Why it’s essential to check the price history?
The quick answer is whatever is profitable at the moment is not necessarily profitable in the future. So, you have to check the selling price history before you make your decision.
Sometimes Amazon itself comes and goes as a seller, especially for some ASINs. When Amazon is a seller of a product, the selling price is usually at the lowest, so other sellers can’t compete and win the buy box. You may find many products with a decent margin, but it’s only because Amazon is temporarily out of stock. As a result, you can’t count on the current selling price, and you may want to ignore this OA lead. It is not always the case when Amazon is a potential seller; a drop in the selling price may happen even when 3rd party sellers have the buy box.
In the online arbitrage business, one of the worst things that can happen is that you buy a product to make a profit, but you cannot sell it and end up losing money or, at best, make no profit. It’s inevitable that every time you buy a product, you take a risk. However, if you assess the price history of a product, you’ll significantly decrease the risk and improve your work quality.
Read More: Amazon Category Approval
Where to check the price history?
There are lots of software and extensions that show you the price history chart of a product, most of which use Keepa as their source. The easiest way to check the price history for a product is by using extensions so you can see the price history chart on the product page on amazon. Keepa has an extension itself, but after years of working with different extensions, we think RevSeller is the most efficient one.
When you are on a product page, you can see the price history of that product by clicking on “graph” in RevSeller:
When you click on the graph, you can see the price history from the first date this ASIN existed. Also, you can choose to see 30-day or 90-day prices.
How to interpret the graph?
There is no one right answer to this question. It depends on your strategy and the risk that you are willing to take. However, there are some hints for assessing the graph and make your decision based on real data.
Generally, you should forecast the future price using historical data. Obviously, we shouldn’t expect sellers to be data scientists who have data analysis skills; Also, indeed, time is money, so we don’t like to spend much time on each graph. What we need is a quick guess about the future price.
Sometimes, guessing the future price is not hard. For example, consider this graph:
As you can see, the current price is 143$, but in the last 90 days, the price was about 50$. Everyone would admit that the 143$ is not reliable, and no one should make a purchase based on this selling price. It’s very likely that the price drops again by 50%. So, in this case, most of the experienced sellers would skip this ASIN.
However, it’s not always that easy; sometimes, the price fluctuates. What should you do in these cases?
One conservative strategy is that you consider the lowest selling prices at a 90-day price history (or even more). If the chart fluctuates, you don’t like to take any risk. This strategy has its own pros and cons:
- Pros: low risk
- Cons: Hard to find reliable products
The other strategy could be for risk-takers. They usually evaluate the price history for 30-day or less. In this strategy, sellers do not like to ignore products just because they are not sure about the future price. They want to take more risks. Maybe they couldn’t sell some purchased items because the price drops, but they sell more items during that time. So, it’s likely that extra successful sales compensate for a few failed ones.
However, it’s evident that there are other strategies between the conservative and high-risk ones. Every seller should find out what works best for them, considering their personality and other aspects of their online arbitrage business.
Read More: 10 Advanced Tips For Online Arbitrage
OABeans 30-day & 90-day badges
At OABeans, drawing on our years of experience doing OA ourselves, we came up with rules to interpret the price history graph. We have developed a software program to assess the price history: Our software reads the data from Keepa and forecasts a price for the future. In the spectrum of different strategies, our strategy is more on the conservative side. For every online arbitrage lead that we send to our subscribers, we assess the price history chart and put a badge in front of the leads.
90 Day badge means considering the lowest selling prices in the last 90 days, the lead is reliably profitable.
30 Day badge means considering the lowest selling prices in the last 30 days, the lead is reliably profitable.
So, if you subscribe to our Online Arbitrage Sourcing List, you don’t need to worry about the price history for every product. However, for the other leads with no badge, you still need to check the price history graph and make decisions based on your own preferences.