Sales Rank Explained

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Sales Rank is a great piece of data that Amazon provides. It can help you gauge demand for a product and help you make better decision about what to buy to sell on Amazon. Understanding what Sales Rank is (and what it is not) will drastically improve your buying decisions, increase your margins, and help you be more efficient with your time.

What Sales Rank Is Not Myth #1: Sales Rank is a static number.

It’s not. A book is not a ‘100K book’. That book just has a sales rank of 100K at that snapshot in time that you checked the sales rank (either live or with a cached database).

Myth #2: A book with a sales rank of X will sell Y copies per month.

Doesn’t work that way. A book may have a 100K sales rank and then never sell another copy. Ever. Do an experiment. Find a high ranking book that you want to buy. Or just buy some cheapie one as a test. Check the rank. 4 million? Good.

Now buy it and check the sales rank hourly to see it spike. Up to 100K? Probably. Now imagine that you use FBAScout and you scan that item at that moment in time. Or your local database just did an update for that item, and now shows it as a 100K item.

Is it a good seller? You may think so, but it’s really just a 4 million ranked item that had a recent sale.

What Sales Rank Really Is

Sales rank is RECENT SELLERS. How deep/high does the list go for books sold within a set time frame? This I don’t know. It could be the top 1 million sales rank items are all items that sold at least one copy in the past 30 days. The top sellers will be selling tons of copies, and maybe items 300K – 1 million are all onesie sales in the past month.

If you choose books based on price and sales rank only, you’ll still end up with dead listings since it’s not a perfect system. You have to use common sense. That

MCAT 1994 planner guide? Sales Rank of 100K? Really? If you buy based on sales rank only, you probably just bought a dud. How did it get to 100K? Well, someone bought it (recently). Maybe for a set in a play. Maybe by accident.

Maybe they just through a cheapie FBA item in their cart to get over $25 for Free Super Saver Shipping and will throw the item away when it arrives. Who knows? It may never sell again. It likely just spiked in sales rank and will drift back down into oblivion.

If you use common sense and learn the business, you’ll be able to spot those Long Tail* books that are high in value but simply don’t sell many copies each year; those specific, niche books that people will look for as needed. They won’t sell a ton of copies, but when someone wants it, they’ll buy it. Hold your price and don’t chase the next sale on Long Tail books. It’s not price that sells them.

Learn to use your judgment and when to pass on items that are only supported by blips of data. You’ll also use judgment as to when to take chances on the Long Tail items. Will you be perfect? No way, but you’ll get better with experience.

This knowledge is based on experience. I’ve made my share of mistakes. Want to point at me and laugh? I have a bunch of ex-library audio books on tape. Wow! $70! Only 5.5 million rank! Yup, you guessed it; they’re still there. Lesson learned. In my defense, some did sell.

A Real World Example of Sales Rank

I like to watch Sales Rank on our Scanfob clip: http://www.amazon.com/gp/product/B004HM0WFK

I’m the only one who has ever sold this item. I get the emails when they ship out. We don’t sell a ton, but I check sales rank every now and then. I’ve seen it as high as 4K and as low as 40K. So is it a 4K item? Or a 40K item? Sold 11 units in two months, so say one every 5 days. Even with a steady sales rate, the sales rank fluctuates tremendously between sales.

Another Real World Example of Sales Rank

I sold an item that I created the product page for. It took two months to get the first sale. I have been the only seller of this item. This item is in the Home Improvement category. It went from 0 sales rank to ~14K sales rank. A week later it was at 70K sales rank. Two weeks later, 90K sales rank. It will sink lower until it sells again at which time it will spike to 10K-14K sales rank and then slowly drop again until the next sale.

It has sold one unit in the entire history of Amazon (although you could say in 3 months).

Say you scanned this item and the margins were attractive. Was it a good item when the rank was at 14K? But not a week later when it’s at 70K?

Will it ever sell again? Probably, but sales rank has nothing to do with it.

Sales rank will continue to climb (sink?) as other items sell and jump above its rank. When it sells again, it will jump up and then slide back down.

Summary

Sales Rank is a good piece of information to have when making buying decisions but use it as one tool/guide out of the many that you have at your disposal. Understanding Sales Rank is an ongoing learning experience and those who educate themselves on the complexities of Sales Rank will make the best buying decisions.

*The Long Tail:

http://www.amazon.com/Long-Tail-Revised-Updated-Business/dp/1401309666/

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