Category Archives: Fears

Overcoming Your Fear of Handling Sales Tax

Fear of Sales TaxToday 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?

TJ_logo_color_office_pngAs 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.

targetstore2. 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.

But fortunately…

gettting-startedGetting 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.

Also, with the recent exception of Virginia, storing inventory in a state creates sales tax nexus in that state. This is where Amazon sellers often run into the intimidation factor. That’s why, if you are a new online seller, we often recommend starting with your home state when it comes to sales tax.

You can read a whole lot more about how to determine your sales tax nexus states in our free Sales Tax for Amazon FBA Sellers guide.

sales-tax-permit2. 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.)

You can find step-by-step guides to registering for a sales tax permit by state here.

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.

tax3. 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.

tax_return14. 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.

Tax Return5. 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.

Do you have questions or comments? Ask here or over in our Sales Tax for eCommerce Sellers Facebook Group.

For a much more in-depth explanation of sales tax, download our free Sales Tax for Amazon FBA Sellers guide.

mark_headshot_web_hAuthor Mark Faggiano is the founder and CEO of TaxJar, a service built to make sales tax compliance simple for eCommerce sellers. Click this link to get a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!

Overcoming Your Fear of Training Your Competition via Outsourcing

Fear of Training Your CompetitionWe all need help.

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.

Many aspects of an FBA business can be outsourced or automated in order to free up my time or expand my capabilities. Tasks such as removing price stickers, poly bagging and shrink wrapping, prepping shoe boxes, listing the inventory, and packing shipping boxes can all be outsourced to someone else. Virtual tasks such as requesting reimbursements, fixing stranded inventory, or searching for online arbitrage leads can be outsourced as well.

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.

scrollAfter 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?

worry1We 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.

Abundance_624_3512. 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.

3d-cover1-738x1024(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.)

SAVE TODAY: Use coupon code FBA30 at checkout and save 30% off the price of the book today!

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.

Overcoming Your Fear of Leaving with an Empty Shopping Cart

Empty Shopping CartWe’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:

burning_money11. 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.

shutterstock_373325772. 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?!

IMG_15713. 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.

comparison-is-the-thief-of-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.

 

Overcoming Your Fear of Buying High Ranked Items

Fear of High Ranked ItemsI’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:

  • Product DetailsThe 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.
  • Screen Shot 2014-12-11 at 11.20.05 AMSales 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.

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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

Screen Shot 2015-09-14 at 5.43.57 PMAgain, 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

CCC Q4The 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

116_1409831933There 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.

Note: I do not send in multiples of high ranked items because I want to avoid long term storage fees.

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!

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Sales rank is easily the most misunderstood aspect of selling on Amazon. What is a good sales rank? What does a sales rank of zero mean? What do I do with sales rank for sub-categories?

Why does sales rank have to be so confusing so much of the time?

I’m here to tell you it doesn’t have to be that way! You can finally get the clarity you need on the issue of understanding Amazon sales rank numbers. We at Full-Time FBA have launched a mini-course called The Reseller’s Guide to Sales Rank: Understanding Amazon Best Sellers Rank for Maximum Profits. The mini-course is a combination ebook (30+ pages) and video course (almost 2 hours). 

Check out The Reseller’s Guide to Sales Rank mini-course to see how you can master the concept of best sellers rank and be on your way toward smarter sourcing decisions for your Amazon FBA business!

Overcoming Your Fear of Starting Your Amazon FBA Business

Starting Amazon FBA

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.

26409-Brian-Tracy-Quote-To-earn-more-you-must-learn-moreFEAR #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.

garage-sale-sign-with-shoppersFEAR #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.

3-Strategies-To-Buy-Property-With-No-Money-Down-1014x487FEAR #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!

self-employedFEAR #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!

Overcoming Your Fear of Selling via FBA versus Merchant Fulfilled or eBay

Fear of FBAThe “Overcoming Your Amazon FBA Fears” Series is back on the blog!

You may remember that last fall we did a 10-part series on our Amazon fears and how we can combat the myths and fears with the TRUTH. If you haven’t read those posts, you might want to take this opportunity to check them out.

We’re picking back up for a second run of posts this summer, and we’re excited to share with you more insights into how you can overcome the fears that may be holding you back in pursuing your Amazon FBA business. We’re also going to have a post covering Amazon FBA issues that you legitimately should be concerned about and some risks that we think just aren’t worth taking. Keep an eye out for these posts in the weeks ahead. And if you have some fears that you would like to see addressed, please leave them here in the comments on the blog, and we’ll do our best to incorporate them into our upcoming posts.

imagesToday we’re going to cover the topic of being afraid of selling via FBA as opposed to selling Merchant Fulfilled on Amazon or eBay. For many of you who have been selling via FBA for a while now, this might not seem like a big deal. But for others, the transition to FBA comes with some trepidation.

As always, let’s look at the potential fears associated with selling via FBA, and then let’s address those fears with the TRUTH so that we can overcome them and be successful in our businesses.

Amazon-seller-costsFEAR #1 – I’m afraid the FBA fees will be too high and will eat into my profits.

TRUTH – Amazon does take higher fees from your payout as an FBA seller. Those fees, however, are covering services provided by Amazon that ultimately save time and money for us as sellers and allow us to grow and scale our business beyond what we could do as Merchant Fulfilled or eBay sellers. The fees cover the picking, packing, and shipping of individual orders, as well as postage and storage.

But think for a minute about what you as an individual seller are saving by paying those FBA fees. You are saving the time it would take to fulfill each individual order as it comes in. You are saving the space it would take to store all of that inventory – either space in your own home or space in a separate warehouse that you would then need to pay for. You are saving the time, effort, and money of having to catalog your inventory. The trade-off of paying FBA fees for these savings is more than worth it, in my opinion. So is the ability to park my car in my garage because I don’t have it cram-packed with inventory.

Amazon.com-worker-David-B-001FEAR #2 – I don’t trust the warehouse workers to do a good job. I’m afraid they will damage or lose my items.

TRUTH – Amazon warehouses do handle millions of items per day, and workers do inevitably damage or lose items from FBA sellers. The good news for us, though, is that Amazon takes full responsibility for those losses, and they reimburse sellers for items that are lost or damaged in their warehouse or by distributors, minus the applicable FBA fees. If your inventory item is damaged or lost, it’s essentially the same thing as getting a sale of that item. You will receive a reimbursement similar to what you would have made from selling it. Nothing to be afraid of here! We even have a series of blog posts on Seller Central tips for making sure that you’re receiving all the reimbursements that Amazon owes you as a seller.

ifOUVAvNfA60FEAR #3 – I’m afraid Amazon won’t keep my inventory separate from other sellers’ inventory. I don’t want to have the wrong item sent to my customers.

TRUTH – It is extremely rare for this type of mistake to happen, provided you have your FBA account set for stickered inventory. If you have it set for stickerless or comingled inventory, yes, you are likely to have someone else’s inventory sent to a customer when you get a sale. We do not recommend this practice because it puts your seller account at risk if there is a complaint about the items from your orders. If you keep your account set to label your own inventory with your own SKU, the chances of this type of mix-up are low.

For more info on why we choose to label our Amazon FBA inventory, check out our YouTube video called Comingling Amazon FBA Inventory – Why I don’t do stickerless inventory at Amazon.

el7ccoFEAR #4 – I’m afraid Amazon will make shipping mistakes and I will get in trouble.

TRUTH – The beauty of selling via Amazon FBA is that Amazon handles all of the shipping for you, including any customer service issues that arise from possible shipping mistakes. If the wrong item is shipped from an FBA warehouse, the item is damaged because it isn’t packed well enough, the item arrives late, or any other number of issues, Amazon takes responsibility. Even if the customer leaves negative feedback for you as a seller, Amazon will strike through the feedback, and it won’t affect your feedback score.

For more info on how to deal with negative feedback from FBA shipping errors, check out this blog post or this YouTube video from our YouTube channel.

162471-425x282-Hand-written-thank-you-note-2FEAR #5 – I like including personal notes to my customers. I’m afraid I will lose that personal connection with FBA.

TRUTH – This fear is one that you have to make a decision about if you’re wanting to switch to FBA from Merchant Fulfilled or eBay. If you want to scale your business through FBA, you won’t be able to hand-write notes to each customer. You also won’t be able to include any type of extra materials with more information about other products or services you offer. It is, in fact, against the Amazon guidelines to include any type of materials with your products that would direct customers away from the Amazon buying platform. Again, giving up this ability is more than worth it to us as FBA sellers, considering the money and time we gain by not fulfilling orders ourselves.

falling-pricesFEAR #6 – I’m afraid that the prices of my items will be too low by the time they arrive at the Amazon warehouse.

TRUTH – When you sell items via Merchant Fulfilled on Amazon or via eBay, you can get a sale as soon as your listing is live. With FBA, you have to wait until the inventory arrives at the warehouse before its is live on Amazon and customers can buy it. Depending on which warehouse you ship to and what time of year it is, this process can take anywhere from a couple of days to a couple of weeks. And yes, a lot can happen to change the prices on your items in two weeks.

We are firm believers, however, that patience brings profit, and if you make smart sourcing decisions in the first place, your inventory will be less susceptible to huge drops in prices. If you’re using CamelCamelCamel and Keepa price history to make your purchasing decisions, you will know whether or not to expect price drops and whether or not that price should come back up at some point in the future.

For more info on how to handle your fear of prices tanking, check out our blog post on the topic, as well as our YouTube video. For more info on how to make smart sourcing decisions using Amazon sales rank and price history, check out our video course and ebook, The Reseller’s Guide to How to Keepa Camel.

negative-to-positive1We hope this post has been helpful in overcoming any lingering fears you have about selling via Amazon FBA instead of Merchant Fulfilled or eBay. We feel that any negatives from selling via FBA are far outweighed by the positives:

  • More sales because of Prime 2-day shipping for Prime members
  • More time in the Buy Box for FBA sellers
  • Save time and money because Amazon does all your shipping
  • Save time and money because Amazon handles your customer service
  • Save space and money because Amazon stores your inventory

Do you have any other fears about selling via Amazon FBA? Leave us a comment!

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!

Overcoming Your Fear of Missing Out

FOMO“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,” – A Tale of Two Cities.

One of the greatest opening lines of any piece of literature still accurately portrays the world that we live in today over 150 years after it was written. Today, with the internet, we have immediate access to almost any piece of information we want to lay our eyes on. While the opportunity is amazing, all the information can become very overwhelming, especially when it comes to learning how to run a successful Amazon FBA business. 

Even though there are so many great pieces of information out there, both free and paid, it could be hard sometimes not to feel like you are missing out on something you need to know. This concept actually has a name. It’s called FOMO (fear of missing out), and it’s a very real mindset.Screen-shot-2011-04-11-at-9.30.52-AM3 

This fear is one that I’ve struggled with personally the past few years. I subscribed to countless email lists on topics ranging from Amazon, FBA, private label products, wholesale information, repricing, retail and online arbitrage, as well as a handful of non-Amazon related newsletters. I was also involved in over 50 different Facebook groups related to selling on Amazon. I felt like if I wasn’t involved in every possible opportunity, then I would miss out on valuable information that would help take my Amazon business to the next level. It turns out, the opposite was true. 

What I didn’t realize was that following so many different opportunities at the same time was actually slowing down the growth in my Amazon business. I was more focused on getting information than implementing information.

So here is the simple trick I used to get over my fear of missing out: FOCUS.

You might have heard me talk about this on Periscope lately, but I’m all about FOCUS. I write the word in all caps because it’s an acronym for what I really want to remember. FOCUS: Follow One Course Until Successful.

414tVZ2FfPL._SX341_BO1,204,203,200_Gary W. Keller and Jay Papasan in their book, The One Thing, introduced me to The Focusing Question. This question has had a tremendous impact on helping me know what I need to focus on right now versus what I can save for later. The focusing questions is this: 

“What’s the ONE thing I can do such that by doing it everything else will be easier or unnecessary?”

Wow… that question revolutionized my life. I use that question when I’m deciding how to spend my time, what new part of my Amazon business I want to learn next, what podcast I’ll listen to, what book I’ll read, what store I’ll source at, what email I’ll read, what Amazon product I’ll purchase, and so on. 

Let’s break this down into the fears associated with FOMO in your Amazon business. 

learnFEAR – I’m afraid that if I don’t learn everything, I won’t be successful. 

TRUTH – If you try to learn everything at once, you’ll never get a strong enough foundation to actually put into action what you have already learned. 

ACTION – Pick one aspect of your Amazon business to learn next, and only read books, listen to podcasts, or watch videos that are on that topic. Learn that topic so well that you could teach a friend how to do it with confidence. And be patient. It takes a while to learn a new skill. Too many people get frustrated because they don’t master something very quickly. It takes time, trial and error, and experience to be able to master a topic. Once you learn that new aspect of your business, move on to the next topic you want to master.

facebook-group-iconFEAR – If I’m not in every Facebook group, I’ll miss out on a valuable piece of information that will help my Amazon business. 

TRUTH – There is not enough time in the day to read all the information in every Amazon FBA Facebook group. In fact, if you try to read it all, you’ll have no time for sourcing or other tasks that actually make you money.

ACTION – Pick only a handful of Amazon Facebook groups (like this one) to participate in. Rather than leaving or deleting the groups you don’t want to participate in, update the notification settings for those groups to OFF. You can still check in from time to time, but you won’t be notified of posts every time you log in. Then, focus on the few Facebook groups you get the most out of, and be a part of that community. The community aspect of Facebook groups is what really makes them work for your business. 

information-overloadFEAR – If I don’t read every Amazon FBA email/update/newsletter I get, I’ll miss out on some great information. 

TRUTH – Emails don’t delete themselves, so if you get an email on a topic you want to focus on later, then save it. 

ACTION – Organize your emails. I set up multiple email folders within my email app to hold important pieces of information until I’m ready to consume them. Now, when I get an email about private label, I put it in the private label folder. When I get an email about wholesale, I put it in the wholesale folder. I still have access to the information, but I don’t consume all of it, all of the time. I can choose to go back and read those emails when the time is right.

Note: I’m not referring here to emails from Amazon. I’m referring to newsletters you have subscribed to. As an Amazon FBA seller, you should always read every email from Amazon related to your seller account immediately.

SOS-buttonThe key to overcoming information overload is to focus. When you are able to focus, you don’t become susceptible to shiny object syndrome. 

Too many of us try to learn multiple aspects of the Amazon business at the same time. Who do you think finds success faster, the person who spends 1 hour a day learning 5 different areas of selling on Amazon, or the person who spends 1 hour a day learning just 1 aspect on how to sell on Amazon? The person who focuses is able to apply what they learn much faster than the person who is trying to learn a little bit of everything. 

images-2Challenge: Choose your “one thing” and then leave it in a comment below. Maybe this will help keep you accountable by posting it here. Then, stick with your “one thing” until you’ve mastered it. I can’t wait to see what your “one thing” is. 

 

Overcoming Your Fear of Creating Listings

Adding A ProductFor many online resellers, one reason we transition out of selling on eBay to selling on Amazon FBA (Fulfilled by Amazon) is so we don’t have to constantly be creating listings. The number of items in the Amazon catalog runs in the millions, so it’s possible to spend your entire FBA career not creating a single listing but still raking in the profits.

But what do you do if you find a great deal on an awesome product that sells on other platforms for a pretty penny…and it’s not available on Amazon? You’ve searched by the UPC, you’ve searched by the product title, and you’ve even searched Amazon’s out of stock items. Nothing. You have a way to buy multiples of this item and make great profits, if only it had a product page on Amazon.

What’s stopping you from creating that listing yourself? I know for me personally, I was afraid to create listings for a variety of reasons, but those fears have all slipped off to the wayside now that I’ve had a little practice. Generally, when we’re doing retail arbitrage we still prefer to find products that already have product pages, just to save ourselves the time and effort. But in some cases it is totally worth it to put our fears aside and just make that product page ourselves!

Here are my top three fears when it comes to creating product listings on Amazon:

manage-timeFear #1 – I’m afraid it will take too much time. 

Truth – It definitely takes more time to create a quality listing than it does to just scan in an item that already has its own page in the Amazon catalog. The picture requirements are stricter than with eBay, so you’ll likely need to do a little photo editing (or hire someone to do it for you), rather than just plunking the item down on the kitchen table, snapping a photo, and calling it done. BUT if you have an item that’s going to bring a high ROI (return on investment) and you have multiples of it, the time spent on creating a solid listing for the Amazon catalog can be very profitable.

You might want to ask yourself a few questions before you consider purchasing items that will need you to create a listing:

  • How much profit will I make from selling one of these items?
  • How many of these items can I buy to resell now?
  • Will I be able to buy more items to resell in the future?
  • Will other people be able to buy this item and join my listing, or will I likely be able to keep this listing to myself?

If you can’t answer these questions in a way that justifies the time and effort involved in creating a listing on Amazon, perhaps you should consider selling the item on eBay or Craigslist or at a garage sale instead.

right-way-wrong-wayFear #2 – I’m afraid I’ll create the listing the wrong way. 

Truth – We all have to learn somewhere and try something for the first time. Sometimes that involves making mistakes, but if other people can create successful listings, chances are so can you! If you do a little research up front, you can avoid making some of the more obvious errors, and you can be off to a great start creating listings that could bring in big profits.

Amazon does have rules regarding adding products to their catalog, and if you’re going to create a listing, you should read those rules before getting started. It’s pretty easy to tell when a seller from eBay has created an Amazon listing — their photos will not conform to the pure white background requirements, or they’ll be too small; their titles will be in all caps; they will include condition notes in their product descriptions. None of these things are acceptable with Amazon, and all of these things are easy to read in their guidelines. Seriously, read the rules. That’s the best place to start with learning how to create a listing.

Screen Shot 2015-11-17 at 6.38.13 AMA side fear related to creating listings is a fear of the dreaded flat file. When you’re first getting started learning to create listings, though, there’s no reason to use a flat file. The “Add a Product” feature in Seller Central is easy to follow step by step. Just log in to your seller account, and under “Inventory” click on “Add a Product.” From there you can follow each step to add the product’s title, description, images, etc. If you enter any information incorrectly, the system will give you a handy little red notification, which can be quite helpful in figuring out how to enter the correct information.

customers_wantedFear #3 – I’m afraid I won’t get any sales on my new listing, and my time will have been wasted. 

Truth – If you have an awesome product to sell and you create an awesome listing, you’re bound to get sales. Sometimes you might need to promote your product with ads, but often you don’t even need to go that far before your product gains momentum and the sales start coming in. We have never promoted any of our created listings, and in some cases we’ve seen sales start coming in within a matter of a day or two once the products go live.

The key to creating a successful listing? Keywords. Keywords are key.

We’ve had a couple of great guest posts by Karon Thackston in the past, and we still stand by everything she has to say:

I have pored over Karon’s book Amazon Advantage: Product Listing Strategies to Boost Your Sales, and I just can’t recommend it enough if you’re wanting to create a listing. We have used her advice to boost current listings, and we’ve used it to create a listing for a replenishable item that has no FBA competition, gives us 100% ROI, and sells about once a day. If only we could find more items just like this one!

Now, this blog post is about addressing our fear of creating listings, but I would be remiss if we didn’t discuss the times when it’s best to reconsider creating a listing:

  • If you can only buy one of an item, the ROI is low, or the dollar amount of the sales price is low
  • If it’s a collectible item better suited for eBay
  • If it’s a generic product (i.e. not a popular brand name; not an item you are selling as your own private label product)
  • If the item already has a product page, but you want to create a duplicate listing with a different UPC. This is against Amazon rules. Don’t do it.

So, are you ready to try creating your own listing? Or have you already tried it and have some insight to share? We’d love to hear from you about your experience with creating listings on Amazon.