Amazon FBA: Sell Cheap vs Expensive Products?

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Cheap vs expensive – which way should you go? This Amazon game is a complicated one, as there is so much opportunity to be found in all areas of the site. You have the freedom to make good money by selling in so many product categories, in so many different quantities and at so many price points.

Probably at the latter end of your first year as an Amazon seller you’re probably going to face the question of how to focus your resources best. Once you’re clear that you know how to source products consistently and generate revenue, you may think about whether you’re going to actively attempt to sell more higher or lower-priced goods.

It’s really attractive to have a high average order value in your Amazon reports. Someone with a £10 AOV probably needs to work a lot harder than someone will a £30 AOV, as they would need to handle a higher quantity of products to generate £1,000 in sales.

If you specialise in online arbitrage – like I do – then there are very clear benefits to expensive products. For starters, it will probably slash the time you spend sourcing and prepping your products for shipment.

There was a lot of indecisiveness in my early days as an Amazon seller. I’ve just checked my spreadsheet and I can see that I was buying from Poundland (so looking for low-priced flips that would sell for around £15) while also purchasing high value items from Toys R Us that I could sell for as much as £40.

I can see that I then tried to stick around the £30 mark, but I can see I attempted some very risky flips for between £150 and £250 (which thankfully paid off). As time went on and I was ungated in more categories, my AOV actually went down and my units volume went up to the point where these high risk, high ROI flips were a lot more rare.

Refunds are a part of the Amazon game and while they may not hurt on cheap items, they definitely make a dent on your available balance at the top end. Although I don’t recall any bad instances of refunds in my time, that threat was probably one of the reasons that I ultimately talked myself out of risky flips and really expensive inventory.

Yes – it’s a lot easier to find overpriced products when you’re hunting for flipping opportunities, but it’s painful if you have to pay for it in other ways. Time and experience will teach you the best way to play the game and how to strategise with your inventory.

At the end of the day, the best Amazon inventory is a balanced one. So long as you have a solid ROI on all of the things that you’re selling, you shouldn’t have any problems. You’re going to get refunds along the way. You’re going to make sales that completely outweigh the lost sales and liquidated inventory.