Welcome to Full-Time FBA

arrow-blue-outline-rightWelcome! On this blog, we talk about our journey towards making FBA our full-time job. We give out free tips and tricks to help you make the most of your time, money, and resources. If you want to subscribe, just fill out the form over on the right side of the screen.

Seller Central Cover Mini x3To show you our appreciation, we’d like to give you a free download link to our newest book, Seller Central Tips: Reimbursements, Refunds, and How To Correct Other Possible Amazon Glitches. When you confirm your subscription, the download link will magically show up in your inbox.

By the way, we hate spam as much as you do, so we only send you stuff that will help you make FBA your full-time job! Let us know if you have any questions.

Stephen & Rebecca Smotherman

The Best Items to Buy on Craigslist and Sell via Amazon FBA

Craigslist Amazon FBAIf you’re like me, you get tired of chasing the next clearance sale at the big national retail chains, only to have your retail arbitrage finds “tank” in price before you even get your inventory sent in to the Amazon FBA warehouse. Sure, there are times when you can beat other sellers to the punch and be the first one to sell your items after the big sale, but other times…well, we know that other times after those big clearance sales, we end up with a mess of dead inventory to clean up when long term storage fees roll around.

One easy way to combat the problem of competing in the midst of market saturation is to source items that other sellers can’t find – or at least they can’t find it for the same low, low, low price that you can. And what’s one often overlooked place to source hard-to-find deals?

Craigslist!

I know, I know, Craigslist has a bad rap at times because buyers and sellers both can flake out on you at the last minute, and you have to be careful of scammers. But if you take the right safety precautions and do the right research, you can find some super sweet deals on Craigslist that you can turn into big profits on Amazon.

Here are my top 4 items that I love to source on Craigslist to sell on Amazon:

  1. textbooks.resizedTextbooks

If you live in a college town, you’ll find textbooks sold by the lot on Craigslist at the end of each semester. Even if you don’t live in a college town, some students will bring their books home during the summer to sell on Craigslist.

Students know that by selling their books back to the campus bookstore, they might only earn $4 or $5 – and they can sell them on Craigslist for $10. Many of those books could be sold on Amazon for anywhere from $40 to over $100, so keep an eye out for them.

  1. 71SxOT00EwL._SL1000_LEGO

LEGO tends to always have amazing sales ranks on Amazon. Whether you list them as new or collectible, they seem to sell almost as soon as they hit the FBA warehouse shelves.

Sometimes you can find LEGO lots on Craigslist, but you can also find individual sets. Maybe a kid had a set that he put together a few years ago, it’s been sitting on his desk collecting dust, and now that he’s grown and leaving the house, the parents are selling that set on Craigslist, complete with box and instructions. Or maybe a kid got a LEGO set for a gift, only opened bag #1, and decided he didn’t want to put the set together after all. And there are even the rare occasions where you can find new, unopened LEGOs for sale on Craigslist by someone who’s just looking to get rid of stuff.

If you want to sell a LEGO set on Amazon as collectible, you need to make sure that each and every piece is included, along with any minifigures and stickers. You don’t need the original box, but you do need to include instructions, whether it’s the original instructions or a copy you’ve downloaded and printed from online. You must include detailed descriptions in your condition notes telling whether you have the original box or instructions.

Bonus tip: LEGO minifigures can sometimes be sold individually in collectible condition for big profits. We are always on the lookout for minifigures from the Harry Potter sets.

  1. IMG_8909bBoard games

You probably know by now that I love board games so much that I wrote a book about selling them – The Reseller’s Guide to Board Games: How to Turn Play Money into Real Money. One of the places I keep an eye out for board games, new or collectible, is Craigslist. You can buy an entire lot of board games with the intention of only selling a portion of them on Amazon, and then resell the rest of them at your next garage sale. Make sure you message the seller ahead of time on Craigslist to find out if all the pieces are included.

  1. 91P+T0RUT2L._SL1500_Ride-on toys

Many people sell their children’s ride-on toys on Craigslist once they’re finished playing with them. These toys will be considered oversized on Amazon, but you know from our previous blog post that you can make big money selling big items on Amazon.

Do a search on your local Craigslist for “ride-on toys,” “ride-on animals,” or “ride-on cars” to find profitable toys you can sell in collectible condition. We have a favorite ride-on toy that we love to find on Craigslist for $40 or $50 and can sell it on Amazon in collectible condition for $400 to $500, depending on the time of year. It may take a little extra effort to put together a box for shipping it in to FBA, but that effort is worth it for the big ROI.

Buying these items on Craigslist is a win-win situation for both you and the seller. They’re getting cash for an item they no longer want, and you’re getting an item to sell on Amazon that will have less competition and less chance of “tanking” prices. The best way to keep an eye out for these items to resell is by setting up automatic searches and notifications through websites like Noticraig or IFTTT. That way you don’t have to constantly repeat your search, but you can just sit back and wait for the notification to come to you.

Word of caution about Craigslist: Always arrange to pick up your items in a public place, like a parking lot or even the police station. If possible, don’t go to pick up the item alone.

Have you bought items from Craigslist to resell on Amazon? Do you have any favorites that we’ve missed here?

Hiring a VA (Virtual Assistant) in Your Amazon FBA Business

Hiring a VAStop it. Really… you seriously need to stop. If you want your Amazon FBA business to grow, you really need to consider taking a step back. Think for a minute of every single thing that you do in your Amazon FBA business. If the answer is everything, then you need to stop. Stop doing everything. It’s hurting both you and your business.

I hope that the paragraph above wasn’t too harsh, but sometimes we need a little wake-up call in order for us to see things from the right perspective. Many online sellers decided to sell via Amazon FBA because of the freedom that the job provides. We get to set our own hours, work at home, be with family more, and use our profits to pay down debt, pay off an mortgage, or give more to those in need. I’ve even heard some people say that FBA could also stand for “Freedom by Amazon.”

Freedom is amazing. But if you’re doing 100% of the tasks in your Amazon FBA business, then you’re only hurting yourself. If your Amazon profits have plateaued and you don’t know how to fix the problem… or if you’re seriously wanting to grow your Amazon FBA income, while actually working less, then you need to consider hiring a Virtual Assistant (VA).

sii-frequently-asked-questionsOne of the best ways to increase your time and profits is to hire an assistant to do most of your FBA back office work for you. The longer you sell on Amazon, the more work it is to keep up with everything you need to do. Keeping your Amazon seller account and business bank account in good health should always be a priority, but when you’re doing everything in your business, you can get too busy. Being too busy can cause you to:

  • Miss out on being properly reimbursed for “returned” items not actually returned by the customer.
  • Not follow up and remove unfair negative feedback left on your account.
  • Not get reimbursed for the items Amazon loses or damages and then “forgets” to reimburse you.
  • Not correct many of the Amazon glitches and mistakes that make it seem like your account is not as healthy as it really is.
  • And so much more!

When it comes to your Amazon FBA back end office work, those jobs can easily be outsourced to someone overseas who would be happy to work for you. Not only are they helping you, but you are being a blessing to them by providing consistent work and fair pay for them to support their family. It really is a win-win!

So maybe the idea of hiring a VA sounds good to you, but I think I know what you’re thinking now… because I thought it too.

“It sounds really hard and time consuming to try and find someone to hire as a VA. Not only that, but with the language and culture differences, how could I actually train them properly to complete the work I want them to do? It seems like more trouble than it’s worth… so I’ll just keep doing the back office tasks myself. Maybe I’ll do this later.”

I want to acknowledge that it’s ok to feel this way, but it’s something you need to learn to press through and overcome. You don’t want to be the biggest roadblock to your Amazon business. I know it’s hard to let go of parts of your business, but if you’re wanting to grow your profits, while actually working less, then hiring a VA is right for you.

VA4FBA_LogoToday, I’m excited to share with you that there is a brand new, affordable course that will walk you through exactly how to find, hire, train, and delegate jobs to a virtual assistant (VA). The course is called VA for FBA and is brought to you by Amazon teacher (and my friend), Amy Feierman. She has removed all of the excuses for why people don’t hire a VA for their Amazon business.

The VA for FBA course explains (in words and videos) exactly how to find the perfect VA for your Amazon business. After watching the videos, I was blown away with how easy it is to find a quality VA to take care of most of my FBA back end office work. Not only does the VA for FBA course tell you how to find the VA, but it shows you how to train the VA to do all of the work you want them to do. That’s a huge time saver in itself — the VA training process has already been recorded and is included in the price of the course, so all you need to do is send the instructions to your VA. Rebecca and I have already started the process of hiring a VA following the course’s instructions, and we’re excited to find a VA who can save us time and money on these tasks.

VirtualAssistantWith the VA for FBA course, you get everything you need to know to find, hire, train, and delegate hours of work to your very own VA. Think of the time you’ll save and the freedom you’ll feel when you no longer have to manage and keep track of all your Amazon back end office tasks. No more dealing with returns, reimbursements, suppressed listings, lost inventory, damaged inventory, and everything else that is keeping you from focusing on the more profitable parts of your Amazon FBA business.

BONUS: Even if you’re not ready to hire a virtual assistant, the VA for FBA course is still extremely valuable as it shows you how you can do all of your FBA back office the right way.

What about you? What’s stopping you from hiring a VA? If you have one, what do you love most about them?

Why I’m Not Worried About the Post-Christmas Amazon Price Drops

price-drop-alert-resizedA quick question: Did you sell out of your entire inventory before Christmas? Neither did I. During Q4, many Amazon sellers get used to the abundance of  sales that come with the Christmas season. Actually, we get spoiled with so many sales per day that when January arrives, we get scared. All of a sudden the sales seem to stop, and for some sellers panic sets in. Some sellers think that the answer is to lower their prices ASAP in hopes of getting more sales, but is that really the answer?

One of the things I always try to remind people is patience brings profit. It’s true that sales in January are usually not as good as December, but they still can be outstanding. The question I want to ask you is this: What is your business model when it comes to selling on Amazon? If you have a model that is focused on fast turns (items that sell very quickly once they arrive at a FBA warehouse) then you will price items much differently than if you have a business model based on patience.

I sometimes hear about Amazon sellers stating they lost money on an item they purchased in the fall and were hoping to sell during the Christmas selling season. The items didn’t sell out and now the price has tanked. Sometimes the price has fallen so far that the current price on Amazon is lower than the price they paid for it back in the fall. This can be frustrating for any seller. So what is the answer?

If your business model is based on fast turns, then you might want to lower your price (even if you lose most of your money) so that you can get some of that capital back to reinvest in items that you think will bring a better and faster return. On the other hand, if you are patient, you might just see the price you want return to equilibrium and wind up making a profit. Since monthly FBA storage fees are usually around a few pennies per month per item, it would seem to me that patience could possibly pay off in the end.

CCC Q4I’ve seen it happen often: An item is selling for a great price in December, but then falls drastically in January. A few months later, the price begins to rise again, and in December the price is back up where the profit margins are the best. Does this happen 100% of the time? No, but it happens enough that the few cents per month to pay for the item to sit in an Amazon FBA warehouse might be worth the gamble. Look at the image above. Almost all year long, the prices are low, but when Q4 approaches, the prices shoot up.

ROISometimes, it’s better to have $50 five months from now than $5 today. Why? Because I adhere to the balanced business model. I try to stock my inventory with slow dimes, fast nickels, and super slow quarters. What does this mean? It means that my inventory is loaded with items that will sell fast, sell slow, and sell super slow. I’m ok with making a 30-50% ROI (Return On Investment) on the items that sell fast. On items that sell slower, I want to get at least 100% ROI, and for the items that sell super slowly (think long tail items), I want the ROI to be well above 200%. The waiting game isn’t always fun, but in this balanced business model, patience brings profit. 

I don’t want to wait 11 months if the ROI isn’t high enough. It all comes down to opportunity costs. The longer I have to wait to sell an item at a higher price, the higher the potential ROI needs to be.

20465.picIf I hold my higher price, I could sell it later and get more for my item… but if I lower the price and sell sooner, I could reinvest that capital into items that will sell much faster. Each item is different and will require a different pricing strategy. Sometimes it’s good to hold at your higher price, because you’ve seen on CamelCamelCamel that in a few months, that item will probably be selling at the higher price you have it listed at. On the other hand, if you’ve seen the CamelCamelCamel data and it looks like the price will not recover soon enough, then it’s a better idea to lower your price so you can get that capital back to invest in better inventory.

Bonus Tip: If you have multiple quantities of a particular product that hasn’t been selling and suddenly begins to sell, check to see if you need to raise the price. You don’t want to raise it so high that it won’t sell again, but raise it up enough to match everyone else’s price. If the items stop selling, you can always lower the price back to where it was.

So what about you? What works best for your business? Would you rather get your capital back to reinvest, or do you wait for the prices to return to what you’d like them to be?

*This article was originally written in 2014 but has been updated for January 2016

How to Find Out Which Items Will Be Charged Long Term Storage Fees

LTSFIf you’ve been selling on Amazon at least 6 months, then it’s possible you have recently received a FBA Aged Inventory Notification email from Amazon (if you have not, you may soon). This notification from Amazon is to warn you about upcoming Long Term Storage Fees (LTSF). To read more about what the LTSF are, why Amazon charges them twice a year, and some timely tips on how to avoid these fees, then click here

Most Amazon sellers would be wise to find out which items in their inventory will be charged the LTSF and how much they’ll be charged. The good news is that Amazon has recently created a FBA Inventory Age report within Seller Central so you can access this information directly. It’s currently in BETA, but seems to be working rather well. 

To find out how you can access your FBA Inventory Age report in Seller Central, all you need to do is watch the video below, or scroll down and read the rest of this blog post. 

Don’t want to watch the video? Well, below is a text version of what I talk about in the video above. Note, there is more information in the video above, but the text below will still tell you the basics of what you need to know.

Here is exactly how you can find out which items in your inventory are going to be charged a LTSF on February 15th (and how much you’ll be charged per item):

1. Log in to Seller Central.

2. Hover over Inventory and click on Manage Inventory.

3. Click on Inventory Dashboard.

4. Scroll down until you see the FBA Inventory Age box. Then, click View Details.

Now, you are able to see the magical report that automatically shows you what items are going to be charged a long term storage fee. At the top of the list is the item that will be charged the highest long term storage fee, and then the following lines show you the rest in descending order. 

With each line item, Amazon gives you a lot of valuable information. It gives you how long your item has been stored at an Amazon warehouse, the estimated long term storage fee (if you don’t sell or remove those items), as well as the number of units you have sold in the last 90 days. Amazon shows you your current price and then tells you if that price is the current low price. If not, Amazon gives you the option to lower or match the current low price. Amazon also gives you the option to advertise the item, edit the listing, improve the keywords, or create a removal order (to either dispose or send back to your place of business).

The next step is to decide what you want to do with the inventory that is affected by LTSF. In a previous blog post, I’ve discussed all the ways you can avoid Long Term Storage Fees, but for the rest of this post, I’ll only discuss the most popular method of avoiding the fee: lowering your price to get the next sale. 

LC_OFF_Body_NLPLowering the price might indeed get you the next sale, but there are more important aspects to consider. Remember, in our example above, you’ll be charged $1.19 for each item for the LTSF, so if you lower the price by over $1.19, just be sure you don’t think you’ll ever sell the item for the price you want over the next 6 months. If you do some CamelCamelCamel (CCC) research and see that you’ll probably get your original price later in the year, then maybe pay the fee, and then wait for the sale to come. On the other hand, if you don’t think you can sell this item for the price you want, then it might be a good idea to lower the price and avoid this fee. 

Again, with our example, say you have the item priced at $19.95, but the current low FBA price is $11.95. If you  lower your price by $8.00 to $11.95 to share the Buy Box, you might indeed get the next sale… but lowering 7 items by $8 each, you’ll be losing out on $56.00 in order to avoid a $8.32 fee. Is this worth it? Well, we’ll need to check CamelCamelCamel to see if we think the price will go back up later in the year. If CCC shows that the price will probably go back up later, then maybe it’s a good idea to pay the $8.32 fee in order to make the profits at a later date. On the other hand, if CCC shows that the price will probably never again go up, then maybe it’ll be a good idea to lower your price in order to sell out before February 15th. As always, different items will require different actions, so do your research and make the best decision for your inventory.

amazon-warehouse-5

Note: Amazon does not want to be your long term storage solution.

You might be thinking that this requires a lot of work and thought, but the LTSF is something to take seriously, as it’s currently $11.25 per cubit foot for items stored over 6 months, and $22.50 per cubic foot for items stored over 12 months. Currently, my LTSF would be over $100, but I’ve been keeping track of my potential LTSF for over a month now. If I didn’t use these tactics to avoid long term store fees, then the fee would be even higher.

So how about you? What are some of your strategies for dealing with these Long Term Store Fees? I’d love to read them in the comments below. 

5 Simple Strategies to Take the Next Step with Your 2016 Amazon FBA Goals

Are you like me when it comes to starting the new year off?

I love new beginnings, love fresh starts, love setting goals and starting over new. Every year we have the opportunity to make it our best year yet.

smart-person-2Hopefully by this time you’ve made some SMARTER goals for your business and for yourself personally. We hope you take this opportunity to dream big, have fun, and set some tremendous goals. If you haven’t seen our post about setting goals for the year, we encourage you to check it out and see how you can set SMARTER goals for yourself and your business in 2016:

  • S – Specific – The better you know your objective, the easier it will be to attain it.
  • M – Measurable – Can the results be measured and compared to the goal?
  • A – Actionable – Can you take action steps to meet this goal?
  • R – Realistic – Are you both willing AND able to meet your goal?
  • T – Time bound – When do you want to accomplish this goal?
  • E – Exciting – Do the goals get you excited about your future?
  • R – Relevant – Do these goals match up with the season of life you are in?

Now that you’ve set your 2016 goals (seriously, stop right now and set some goals if you haven’t already), we’re going to take those goals to the next level. Here are 5 simple strategies for taking your goals to the next level for your Amazon FBA business this year:

1. Write down your goals.

penpad2Often we find ourselves thinking about or talking to other people about our goals, without actually putting pen to paper and writing down a record of our goals. For some reason, however, the physical action of moving a goal from our brain and our mouth down to a piece of paper has an effect on whether we achieve the goal. There’s just something in the process of writing it down that causes people to achieve their goals more often.

2. Break down your goals into smaller goals.

kenya_2808How do you eat an elephant? One bite at a time. Break down your huge goals into bite-sized pieces so you can keep your forward momentum.

For example, if your goal is to double your sales by the end of the year, then figure out the halfway point and make that a smaller goal for your business. If you made $50k in sales last year and want to double it this year to $100k, go into your account in Seller Central and figure out which day in the previous year you hit $25k in sales. Set a smaller goal for yourself to hit $50k by that date this year.

Another example: You can set smaller goals for your Amazon FBA education. If you set the goal to finish the Proven Wholesale Course by February, you could set smaller goals that will help you complete the course on time. Look at the modules, see how many there are, then figure out when you should finish each of the modules in order to reach your February goal.

3. Put your goals on your calendar.

If-it-doesn-t-get-scheduled-It-will-never-get-doneOnce you know what your bite-sized goals are, write your deadlines on your calendar or put them in your calendar app. Having the deadlines on your calendar means you will see them regularly and will keep your goals fresh in your mind.

Even more important than putting those deadlines on the calendar, though, is scheduling time to work on your goals. Make an appointment with yourself to work on achieving your goals. You make time for the things in life that are a priority. If your goals are a priority, you will set aside time where no one can interrupt you as you make progress on your goals. You’re much more likely to actually do something if it’s scheduled in your calendar.

4. Find accountability for working on your goals.

AccountabilityWe all need someone to walk with us in life as we make progress towards our goals. I’m not talking about just posting your goals on Facebook for all your “friends” to see. That’s not true accountability. No one is going to come back in a month and check on that post and see how you’re doing.

Find a specific person who has experience in the area of your goal who you can talk to regularly and who will call you out when needed — someone who will ask you honestly about your progress. You don’t have to tell one person all your goals — that could get overwhelming for your accountability partner. But maybe you could tell your spouse one goal, tell a friend in the Amazon business another one, tell your sister another one. And with all of these people, make sure you’re giving, not just taking in the relationship. Accountability works best when it’s mutual, not a one-way street.

5. Review your goals regularly.

shutterstock_117743374-review-600pxStephen and I set ten really big goals for 2016, three personal goals and seven business goals. We will review these goals throughout the year, the same way we did last year. Towards the end of each month we have a budget meeting to go over our family finances, and we also review our goals at the same time. We remind ourselves of our motivations for reaching those goals, look at our progress, decide if they’re still relevant (in 2015, we completely deleted one goal by August because it no longer applied to our life situation; for another 2015 goal, we reached it in July instead of December!), and figure out the next step to take to keep moving forward.

For some people, a weekly review is good, for others quarterly, but for us a monthly review works best. Again, it’s crucial to put this review time on the calendar, or it’s too easy to forget to do it. We challenge you today to put a reminder on your phone or in your calendar for a monthly review of your goals for the next 12 months.

403a88a5d63b40347827bce7e74afd12If you follow the steps above, you’re much more likely to accomplish your goals in the time you set for yourself than if you just hope and wish that you’ll achieve them. Dreams are good, but we don’t want you to just live your life on dreams. We want you to develop plans that will help your dreams become reality. Some of you have some amazing long-term goals for your FBA business (like paying off your mortgage or other debt, being able to stay home with your kids, finding freedom from your corporate job). Working towards your 2016 goals will also help you achieve your long-term goals and achieve them faster.

Please leave a comment below and let us know how you’ll use these 5 strategies for making progress on your 2016 goals. What is your next action step? Did you put a reminder on your phone for your regular goal review? Did you schedule a time to work on your goals this week? Let us know!

 

My Top Eight Ways to Wisely Use Your Q4 Income

As I’ve stated before, the fourth quarter selling season on Amazon almost always brings your highest income possibilities of the year. Most Amazon sellers find that their sales sometimes multiply ten-fold from what they’re used to during the other three quarters. How you handle your increased profits can possibly help propel you into even more profits in the year to come. Here are some ideas:

41goi0EX1bL

When buying a shrink-wrap machine, I recommend the 16 inch impulse sealer.

1.  Invest in time saving equipment – What are you doing now that can be done much faster with the help of some new equipment? Now is the time to research quality tools that can lessen your work load. Two years ago I purchased a 16 inch shrink-wrap machine and heat gun. Last year I purchased a box re-sizer and a newer laptop. Think about what tools can help you speed up your current work process. Could you be in the market for a Bar Code Scanner or Scan-Fob? Maybe you’d like to get a Dymo label printer. There are so many tools out there that help save time and money.

2. Invest in time saving programs – Maybe you’ve been listing your items directly on Amazon and are ready to save some time by signing up for  Inventory Lab, ScanPower or other listing tools. These programs help save a lot of time and help with many other areas of your business too (like repricing, financials, etc).

IMG_84833. Purchase more inventory – In the weeks leading up to Christmas, many stores start to put toys and other gift items on sale at really great prices. If you wait a little longer, right after Christmas, many stores start mega clearance sales. You’ll find sales in brick-and-mortar stores as well as online. If you don’t want to get out and source inventory in the cold weather, you can find many great sales at stores online. In store and online, there will probably be more items you can buy for resale than you have money for. Amazon sales in January are still really good as people have Christmas gift cards burning a hole in their pockets, so it’s wise to keep stocking up your inventory into the new year.

4. Purchase supplies in bulk – What items do you buy all year long? 3-inch Packing tape, shipping boxes, Dymo labels, and printer ink are just a few of the items that I buy all year long. It would be wise to buy these items in bulk now (at much better prices per item) instead of spending more money to buy them later in smaller quantities. Click on the following links to see more about the supplies I use in my processing desk and shipping station.

debt-picture5. Pay off debt – As Dave Ramsey says, “Debt is not a wealth building tool.” If you have any debt, the wisest thing you can do is to pay it off as fast as you can. Imagine giving yourself a raise by doing the same amount of work you do now! When you are no longer paying debt interest fees, that’s money that you can use for your business. If you are in debt, I highly recommend Dave Ramsey’s Financial Peace University. For more information on getting out of debt, check out his book, The Total Money Makeover and his program, Financial Peace University.

6. Treat yourself – Sometimes we can be so focused on work that we forget ourselves. Getting too wrapped up in work can lead to burnout. If you can, give yourself a Christmas bonus and treat yourself to something fun.

7. InvABC Affiliate Logo 250x250est in Your Mind – Is there an Amazon FBA related book, course, or program that you have been interested in buying? This might be the best time to buy FBA training materials so that you can learn how to improve your current Amazon business. You are the number one asset to your business. Invest in yourself. The more you can learn, the more you can earn!

8. Give generously – If you have yet to discover the joy of giving, I challenge you to try it this holiday season. There are so many worthy causes and organizations that need your financial help. Remember to find out if the money you are giving is tax deductible or not. If it is, be sure to keep receipts for your tax records.

Q4 GrowthSo what about you? How do you best use your Q4 income to help you and your business succeed? I’d love to hear your ideas, so leave a comment below.

*This article is an updated blog post from 2014.

The #1 Way to Ruin Your Q4 Sales on Amazon

IMG_1571We see them during all the pivotal dates this time of year. We saw them on Black Friday, we saw them on Cyber Monday, and we’ll see them again over the next couple of weeks. Posts on Facebook groups that include screenshots of huge sales numbers or pictures of 10 shopping carts loaded with toys from a retail arbitrage haul.

We can be inspired by these posts and feel excited for what is to come in our businesses — or we can have another response and ruin our Q4 sales.

We can start comparing ourselves to other sellers.

Comparing yourself with other sellers is the fastest way to ruin your Q4 sales. Falling victim to the comparison trap might not cause you to lose sales today or tomorrow, but it will definitely have an impact on your psyche and your business over the long run.

When we compare ourselves to other people and start feeling negative emotions, that negativity can snowball. Pretty soon we’ll find that our entire mindset has shifted. We could become so dejected over not feeling good enough as a seller that we are tempted to quit. Or even worse, we could start making bad buying decisions for our business.

It’s crucial throughout the year but especially in Q4 to keep in mind what you don’t know when you see posts on Facebook about amazing sales or massive RA hauls:

  • recruiting-software-comparisonWe don’t know how much profit other sellers are making. If someone says “I made 6 figures in sales!” we can’t assume anything from that number.  After that seller takes out the cost of inventory, supplies, or other fees, they might only be taking home in their pocket $15,000 of that $100k. And we don’t know how much time they spent to buy and prep their inventory. For all we know they really are only making minimum wage for their time.
  • We don’t know how other sellers are paying for their inventory. We don’t know if they run a cash-only business or if they go into debt to make huge purchases.  We never know if someone is making horrible decisions, taking out ginormous loans, and maxing out multiple credit cards to finance their Q4 inventory. This kind of behavior is very dangerous. At any moment Amazon could shut someone’s account down for something they did or did not do, and that seller would be stuck with the debt without getting a disbursement from Amazon. They could be making bad buying decisions thinking they have to blow a ton of money on inventory before December 10 in order to maximize Q4 — but what if their inventory doesn’t sell as expected? Or maybe they pay for everything with cash, make a ton of sales, and buy a new car in January. It could be either scenario when you see those posts online. The point is we just don’t know.

I’m not trying to suggest that everyone who makes these types of posts on Facebook is giving an inaccurate portrayal. On the contrary, many sellers make these posts in order to inspire others or as a way of celebrating within a community, neither of which is a bad thing. What I want us all to think about is how am I personally receiving this post? If I’m receiving it in a negative manner and comparing myself to others, then I have a problem.

When we compare ourselves with other sellers, we can have two types of negative results:

  • comparison-is-the-thief-of-We can begin to feel discouraged. If I’m comparing my Chapter 2 to someone else’s Chapter 12, I fail to take into account all the years of experiences (some successful, some otherwise) the other seller has had. When we compare ourselves this way, we can completely lose the steam in our engines and lose the motivation to excel as a seller. Worst case scenario, we could decide to quit.
  • We could look at other people’s sales and start getting puffed up. If I’m comparing my Chapter 12 to someone else’s Chapter 2, I can get arrogant, be filled with pride, and make reckless decisions. “Pride comes before the fall,” says the wisdom of Proverbs.

So then, what should we be comparing?

We should be comparing our outcomes with our goals

Q4 is an excellent time for us to begin looking back to see if we met our goals — for Q4 and for the year. I really hope you’re setting goals every year, if not every quarter. Goal setting is the best way for me to challenge myself in my business. Rather than comparing my sales to someone else’s, I want to look at my own goals and see how I fared this year. Did I meet my goals? If not, what can I do to tweak those goals for next year? What am I planning to do to make next year’s sales even better?

Don’t get weighed down by looking at other people’s sales numbers. Don’t fall victim to the trap of comparison. Focus on where you are personally and how you can meet your own goals.

Screen-Shot-2014-01-14-at-1.45.30-PMSpeaking of goals, if you’re interested in making 2016 your best year ever, be sure you sign up for this free video course on goal setting. Rebecca and I used this knowledge last year to both meet and exceed many of our 2015 goals. It’s awesome information, and it’s FREE!

How are your sales going this Q4? I don’t want to know specific numbers — remember, we don’t need to compare those to anyone else’s. But did you meet your goals? Did you exceed them? Do you see now that you need to tweak something for next year? Let us know in the comments! We’d love to know how your Q4 is going, in general terms rather than specific numbers.

Overcoming Your Fear of Going Deep on Inventory Items

Going Deep“Should I go deep on this item?”
“How deep should I go on this item?”
“What does it mean to ‘go deep’ on an item?”

These are all questions we get on a regular basis, whether in blog comments, in Facebook groups, or on Periscope. One of the universal fears of being an online seller is going too deep on an item and having it bust.

If you were to summarize the risk involved with being an Amazon FBA seller in a nutshell, it would come down to this: knowing how much money to invest in which items.

I have some good news and bad news about the fear we’re covering today in our blog series. Which news do you want first? Never mind, let’s get the bad news out of the way first…

We can’t make a perfect decision every time. We all make mistakes. And sometimes we learn best through trial and error. Even when it comes to deciding how deep to go on an item.

risk_reductionThe good news is really great news, though. We have the ability to refine your decision-making process and reduce the risk of going deeper than we should. Notice I said reduce, not eliminate. There will always be variables out of our control and ways that we can’t predict future sales. But if we focus on the factors we do know and we can control, then we can increase the likelihood of making profitable decisions concerning how much inventory to buy.

As we’re handling our fear today of going deep on inventory items, here’s a set of questions to ask ourselves in the buying process:

#1 How much capital do I have to invest?

CDKVGS1WIAERLcvThis first question may seem too basic, but you would be surprised how many people don’t know their numbers in their business. It’s impossible, however, to make solid buying decisions if you aren’t aware of 1) how much money you have available to invest and 2) how much you have tied up already in inventory. Once you know those numbers, you can look at the buy cost of the item you’re considering and come up with a good idea of how much money you’re willing to tie up in this new inventory.

Also, look at the percentage of your inventory that will be tied up in this investment. Even if something looks to be a sure deal, it’s super risky to have too great a percentage of your total inventory tied up in one product.

#2 What is the sales rank of the item on Amazon? Better questions: What is the sales rank history? What is the current sales velocity?

salesrank-camelchart-locale-usasin-b0011457neforce-1zero-0w-725h-440legend-1ilt-1tp-allfo-0lang-en2014-12-0903_37_29Yes, look at the rank of the item and where it falls in the top-selling items in its Amazon category, absolutely. But you have to do your due diligence to follow through and see if today’s sales rank is a fluke (i.e. a spike from a recent sale in an otherwise slow-selling item) or if it’s the typical rank. Check out the item on camelcamelcamel.com and keepa.com to see how it usually fares compared to today’s rank.

Another important factor to consider is the time of year that you’ll be selling this item. Sales velocity during Q4 can make a 100,000-ranked toy a different bet than in, say, July. If you buy deep in this item now, will you be able to sell it quickly? Or will you need to be patient to sell out over a longer period of time?

#3 How many sellers are on this item?

competitionYou need to know and consider your competition. Looking at the number of sellers and the sales velocity, how likely is it that you will lose profit margin on this item if other sellers drop their prices and you try to stay competitive? Along with the number of sellers, you should also consider how much your competition has in stock (see this blog post to learn how to see your competition’s amount of stock).

For example, a while back we had an item that we were selling and replenishing at a regular pace for several weeks, and suddenly we had an opportunity to buy it in a greater quantity at a lower price. At first this seemed like a great opportunity for us, but after a few calculations based on the number of items we’d been selling per day and the amount of competitors’ stock at the same price, we decided against making a larger purchase. The trend we saw in the numbers indicated that the price was going down faster than our sales would be able to keep up. We sold out of the item a couple of weeks later, and when I checked on this item today it was priced 30% lower than when we were selling it. We made the right decision.

#4 What is the buy cost of the item and the expected sale price?

Will it cost $5 to buy one of this item? $20? $50? $100? Let’s say the ROI is equal, 100% for all these items. If I buy 20 of an item at $5, it takes the same amount of financial investment as buying 1 of a $100 item. The higher my buy cost, the fewer number of items I’ll be able to buy — and the more risk involved in selling that one item if the selling price falls out from underneath me. Now, there is less time and fewer resources invested in prepping and shipping 1 item than in 20, so that’s a consideration also.

I’m not trying to say that you should only buy $5 items or only buy $100 items. I’m saying you should consider all these factors, and that “going deep” can mean only 1 item if it’s a $100 item.

#5 What is my source for this item?

targetstoreIs this a retail or online source at full price that anybody and everybody can find? Will other people be able to stack coupons, cash back, or other discounts to get a better ROI than me, meaning it’s possible that I might have to sacrifice profit margin to stay competitively priced?

Or is this a clearance or discontinued item at a unique location that other people can’t find? If so, it’s less likely that my competition will increase, and I have a better shot at selling at the price I want. Also, I can consider whether this is an item I can buy a few of (whether that’s 1, 2, 5, or 10 depends on your answers to all of the above questions and more) to test out and come back for more if needed. Here you’ll need to consider the distance you’ll have to travel to pick up the items on a return trip, or whether it will sell out at that location before you have time to test.

When it comes down to it, there’s no tried-and-true formula to guarantee that you’ll always know exactly how deep to go on any one particular item of inventory. We all have stories about “the one that got away” (the item we wish we’d gone deeper on, but now we can’t find it again), as well as stories of items that we wouldn’t touch again with a 10-foot pole. Hindsight is 20/20. But we can make smart sourcing decisions if we ask ourselves the right questions.

Are we leaving out any factors that you consider before going deep on an item? Let us know in the comments. We’d love to hear your input!