Amazon purchase order management is crucial for any seller. Small or large, wholesale or private label – it doesn’t matter.

You want to get the most out your POs. Period.

You see, items can look great right now. Heck, they may look incredible.

But down the line, maybe even in two days – they can look completely different.

In fact, they may be at a heavy loss by tomorrow.

So how can you prevent these losses? What are some tips and tricks to make profitable, recurring purchase orders that just keep on coming?

Today we’re going to dive in to some of my tips and tricks for making the best purchase orders – even on a limited budget.

Purchase Order Diversification

Step one should come out as fairly obvious, but a lot of sellers fail to do so.

Diversification is absolutely key – no matter what size of seller you are.

But this especially applies to smaller sellers: Do not put all of your eggs in one basket!

This is absolutely crucial. I don’t care if you’re ordering $100 worth of product or $100,000.

Deciding to have only one ASIN in your purchase order is a setup for failure.

Instead, split that up into as many profitable ASINs as you possibly can.

Even if that means only 24 units a piece – it’s going to keep you a lot more secure than throwing your entire budget on a single ASIN.

Then, when the time comes to restock, restock your winners at a higher amount.

You want to keep your purchase orders small and simple at the start. Slowly work your quantities up over time.

Analyze Historical Margins

Step two is to analyze the historical margins of your product. You can do this in Sellonaut by adding on the filter “90-Day ROI”.

Take a look at the ROI for 90 days. Is it significantly lower than the current ROI?

This may signal an issue.

While it’s ultimately up to you whether it’s worth it – I recommend not straying away from 10-20% of the current ROI.

That is, if your historical ROI is 20% and your current ROI is 80% … you may have an issue.

Take into account the historical ROI when purchasing, and make sure it’s still at a level you’re comfortable with.

If you’re not comfortable with it, drop it from your purchase order.

Remember the other expenses that come in with selling – returns, fees, etc.

Also consider that new Amazon accounts have a 14-day payout window – you’re not getting paid for your orders until 14 days after they ship.

You want to stay with higher ROI, faster movers to keep your cash flowing as fast as possible.

Analyze Historical Profits

Step 3 is to analyze historical profits.

This is a lot like 90-day ROI – and once again, is an easy filter to add on Sellonaut.

Add the “90-Day Profit” to your view. Or, alternatively, specify a minimum 90-day profit criteria on your search.

analyze historical graphs in sellonaut for amazon purchase orders

Analyzing historical graphs such as these can be done in Sellonaut. Take a good look at the green bar to view SKU-level profits over time.

I recommend keeping this above $1.30 for smaller, cheaper items.

For more expensive items, it’s totally up to you.

Consider material costs and inbound shipping will be subtracted from this number before your take-home profit, so choose a number you’re comfortable with.

Check Buy Box Last 14 – 30 Days

Now that you’ve analyzed 90-day ROI and profit, you’ve got a decent view into what your product is looking like in terms of profitability.

But I recommend doing one more thing.

Take a look at your history graph.

Has the price recently tanked?

Is it going down in tiny increments (like $0.01)?

This could signal some extreme competition on the listing.

You may not want to hop on a listing with a competitively repricing seller on it. If you’re unaware of their floor, take a look at the lowest price in the past 90 days to get a good estimate.

Analyze Competition

Step four to Amazon purchase order management is to analyze competition on the listing.

We cover this in-depth in our Ultimate Guide to Analyzing Buy Box Competition, but on a surface-level:

  • Are there any sellers priced $0.01 below others?
  • Are there a significant amount of sellers on the listing, all FBA, and within a small percentage of each other?

If you answered yes to either of those questions, you’ll want to reevaluate your sales estimates for the SKU.

Take into account all sellers who are within a small price range (within $0.50 or so on listings under $10, within $1 or so on listings above that), and divide your unit estimation by the number of sellers + 1 (to include yourself).

Consider if that estimation is enough sales for you – and if it’s a new SKU, only order what you plan to sell in 30 days, max.

Analyze Brand Competitiveness

Step five is to repeat the Analyze Competition step, but for other top performers on the brand.

Are you seeing similar competition on those listings?

How are they acting in relation to the other sellers?

Are they $0.01 lower than other sellers? Are there lots of sellers on these listings?

analyze competition for amazon wholesale purchase orders

Analyzing the competition and buy box rotation is crucial when purchasing new SKUs.

This could signal a highly competitive brand.

Not that that’s a bad thing – just take it into consideration with your purchase order.

You could be purchasing from a brand where tons of competition could hop on in a moment’s notice.

Prepare yourself accordingly by purchasing smaller batches at a time if necessary.

Make the Purchase Order

Now that we’ve gotten all the basics handled, let’s talk about what my recommended criteria are for a newer wholesaler starting out.

Here’s what I tend to look for when I’m purchasing faster-moving items:

  • More than 240 units sold a month
  • Greater than 30% ROI
  • Above $1.00 profit
  • More than 30% historical (90-day) ROI
  • More than $1 historical (90-day) profit
  • No Amazon coverage past 90 days

And here’s what I tend to look for when I’m trying to diversify a ton:

  • More than 24 units sold a month (in some cases, this can take me past the #150,000 BSR range in some categories)
  • Greater than 50% ROI
  • Above $1 profit
  • More than 40% historical (90-day) ROI
  • More than $1 historical (90-day) profit
  • No Amazon coverage past 90 days

Of course, your criteria may vary from mine by quite a bit, but this should give you a decent start.

Try to come up with some good criteria yourself. Then, stick to it for a few months and see how it works.

Did it perform well? Great, stick to that criteria and don’t change it.

Did it perform poorly? Refine and optimize your criteria over time.

Purchasing criteria varies wildly based on seller type, your main category, and overall competitiveness, along with a seller’s long-term goals.

You’ll want to figure out if you prefer to be a seller of few faster-movers, or many slower performers. Or both!

And in the beginning, be sure to keep it simple. Purchasing criteria is just one part of success on Amazon. You can always make your orders more complex over time.

We hope this post helped you a bit in refining your Amazon purchase order criteria and increasing your profits. If you’d like to automate your purchase orders (and try out some more complex purchasing criteria) – be sure to try out Sellonaut for 14 days, totally free.