Welcome! 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.
To 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.
I would prefer to save a lot of time and money, but hey, every little bit counts when we’re trying to make a profit at Amazon FBA. Any time I can save money on shipping supplies or other areas of my business, I can use that saved money to buy more inventory – and buying more inventory is how I would prefer to spend my money in my business!
All of the tips I’m going to share with you in this post should be either free or next to free. I hope you find these tips super practical and easy to implement right away in your Amazon FBA business, no matter what stage of business you’re in.
Before I get into my tips, I want to invite others to add their advice to the comments at the bottom. Let’s make this post our most-commented post ever! We all have knowledge and experience that others can benefit from, so please share your wisdom and be a blessing to others in the Amazon FBA community today.
Also, if you want to see these tips in action, scroll to the bottom of this post to watch a video of Stephen demonstrating them.
Now…here we go…my top Amazon FBA hacks to save money:
1. Use free boxes from grocery stores for Amazon FBA shipments.
Especially in the early stages of your FBA business, there’s no need to pay for shipping boxes when you can get them free from grocery stores, friends who have recently moved, or other places who are just going to recycle their old boxes. Find out from store employees when they’ll be restocking the shelves, and stores are generally happy for you to come take the empty boxes out of the aisles for them.
2. On a similar note, use the boxes from online arbitrage purchases to send in Amazon FBA shipments.
We do a significant amount of our sourcing through online arbitrage, so we just turn around and send our shipments to Amazon in the online stores’ boxes. Just make sure you remove or cover up any previous barcodes before putting on the Amazon and UPS label.
3. Use free dunnage for your Amazon FBA shipments.
Dunnage (isn’t that a weird word?!) is the stuff you put in a shipment to pad the items and keep them from touching the sides of your shipping box. Here are a few ideas for things to use for dunnage:
air pillows from online arbitrage purchases
plastic grocery bags filled with printed newspaper and tied off (do not let newsprint come into contact with your inventory in the shipment)
small cardboard boxes
4. Use lighter fluid to remove residue from price stickers.
I usually recommend using Goo Gone for removing price sticker residue, but if you don’t want to rush out and buy a new bottle of Goo Gone, you can use lighter fluid if you already have it at your house. (If you want to see how I remove price stickers, check out this video.)
5. Get FREE inventory from around your house.
We all have items sitting around our house that are brand new or barely used – prime candidates for sending to Amazon and turning into profits. Check out your bookshelves, your kitchen cabinets, your game closet, and your kids’ rooms (with their permission), and you might be surprised what you can find that you don’t use and would actually turn a profit on Amazon.
You can join a group for your area of town on the Freecycle Network and keep an eye out for items that people are giving away for free. I’ve been able to source free board games (new and used), boxes of books, and other items. If you claim an item on Freecycle, the person will leave it on the porch or sidewalk for you to drop by and pick up on your own time. It’s way easier to coordinate than Craigslist purchases, but please still use safety practices and don’t make pick-ups alone.
7. Join Amazon FBA Facebook groups to get tons of free FBA business information.
One of the easiest ways to absorb free information from the FBA community is to join Facebook groups, search and read the archived posts, and ask questions. We have a Full-Time FBA Facebook group that we would love for you to join, and there’s tons of other groups you can search for on Facebook as well.
Those are my top tips for getting FREE items so that you can use the money you save on buying inventory instead. Let me know in the comments if you know of any other awesome ways to save money on supplies for your business.
You’ve likely heard us mention that we use the Inventory Lab software package to streamline our process of listing inventory on Amazon FBA and for sourcing inventory through the Scoutify app. Today we want to share with you another feature of Inventory Lab that we’ve come to depend on: the ability to track supplier profitability through Inventory Lab reports.
Sometimes it’s easy as a reseller to get caught up in the rush of sourcing for inventory, sending it in to the FBA warehouse, and seeing the pending sales in Seller Central. Honestly, isn’t the thrill of the hunt and the excitement of the sales one reason we all do this business?
But if we stop and dig a little deeper into those sales, would we still be as excited about the raw numbers? Sales numbers can be deceiving at times, and if we don’t take the time to look at and think about our actual profit, then we don’t really know if our business is as successful as we want it to be.
Inventory Lab allows you to enter the total cost of an item when you list it on Amazon. Inventory Lab then takes that cost, your sales price, and associated fees to calculate profit and return on investment (ROI). You can see the projected profit and ROI for a batch when you’re listing through Inventory Lab, but you can also run reports to show you the actual profit and ROI based on payments from Amazon for your inventory items.
The circled area is where you input the data to help Inventory Lab calculate supplier profitability. Some areas of the screen shot have been blurred out for business privacy.
Prices may change from the time you enter a batch to when the item actually sells – it’s fun to think about a batch having 150% ROI when you send it to the warehouse, but it’s more useful to look at the ROI when you are actually paid for the sale of those items. From time to time we need to stop and analyze our numbers and ask ourselves, “Am I making the ROI I want/need on my inventory? How do I need to tweak my business to get the ROI I want?”
You can take the profitability question a step further by entering not just your total cost for each inventory item, but also the supplier. Then the question becomes, “How do I need to tweak my sourcing from each supplier to get the ROI I want?”
We currently use the supplier profitability report in several ways:
To track how much commission on sales we need to pay our helper who sources for us
To track the profitability of our online arbitrage subscription services
To track the profitability of our wholesale sources
In order to run the supplier profitability report, you will first need to enter a supplier at the time of listing an item. Inventory Lab comes with many retail sources already listed as options for supplier, but you can easily add your own. For instance, we use our helper’s initials as the supplier when we’re listing items she has sourced for us. We use other abbreviations for tracking each of the OA subscription services we use (e.g. Cyber Monkey Deals is CMD, Gated List is GL, Your Sourced Inventory is YSI, OAXray is OAX, etc).
After this info is entered and enough time has passed to have generated some sales, you can run the supplier profitability report by following these steps:
Go to the top menu on Inventory Lab.
Click on Reports.
Choose Supplier Profitability.
(Note: You will see there are several other useful reports you can run to analyze your inventory’s profitability.)
The default selection will be for the last month, but you can click Advanced Search to choose more date range options. Right now it doesn’t look like you can choose a specific date range, which would be a useful feature for the developers to add.
Once you’ve pulled up your report, you can sort by supplier, units sold, revenue, % of revenue, profit, ROI %, and on hand (number of units currently on hand in your inventory).
Depending on the circumstances, each of the fields might carry a different weight for you as a seller in your decisions for how to adapt your business to improve those numbers. Some sellers like to have 100% ROI on everything they sell; others have a business model that supports 50% or even 30% ROI. The point of running these reports isn’t to compare your numbers to someone else, but to look at your own results and see if they meet your own business model’s criteria.
Let’s look now at two practical ways that we use our supplier profitability report.
To track how much commission on sales we need to pay our helper who sources for us
At the beginning of each month, we run the supplier profitability report and look at the line with our helper as the supplier. We look at the dollar amount for the previous month under the Profit column, and we pay her commission out of that amount.
To track the profitability of our online arbitrage subscription services
We also look once a month at the lines for each of our subscription services as the supplier. First, I look at the profit and make sure it’s more than the amount we’re paying for the subscription. This is an easy way to put solid numbers together to show yourself whether or not it’s worth it to pay for that particular subscription.
I also will look at trends as far as profit and ROI go. (This is where I’m currently having to keep screen shots of each month because I can’t set the date range to specific dates. If there’s something I’m missing and this is possible, someone please let me know.) I don’t rush to cancel a long-standing subscription if I randomly have an off month, but I do look at whether a service seems to be deteriorating for me over time and make my decision whether to keep subscribing or not.
I also don’t rush to cancel a subscription if I think that I’m the problem rather than the service. For example, a while back I saw in my monthly report that my units sold and ROI for OAXray were not what I would prefer. A quick look back over my schedule for the previous weeks reminded me that I hadn’t been spending the same amount of time using OAXray each day as I had in the past. Of course those numbers are going to go down! If I’m not prioritizing my time to use the product as often as I should and actually send in items I sourced with it, the problem is me, not the product. So I made some adjustments to my schedule, made more time each day to use OAXray, and the numbers the following month were back up where I wanted them.
We’ve also started using Inventory Lab to track supplier profitability for wholesale sources, and many people use it to track their retail arbitrage sources. Are there other ways you use the supplier profitability report in Inventory Lab? We would love to hear your ideas and experiences in the comments!
Hindsight is 20/20, and I’m sure all of us can think of ways we would improve our Amazon FBA businesses if we could start over from scratch. I know I can think of plenty of things I wish I had known back in 2011 when I started selling on Amazon!
Since I don’t have a time machine, I can’t revisit 2011 and get that do-over for my business. Instead, today I’m going to share with you the products and services I would invest in from the very beginning if I had to start over from scratch doing Amazon FBA with only $500.
These items are the essentials, folks. The bare minimum for starting Amazon FBA and finding success in a sustainable yet timely fashion. In fact, you’ll see that with my plan below, of the total $500, you’ll actually get to spend $342 for investing in inventory. Not a bad amount to start sourcing with!
Here are the ways I would spend my $500 if I got to start over on my Amazon FBA business today:
1. A Pro Merchant account with Amazon –FREE for first month ($40/month afterwards)
Yes, I know that you can start off with an Individual Merchant account and save the $40 fee per month for the Professional Merchant account. But Individual Merchants pay 99 cents per sale, and a little quick math shows that selling only 40 items per month means you’re paying the same as a Pro Merchant.
There’s one huge benefit, however, to setting up that Pro Merchant account from the very beginning. It gives you accountability, a $40 incentive every month to send in plenty of items to Amazon FBA so that you’re making at least 40 sales per month to make that account worth it from the very beginning. If you can start off giving yourself the goal of at least 40 sales per month, you will gain momentum more quickly than if you allow yourself to be satisfied with only 20 sales.
2. Inventory Lab for listing and sourcing – FREE for first month ($49/month afterwards)
We use Inventory Lab to process our FBA inventory, list it on Amazon, and keep track of our accounting for that inventory. You can list your inventory directly through Seller Central, but the process is much slower than listing through a 3rd party program like Inventory Lab. Using Inventory Lab allows me to touch each inventory item fewer times during the listing process because I can label it and divide it into shipments at the time of listing, rather than waiting until I’m finished listing everything.
You must be a Pro Merchant to sign up for Inventory Lab, another benefit to going ahead and making the commitment as a Pro Merchant from the very beginning.
If you sign up for Inventory Lab through our link here, you can get a free 30-day trial of their listing software and Scoutify sourcing app. After the first month, Inventory Lab and Scoutify cost $49/month, but they are absolutely worth it to my business.
3. Barcode scanner – $22
A barcode scanner connects to your laptop through USB and saves a ton of time (and errors!) when entering the UPCs from the barcodes on your inventory. Simply place the cursor in the correct field of your listing program, scan the barcode, and presto! No more squinting at tiny numbers and pecking out the UPC on your keyboard.
Every little bit of time counts when you’re working at building an Amazon FBA business, and using a barcode scanner is a simple way to help scale your business more quickly.
4. DYMO LabelWriter 450 – $70 new, $40 used
A DYMO LabelWriter is another essential for scaling your business and saving precious time. When used in conjunction with Inventory Lab or other 3rd party listing programs, the DYMO will allow you to print a label for each individual item as soon as you have it listed. Scan the item, enter your price and other accounting info, and then print the label. If you have the “live” listing flow turned on in Inventory Lab, you will know at this time which fulfillment center the item will be sent to, and you can sort it into boxes immediately. No need to print 30-up labels and sort back through inventory at the end of your listing process.
5. Scotty peelers – $6 for 3-pack
These are an essential tool for scraping the price stickers or other residue off my inventory before I send it to Amazon. The Scotty peelers come in a pack of 3, and we use them for several months before the ends become too dull to work easily.
6. Goo Gone – $4
Another must-have item for cleaning up inventory before sending it to the FBA warehouse. Goo Gone takes off the sticky residue left over from price sticker adhesive. (Note: be careful not to use Goo Gone on certain types of non-glossy cardboard boxes or book covers, as it will soak in to the material and stain it.)
7. 3-inch tape gun – $13
8. 3-inch tape – $13 for 4-pack
I started out using a 2-inch tape gun when I first began selling via Amazon FBA. That 1-inch difference may not seem like a lot, but it’s a huge difference when it comes to the number of times you have to swipe the tape gun across a shipping box in order for the tape to hold the box flaps together. With the 3-inch tape on my 3-inch tape gun, it’s one swipe, and I’m done – saves time and tape.
9. Feedback Genius – FREE for first 2 months ($20/month afterwards)
Getting control of the buy box is a crucial component of getting sales through Amazon FBA. Some aspects of who controls the buy box are a mystery, but having a positive feedback score is known to be one important factor. Having a high number of positive feedbacks and limiting your number of negatives will help you gain the buy box more often. Feedback Genius is a simple way to automate contacting buyers after a sale in order to limit your negatives and increase your positives. Feedback Genius also alerts you when a negative feedback is received so that you can quickly and appropriately handle it.
I wish I had started using Feedback Genius from the very beginning of my Amazon FBA business. If you sign up through our Full-Time FBA link, you can get 2 months of Feedback Genius for free, along with a bonus of 500 free email messages. Two months and 500 messages will go a long way towards boosting your feedback score!
Using Feedback Genius requires a Pro Merchant account, so go back up to #1 in this list and sign up for that account if you haven’t already!
10. UPS self-adhesive labels – FREE from UPS.com
UPS offers a great partnered rate for Amazon FBA sellers on their inbound shipments, and they also provide you with free self-adhesive labels to use for your shipments. If you sign up for a free account with UPS.com, you can order the labels to be sent directly to you.
11. Shipping boxes – FREE from grocery stores, friends, etc
In the early days of just starting an Amazon FBA business, I recommend getting free shipping boxes from friends who have just moved, from grocery stores, or from other locations where people are wanting to recycle their boxes. Just make sure they’re sturdy enough to hold the weight of your shipment, and cover or remove any previous barcodes before adding your Amazon and UPS shipping labels.
12. Scale – $30
If you don’t already have a scale at your house, you will need to buy one in order to weigh your inbound shipments to the Amazon FBA warehouse. You can get a scale on Amazon for about $25-30.
In summary, here’s a list of the items and prices:
A Pro Merchant account with Amazon –FREE for first month ($40/month afterwards)
Inventory Lab for listing and sourcing – FREE for first month ($49/month afterwards)
Barcode scanner – $22
DYMO LabelWriter 450 – $70 new, $40 used
Scotty peelers – $6 for 3-pack
Goo Gone – $4
3-inch tape gun – $13
3-inch tape – $13 for 4-pack
Feedback Genius – FREE for first 2 months ($20/month afterwards)
UPS self-adhesive labels – FREE from UPS.com
Shipping boxes – FREE from grocery stores, friends, etc
Scale – $30
NOTE: Prices of these tools and services will change over time, so be sure you double-check all prices and fees before purchasing. Some prices might go up, while other prices might go down.
If you add up the amount of those items for the first month of starting an Amazon FBA business, the total comes to $158. That leaves us with $342 to spend on buying inventory. I would recommend looking for low cost (or even free!) inventory with low ranks and high return on investment (ROI), so that you can reinvest your profits and grow your available capital quickly. When I started Amazon FBA, I frequented garage sales and thrift shops while I was learning the ins and outs of how the business works and while my capital was growing. I would follow that same method again today.
If you would like to watch a video where I show the items from the above list, check out this video on our YouTube channel:
Do you have anything you would add to this list? Or do you have questions about any of the items or services I mentioned? We would love to hear from you in the comments!
Today we have a guest post from Mark Faggiano. Mark is the founder and CEO of TaxJar. We hope you find the information as helpful as we have.
I get it. Sales tax can be confusing and intimidating. The rates change from location to location. The laws change from state to state. And don’t get me started on the legalese. What the heck is “nexus” anyway?
As the founder of TaxJar, I talk to eCommerce sellers of all experience levels every day. Over and over I’ve found that several common fears prevent sellers from tackling sales tax. These include:
1. Sales tax is governed at the state level – Sales tax laws are created at the state level, so there’s no central, overarching “IRS” for sales tax in the U.S. For this reason, one state might consider some items (like groceries or textbooks) taxable, while another might not. Or one state might want sellers to file their sales tax returns on the last day of the month while another will want to hear from that same seller on the 20th day of the month. Dealing with multiple states’ laws can present a major challenge right out of the gate for eCommerce sellers.
2. Sales tax laws were written for brick-and-mortar businesses – Another reason sales tax can be so intimidating? The laws simply weren’t written with eCommerce sellers in mind. The language and thinking around many sales tax laws simply don’t apply. For example, sometimes shipping charges aren’t taxable if a customer has the option to physically pick up a product at your location. This is, of course, impossible for Amazon sellers (among others). States are still interpreting their laws when it comes to online sellers.
3. There are a lot of rumors and misinformation out there – I demystify sales tax misconceptions every day. Common rumors include that online sellers don’t have to charge sales tax at all, or that Amazon takes care of all sales tax obligations if you use their sales tax collection service. Sales tax can seem much more complicated when you’re trying to untangle fact from fiction.
Getting started is the hardest part – How many times have you dreaded a task like going to the gym or tackling a stack of laundry only to find that things are smooth sailing once you get started? Sales tax is the same way. Once you get started, it all clicks into place. Remember – states want you to collect sales tax from your buyers because it funds their budget items like roads and schools. And tools like TaxJar are here to help when you get stuck.
Now that I’ve talked about why sales tax is so intimidating, let’s demystify it together.
The 5 Basic Steps to Sales Tax Compliance
1. Determine your sales tax nexus states.
“Nexus” is Latin for a “tie” or “connection,” and sales tax nexus simply means that you have a tie or connection to a state that requires you to collect sales tax from buyers in that state. As I mentioned above, every state’s laws are different, but a few common factors generally create nexus: having a location or personnel in the state, attending a trade show in the state, or having other ties, such as a 3rd party affiliate or trade show presence, in a state.
2. Register for a sales tax permit in your nexus state(s).
Once you’ve determined your nexus states, your next step is to register for a sales tax permit in that state.
Don’t skip this step! Most states consider it unlawful to collect sales tax without a permit. (They’re suspicious, and afraid you’ll tell customers you’re collecting sales tax while really keeping that extra percentage of the sale in your pocket.)
When you register for your sales tax permit, the state will tell you how often and on what dates they want you to file a sales tax return.
3. Collect sales tax from your buyers.
Once your business is registered to collect sales tax in a state, your next step is to ensure you’re collecting sales tax from your buyers in that state. If you sell on multiple channels, be sure you’re collecting sales tax on all of your shopping carts.
Out of the most popular shopping carts, Amazon has one of the most sophisticated when it comes to sales tax settings. To use Amazon’s sales tax settings, you’ll need to be a Pro Seller and then tell Amazon in which states you’d like to collect. You can find step-by-step instructions for setting up your Amazon sales tax settings here.
4. Report how much sales tax you’ve collected.
When it comes time to file your sales tax return, your next step is to report how much sales tax you’ve collected from customers in each state.
Unfortunately this isn’t as simple as sending the states a single amount. The vast majority of states want you to break down how much sales tax you’ve collected by city, county and other special taxing district. In essence, they require you to help them distribute the funds collected to the right part of the state.
This is where sales tax automation can help. Tools like TaxJar will integrate all of the channels you sell on and give you all of your sales tax collected in return-ready reports. As your business grows more complex, automation takes sales tax off your plate.
5. File your sales tax return(s).
Now that you’ve reported how much sales tax you owe, your final step is to file your sales tax return and remit payment to the state.
You have a few options here. You can take your sales tax report and file online, or you can let a sales tax automation service file your sales tax for you. Either way, be sure you file on time to avoid fine and penalties. Some states will even give you a sales tax discount for filing on time! That means you get to keep a small amount of the sales tax you collected in your pocket!
Also don’t forget to file every time you have a sales tax return due, even if you don’t owe any sales tax to the state. Some states will fine you or even revoke your license for forgetting to file.
And that’s it – you’ve successfully mastered sales tax!
I know this is a lot of information, but most sellers tell me that once you face the learning curve, handling sales tax will become just another routine (but not necessarily fun) part of your business – like counting inventory or recording expenses.
In 2015, Amazon decided to celebrate its 20th birthday with a huge day of sales called Prime Day. Amazon promised its Prime customers would see even more deals on Prime Day than on Black Friday. The sale ended up living up to the hype as Amazon reported selling 398 items per second (source) that day.
This year, on July 12th, Prime Day is back. Amazon is promising even more sales than the year before. In fact, they are going to start with early exclusive Prime deals starting July 5th and every day afterward leading up to the big day. With these pre-Prime Day deals, I think Amazon is basically “priming” their customers to buy even more on Prime Day (see what I did there?).
Here are some timely tips on how to make the most of Amazon Prime Day:
1. You might be tempted to buy some of the Prime Day deals to flip right back on Amazon. Don’t forget that it’s against Amazon’s rules to buy items using Prime shipping that you intend to resell on Amazon. This is a rule that many new Amazon sellers don’t know, but could get you in a lot of trouble if broken.
2. Even though you can’t use Prime to buy inventory for Amazon, you can still use it to buy inventory to sell on other platforms like eBay, craigslist, or anywhere else you can make a profit.
3. Search the Prime deals for items you can use in your business, like shipping supplies, office supplies, a new processing laptop, or anything else you can deduct as a business expense.
4. Last year, other stores responded to Amazon’s plan for Prime Day with special sales of their own. Be sure you look at other online stores to see if they have special deals going on that day. I know Walmart had a big sale last year in response to Prime Day. I’m sure they (and other stores) will be doing so this year, too.
7. Set a reminder on your calendar for July of 2017 and be sure you are ready for Prime Day next year. Even though this is the second consecutive year Amazon has planned a Prime Day, it’s still not for sure if this will become an annual event — but if it does, you want to be sure and be prepared.
8. Have realistic expectations for Prime Day sales. An increase of sales is expected, but overall it will most likely be a nice bump in sales. While some people might have a day filled with tons of amazing sales, that probably won’t be the norm. Don’t get caught up with checking your sales every 10 minutes to see if you have any new sales. And don’t fall into the trap of comparing your sales with others who are posting online. Remember, comparison is the thief of joy. Just enjoy the nice bump in sales and then get back on track with your overall goals for your Amazon business.
If you have any more suggestions about how to make the most of Amazon Prime Day, then leave a comment below. I’d love to hear what you have to say.
Especially when it comes to running an Amazon FBA business, we need help in order for our business to grow. Sure, there are days when I feel like no one can Tetris the contents of an FBA box quite as well as I can, but in reality my business has more potential to grow if I put down the tape gun and let someone help me.
There’s one task, however, that many Amazon sellers fear outsourcing more than all other tasks. Sourcing. The actual task of going out and scanning the aisles or the garage sales for inventory to resell.
Over and over we get this question when we tell people we’ve outsourced some aspects of our sourcing:
“Aren’t you afraid of training your competition?”
I can tell you emphatically that the answer is always NO. I don’t at all fear training a competitor. I’ll get into the reasons why I don’t have this fear in moment.
After your business reaches a certain level of inventory and sales, it becomes harder and harder for one person to go out and buy enough inventory to maintain business at that level, much less grow beyond that level. It can become tiresome or even impossible to maintain that level of sourcing without becoming more than a one-man-show.
Sourcing is a more specialized skill than removing stickers or packing shipping boxes. Sourcing requires analyzing information and making decisions, and those decisions carry with them a certain amount of risk. Part of what makes each Amazon FBA seller able to excel in their business is their ability to make smart sourcing decisions.
Many sellers fear that if they teach this specialized skill to someone else in order to get help with their sourcing, they risk having that person take their newly acquired skills to go out and start their own competing Amazon business. Here are a few more questions we often get about training other people to source for us:
What if they see how much money you’re making at FBA and decide to quit working for you to start their own business?
What if they go to the stores in your area and buy all the good inventory for Amazon FBA before you can?
What if they get to all the garage sales in your town before you do?
What if they keep working for you, but they keep all the good inventory for themselves and only give you sub-par inventory for your business?
We get it. Those are legitimate questions to ask and legitimate risks you are taking when you train someone else to do your sourcing for you. But we feel that the benefits far outweigh the minimal risks. We would rather have the help we need sourcing today than fear something that might or might not (and honestly, likely will not) happen tomorrow.
Here are the reasons we do not fear training our competition to source for us:
1. Not everyone wants to run their own business.
If you’ve been selling on Amazon for any amount of time, you know the time, effort, and money required to invest in running an Amazon business. The return on that investment can be great, but it still takes an upfront investment and ongoing effort to actually do the work of running the business. Not everyone wants to go through that effort of setting up an account, setting up an LLC, setting up programs like Inventory Lab, getting ungated in certain categories etc. Not everyone has the money to invest in a few tools and some inventory (we think it can be done for about $500 to get started) – or wants to spend their money that way. Some people really only want to work for someone else and not have to deal with the responsibilities and headache of being the one in charge. They just want to earn some extra money and be done with work for the day. Just because you train someone to source doesn’t mean that person automatically will want to become the boss.
2. We have an abundance mindset when it comes to finding Amazon FBA inventory.
This reason is even bigger for us than the first one is. We truly believe there is more inventory to be found than there are sellers on Amazon. We know for a fact that there is more inventory to be found in our geographic area than our own small business can handle purchasing. If we train someone to source for us and they decide to leave and start their own FBA business, we do not at all worry that we will run out of inventory in our area.
We live in the Fort Worth-Dallas area and belong to a Facebook group of local FBAers. That group has over 200 members. Think about that for a moment. That’s almost 200 people doing FBA in this metropolitan area. Our business has grown year over year since I began selling through FBA in 2011, so I know for a fact that the increasing number of sellers in Fort Worth or Dallas is not affecting my business. Each seller has their own business model, their own strengths at sourcing, their own personal preferences for categories on Amazon. If you send 5 resellers into the same store, it’s likely that all 5 of them would come out of the store with a different set of inventory.
I’m truly not worried about my business if I train someone to help me source and they decide to strike out on their own. There is an abundant amount of inventory in this geographic area, from online stores, and from wholesale sources. Whether you live in a large city or a small town, there are abundant sources for Amazon FBA inventory available today.
If you decide to train someone else to source for you, you only stand to gain from the help. Your business only stands to grow from the increase in inventory. But that other sourcer cannot replace you. No one can source like you. No one has your unique gifts and abilities at making decisions for your business. No one knows your own business like you do and your categories like you do.
If you train someone and they leave to become one more seller on Amazon, bless them in their endeavor and get back to your own business. You have just proven that you can train someone well enough to give them confidence to be independent. Get out there and train another person now.
(If you’re ready to take the leap to train someone to source for you, we highly recommend Ryan Grant’s book Outsourcing Sourcing. We used this guide when we hired our first sourcing help and found it tremendously useful.)
Have you tried enlisting help in sourcing for Amazon FBA? Are you afraid of training your competition or do you have an abundance mindset? We would love to hear from you in the comments below.
One of the most annoying emails for FBA sellers to receive from Amazon starts with “Refund initiated for order #102-12345-67890.” Getting a return notification is not only annoying, but it can sometimes spark a few fearful questions.
Is this return one of the high priced items I just sold?
Is the buyer going to say that the item was defective (which will ding my seller metrics)?
Is the returned item able to be resold, or has it been damaged by the customer?
Is the buyer going to leave me negative feedback now?
What do I do to protect my account because of this return?
When it comes to getting returns, you must take a few critical steps as an FBA seller to protect your account. If you don’t stay on top of your returns and do your due diligence to make sure your account is taken care of, you could suffer negative consequences down the road.
So, what do you need to do to protect your account when a customer returns an item saying they no longer want it? Here are 6 steps to take for every returned item on Amazon:
1. Keep a record of the return notification email from Amazon.
When a customer initiates a return of an item ordered via Prime shipping, Amazon immediately issues that refund, without waiting for the item to be returned. Amazon will notify you that the refund has been issued from your account. You should keep a folder in your email app to organize these emails so you will have record of this refund and can verify that the return actually occurs within 45 days. For more info on how to keep track of your refunds and reimbursements, see our previous blog post.
2. If you find that an item was not returned within the 45-day limit, request a reimbursement from Amazon.
3. Protect your seller feedback score by contacting the buyer.
Sometimes after a buyer requests a refund, one of the next things they do is leave feedback for you the seller. No matter if they left you negative feedback or not, I think it’s a good idea to contact the buyer and personally apologize for the customer’s negative experience. I would say something like, “Amazon just notified me that you have requested a return for item X. I’m so sorry that the item did not meet your expectations. Since this was a Prime order, Amazon is supposed to provide you with an immediate refund, so I am following up to make sure the refund was successful. I would also like to know if there is anything I can do to make things better. Thank you for taking the time to read this message and have a great day.” Sometimes just sending that email will stop the buyer from leaving you negative feedback. If negative feedback has already been left, then this email opens up the door for the customer to see you as a helpful person and they might consider removing the feedback. For more on removing negative feedback, check out this blog post on how to keep a 100% feedback score.
4. Have returned items sent back to you for inspection.
When the item shows back up at the Amazon warehouse, a warehouse worker will inspect the item to see if it should be returned to your inventory as fulfillable or unfulfillable. If they see that an item has been opened by the customer, they will mark it as “Customer Damaged,” and it cannot be put back in your fulfillable inventory. If an item was returned as “Defective,” it cannot be put back in your fulfillable inventory. But if the warehouse worker decides an item hasn’t been opened by the customer, the packaging isn’t damaged, and it wasn’t returned as “Defective,” they will decide to add it back to your sellable inventory.
Regardless of their decision, you should have all returns sent back to you for personal inspection. The warehouse workers are trying to do their job at a high speed, and they might miss something in their inspection. If an item is listed in new condition, even the packaging must be in new condition. Even a small tear in the box or a missing piece of shrink wrap could cause a customer to doubt the new condition of your item. And if that future customer returns an item and reports it as a used item that you’re trying to sell as new, you would get a huge ding on your seller account, even if the warehouse worker was the one to make the determination of the condition after the return. You want to be the one to make that decision. Don’t leave it to the warehouse worker.
Note: If you have multiples of an item returned and put back in your inventory as sellable, then it’s up to you to decide if it’s worth it to have them all removed for inspection. For me, I’ll remove up to 3 items for inspection, but if I have over 3 in stock and one is returned as sellable, I’ll usually just make a note of it. That way, if I’m ever someday accused of selling an open/used item as new, then I’ll have proof that the item was deemed as sellable by a FBA warehouse worker and returned to my inventory and I am without fault.
5. For all items returned to the FBA warehouse, find out the reason for the return. You can run a report to find out the reason by following these steps:
Log in to Seller Central.
Under Reports, choose Fulfillment, then Customer Concessions, then click on Returns.
I usually run the report for 30 to 60 days, depending on how long ago the item was returned.
Find the item in question on the report, and determine the reason given for the return.
For some reason, not all of your returns will show up on this report. If the item you’re looking for cannot be found on this report, you will need to open a ticket with Seller Central and ask them why the item was returned.
6. Inspect the items that are returned to you.
If you inspect a returned item and find that it’s unopened and still in new condition, you can send it back to Amazon to sell it. It takes time, effort, and a small amount of money (less than $1) to have these items returned to you for inspection before sending them back in, but you want to spend that time and money in order to protect your selling account.
One more layer of protection is to check on the reason for the return. Customers can choose a variety of reasons for returning an item, including accidentally ordered, no longer needed, unauthorized purchase, description on website is not accurate, or wrong item was sent, among other reasons. Some of the reasons for return require the customer to pay return shipping. Some of the reasons do not.
Because of this free return shipping issue, you want to verify whether any items returned as “Defective” are in fact defective. It’s sad but true that some buyers will choose “Defective” as their reason for return solely to get free return shipping. They have no idea that this action harms third party sellers on Amazon. They just want to save $5 on shipping, and that’s the easiest way to do it.
This puzzle was not defective. So I sent Amazon this picture, as well as a few more that proved it was not defective. Amazon reimbursed me 100% of the sales price of this item since the customer tried to return it as defective when it was not.
If you find that an item has been returned to you as “Defective” but it’s never been opened, or you test it and find that it is not defective in any way, you should immediately open a ticket with Seller Central. In your message, tell them that the item was returned as defective but you have no doubt that it is NOT defective, and you suspect the customer was trying to get free shipping. Along with your message, include a photo of the returned item with the return packing slip from Amazon, as well as a close-up photo of the packing slip with the numbers and text visible.
Note: ONLY take these actions if you are absolutely beyond-a-shadow-of-a-doubt positive that the item is not defective. If an item truly is defective, you must take responsibility as a seller for finding out why and then stop selling that defective item.
When I’ve taken the above steps with non-defective items in the past, I’ve received one of two responses from Amazon:
A message stating they can tell from my photo that the item is unopened or not defective; thanking me for calling this to their attention; and letting me know they are adding a note to the customer’s account about this incident (if a customer continues this “buyer abuse” behavior, their buying account can be cancelled).
The above message plus a statement that they are requesting a reimbursement on my behalf for this item.
If the item is unopened and in new condition, Amazon will not give a reimbursement, since you can just send it back in again to be sold. If it’s opened, they will usually give the reimbursement.
Following these steps will help protect your account from any dings that could trigger the suspension bots every Amazon seller fears. You don’t have to fear returns, as long as you are diligent to be proactive in protecting your account.
How have you been dealing with your Amazon FBA returns? Are there additional steps you’ve been taking that have helped you out? If so, be sure to share them in the comments below.
We’re well into our second round of blog posts in our series on Overcoming Your Amazon FBA Fears. If you want to catch up on the previous posts, click here to read through them.
Today we’re going to discuss a fear that can strike deep in the heart of anyone who spends time doing retail arbitrage (RA). Sometimes the fear can strike as soon as we walk through the doors of a retail store. Sometimes it takes a few minutes into scanning the clearance aisle before we feel it creeping in. Other times it can mess with our heads after an hour or more spent scanning items, and it can cause us to throw our sourcing parameters out the window and start making ridiculous choices.
It’s the fear of leaving a store with an empty shopping cart.
No one who does RA likes to spend 30 minutes, an hour, two hours in a store scanning items and come up empty. We can feel like the time has been wasted or that we are inadequate as resellers. It’s easy to start thinking that the problem must be with me, that I am not good enough to find something to resell in this store.
While it’s true that the more you scan the more you can find and the longer you’ve been in the business the more quickly you’ll be able to load up a cart, we all need to remember that there are days when the stars just don’t align and we can’t find anything worth buying in a store. Sometimes you hit home runs. Sometimes you strike out. It’s all part of the game.
Everyone has a different business model when it comes to Amazon FBA. When you head into a retail store (or garage sale, thrift store, online store, wholesale marketplace, etc), you should know your business’s unique buying parameters: the categories you’re interested in, your maximum buy price, your minimum sell price, your expected return on investment (ROI), and your maximum sales rank percentage per category. In certain categories you will have other criteria as well, including number of sellers, number of reviews, or number of variations.
You should set up these parameters well before you head into a store so that you can make the best decisions possible for your business and so that you are equipped to handle just such a situation as the empty cart scenario.
Here are 3 truths to remember when you are tempted to buy something, ANYTHING, rather than leave a store with an empty cart:
1. You don’t want to waste your money.
If you spend your capital on items outside your sourcing parameters, you are using up capital you might need later that day or that week. You don’t want to buy items outside your parameters and then not be able to buy that amazing home run at the next store because you ran out of money.
2. You don’t want to waste your time.
It may seem like you’re wasting your time by scanning for an hour and then just leaving the store empty handed, but that’s the short sighted way of looking at this situation. Think about how much more time you will waste by not just walking away. You will waste the time spent arguing with yourself that it’s OK to forget your sourcing parameters. You will waste the time standing in line to check out with your less-than-stellar purchases.
And then for weeks and months you could potentially be wasting time dealing with dead inventory at the FBA warehouse. I’ve found that often times the items I had to convince myself to buy in order not to feel like a failure at RA are the exact items I regret buying 8 months later when no amount of repricing will get those suckers to sell. Then I have to spend more time and mental energy deciding whether to remove the items or destroy them to avoid long term storage fees. Why didn’t I just walk away in the first place?!
3. You don’t want to fall into the comparison trap.
If you spend any amount of time in Facebook groups for Amazon sellers (and I recommend you do join some groups for the camaraderie and education; ours is found here), you will see that some sellers like to post pictures of their latest RA haul: a receipt stretched out for yards, multiple shopping carts attached in a train, the back of a van packed to the ceiling with shopping bags. These photos can be inspirational, but they can also come back to haunt us when we we are standing in the store aisle with an empty cart.
Please, please do not compare yourself to any other FBAer when you are sourcing. You don’t know what their parameters are, you don’t know how far in debt they may be in order to make those purchases, you don’t know if that inventory is going to sit languishing on a warehouse shelf never selling or selling at a loss. Please do not spend one moment comparing yourself to anyone else. Do not be discouraged by walking out of a store with an empty cart. It does not mean you weren’t successful at sourcing. It means you were wise in your choices.
I hope these truths have helped you understand how you can fight the fear of the empty cart. It’s my desire for you to have a successful Amazon FBA business and be prepared with the knowledge you need in various sourcing situations. Next time you’re in a store and can’t find anything to buy, no matter what you scan, know that you need to stick with the sourcing parameters you set up ahead of time. It’s OK to walk away. It’s OK to leave an empty cart. Move on. You have better buys around the corner.
I’m like any other Amazon FBA seller out there – if I could source and sell only low ranking, fast turning items at 100% ROI (return on investment) or higher, I would choose to do that every day, all day. That’s what we all want to do, right? Maximize our ROI and maximize the speed with which we get that return back in our bank account.
Today I want to share with you 5 times that I don’t shy away from buying high ranked items to resell on Amazon. Through careful research and critical thinking, it is possible to turn high ranked items into big profits on Amazon FBA. In some instances, you don’t have to fear that a high ranked item lacks potential value for resale.
First, let’s talk through a few points related to sales rank so that we can get on the same page for the rest of the conversation:
The sales rank (also known as BSR for “best seller rank”) of a product on Amazon is number that represents a snapshot in time of how recently and how many units an item is selling compared to other products within the same Amazon category.
A low sales rank means more sales. A #1 best seller is selling really well.
A high sales rank means fewer sales.
Low ranking items are more likely to sell faster than high ranking items.
Sales rank is relative to the number of items in a category. A rank of 1 million in books is in the top 2%, which is very different from 1 million in toys, the top 15 or 20%. (Be sure to subscribe for our free sales rank chart in your email inbox every month, so you can keep track of the sales ranks for each Amazon category.)
High sales rank might mean fewer sales, but don’t skip over one crucial piece of information in that statement: An item with a high sales rank has had sales. If something sells once, it could potentially sell again.
So back to our topic for today…here are the 5 times you don’t need to be afraid of buying high ranked items to resell on Amazon:
1. When an item’s sales price is artificially high
Many times when an item on Amazon is priced artificially high,the sales rank also becomes very high. By artificially high, I mean those items that you pick them up, you scan them, and your jaw drops at how incredibly high the sales price is. I know, that’s not a very specific definition.
You can get a clearer definition of an artificially high sales price by looking at the CamelCamelCamel or Keepa data for an item. If the historical data for an item shows that the sales rank is much lower when the item is priced much lower, then you know that the current high price is artificially high. Customers aren’t willing to buy it at the higher price, and it may or may not ever sell again at that high price. If I can source the item at a low buy cost and still make a good ROI by lowering the sales price back into a reasonable range, I am not afraid to buy this type of high ranked item.
2. When an item is out of stock on Amazon
Again, the longer time passes from an item’s last sale on Amazon, the higher the sales rank of that item will go. If an item is out of stock or “currently unavailable” on Amazon, the sales rank will continue to creep upwards until it might eventually go back to N/A or zero sales rank. If I can source an item with a high rank that is currently unavailable on Amazon and the data on CamelCamelCamel shows that it was once selling at a good rank and price, I will buy that item in a heartbeat!
3. When Q4 is approaching
The closer it gets to Q4, the more I’m willing to expand my sales rank parameters when sourcing for Amazon FBA. Sales velocity during Q4 increases to such an extent that higher ranking items will sell at a faster rate than they will during other times of the year. A toy that sells once a month throughout the rest of the year could sell once a day during Q4. Once again you will want to look at CamelCamelCamel for the historical data in Q4 of previous years to see if you can expect the sales rank to pick up at that time of year.
4. When the product page needs improvement and it’s worth my time to improve it
There are some really crummy product pages in the Amazon catalog. Sometimes the reason an item has a high sales rank is because the picture stinks, the title is awful, the product description is nonexistent, or the keywords are pathetic. One or two little improvements can make a huge difference in how quickly a product will sell on Amazon. For an outstanding resource on creating and improving Amazon product pages, check out Amazon Advantage by Karon Thackston.
The key in making a smart sourcing decision in this situation is to decide if it’s worth your time to attempt to make those improvements. Sometimes a product page can be easy to change, and other times it can take a lot of back and forth with Seller Central to make the change. Sometimes you need to submit multiple photos and screen shots in order to get approval for a change. If you find a high ranked item with an outstanding ROI or you find multiples of an item that will bring you a hefty profit, go for it with making those product page improvements! (If it’s a one-off item with low ROI, I would pass.)
5. When I can source the item for free
If I don’t invest any money in an item and I only have one that item to sell, I will only need to pay pennies per month for storage at the Amazon warehouse. I’m willing to wait it out for these type of items to sell if their rank is high.
Hopefully these 5 scenarios have given you some ideas of high ranked items you should not be afraid of finding while you’re out sourcing. I want to emphasize that in general I prefer to source low ranking items; the scenarios above are exceptions to my usual sales rank parameters.
Also, many people ask what I consider to be a “good” sales rank for FBA sourcing and, conversely, what would constitute a “high” sales rank. This is a question that each seller needs to decide for themselves based on their experience, their available capital, how quickly they need to make their money back, and several other factors. Some sellers like to stay in the top 1% of sales rank for a category. Others prefer 3% or 5%.
Do you have any other scenarios you would add to our list above? Are there other times that you would buy a high ranked item to resell? Let us know in the comments!
Are you dragging your feet in starting your Amazon FBA business? This post is for you.
Have you already started your Amazon FBA business, but you’re tempted to quit? This post is also for you.
Many contingencies and what-ifs might be plaguing your mind right now when it comes to thinking about building a successful Amazon business, but we want to help fill your mind with TRUTH, not fear – and we want to help you stay the course in building your business, even when the times get tough.
It’s easy when you first hear about the opportunity of earning money through selling via Amazon FBA to get excited and want to learn more. We can start making plans to start a business. We can start talking about what it would be like to have a business. We can start thinking about how we would use all that money we’ll make from our business. But what we really need to do is start the business!
Today we’re going to discuss 4 fears of getting started in Amazon FBA and how you can conquer those fears with the truth. If you’ve already started FBA, going back over these 4 truths will help you refresh your memory about how to keep up your progress in selling online.
FEAR #1: I don’t know enough to start my own Amazon FBA business.
TRUTH #1: You can always learn! And there are plenty of places to learn – some places for a fee and some really great places to even learn for free. Don’t let your lack of knowledge become an excuse for inactivity.
The best place to get a basic understanding of what you need to know for starting an Amazon FBA business is right there within the Amazon guidelines. Every seller must be responsible to read and apply the guidelines for him or herself.
If you’re wanting to learn the big picture about how to sell on Amazon FBA, we encourage you to read Chris Green’s book Arbitrage. For less than $10 you can get your hands on a brand-new copy of this wealth of information.
For a step-by-step video course on how to sell on Amazon FBA, we recommend Amazon Boot Camp by The Selling Family.
If you’re looking for information on taxes as related to selling on Amazon, check out the awesome services of TaxJar.
And as always, you can get tons of information for free here at the Full-Time FBA blog (subscribe to the newsletter for some free PDFs!) and on our YouTube channel. We also have a Facebook group where you can search the archived posts or ask questions.
FEAR #2: I don’t have any inventory to start an Amazon FBA business.
TRUTH #2: There are great places to find inventory all around you – you just need to start scanning barcodes! (We like to use Scoutify for our scanning app because it comes packaged with Inventory Lab for listing and accounting.)
Our favorite places to look for low-cost FBA inventory are
That last one is our favorite place to find inventory when we don’t know where else to look. Look on your bookshelves for books you haven’t gotten around to reading in years. Look through your kitchen cabinets for a gadget you got last year for Christmas but never even opened. Look for old board games that have no missing pieces, but you just never play them any more. All of these items could be potential profits on Amazon FBA.
FEAR #3: I don’t have enough money to start an Amazon FBA business.
TRUTH #3: Yes, it does take some capital to get started with a business.But unlike many businesses that require a great deal of investment up front, you can get started with Amazon FBA with a relatively small amount of capital. In fact, we have a YouTube video that shows how you could potentially start FBA with as little as $500 (and $300+ of that money would go towards inventory!).
If you’re looking for items around your house, at garage sales, or in thrift stores, you can buy inventory for less than a dollar and potentially sell it for $10, $20, $30 or more. The potential return on investment (ROI) for these types of items gives you a lot of momentum when you’re just getting started.
If you are truly strapped for cash and want to start FBA, we recommend saving up a few hundred dollars first. Some people work a part-time job for a few months in order to save up some capital, and others have a garage sale of things around the house to make some money to invest in FBA.
We do not recommend using credit cards or taking out loans to start FBA. There is too much risk involved in learning the business to run up debt in the process. Instead, focus on finding low-cost, high-ROI items and start your business slowly. You’ll be surprised at how quickly you learn and how quickly you can turn your profits into a snowball of disbursements from Amazon!
FEAR #4: I’m just not sure I can do this. Do I have what it takes to run my own business?
TRUTH #4: Maybe you’ve tried out other ventures in the past that haven’t turned out so well, and you’re afraid to experience the same kind of results. The fear of failure is holding you back. This fear is valid and real. But it can be overcome!
You have to disconnect the event of failing from you as a person. You may have failed in the past, but you are not a failure. My dad likes to emphasize this truth to me in a quote from Zig Ziglar: Failure is an event, not a person.
For all of us, there will be times that we fail. No exceptions. This applies to everyone. But you can’t take your failures personally. If you do, that’s where your business will start to break down (or never get off the ground!).
Instead, we learn from our failures. We leverage our mistakes into educational experiences that can’t be gained for any amount of tuition at a business school.
When we’re starting out at any new venture, we’re like a new baby learning to walk. The baby may fall down a few times (OK, a lot of times), but never does that baby decide, “You know what, this walking thing is too hard. I just can’t get it. I think I’ll crawl the rest of my life.” No, the baby gets up, tries again, and eventually starts walking. Then running. Then skipping. The same can be true for any of us in our Amazon FBA business.
Do you have any other fears that are holding you back from starting Amazon FBA? Do you ever face the temptation to quit your FBA business? Let’s talk in the comments!
At times, I might include affiliate links of items that I endorse. If you click through and decide to purchase the item linked, I will make a small commission on the sale. I promise to never endorse a product only because I have an affiliate link to it. I only want to post links when it is helpful to you and your business. ~Stephen