Tag Archives: Business

Why You Should Consider Raising Your ASP (Average Selling Price)

Did you see that we recently released a PDF of Amazon acronyms you can print out and refer to in your FBA business? If not, you can grab a copy of the acronym list here as a handy reference.

One of the acronyms at the top of that list is ASP: average selling price. Over the next couple of blog posts, we’re going to discuss ASP and how it impacts your business.

Your ASP is the average amount of money you make in sales per item you sell on Amazon. ASP is calculated by dividing the dollar amount of sales by the number of items sold. To find your ASP, follow these steps:

  • Log in to Seller Central.
  • Hover over Reports.
  • Click on Business Reports.
  • Check out your Sales Snapshot – your ASP is the amount listed for “Avg. sales/order item.”

Why is it important for you to know your ASP and why is it important to increase your ASP?

I really believe that an Amazon FBA business needs a higher ASP in order to make it long-term in this business. If selling on Amazon is a business for you and not a hobby, you want to make sure you’re getting paid like a business would pay you. One way to increase your ability to pay yourself out of your business is to increase your ASP.

Sure, there are plenty of people who are able to make good money on Amazon with a lower ASP, for example book sellers or sellers in other categories that depend on high volume at low prices. Depending on your business model, you can really make a lot of money at high volume and low prices. But along with that type of business model also comes more work because you’re having to find and sell more items in order to make that volume. That type of business model also might require more outsourcing if you want to scale even larger, more sourcers to find your inventory, more listers and preppers, etc. I’m not saying this isn’t a viable business model; I’m saying that selling at a low ASP comes with a price.

In my experience, my business has seen more growth when I have focused on finding items to resell at a higher ASP, rather than trying to increase my volume on low ASP items. I’ll share with you a few reasons why I believe this has been the case:

1. You can save a lot of money on FBA fees when you raise your ASP.

Let’s think about an example using two FBA sellers, Bob and Sally. Bob typically sells lower priced items on Amazon. Today so far he has sold 10 items at $10 each, so he’s made $100 in sales. Sally, on the other hand, has sold one item today, but it was priced at $100. Both sellers have the same dollar amount in sales, but their FBA fees are taken out of those sales differently. Sally only has the one sale, so she only has to take care of the referral and FBA pick & pack fees for just the one item ordered. Meanwhile, Bob has to pay the referral and FBA pick & pack fees 10 times for 10 items. All those fees on low priced items add up over time.

In the end, Sally’s $100 of sales allows her to take home about $80 of profit. Bob’s $100 of sales leads to closer to $60 of profit. If you increase your ASP, you reduce your fees and increase your profit.

2. You can save a lot of time, money, and effort on prepping and shipping items when you raise your ASP.

Think about Bob and Sally again. With Sally’s one $100 item, she only had to expend the time, money, and effort to put one FBA label on her item, put one poly bag on her item, and pack that one item in her FBA shipment. But Bob with his $10 items…he (or someone he has hired) has to put on 10 FBA labels, seal 10 poly bags, and pack 10 items for shipment to get that $100 in sales. All of those costs add up over time, and you can save money and increase profits by reducing the amount of prep work required in your business. Increasing your ASP is a great way to reduce your necessary prep work.

3. You can give yourself more wiggle room for price fluctuations when you raise your ASP.

Back to Bob and Sally…

For sellers like Bob who have items priced mostly in the $10-$15 range, if the going price of their items begins to drop, they don’t have much room to lower their price and stay competitive without losing all their profit. If they lower the price even a couple of dollars, it drastically changes their return on investment (ROI). But if Sally’s $100 item lowers in price by $1, $2, or even $5-$10, she still has wiggle room to lower her price and stay competitive, without sacrificing her ROI.

Note: In general I don’t recommend always lowering your price whenever your competition does, which can start a race to the bottom. But in those instances where for some reason you need to keep your price competitive, having that wiggle room to lower your price without sacrificing profit and ROI is a nice feature of increasing your ASP.

4. You can increase your Amazon disbursements if you raise your ASP.

When you have fewer fees removed from your FBA sales and you sell more items with higher ASP, the natural result will be higher disbursements from Amazon. More profits, more money to reinvest in your business, and more money to take out of your business in the form of income for yourself and your family. That’s the progress we personally have seen over the past few years – the number of items we have sold via FBA has decreased each year, but our ASP has increased, and as a result our Amazon disbursements have increased.

Like I said earlier, some business models work very well by selling a high volume of items at a lower ASP. But for the amount of time, effort, and money that I want to invest in my business, I have found that sourcing and selling higher ASP items has given my business tremendous growth. My goal is to continue making a full-time income with only part-time hours through Amazon FBA, and increasing my ASP has been a vital component of achieving that goal each year.

Here’s one strategy I suggest for anyone who might struggle with having enough money in their sourcing budget to make it from one Amazon disbursement to the next: Start setting aside a portion of your budget solely dedicated to higher ASP items. Make sure you are gradually working at finding items that will increase your sales without increasing your work. In my next blog post, I’ll go into more detail about how to raise your ASP and start getting more bang for your buck with your sourcing budget, time, efforts, and energy.

Keep an eye out for that next blog post soon, but in the meantime we would love to hear from you in the comments. Have you had success increasing your ASP over time? Are you actively trying to increase your ASP? Or is your business model built on lower ASP items?

Beginner Lessons For Selling Shoes on Amazon FBA

When it comes to sourcing and selling shoes on Amazon, some of the hardest lessons are learned during the early stages of adding shoes to your Amazon business model.

Many of you know that Rebecca and I are a team when it comes to our Amazon FBA business. While I mainly focus on retail arbitrage and wholesale sourcing, she is the specialist when it comes to online arbitrage… and specifically sourcing and selling shoes.

Since my last interview video with Rebecca was so well received, I decided to sit down with her and record another Q&A  interview video with her. Rebecca has such a wealth of knowledge about sourcing and selling shoes and you’ll learn a lot in this video.

In the video below, you’ll learn:

  • How our very first experiment with sourcing and selling shoes went (spoiler: it didn’t go so well)
  • What we learned from that experiment
  • How we almost decided to give up selling shoes – and why we’re so glad we didn’t quit.
  • The biggest thing we wish we knew when we started selling shoes
  • The mindset shift you need to be successful with selling shoes
  • The biggest difference between sourcing items like books/toys and sourcing shoes
  • How to overcome not being able to see sales rank history of shoes
  • Which is better? Going wide or going deep when sourcing shoes?
  • How to find confidence in sourcing shoes
  • How customer returns of shoes are not as bad as returns from other categories (despite what other people might say).

Enjoy! Leave us a comment below the video if you have a specific shoe question and we’ll see about addressing that in a future video.

If you like the shirts we’re wearing in the video above, you can get them right here on Amazon.

Want to learn more? Rebecca and I recently hosted a FREE webinar all about how to get started with selling shoes on Amazon and added it to our YouTube channel. Just follow the link above to see the webinar in its entirety.

9 Reasons Why You Should Add Wholesale to Your Amazon FBA Business

The more you talk with Amazon FBA sellers from all walks of life, the more you understand why each seller prefers the sourcing model used in their business.

Some folks love the thrill of the hunt, and they thrive on getting out there and scanning to their heart’s content at garage sales and thrift stores. Other sellers enjoy working retail arbitrage into their daily routine, or they love the huge profits that come from RA during the Q4 selling season. Some sellers live in a remote area or their time is limited, so they choose to do online arbitrage (OA) or wholesale. Still others like all aspects of product development and marketing, so they dive into private labeling.

Today I want to focus on one method of sourcing for Amazon FBA: sourcing from wholesale suppliers. We’re going to have a couple more posts after this one, so stick with me to learn more about where to find wholesale sources and other wholesale time hacks. But for today, let’s discuss the top 9 reasons why you should consider adding wholesale sourcing to your Amazon FBA business.

1. Profit potential

We’re all in this business to make profits, right? Well, selling items sourced via wholesale has huge profit potentials. You can find items with great return on investment (ROI) for resale on Amazon because you buy them at a low wholesale price, compared to what other sellers are getting by buying from retail sources.

2. Go both wide and deep on inventory

Buying via a wholesale account gives you the opportunity to search their catalog for several different profitable items in one product line, and you can then buy larger quantities of those items than you would be able to if sourcing via RA or OA. Once you’ve done your research on the sales history data on CamelCamelCamel and Keepa, as well as researching how much your competition has in stock (we use the How Many? extension for doing this research), you can make an informed decision and buy as many of an item as you feel comfortable buying, rather than being limited to what’s on the shelf at the retail store.

But you don’t have to worry about making a huge wholesale order of only one item to meet a company’s minimum purchase requirement. You can order a few of several different items, test them out, assess the results of your sales, and make a decision about reordering and possibly going deeper.

3. Opportunity for consistent replens

“Replen” is short for replenishable. A replenishable item is one that is profitable to buy over and over again because you can sell through the item at a decent rate. Replens can be a lovely cash cow for your business, since all you have to do is order, send to FBA, sell, order, send to FBA, sell, and repeat, repeat, repeat. Finding a replen today saves you time tomorrow by not having to repeat your sourcing research once the item sells out. You’ve already done the research – now all you need to do is reorder and send that item in again. It’s a much more time-efficient process than the one-offs that come with RA, OA, garage saling, and thrifting.

4. Potential for less competition

If an item isn’t available from retail sources at a low enough price to resell on Amazon BUT you can find it at a wholesale source, you will have lower competition. If you’re sourcing items that anyone can find at a retail store and resell for profit, it’s often only a matter of time until a ton of sellers jump on that listing. Sourcing via wholesale opens the door of opportunity to find unique items that RA and OA sellers can’t source at your buy cost.

5. Predictable cash flow

Once you have found several replens through wholesale sourcing, you can get to a place in your business where you have more predictable cash flow. Often with RA, OA, and thrifting, you will see ebbs and flows with your sales throughout the year, depending on what’s going on in your part of the country or in the stores where you like to source. Wholesale sourcing can provide more stability when it comes to ordering products to sell consistently throughout the year.

6. Saves time

Like I said above, finding a wholesale replen saves you a ton of time when it comes to not having to constantly be out sourcing for more one-off items to resell. It could take you all day to drive around town and spend $800 on RA finds, or you could spend a couple of hours doing wholesale research and find a great replen, place an $800 order, and then just reorder when you’ve sold out.

Another way wholesale saves time is when it comes to prepping your inventory. Wholesale items won’t have stickers to remove, and they often (though not always) come already poly bagged. You also can save time in listing the items. Instead of having to list and price 20 one-offs from RA clearance, you could list and price one item with 20 multiples from a wholesale source.

7. Easier to scale the business

As your FBA business grows, you will need to find ways to scale the business. Scaling your business means being able to increase your output. There are only so many garage sales in your town every week, so unless you hire folks in other towns to source for you, you can’t scale an FBA business based on garage saling. Same with retail arbitrage – you only have so many hours in the day to drive to retail stores, so you will need to hire someone else to source if you want to scale your RA business. But with wholesale, it is much easier to keep your business simple, source large amounts of inventory, and process it without needing to hire help. In fact, if you use a prep and pack center to process your inventory, you can grow your Amazon FBA business even more through wholesale.

8. Protects your seller account

Many Amazon FBA sellers experience great anxiety over the thought of being suspended because of claims by customers, especially claims of inauthentic products. As of this writing, Amazon is accepting retail receipts as proof of your source for inventory, but it’s often more difficult to prove your case with Amazon using retail receipts than using wholesale invoices – not to mention, at any point Amazon could stop accepting retail receipts altogether. Adding wholesale sources to your Amazon inventory gives you a level of protection for your seller account.

9. Become a brand approved seller

Brand restrictions on Amazon can be tricky when you’re looking for good retail sources for inventory. There’s nothing worse than finding an awesome item for resale, only to discover you are restricted from selling that brand. But with wholesale sources, you have the potential to work with Amazon and the manufacturer to become a brand approved seller. It requires some time and effort to get approval, but if you’re successful, you have the potential to make even more profits with even lower competition.

Now you have plenty of good reasons why you should consider adding wholesale to your Amazon FBA business. Stay tuned because in our next blog post, we’ll share with you how to find profitable wholesale accounts.

For the longest time I had wanted to add wholesale to my Amazon business. I have actually gone through 3 different wholesale courses to teach me how to do it. Each time I went through a new wholesale course, I would try what was taught, and I kept coming up empty. It was extremely frustrating… then I scheduled a phone call with Dan, one of the guys behind The Wholesale Formula. That conversation opened up my eyes to things about wholesale I’ve never thought about before. I took his advice and began to find multiple wholesale accounts.

Would you have wanted to listen in on that conversation? Unfortunately, we didn’t record the call, but Dan and his business partner Eric recently recorded an entire video series that focuses exactly on adding wholesale to your Amazon FBA business. The best part? It’s free! So many people think that you have to have thousands of dollars or special connections to start selling wholesale items on Amazon, but that’s just not true.

In this free video series my wholesale mentors, Dan and Eric, will teach you exactly how to find profitable items to buy via wholesale so you can experience growth in your Amazon business.

Now here’s the deal. These free videos are only going to be accessible for a limited time, so you need to click here and watch today.

Have you considered adding wholesale to your Amazon business? Have you been successful? If you have not tried it yet, what’s stopping you? What’s getting in the way of you sourcing directly from wholesale suppliers? Let me know in the comments so I can best help you in our current wholesale blog series.

4 Tips for Handling Amazon FBA Taxes

Before you hit the snooze button and move on to a more exciting post, let me acknowledge up front that taxes aren’t the most glamorous topic out there. Unless you’re a CPA or tax professional. In which case I don’t mean any offense by saying that taxes are boring.

Is anyone still with me at this point in this blog post? I hope so – because the topic of taxes, while potentially a snoozer, is of great importance to the success of your Amazon FBA business. If handled incorrectly, your business taxes could negatively impact your success at FBA – but taxes don’t have to be something that holds you back from making progress as an Amazon seller.

We at Full-Time FBA are not tax professionals or CPAs, and we do not intend to give advice for preparing your taxes in this blog post. We also do not give advice in our Facebook group, so if you ask tax questions there we will give you the same disclaimer and point you towards the services of someone qualified to give that type of advice.

Which leads us nicely to our first tip out of four for handling taxes for your Amazon FBA business…

1. Find a good CPA. 

Our biggest piece of advice for you when it comes to handling your taxes is to find a good CPA who can take care of all the nitty gritty details for you. We are greatly indebted to our own CPA for her help throughout the year and at tax time in keeping our business running smoothly and above board with our taxes. A good CPA will know all the ins and outs of the rules related to business taxes (both federal and state, depending on where you live), and a good CPA is worth every penny you pay for their services.

When I say you need to find a “good CPA” I mean a couple of things by it. First, you don’t want to just pick the first person who pops up in a Google search for CPAs in your area. You need to find someone who has the heart of a teacher, who is willing to help you understand the tax rules and how to be compliant. It might take time to find this person and to ask questions to make sure you’re a good fit with each other.

Note: Please do not go to a bunch of different CPAs and ask questions under the pretense of “seeing if you’re a good fit.” For a service professional, nothing is worse than being taken advantage of by someone looking for free advice. Be respectful of your potential CPA’s time and pay them well.

The second thing you need to look for in a CPA is someone who understands taxes as related to ecommerce, Amazon FBA, self-employment, an LLC, or whatever particular situation your business is in. Be sure to ask questions up front to make sure the person you hire has the relevant experience to best assist you in preparing your taxes.

2. Keep good records throughout the year.

Keeping good records is crucial to preparing your taxes and protecting yourself in case of audit. Your records should include (but aren’t limited to) receipts for inventory, receipts for supplies, receipts for any other business expenses, records of your disbursements or other income, any business-related fees, any payments for business-related services, etc.

We use Inventory Lab to track inventory-related financial information, and we have our CPA do our bookkeeping every month throughout the year. We have a simple system for filing our receipts by month, and we use Evernote and email folders to track online receipts.

Whether you already have a good system in place for keeping good records or not, nothing is stopping you from keeping your records organized from this point forward. You can’t change the past, but you can make a difference in the future. Don’t get overwhelmed with your receipts, take it one step at a time, and make the most of the year ahead by knowing your numbers, organizing your receipts, and paying attention to business reports in Seller Central, Inventory Lab, or whatever program you are using.

3. Run the right reports for your CPA.

In order to prepare your taxes, your CPA (or whoever is preparing your taxes) will need to know the money you have coming in, the money you have going out, the amount of inventory you have in stock that hasn’t been sold, etc. Talk with this individual to be sure exactly what they need.

As a good starting point you can check out this blog post with instructions for how to run the most useful year end reports within Seller Central. We like to run reports for our CPA on our year end inventory, our monthly inventory history, and our received inventory.

Note: It’s best to run your year end inventory report as close to December 31 or January 1 as possible, to give your CPA the most accurate picture of the inventory you had in FBA warehouses at year’s end.

4. When it comes to sales tax, look into services like TaxJar to automate the process for you.

We like to point our readers to the TaxJar website when it comes to handling sales tax. TaxJar has a wealth of free information and links on their website to point you in the right direction for knowing the sales tax regulations in each state. When you’re ready to automate the process of dealing with sales tax, TaxJar can help you get set up.

Dealing with taxes definitely isn’t the most fun part of running your own business – we would all rather be out sourcing and finding treasure and making big profits than talking about taxes, right? But getting your business set up to handle taxes correctly is an important component of business success. You really want to do things the right way as quickly as you can, so that you won’t have to pay penalties or fines later. You can take a few simple steps today to set yourself up for the year ahead and make the most of your Amazon FBA opportunities.

Make 2017 your Best Amazon Sales Year Ever! 

Imagine knowing exactly what to expect in your Amazon FBA business every month of the year.

Imagine what it would feel like knowing you were not missing out on any of the opportunities that will come your way in 2017.

Imagine working on your Amazon business knowing exactly what your priorities are, what you need to avoid, and what you need to accomplish during each month to make progress toward making 2017 your best sales year ever.

Find out more about The Reseller’s Guide to a Year in FBA: A Month by Month Guide to a Profitable Amazon Business today. The package includes a 200-page ebook, monthly live webinars, and 4 special bonuses.

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What are you doing today to prepare for the year ahead? How are you taking steps to handle your taxes the right way? We would love to hear from you in the comments!

Feedback Genius Review – Get More Positive (and Eliminate Negative) Feedback

feedback-genuis-reviewMost Amazon sellers will agree: It takes a verrrrrry looooooong time to build up your feedback on the Amazon platform.

Most Amazon customers aren’t accustomed to leaving seller feedback for FBA purchases, at least not with the same frequency as eBay customers leave seller feedback. It could take 100 sales via FBA to receive one or two customers leaving feedback on Amazon. At that rate, it seems to take forever to build up a solid feedback score.

That rate also means that just one negative feedback carries a huge punch. The effects of one negative feedback can be devastating to your seller account, if you don’t have enough positive feedback to counterbalance it. No one knows for sure exactly what algorithm Amazon uses to award the buy box, but feedback scores have some component to it. I absolutely must pay careful attention to keeping my feedback score as close to 100% as possible if I want to keep the buy box and get more FBA sales.

This is where the genius of Feedback Genius comes in. Feedback Genius helps me keep my 100% positive feedback score, and it also helps me fight off the occasional negative feedback that I receive as an FBA seller.

1. Fmail-1454731_1280eedback Genius automatically sends my customers an email the day their item will be delivered.

The email lets the customer know to be expecting the item, and it gives the customer a link where they can leave positive feedback for you as a seller if everything went well in the transaction. The email also asks the customer to just reply to the email with any issues that need to be resolved before they leave a negative feedback.

Feedback Genius emails allow you to set a positive tone with your customer right off the bat and to be proactive in avoiding negative feedback. With just this one email, I can increase my positive feedback and descrease my negative feedback.

do-it-now-1432945_12802. If the customer hasn’t left feedback in 4-5 days, Feedback Genius sends a reminder email.

Again, this reminder email gives me another chance to increase my positive feedback from customers and decrease the negative. I’ve seen a huge increase in my feedback score overall since signing up with Feedback Genius, and I’m convinced this increase has had a positive impact on my ability to get the buy box.

feedback-genius-text3. Feedback Genius sends me a text and email if I receive a feedback score of 3 or below.

This feature is even more of a game changer for me, as far as Feedback Genius is concerned. I wrote a blog post a while back about how one day a text from Feedback Genius at the beginning of lunch helped me act quickly and have a negative feedback completely removed by the time I was paying the check and headed back to work.

Amazon considers 4 and 5 to be a positive feedback score, 3 is neutral, and 1 or 2 are negative. Although a 3 is technically neutral, it will still negatively impact my feedback score. I don’t want to waste any time when it comes to dealing with negative feedback on my FBA account. For me, that text notification from Feedback Genius is a must.

To find out more about how to handle removing negative feedback, check out this blog post or this YouTube video.

ratings-1482011_1280-14. Feedback Genius can also be used with product reviews for specific ASINs.

In addition to helping monitor my seller feedback, I’ve also used Feedback Genius to send out emails to request product reviews for specific ASINs. The service also allows me to set up alerts for negative product reviews on specific ASINs. Just as seller feedback is important for helping me get the buy box, the number and quality of product reviews helps an item show up higher in search results and potentially get more sales. For any seller who creates their own listings, whether it’s a one-off product, a bundle, or a private label product line, having a way to monitor or increase product reviews (without breaking the Amazon seller terms of service) is critical to business.

parameters5. Feedback Genius is customizable as to the content and number of emails you wish to send out.

Some sellers want to send lots of emails, some just a few. Some want to just send out the content of the template email, some want to tweak it and personalize it. Feedback Genius lets you take the lead in deciding what you want to say to your customers, when you want to say it, and how often.

FB-GeniusSpecial Offer from Feedback Genius

I spoke with Jeff from Seller Labs (creator of Feedback Genius) and he is offering Full-Time FBA blog readers a special offer of 500 free messages for signing up for Feedback Genius. That’s 500 free messages to your buyers asking for them to leave you 5-star reviews, to contact you if there is a problem, or to leave a product review. That’s a lot of messages, and you get them for free when you sign up for Feedback Genius. You’ll also get a 60 day free trial (that’s twice as long as their normal 30-day trial period). There is really no reason why you shouldn’t give Feedback Genius a try today.

How to Know What to Do Next in Your Amazon FBA Business

what-to-do-nextInformation about selling on Amazon is everywhere… Blogs, Facebook groups, YouTube, eBooks, video courses, and even live conferences. There is such a vast amount of information available, both free and paid, how can you ever filter through all the noise and decide on your best course of action?

I wish I could just tell you exactly what to do next, but that would not be the best advice to give you. Your situation, your finances, your time, your skills, and your passions are all unique to you, and therefor what you need to do next is also unique to you.

While I can’t give you a simple step by step process on exactly what to do next, here are 5 things you need to think about that will help you see your next steps with much more clarity.

manage-time1. TIME – I think the first thing you need to do is to consider how much your time is worth to you… If you have a TON of time available, then it’s not a bad idea to look for as much free information online as you can. If you don’t have a lot of free time, then I recommend purchasing a quality course/book/conference so you can streamline your time and get focused information all in one place.

banner-quality2. QUALITY – Of course, you want to be sure that the info you learn from (either free or paid) is of top quality. The best way to do this is to put what the person teaches to the test. For paid content, see if the author has a lot of free content to consume first… then if you see the quality of the free content, purchase the paid content, since you know it’ll be good. If you have to pay to find out if the information is high quality, then make sure there is a refund policy, and then get your money back if it’s not up to your standards.

trust3. TRUST – You want to be sure you can trust the person teaching you. Again, if you can put any author’s teaching into action and get good results, you can trust their other material is good too. Trust can also come from the teacher showing you their results and proving that what they teach has worked for then. For example, here on this blog it’s our goal to help you turn part time hours into a full time income with Amazon FBA… and that’s exactly what we do. I spend about 20 hours a week on Amazon FBA and our disbursements pay our bills. We are full-time FBA sellers and from that I would think you could trust us.

photo-sep-12-11-27-57-am4. FOCUS – This is the big one… I love the acronym for FOCUS: Follow One Course Until Successful. I even have that phrase on a Post It Note on my desk. It’s so easy to think that some new strategy or book will be the answer… but if we have not followed through on strategy #1, then why would we think strategy #2 or #3 will work better? Here’s a question: Who do you think finds success faster? Person A or Person B? Person A works on learning RA on Monday, learning OA on Tuesday, learning Wholesale on Wednesday, learning Private Label on Thursday, and learning Merch on Friday… or Person B who learns ONE STRATEGY on Monday, Tuesday, Wednesday, Thursday, and Friday. Of course the person who FOCUSES will find success faster.

follow-your-passion5. PASSION – Passion is the fuel that pushes you forward and helps you avoid burnout. What strategy do you feel passionate about? Which one gets you most excited? Follow that strategy until successful, and then you can look to add another strategy once your first strategy gets put on autopilot. If you’re passionate about the idea of sourcing from home via online arbitrage, then focus on that… if you love the thrill of a retail arbitrage treasure hunt, then focus on that. If you love making T-shirts, then focus on Merch. Pick something you’re passionate about and see it through.

So if you’re wondering what you need to do next in your Amazon business, you can think about the above points and see which strategy/book/blog/course/etc stands out to you… and then follow it through until successful. If you’ve started a book or course and then are tempted to jump ship to some “shiny” new strategy, just calm yourself down and finish that book or course until you can see results. If you find something that you’re passionate about and see it through until the end, you will thank yourself for the results, and you’ll continue on your road toward success that much faster.

I hope these five tips will help you find direction in what you need to do next in your Amazon FBA business. Now, I’d love to hear from you. What methods or strategies have you found to be helpful when deciding what your next step needs to be with your Amazon FBA business?

Calculating Amazon FBA Fees – Know Your Numbers and Make Better Buying Decisions

Know Your Numbers - FeesA while back I saw a super scary video. It was truly horrifying. I still have nightmares when I think about it for too long.

I showed a short clip of this video to my wife. She actually screamed at the TV: “Nooooooo!!!!!!!!” She was just as terrified as I was.

In this video people were walking the aisles of a big box retail store, scanning toys with the Amazon app. Not the Amazon Seller app. The Amazon app. The one you use to buy merchandise from Amazon. These people were looking up toys on Amazon, comparing the price on the retail store shelf, and loading up a shopping cart if the price was even the slightest bit higher on Amazon. They intended to buy this shopping cart full of toys and sell them on Amazon.

As if this scenario weren’t gruesome enough, these people were actually encouraging their viewers to go out and do the same thing. They exuberantly proclaimed that anyone can sell on Amazon, see, look, there’s merchandise everywhere that sells higher on Amazon than in stores. You, too, should go out and buy toys by the shopping cart load, and just send them in to Amazon and wait for your paycheck.

At this point you might be ready to ask me a few questions. “How is this scene any different than what you do in your Amazon FBA business every day? Don’t you use retail arbitrage as one of your strategies for finding FBA inventory? Isn’t that what these folks are doing – and showing others how to do?”

The key difference boils down to one simple factor: I never buy an item for resale without knowing the Amazon FBA fees for that item first. If someone were to actually follow the methods these people were using in this Amazon FBA horror movie, they would be hit with fees they hadn’t calculated beforehand and suffer financial loss.

2631823For anyone who wants to make a profit running an FBA business, you have to know your numbers. You have to know all of your expenses, including inbound shipping, taxes where applicable, prep fees, materials, and the cost of any subscriptions or services you buy. You also have to have a good handle on the FBA fees that apply to any items you intend to have Amazon fulfill for you.

If you aren’t aware, the name of this blog is Full-Time FBA. About 99% of our Amazon business is through the FBA (Fulfillment By Amazon) program. We do choose to Merchant Fulfill items on occasion (check out our YouTube video where we discuss those occasions), but overall we prefer to stick with having Amazon fulfill our inventory when a customer buys it (see also our blog post “Overcoming Your Fear of Selling via FBA versus Merchant Fulfilled or eBay”).

There are 4 easy ways you can calculate the potential Amazon FBA fees before you buy an inventory item. We’ve listed below two options for calculating fees on your smart phone and two for calculating fees on a web browser:

  1. AZ Seller app screen shotAmazon Seller app – FREE

The Amazon Seller app is free and allows you to scan items either by barcode or using Amazon Flow (the camera of your phone recognizes an item’s image and matches it with the product in the Amazon catalog). The Amazon Seller app allows you to see the fees for an item if you sell it Merchant Fulfilled or through FBA. It allows you to adjust your selling price, your inbound shipping cost, and the cost of purchase. It then subtracts the fees and your cost of purchases, giving you your estimated net proceeds. (See this blog post for more pros and cons on the Amazon Seller app.)

  1. Photo Apr 15, 10 23 15 PMThird party scanning app, like Scoutify, Profit Bandit, or ScanPower – PAID

Similar to the Amazon Seller app, third party scanning apps allow you to scan items by barcode or enter a text search for the item. Third party apps also allow you to adjust selling price, inbound shipping, and cost of purchase before you subtract out the FBA fees and see your estimated net proceeds. We personally use Scoutify most often when sourcing, with Profit Bandit being our back-up on occasion. (For more info on third party scanning apps, check out our blog post about why we use Scoutify.)

  1. FBA CalculatorThe FBA Calculator website – FREE

If you are doing product research on a web browser, Amazon Seller Central has an FBA revenue calculator where you can enter the ASIN, UPC, or product name of an item and do the same calculations as above to find out your potential fees and potential profit. We highly recommend creating a bookmark for the revenue calculator so you can easily reference it when making online purchases, determining prices for your inventory during the listing process, or repricing your inventory after it’s at the warehouse. We’ve also created a quick link for the calculator: www.fulltimefba.com/calculator

To see the FBA revenue calculator in action, I’ve created a screen capture video explaining how it works.

  1. Scanalyze 1Google Chrome extensions, like Scanalyze  – PAID

Another easy way to see FBA fees when doing online arbitrage or product research is by using Google Chrome extensions that show the fees right on the Amazon product page. We use Scanalyze (available through the Cyber Monkey Deals website) and love it. You simply click the “Scanalyze” button and the fee calculator pops up at the bottom of your screen.

Scanalyze 2

Hopefully you’re equipped now to calculate your fees and know up front what your profit potential is before you buy inventory to send to Amazon. Please don’t become another victim in a scary movie! You can make good choices. You can build a profitable Amazon FBA business because you know your numbers.

How to Handle Unfair Amazon Reimbursements

Unfair ReimbursementsWhen Amazon loses or damages one of your inventory items, it is their policy to either 1) find a replacement for your lost/damaged inventory, or 2) reimburse you the replacement value of your lost inventory (less any applicable FBA and selling on Amazon fees, of course).

This is how most people imagine this reimbursement policy being lived out in real life:

670px-Put-a-Rubik's-Cube-Back-Together-Step-1“You find a great item to resell, price it competitively at $24.99, and send it to an Amazon FBA warehouse. Amazon accidentally drops and breaks your item, so they now owe you a reimbursement. Amazon takes your $24.99 selling price, takes out the fees as if you had sold the item, and then reimburses you $18.42.”

Unfortunately, this is not how many Amazon reimbursements work out. Did you know that when Amazon reimburses you for lost or damaged items, they have specific rules they are supposed to follow when coming up with the amount they are to reimburse you? It might surprise you to know that Amazon sometimes (not all the time) fails to follow their own reimbursement rules.

Here are the set of factors Amazon is supposed to consider when calculating the reimbursement amount:

  1. Your sales history – Is this an item you sell often, and what is the price you usually sell it for?
  2. The current average FBA selling price – What is the average of the most recent (no number is given) sales prices for that item.
  3. Other factors (Amazon doesn’t explain what these “other” factors are).
  4. Screen Shot 2016-08-15 at 3.54.14 PMIf Amazon doesn’t have enough information to establish a reasonable value for an item, then the replacement value is determined based on a default replacement value from the table pictured to the right.

Here’s the deal… I have never ever seen a reimbursement that has followed the above table, so in my experience, Amazon comes up with their own reimbursement amounts based on something other than this table, something a bit more subjective.

In reality, this is how Amazon’s reimbursement policy is lived out more times than not:

728px-Disassemble-a-Rubik's-Cube-Step-3“You find a great item to resell, price it competitively at $24.99, and send it to an Amazon FBA warehouse. Amazon accidentally drops and breaks your item, so they now owe you a reimbursement. Amazon takes your $24.99 selling price, and somehow decides to reimburse you only $10.54.”

Did you notice that? If Amazon took your FBA selling price, and took out the correct fees, then they should have reimbursed you $18.42, not $10.54. What’s going on? The truth is, I’m not sure what’s going on, but I do know what to do to get the reimbursement you think you deserve.

How to know if you received a fair reimbursement:

  1. When you get a reimbursement, do some quick research.
    1. Research Part 1:
      1. Take the ASIN and put it in the Amazon.com search bar and find the product page.
      2. Click on the link to view the current FBA offers.
      3. Take 3-5 of the current lowest FBA sales prices and find an average. This number will be your current FBA average selling price.
    2. Research Part 2:
      1. Take the ASIN and put it in the FBA revenue calculator.
      2. Input the current FBA average selling price (that you calculated above) on the Item Price line under the Amazon Fulfillment column.
      3. Click the yellow Calculate button.
      4. Write down two numbers: the Cost (Amazon fees) and the Margin Impact (your profits after fees)
    3. Research Part 3:
      1. Repeat Research Part 2, but instead of the current FBA average selling price, use your original selling price you had priced for that item.
  2. Screen Shot 2016-08-15 at 8.13.40 PMCompare your Margin Impact number of the current FBA average selling price (found in Research Part 1) with your reimbursement amount. Also, compare your Margin Impact with your original selling price with the actual reimbursement amount.
  3. Screen Shot 2016-08-16 at 3.10.48 PMIf the difference is big, then it’s time to open up a ticket with Amazon and request an additional reimbursement (more on that in a minute).
  4. If the difference is small, then just let it go and move on with your business. Opening up a ticket with Amazon and dealing with getting a higher reimbursement amount can take some time. So, for most cases, it’s not worth your time to fight a reimbursement that is only a few dollars difference. Value your time and only fight a low reimbursement when you think it’s worth the time to dispute it.

How to get the reimbursement you deserve:

  1. Open up a ticket with Amazon. If you’re not familiar with the process, here is a quick video from our YouTube channel on how to open up a ticket with Amazon.
  2. Screen Shot 2016-08-15 at 8.17.09 PMWhen contacting Amazon, choose the option to open a ticket about Fulfillment By Amazon, and then click FBA Issue. Yes, it’s redundant, but it’s how Amazon has things set up right now.
  3. Click on the Something Else button.
  4. Choose your method of communication. Personally, I like to use email because there is a written record of the communication, and I can communicate without being interrupted.
  5. Enter the ASIN in question for the reimbursement in the proper field.
  6. In the “Please Describe your Issue” field, write this:
    “I received a reimbursement for ASIN __________, but it was not a fair reimbursement amount. I was reimbursed $$10.54, when I should have been reimbursed $18.42. I have calculated the correct reimbursement number using my sales history (My average selling price is $24.99) as well as the current FBA sales prices (the current FBA average selling price is $24.76). Here is the math:
    $24.99 (my sales price) – $6.57 (applicable fees) = $18.42 (correct reimbursement amount.
    Would you please approve an additional reimbursement of $7.88 ($18.42 – $10.54 = $7.88)? I would really appreciate it. Thank you for your time.”
  7. Click Send and a new case will be opened.

Keep Calm Do the mathWhen you go to the trouble to show the Amazon representative that you’ve done the math and spell it out for them, they are much more likely to approve your additional reimbursement request than if you only complained about your reimbursement amount. You’ve basically done all the work for them and they don’t have much to argue with.

When you open up a new case for an additional reimbursement, someone who works for Amazon will review your case and will reply. When you get a reply, one of three things will happen:

  1. You will get the reimbursement that you deserve. (YAY!)
  2. You will be requested to provide more information such as a receipt or invoice of that item.
  3. You will get a form letter from an Amazon employee that probably didn’t read your entire message and is just responding with a “copy and paste” reply that basically states back Amazon’s current reimbursement policies. They will then close the case.

If Amazon asks for more information (like a receipt):

ReceiptsI don’t know why Amazon asks for a receipt or invoice in order to get a proper reimbursement of a lost or damaged item. It might be in case you never really sent Amazon the item, and Amazon says they lost it, but in reality you never sent it, so Amazon wants proof you actually purchased it to sell on Amazon. No matter the case, I have never sent Amazon a receipt in reply to this response. Here is how I reply:

“I’m not sure why you are asking for a receipt or invoice in order to determine the proper reimbursement amount for this item. The reimbursement amount is supposed to be calculated by looking at my sales history, as well as the current FBA selling prices.”

I would then copy and paste the math I provided earlier so that all the information is in one place for the Amazon rep to make a decision.

If your request for an additional reimbursement was declined and the case was closed:

escalate-300x2911If you didn’t get the additional reimbursement you expected, the next step is to re-open the case. When you re-open the case, be sure to ask that the case be “escalated” and for that Amazon rep to hand the case off to one of their supervisors. Be sure you use the word “escalate” because the Amazon employees know and understand that word and that you mean business. You can re-open the case and communicate something like this:

“Thank you for your response, but it did not solve the issue. I would like to escalate this case to your supervisor. Please have your supervisor read through our previous communications and reply to me at their earliest convenience. Thanks and have a great day.”

Usually when you escalate a case, your request will be forwarded to the Amazon rep’s supervisor who will more than likely approve your request.

Stickerline-elsa-let-it-goIf, after all this, Amazon still doesn’t reimburse you any more, then it’s time to let it go and move on with your business, but the majority of the time you will end up with an additional reimbursement.

For more information about Amazon’s FBA Lost and Damaged Inventory Reimbursement Policy, just click here.

Want more? Two fantastic resources to make sure you’re getting all the reimbursements you deserve are The Amazon Refund Guide (a do-it-yourself book for all things reimbursements) and AMZSuite (a really affordable service that does most of your reimbursement work for you). We have personally used both of these resources and found great success at getting reimbursements!

So how about you? This is how I handle unfair reimbursements, but do you have any more ideas on how to get the reimbursement amount you deserve? I’d love to hear from you in the comments below.

If I Had To Start My Amazon FBA Business Over Again With Only $500

Start FBA Over 500Who doesn’t love a do-over?

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:

AM-Pro-Sellers1. 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.

The Pro Merchant account is also necessary for other reasons that we’ll get into below.

175_InventoryLab2. 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.

Inventory Lab comes bundled with the Scoutify sourcing app, which I use for scanning inventory at retail stores, garage sales, and thrift shops. I prefer to use Scoutify rather than the Amazon Seller app mainly because Scoutify gives me direct access to sales rank and price history on CamelCamelCamel and Keepa, which is essential for me to a make a smart sourcing decision.

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.

41MNr5dy0HL3. 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.

41IWrVLa8yL4. 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.

s15. 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.

61h-B0szXtL._SL1280_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.)

81K1bfSxJ5L._SL1500_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.

FB-Genius9. 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!

UPS-Shipping-Labels-110. 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.

brownbox211. 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.

61sL7QYmSwL._SL1500_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:

  1. A Pro Merchant account with Amazon –FREE for first month ($40/month afterwards)
  2. Inventory Lab for listing and sourcing – FREE for first month ($49/month afterwards)
  3. Barcode scanner – $22
  4. DYMO LabelWriter 450 – $70 new, $40 used
  5. Scotty peelers – $6 for 3-pack
  6. Goo Gone – $4
  7. 3-inch tape gun – $13
  8. 3-inch tape – $13 for 4-pack
  9. Feedback Genius – FREE for first 2 months ($20/month afterwards)
  10. UPS self-adhesive labels – FREE from UPS.com
  11. Shipping boxes – FREE from grocery stores, friends, etc
  12. 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!