It seems that before you can become a master of using Keepa, the typical feeling is to feel completely overwhelmed and stressed by the fact that you don’t understand the graphs.
When I help people start selling on Amazon, this is up there with the Top 3 Complaints. I understand why, completely.
I struggled with this myself when I started on Keepa, and I’ve decided to show you how to read and understand Keepa Graphs.
It’s broken down completely into small phases, which are easier to digest than throwing you in the deep-end without a life jacket.
Using Keepa to Source Items to Resell on Amazon
When I first started out, I was advised to use Keepa for my sourcing methods. That’s it. After I had clicked an affiliate link for the product, the person who got his sale just pointed me towards YouTube, as that’s where he learnt.
The truth is; Keepa is a brilliant tool when you set it up and use it correctly. You can’t just purchase a membership and have profitable items given to you on a plate though. You need to do some digging, and some research.
I use Keepa on a daily basis, or probably more like on an half-hour basis, I’ve always got it open somewhere! It’s the ideal tool for sourcing items for Retail or Online Arbitrage and will help you to make thousands of pounds… when you know how to use it.
What I’m going to do first is completely break down a graph for you, explaining what every single line on the chart means. With all of them activated, it’s just a headache waiting to happen!
The above is the example we will be using today. Note; I’ve started with everything activated and even I would struggle to explain this, it’s just too confusing!
The Data here is all useful, but we need to work out the basics before we cross-compare with eBay prices etc!
I’m going to turn off all of the presets and explain each one individually, including some great Keepa tips that I’ve picked up over the years.
Amazon Buy Price
The below chart shows the Keepa Chart with the Amazon Price activated. At this stage, we are only looking at the top chart, so I’ve blurred out everything you can ignore for now.
There’s a few things that you will notice here. Firstly, Amazon change their prices quite frequently, this is only a 3 month overview and they’ve changed prices four times.
What’s even more interesting, is the period that they went Out of Stock. Whenever Amazon go out of stock on a product, there will be a distinct drop off on the chart, with periods of gaps.
I’ve highlighted these on the chart. Amazon went out of stock in the run up to Christmas, which is where FBA and FBM sellers would have the opportunity to enter the listing and set any price that they wish!
When you’re out sourcing, if you see lots of these gaps on your chart, it shows that Amazon either struggle to get stock or run out quickly. It’s a good indicator that you should purchase, as it means that you have a great chance of the buy box.
The key things that you should take from this section are:
- Amazon haven’t settled on a single price, changing frequently
- The current price is the peak price of £25.89
- They have gone out of stock recently.
New & Used Price
I’ve included New and Used prices on the below chart, but in all honesty you’ll only be interested in New. We won’t be dealing in Used goods for Retail or Online Arbitrage.
However, it’s worth showing the chart just to help you understand it.
Slowly as we go through all of these options, it will start coming together for you.
Do you remember how I mentioned that Amaozn went out of stock around the 16th of December? If you take a look at the above image, you’ll see the price increased to £30 and then once more to £35.
This graphs shows you a breakdown of the overall lowest price to purchase this item. As Amazon went out of stock, the next lowest seller would’ve been a reseller who had control of the market pricing.
Amazon did end up coming back into stock in January, bringing the price back to their £25.89 total. Although this was only out of stock for a short period, it gave seasonal sellers the chance to earn an extra £10!
This item sells an average of 1,650 units per month, so it’s incredibly popular. It gave FBA/FBM sellers the chance to control the listing for 2 weeks, which is an average of around 800 sales. Earning an extra £10 for 800 sales would net you a tasty £8,000 EXTRA profit on top of the original ROI. (This is hypothetical as it would be unlikely that you have 800 units of this, but you can easily do this once per unit, spread over 300-500 units with ease.
The key things that you should have taken from this section (new and used) are:
- The chart shows the Lowest Price on Offer at any given time
- When Amazon go out of stock, FBA and FBM sellers have ‘free reign’ over the price of the item. This will provide a potential profit avenue as you continue with your sourcing efforts.
Sales Rank is an important metric, providing a figure for an items performance in it’s category. It’s updated every single hour, and can range from 1 to almost 2 million. Whilst it’s algorithm hasn’t been revealed, we know it’s affected by how many items sell during a specific month. Seasonal items may have a varying sales rank, but items such as replenishables will have a consistent sales rank.
The key thing that you should be aware of, is that the Lower the Sales Rank figure, the more that it sells. If an item is Sales Rank #1, this means that it’s the best selling item in it’s category. It would be selling more than another item that has, say, 50,000 sales rank.
Most sellers work within the 2% rule, only buying items that are in the Top 2% Sales Rank figure for that category. As you go beyond 2%, you’ll find that these items struggle to achieve consistent sales, so it’s a risk sending them in to Amazon.
You want items that sell frequently, so there’s no risk that you’ll be stuck with inventory.
The next one that we will be looking at is the FBM Price. This doesn’t matter too much if you’re an FBA Seller, as you’ll always have preferential treatment over FBM sellers even if you’re a little more expensive.
However, it’s useful to see what the FBM Price is currently set to, so you can analyse it for your next listing. Typically, I avoid FBM completely as I always want Amazon to do the leg-work for me.
As you can see above, around the exact same time that Amazon went out of stock, the FBM sellers decided to increase their prices. This is a standard move that all sellers make, to maximise their profits.
Once Amazon came back into stock, the sellers dropped their prices. However, the prices have appeared to hold around 10% higher than the previous FBM price.
This is one of the key indicators that we will be looking for. This will show us the lowest direct price that our competitors are listing the item for.
It’s refreshing to see a graph that’s pretty stable and on the increase, as it shows that the sellers aren’t trying to cause a price war and drive the price down.
Remember, this isn’t the price that it’s sold for, it’s the lowest price that it’s been listed for.
If you see an item that jumps around the chart, varying in price, this would be a slightly higher risk item. This is because it’s simply not stable, so you can’t properly predict where the price may end up.
You could be onto a winner and earn an extra 10-20% ROI, but you could also lose the original 10-20% Return on Investment that you planned for.
Investing £30 and receiving £0 profit isn’t going to get you scaling anytime soon. It’s OK to make a mistake, but you don’t want to be doing this if you can avoid it.
Buy Box Analysis
The good old fashioned Buy Box, something every FBA Seller wants to dominate!
The Buy box is the big ‘add to cart’ button that Amazon displays, and it typically increases your chances of the sale by over 85%.
This analysis shows you the moving price of the buy box, as you can see this is a little bit of a rollercoaster. However, it’s due to Amazon going out of stock and the FBA/FBM sellers taking charge of the listing.
Offer Count Analysis
Another incredibly important piece of data that’s available to us, is the amount of offers on a listing.
In the simplest terms; this means other sellers that are also attemping to sell the exact same item. Increased competition can show that you may have stumbled upon a golden replenishable item, but too much competition and you’ll struggle to make sales or even start competing too hard with the other sellers and the price of the item drops.
The number of sellers is shown on the bottom chart of the three above, and you can see that as the initial number of sellers dropped, the price rose. This is completely natural and a perfect example of the Supply and Demand cycle.
Again, just after December, the price lowered closer to it’s start price. The number of sellers has started to increase.
I’d suggest this is heading back to the £20 mark!
Other Offers and Buy Box Info
There’s an extra chart that you can select to view some data on. This can help you to understand which other sellers are on the listings.
It even gives a clickable link to their storefront, so you can have a good scout of their ‘wares!
Reading a Keepa Chart
That should be enough for your first taster of reading a Keepa chart. I don’t think it makes too much sense to go straight in with deep analysis, as you need to understand the charts first!
Going forward, I will be running a full Keepa Analysis article, going through a few items I randomly find on Keepa to provide a more intermediate approach. Stay tuned for more!