The 5-second math I run before I even open a product
New sellers spend five, six minutes analyzing a lead I would have killed in five seconds.
Not because I'm smarter than you. Because before I look at anything else, I run one piece of math.
Divide the buy box by two.
That's roughly the price you need to BUY the product at for it to even be worth your time. Buy box is $90? I'm hunting it around $45. Can't find it anywhere near that? Move on. Next.
Why halving works: Amazon takes roughly 30% off the top of everything you sell.
About 15% referral fee, plus a fixed pick and pack fee for FBA, call it $6 to $8 on a normal sized item. So if you buy at half the buy box and Amazon eats its 30%, there's about 20% left over for you. Buy at half, keep 20. That's the whole trick.
One caveat before anyone spends money off this: those fees move by category and by size. The halving rule decides what deserves your time. Before you actually buy, confirm the real fees in SellerAmp or the revenue calculator.
The referral fee is a percentage, so it scales with the price and you can ignore it. The pick and pack fee is fixed, and on cheap products it eats you alive. I've had leads where the buy box was $10.99 and my real target buy price was $3.29. Way under half. The cheaper the item, the greedier you have to get.
On expensive products it flips. That same $7ish fee is a rounding error against a big buy box. I've pulled products up live with my group where the max cost came out to $177, way past the halfway point, and it still cleared my return target. The higher the buy box, the less the 50% rule comes into play. You get forgiven on expensive items.
And on the return target itself. Everyone repeats the magic number of 30% ROI like it's law. I use it too, and I couldn't even tell you where it originated from. I also break it constantly.
I sell things at 20% ROI that put $20 in my pocket every time they sell, because the cost of goods is higher. Dollars is dollars. A 15% ROI item that flips 100 times will beat a 90% ROI item that sells twice a month. It's always a case by case basis, which I know is the most annoying answer I give, but it's the most truthful one.
So here's the move. The next 10 products you look at, before you open a single chart, divide the buy box by two and ask if you can realistically source it at that price. You'll be shocked how many leads die right there, and how much time you get back for the ones that deserve a real look.
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Anthony Mancini
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The 5-second math I run before I even open a product
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