Chapter 20: Worked examples (US leads)
What you'll learn: how the Lead Check works in practice, through six Amazon.com leads that between them reach all four decisions.
About these examples. They're illustrative: the products are described in general terms and the figures are simplified, but every Amazon fee uses the US rates from Chapter 5, outside the peak season. In each one, the seller:
- pays sales tax at checkout at an example rate of 7%, and chooses to allow for it (optional good practice; see Chapter 6). The "product cost" line includes it;
- allows $0.60 for prep and shipping to Amazon (example figure);
- has chosen minimums of $3 profit and 30% ROI.
"Amazon's fees" below means the referral fee, the FBA fulfillment fee plus the fuel and logistics surcharge, about a month's storage, and an example inbound placement fee. ArbiSource works out Amazon's fees for you; the tables just show what sits behind its figures.
Lead Check worked examples on real US leads, recorded on the US version.
Example 1: a kitchen storage set (Buy)
A Store Scan finds a branded set of food storage containers for $13.50 at a US retailer. It sells on Amazon for $34.99, with a 90-day average of $33.99. It's in Home and Kitchen (15% referral fee), large standard, about 3 lb.
| Today ($34.99) | 90-day average ($33.99) | |
|---|---|---|
| Amazon's fees | −$13.02 | −$12.87 |
| Prep and shipping | −$0.60 | −$0.60 |
| Product cost ($13.50 + 7% tax) | −$14.45 | −$14.45 |
| Profit / ROI | $6.92 / 48% | $6.07 / 42% |
| Question | Rating | Why |
|---|---|---|
| Match | 🟢 Green | Same title, photos, piece count and UPC |
| Money | 🟢 Green | Comfortably above both minimums at the average price |
| Momentum | 🟢 Green | About 150 sales a month and 6 competitive FBA sellers: a share of around 20 to 25 a month. Price steady for 6 months |
| Safety | 🟢 Green | Ungated, no warnings, sturdy box |
Decision: Buy. A first order of about 12 units should sell within a month or so at that share.
Example 2: a moisturizer with a short history (Test-buy)
A Price Drop shows a branded moisturizer at $6.00, down from $9.50. It sells for $16.99 (average $16.49) in Beauty and Personal Care, where the referral fee is 15% above $10. It's small standard, 2 to 4 oz.
| Today ($16.99) | Average ($16.49) | |
|---|---|---|
| Amazon's fees | −$6.41 | −$6.33 |
| Prep and shipping | −$0.60 | −$0.60 |
| Product cost ($6.00 + 7% tax) | −$6.42 | −$6.42 |
| Profit / ROI | $3.56 / 55% | $3.14 / 49% |
| Question | Rating | Why |
|---|---|---|
| Match | 🟢 Green | Same size (1.7 fl oz), same UPC |
| Money | 🟢 Green | Above both minimums at the average price |
| Momentum | 🟠 Amber | The listing has only about 3 months of history. Sales look steady, but there isn't much to go on |
| Safety | 🟢 Green | Ungated on this account, no hazmat warning, and the expiration date is well over a year away |
Decision: Test-buy. Buy 3 to 5 units and watch how quickly they sell. If the price holds, it can be a Buy next time. Price Drops don't last, so check the retailer's price before ordering. This is exactly the kind of lead to turn into a Test-buy during your free trial.
Example 3: a toy with a price spike (Watch)
A Vault result shows a building set for $9.00. Today it sells for $24.99, which looks excellent. But the Keepa chart shows the usual price over the last 90 days is about $19.99: today's price is a short spike because a few sellers ran out. Toys and Games (15%), large standard, 12 to 16 oz.
| Today ($24.99) | Average ($19.99) | |
|---|---|---|
| Amazon's fees | −$8.86 | −$8.11 |
| Prep and shipping | −$0.60 | −$0.60 |
| Product cost ($9.00 + 7% tax) | −$9.63 | −$9.63 |
| Profit / ROI | $5.90 / 61% | $1.65 / 17% |
Keepa 12-month chart for a Pokémon TCG Elite Trainer Box on Amazon.com: a shortage spike from February to April, when stock ran short and prices jumped. The prices differ from Example 3, but the pattern is the same.
| Question | Rating | Why |
|---|---|---|
| Match | 🟢 Green | Same set number and piece count |
| Money | 🟠 Amber | Profitable at the average price, but well below both minimums. Only today's price meets them |
| Momentum | 🟠 Amber | Sales are steady, but the price is a spike and sellers are likely to return |
| Safety | 🟢 Green | Ungated, no warnings |
Decision: Watch. Add it to the Sourcing List and set a retailer price alert. If the set drops to about $7.50 at a retailer, the numbers at the average price would work. If you keep an optional paper-trading log alongside your real buying (Chapter 21), it's a good one to follow.
Example 4: a multipack mismatch (Pass)
A scan shows a pack of kitchen sponges for $4.50, against an Amazon price of $16.99 (Home and Kitchen, 15%): an apparent profit of $3.91 and 81% ROI on a cheap item. That's a cue to look closer. The Amazon listing is a pack of 3; the retailer sells single packs.
| As shown | Buying 3 packs to match the listing | |
|---|---|---|
| Product cost (incl. 7% tax) | $4.82 | $14.45 |
| Profit / ROI | $3.91 / 81% | −$5.72 / −40% |
| Question | Rating | Why |
|---|---|---|
| Match | 🔴 Red | Different pack size: the listing is for the 3-pack, not the single pack the retailer sells |
| Money | 🔴 Red | A loss once you buy the right quantity |
Decision: Pass. Once Match is red, there's no need to check the rest. A profit that looks too good is often a mismatch. Report it in ArbiSource if the match is wrong, to help everyone.
Example 5: a restricted brand (Pass)
A Store Scan finds a large branded playset for $17.00 that sells for $39.99, with steady sales and a price that has held for months. After fees, tax, prep and shipping it would make about $7.43 (41% ROI). Everything looks right, until Check Restrictions shows the brand is restricted on this account, with no option to apply.
| Question | Rating | Why |
|---|---|---|
| Match | 🟢 Green | Same product and UPC |
| Money | 🟢 Green | Comfortably above both minimums |
| Momentum | 🟢 Green | Steady sales and price |
| Safety | 🔴 Red | Restricted on this account |
Decision: Pass, for now. Every seller is restricted in some brands, new and established alike, and that can change as your account grows (Part 6). Keep a note of brands like this; ArbiSource's Restriction Tracker (Pro and Premium) can tell you if you become able to sell them.
Example 6: thin margins, sales tax and cashback (Test-buy, or your choice to pass)
A video game is $15.75 at a retailer, with 5% cashback available. It sells for $27.99, with an average of $27.49 (Video Games, 15%; small standard, 2 to 4 oz).
| Today ($27.99) | Average ($27.49) | |
|---|---|---|
| Amazon's fees | −$8.06 | −$7.98 |
| Prep and shipping | −$0.60 | −$0.60 |
| Product cost ($15.75 + 7% tax) | −$16.85 | −$16.85 |
| Profit / ROI | $2.48 / 15% | $2.06 / 12% |
Two things could change the picture:
- Cashback (about $0.79) can also help: with it, the average-price profit would be about $2.85.
- Buying tax-exempt with a resale certificate would make the cost $15.75 and the average-price profit $3.16 (20% ROI). That meets the profit minimum, but the ROI is still well under 30%.
| Question | Rating | Why |
|---|---|---|
| Match | 🟢 Green | Same edition and platform, same UPC |
| Money | 🟠 Amber | Profitable at the average price, but below the minimums (below both if paying tax; below ROI even tax-exempt) |
| Momentum | 🟢 Green | Fast, steady seller; price stable for a year |
| Safety | 🟢 Green | Ungated, no warnings |
Decision: Test-buy, at most. One amber allows a small test, and a fast seller is a reasonable place to try a thinner margin. But the ROI is well below this seller's minimum, so passing is just as sensible. The decision sets the limit; you choose within it.
What the examples show
- Today's price can mislead. Example 3 looked like the best lead until the average price was checked.
- Too good to be true usually is. Example 4's 81% ROI was a mismatch.
- One red ends the check. Examples 4 and 5 didn't need every question answered.
- Sales tax matters most on thin margins. In Example 6 it made the difference between meeting the profit minimum and missing it; on Example 1 it barely mattered.
- Amber is useful. It turns a "maybe" into a small, safe Test-buy or a lead to watch.
Checklist
- I've worked through each example and agree with the ratings
- I check the profit at the average price, not only today's
- I treat a surprisingly high ROI as a reason to check the match
- I know how sales tax (if I pay it) and the placement fee affect thin deals