Guest blog post by Stephen Smotherman from Full-Time FBA
Your ASP (average selling price) is the average amount of money you make in sales per item you sell on Amazon. ASP is calculated by dividing the dollar amount of sales by the number of items sold.
To find your ASP, follow these steps:
- Log in to Seller Central.
- Hover over Reports.
- Click on Business Reports.
- Check out your Sales Snapshot – your ASP is the amount listed for “Avg. sales/order item.”
Raising your ASP can benefit your Amazon FBA business.
- You can save a lot of money on FBA fees.
- You can save time, money, and effort on prepping and shipping items.
- You can give yourself more wiggle room for price fluctuations.
- You can increase your Amazon disbursements.
But HOW do you go about raising your ASP? It may seem easier said than done, but the reality is you can take a few steps to impact your ASP and give your Amazon FBA profits a boost.
Here are our suggestions for increasing your ASP:
1. Set a minimum selling price parameter
A while back, we made the decision in our Amazon FBA business to stop sourcing items that are selling for under $10-$12 on Amazon. Even if we could make 100% ROI on an item that is selling for $8 or $9, we decided to stop sourcing those items and focus our sourcing on higher priced items.
When we eliminated the low-priced items from our sourcing strategy, we had more money to focus on buying higher-priced items – partly because we could add up the saved sourcing money to go towards higher-priced items and partly because we were saving money in fees and prep costs when we raised our ASP and lowered our overall number of units sold.
The $10-$12 range is what we chose for our minimum, but for other people, that amount might be different. This type of minimum sales price might affect a lot of booksellers or others who (like us in years past) are dependent on high volumes of low-priced toy sales. Overall, though, we have found that eliminating those super low-priced items from our inventory has been the biggest practical step towards raising our ASP.
2. Consider selling bundles or multi-packs
Multi-packs are multiples of the same item for sale on Amazon. Bundles are a group of items with a similar use or theme for sale on Amazon.
If you follow the Amazon guidelines, you can create your own bundles for sale and increase your ASP per unit sold over the ASP if you sold all of those individual items from your bundle separately instead. If you’re interested in learning more about selling bundles on Amazon, I recommend The Book of Bundles.
For multi-packs, you can no longer create a multi-pack if it doesn’t already exist on Amazon, but you can list a multi-pack of items if it’s already available in the Amazon catalogue. Like bundles, multi-packs offer a great way to raise your ASP per unit sold over the ASP if you sold each of those items from your multi-pack separately instead.
Once again, you also save money in fees if you sell items in a bundle or multi-pack instead of individually. For example, if you sell 5 individual units of a $10 grocery item, you would make $50 in sales, but you would have to pay 5 sets of FBA fees. If you sold it as a multi-pack of 5 for $50, you would still make $50 in sales, but you would only have one round of FBA fees to worry about.
3. Source higher-priced items
It might seem obvious, but sometimes we need to get back to the basics of the topic we’re trying to learn – if you want to raise your ASP, you need to have higher-priced items in your inventory. You can’t sell high-priced items if you don’t have high-priced items available for Amazon customers to buy.
The easiest way we found for selling higher-priced items in our FBA business was to add shoes to our inventory. Our ASP in the Shoes category is about $70, and our overall ASP across all categories combined has risen to $47 now that shoes are a main staple in our Amazon inventory.
When we talk to other sellers about adding shoes to their Amazon inventory, we often get asked, “Isn’t Shoes a restricted category? Isn’t it hard to get ungated?” And the answer is YES Shoes is a gated category, but NO it’s not hard to get ungated in Shoes right now. If you want more info about how to get ungated in the Shoes category, you can click here to download our free guide for the shoe approval process. If you want to read more on our blog about selling shoes on Amazon, you can click here for the blog series.
Shoes aren’t the only higher-priced items you can source. Other sellers like to sell electronics to raise their ASP. Some sellers go with high-priced toys to raise their ASP. Whichever category you like to focus on, there are ways to start sourcing higher-priced items as a step towards raising your overall ASP.
Those are the top three ways that we have impacted our ASP and raised it to a point where we’ve seen an increase in our disbursements and a significant boost in our Amazon FBA business.
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About the author:
My name is Stephen, and I love my job! I get the honour of working for myself, at home. I’ve been using Amazon FBA since 2011 and have been able to completely support myself and my family almost from the beginning.
On my FBA blog, we talk about what it takes to make FBA a full-time job.
http://www.fulltimefba.com
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