with a sales rank of 55,360… which is just outside of 1% for the category.
This would fall outside of my typical buying criteria.
However, when checking back just a few hours later the very same product had a sales rank of 7587.
(TIP: The sales rank is the green line on the graph, with the BSR figure on the right)
That’s a HUGE jump in sales rank.
When judging a “good” or “bad” sales rank it is always worth checking the 3 month average for the product to understand where the product typically ranks.
(How did you get that super-cool graph? It’s a free Google Chrome extension called Keepa. The sales rank data is only available on a paid plan but it’s totally worth it! Get it here.)
As you can see, this product is ranked on average at 30,616, which is well within the top 1% BSR (bestsellers rank) for the Toys & Games category…
…which is actually pretty good.
But you may be wondering what it all actually means?
Amazon doesn’t actually disclose the exact specifics of the sales rank algorithm, so other factors do come into play other than just sales.
However from a resellers point of view, it’s simply a benchmark of how popular a product may be in the marketplace.
You should try to avoid products with a languishing sales rank (unless you know it is seasonal or has a large profit potential) and instead try to pick fast-moving products with strong sales ranks.
When an item is selling lots of units it will sustain a very low sales rank, and products with longer gaps between sales will experience dips in the rank until it sells again.
It is safe to assume that if you choose an item in the top 5% BSR compared to one in the top 1% that it will be take longer to sell.
Your decision ultimately comes down to your buying strategy based on what the minimum amount of ROI% you expect, and how fast you expect to get a return on your investment.
Finding your BSR% sweet-spot
There are many FBA strategies to choose from, each depending on your adversity to risk and reliance on the income generated from Amazon.
A full-time FBA seller who rely on sales to put food on the table will almost certainly be looking for products well within the top 1% BSR for a category (among other factors like ROI% and how many sellers are on the listing.)
On the other hand, somebody who is looking for a way to invest savings when bank interest rates are super-low may be willing to purchase an item with a high sales rank but sizeable margins and be happy to wait a while for the inventory to sell.
I like to call this decision finding the BSR% sweet-spot; basically deciding on a sales rank range that you are comfortable with and sticking to it.
For a seller like myself, I’m happy to take a smaller ROI% in exchange for a product that is selling very quickly and ideally sells the day it hit the Amazon warehouse.
I have found the top 1% to be my sweet-spot on Amazon and it has served me very well so far.
Only you can make the decision on your BSR% sweet-spot, but it forms an integral part of your FBA strategy and requires diligence and thought.
Generally speaking there is always a trade off between BSR% and profit margin, unless you stumble upon those special items that offer a great sales rank and good margins.
Does a high sales rank mean an item doesn’t sell?
No it doesn’t mean it doesn’t sell, it is just a slower moving product than something in, let’s say, the top 1%.
Items with high/poor sales ranks (sometimes referred to as long tail) shouldn’t be ignored at all.
Assuming there is little competition from other sellers on the listing it can be a great opportunity to make greater amounts of profit…
…and even an item in the top 5% BSR for it’s category is still selling more units than the other 95% in the same category!
However, the best solution when buying items like this is to limit the capital you invest in them and to gradually get a “feel” for how well they sell.
Experiencing a long tail item and how long it may take to sell is the best way to become a better reseller.
It’ll give you more confidence the next time an opportunity arises in your chosen categories.
It’s wise to remember that nothing with Amazon arbitrage is set in stone.
You could purchase a product with a great sales rank only to be unable to achieve your desired sell price due to competition.
Alternatively you could purchase an item with a sales rank that you may consider long tail and the product sells on the same day it hits the Amazon warehouse.
It is smart for you to use sales rank as a guide only to how quickly you can expect your inventory to sell.
It’s really important NOT to make all of your buying decisions ONLY based on sales rank.
You have to consider ROI%, competitiveness of the listing and potential profit too.
So the next time you find a deal online, or scan a potentially profitable product in the shops remember; check for the consistency of the sales rank, consider your strategy and make an informed decision based on it.