Tag Archives: FBA

Improve the Customer Experience: Think Like an Amazon Customer

One thing Amazon wants to be known for is having the most customer-centric online marketplace in the world. Amazon truly takes “the customer is always right” to the extreme – just look at their super lenient return policy if you need an example. They want happy customers. Customers who will come back again and again. Customers who trust Amazon. Customers who leave raving reviews. Customers who tell all their friends how much they love Amazon.

Amazon wants the customer experience on their website to be the best in the world.

And that’s a phrase you as an Amazon FBA seller should remember and ingrain into your psyche: the customer experience. If you can begin to focus on how you as a seller can contribute to the customer experience on Amazon, you can begin to increase your profits and decrease your returns as an FBA seller.

The easiest way to make this mindset shift is to think like an Amazon customer. Shift away from always thinking like an Amazon seller…shift toward thinking like an Amazon customer.

Shift away from thinking only about your bottom line as a seller…shift toward thinking about how the customer will react when they open your product after their delivery arrives.

One tendency many of us resellers have developed over time is frugality. We are always on the lookout for a good deal, and we’re willing to overlook some minor flaws in order to save a few bucks. When customers go to Amazon, however, to purchase new items, they are looking for good deals but not at the expense of quality. They don’t want to receive an item with dinged up packaging or crushed corners. They want their merchandise to arrive in pristine, gift-quality condition.

As resellers, we absolutely cannot send in inventory to FBA warehouses that will cause customers to lose trust in Amazon or have an unpleasant customer experience. We must look for ways to positively impact the customer experience by providing quality merchandise. And when we give customers a great experience, it can increase our profits by giving us more sales, more product reviews, and more positive feedback.

Here’s how your contribution to the customer experience can increase your profits:

  • Thinking like an Amazon customer opens your eyes to see more items to source. Too often when we’re sourcing we pass up quality inventory because we think, “No one would ever buy that!” But if you’re thinking like an Amazon customer, your mind is open to the possibility that even the oddest item could be something customers are searching for. Scan everything (we use the Scoutify app), and don’t just disqualify items because you personally would never be interested in buying them. Pay attention to sales ranks and sales rank history, and you’ll begin to learn trends in what Amazon customers are buying.
  • Thinking like an Amazon customer helps you find higher ROI items. ROI is return on investment – and in general we as Amazon sellers want to get the biggest ROI possible. As you’re scanning items and keeping an open mind about what customers are looking for, you can start finding items that other sellers would overlook, but that have great ROI potential! Often we make assumptions that items aren’t worth anything, but when we do the work of 1) thinking like a customer on the search for these types of items, 2) scanning anything that fits the description of what an Amazon customer would be looking for, and 3) paying attention to sales rank and how it works in different categories, then we can start finding items that stand out and have higher ROI than if we just follow what every other seller is doing and chase after the latest BOLO.

Now let’s look at the other side of this coin of thinking like an Amazon customer. Here’s how you can begin to decrease your return rate:

  • Think like an Amazon customer while you’re sourcing. When you’re sourcing for inventory, the biggest way you can positively impact your return rate is to stop sourcing borderline items. It may be a hard habit to break, but for the sake of your seller account, I highly recommend you not buy items that are at all questionable as to their condition – and that includes packaging. No more dinged tins, crushed corners, broken plastic, or missing shoebox lids. The reseller thinks, “They’re just going to throw the box away. What difference does it make?” But the customer thinks, “What’s the deal? Why is this packaging all messed up? Is something wrong with the item also? Guess I should return it.” While you’re standing there in the clearance aisle sourcing, stop looking at the dollar signs on your scanning app for a moment and think about how your customer would feel opening an Amazon box and finding this particular item. Would they be pleased with their purchase? Or would they be disappointed because of how it’s presented? There are plenty of high quality inventory finds out there for you to source, so if you think the customer will be disappointed at all with the item in your hand, put that item down and keep moving down the aisle. Your return rate will thank you.
  • Think like an Amazon customer while you’re listing. When you’re listing your items for sale on Amazon, always round down on the condition. You’re not going to be making it out of the store with borderline items anymore, right? But sometimes inventory items make it home with you and you find out too late that there’s a defect in the packaging or something else about the item that makes it not in new condition. In these cases, always round down on the condition. Do not list them as new. List them as like new or very good.

Think like an Amazon customer. If someone buys a book in like new or very good condition, but they open it up and see that it’s way better than they imagined, they’re going to be pleased (and possibly leave you positive seller feedback). On the other hand, if they order a new book but open it up to find it has shelf wear of any kind, that book might be on the fast track to your return pile (and your seller feedback might take a hit). Always round down on the condition, not up.

It’s not worth it to make 5 extra dollars on a sale but risk the return or the impact on your seller account – it’s not even worth it to make $50 extra! Amazon sellers must stop putting their bottom line ahead of the customer experience.

It may seem counterintuitive to think like an Amazon customer, but really, try it! Next time you’re out sourcing or back at the computer listing, start thinking about your products and how a customer would respond to these products if they receive them in an Amazon shipment. It may sound crazy, but thinking this way will begin to increase your profits and decrease your returns.

Have you found some ways to think like an Amazon customer? If so, we’d love to hear from you in the comments below.

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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 this year. 

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 this year 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.

How to Increase Your Amazon FBA ASP (Average Selling Price)

Today’s post is a follow-up to the previous article we posted about why you should consider trying to raise your ASP, or average selling price. If you haven’t read that first article yet, you might want to refer to it before diving into this one.

For a quick review, your ASP is the average amount of money you make in sales per item you sell on Amazon. Raising your ASP has some great benefits to add to your Amazon FBA business.

But HOW do you go about raising your ASP?

It might seem easier said than done, but the reality is you can take a few steps to impact your ASP and give your Amazon FBA profits a boost. Here are our suggestions for increasing your ASP:

1. Set a minimum selling price parameter.

A while back, we made the decision in our Amazon FBA business to stop sourcing items that are selling for under $10-$12 on Amazon. Even if we could make 100% ROI on an item that is selling for $8 or $9, we decided to stop sourcing those items and focus our sourcing on higher priced items. When we eliminated the low-priced items from our sourcing strategy, we had more money to focus on buying higher-priced items – partly because we could add up the saved sourcing money to go towards higher-priced items and partly because we were saving money in fees and prep costs when we raised our ASP and lowered our overall number of units sold.

The $10-$12 range is what we chose for our minimum, but for other people that amount might be different. This type of minimum sales price might affect a lot of booksellers or others who (like us in years past) are dependent on high volumes of low-priced toy sales. Overall, though, we have found that eliminating those super low-priced items from our inventory has been the biggest practical step towards raising our ASP.

2. Consider selling bundles or multi-packs.

Multi-packs are multiples of the same item for sale on Amazon. Bundles are a group of items with a similar use or theme for sale on Amazon.

If you follow the Amazon guidelines, you can create your own bundles for sale and increase your ASP per unit sold over the ASP if you sold all of those individual items from your bundle separately instead. If you’re interested in learning more about selling bundles on Amazon, I recommend The Book of Bundles.

For multi-packs, you can no longer create a multi-pack if it doesn’t already exist on Amazon, but you can list a multi-pack of items if it’s already available in the Amazon catalog. Like bundles, multi-packs offer a great way to raise your ASP per unit sold over the ASP if you sold each of those items from your multi-pack separately instead.

Once again, you also save money in fees if you sell items in a bundle or multi-pack instead of individually. For example, if you sell 5 individual units of a $10 grocery item, you would make $50 in sales, but you would have to pay 5 sets of FBA fees. If you sold it as a multi-pack of 5 for $50, you would still make $50 in sales, but you would only have one round of FBA fees to worry about.

3. Source higher-priced items.

It might seem obvious, but sometimes we need to get back to the basics of the topic we’re trying to learn – if you want to raise your ASP, you need to have higher-priced items in your inventory. You can’t sell high-priced items if you don’t have high-priced items available for Amazon customers to buy.

The easiest way we found for selling higher-priced items in our FBA business was to add shoes to our inventory. Our ASP in the Shoes category is about $70, and our overall ASP across all categories combined has risen to $47 now that shoes are a main staple in our Amazon inventory.

When we talk to other sellers about adding shoes to their Amazon inventory, we often get asked, “Isn’t Shoes a restricted category? Isn’t it hard to get ungated?” And the answer is YES Shoes is a gated category, but NO it’s not hard to get ungated in Shoes right now. If you want more info about how to get ungated in the Shoes category, you can click here to download our free guide for the shoe approval process. If you want to read more on our blog about selling shoes on Amazon, you can click here for the blog series.

Shoes aren’t the only higher-priced items you can source. Other sellers like to sell electronics to raise their ASP. Some sellers go with high-priced toys to raise their ASP. Whichever category you like to focus on, there are ways to start sourcing higher-priced items as a step towards raising your overall ASP.

Those are the top 3 ways that we have impacted our ASP and raised it to a point where we’ve seen an increase in our disbursements and a significant boost in our Amazon FBA business. Do you have any other tips or tricks you would add to this list? Please leave us a comment below!

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?

Easy Way to Track your Mileage for Retail Arbitrage Trips

Am I the only reseller out there who has ever done a great day of retail arbitrage and forgotten to write down my mileage?

I am? Really? Hmmm. I thought surely I wasn’t the only one who’s done this before.

OK, thanks for finally admitting it. You’re just like me…you don’t always remember to track the tiny details of your Amazon FBA business without a little assistance.

Tracking your business mileage may seem like an inconsequential part of your Amazon business, but in reality those miles can really add up over the course of a year. You don’t want to miss out on a single mile if at all possible! Your CPA or tax preparer is going to want to see those miles at the end of the year, and you need a way to smoothly record all of your business trips.

What qualifies as a business trip for an Amazon FBA seller? Any trip in your vehicle where you are adding miles for a 100% business purpose, including but not limited to:

  • Driving from store to store for retail arbitrage
  • Driving to the UPS store, FedEx, post office, or wherever you need to drop off packages for shipment
  • Driving to Staples or wherever to pick up office supplies
  • Driving to The Home Depot, Lowe’s, or wherever to pick up shipping boxes
  • Driving anywhere to do errands or tasks related to your Amazon business

Over time you can save a lot of money in your business by writing off the mileage on your tax return that comes from these business trips. Always speak with a CPA or tax professional to make sure that the types of trips you are recording qualify to be written off.

In the past I’ve used a number of different solutions for recording my mileage, some of which worked better than others. I started off by carrying a little notebook and pen in my car to write my details down for start mileage, end mileage, destination, and purpose of the trip – but who knows how many times I forgot to write it down over the course of the year! I even left a sticky note on my dashboard for years with the word “MILEAGE” in all caps, in an attempt to remind myself to record my trips. If I didn’t manage to remember, I would have to go to Google Maps and try to recreate my trip and estimate my mileage.

Then I progressed to using a couple of different smart phone apps to help me record mileage, and they were just OK. They were more convenient than trying to jot things down in a notebook, but they still didn’t help me solve my main problem: remembering to record my miles!

Finally I found the MileIQ app, and I landed on an automatic solution that saves me time in recording my mileage and (more importantly!) saves me from having to remember to record it.

The way the MileIQ app works is by running in the background as you drive to different destinations throughout the course of your everyday life. The app tracks each trip you make in a vehicle, logs it, and learns how to categorize it.

The app knows when you start and stop a trip, and all you have to do is review your trips at the end of the day and tell the app whether it was a business or personal trip – all with one swipe classification. Swipe one direction for personal, the other direction for business. After a while, the app will start to learn which destinations you usually classify as business, and it will automatically classify those trips for you.

Now, I’m sure you’re wondering, just like I did at first, what happens if you’re riding in someone else’s car? Does MileIQ know the difference? No, it doesn’t know the difference and will still track the mileage even if you’re not in your own vehicle, but you can easily cancel those trips during your review of your mileage. You can also choose to turn off tracking if you want to… just remember to turn it back on when you’re back in your own vehicle.

Another handy feature of MileIQ is that at the end of each month you receive an email from them with your stats for the month. At the end of the year you can quickly download a report with your mileage numbers for the year, and all you need to do is pass this report along to your CPA and presto – you’ve efficiently tracked your business mileage without having to remind yourself to log any numbers!

I’ve been using the app for almost a year now, and the app hasn’t been a battery hog for my iPhone. It’s always running in the background, but it doesn’t affect my phone’s usage in any way.

If you go through this link, MileIQ offers a free trial of 40 drives per month and a 20% discount off an annual subscription if you decide to upgrade. The subscription comes out to a few dollars a month, but it could add up to hundreds of dollars saved by logging miles you would otherwise forget.

The MileIQ app has been extremely helpful for my business, and I hope you find it helpful too!

Any other MileIQ users out there? Share with us in the comments if you love the app as much as we do.

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.

Selling Shoes on Amazon FBA – Should You Do It?

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 on Amazon.

Since Rebecca has such a wealth of knowledge about sourcing and selling shoes, I decided to sit down with her and record a Q&A interview video focused on the biggest lessons we learned when we first started selling shoes on Amazon.

In the video below, you’ll learn:

  • Why we added shoes to our Amazon business model
  • How adding shoes impacted our Amazon FBA business
  • How shoes helped our ASP increase substantially
  • What the competition is like in the Shoes category
  • Why brand restrictions in shoes don’t have to be a problem for FBA sellers
  • How selling shoes has changed our lives
  • Why we choose to source shoes via OA instead of RA
  • How sales ranks of shoes are different than most other categories
  • … and more!

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 blog post or video.

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.

Money Saving Post-Long-Term Storage Fee Strategy

As you’re probably aware, twice a year (February 15th and August 15th) Amazon charges a long term storage fee (LTSF) for all items that have been stored in a FBA warehouse for 6 months or longer. This fee can be very high as it’s currently $11.25 per cubic foot for the 6-month fee and $22.50 per cubic foot for the 12-month fee.

With Amazon charging this big fee twice a year for any item in their warehouse over six months, it’s a good strategy to possibly wait until after long-term storage fees are calculated on February 15 to send in items you think might take longer than six months to sell (or sell out if you have multiples). Here’s my thinking on why:

When Amazon calculates long-term storage fees on February 15 and August 15, they look at all of your inventory and charge you a fee for anything that’s been in an Amazon warehouse over six months. But here’s what many people forget: If you send your inventory to Amazon right after February 15, then when Amazon calculates long-term storage fees on August 15, they will only charge you the fee for any items that were stored in Amazon since before February 15 (the long-term storage fee calculation date). Here’s an example:

Scenario 1 – Sending inventory to Amazon right before February 15:

Send an item to Amazon FBA on February 10. When August 15 comes around, if you have not sold that item, then you’ll be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for over six months (6 months and 5 days to be exact).

 Scenario 2 – Sending inventory to Amazon right after February 15:

Send an item to Amazon FBA on February 17. When August 15 comes around, if you have not sold that item, then you won’t be charged a six-month long-term storage fee since you have been storing that item at an Amazon warehouse for under six months (5 months and 29 days to be exact). You won’t be charged a six-month long-term storage fee until February 15 of the following year.

In summary, the few weeks after Amazon calculates long-term storage fees are the absolute best days to send your potentially slow moving inventory (long-tail items) to Amazon, since you’ll be buying more time to sell your items without incurring long-term storage fees.

Keep this strategy in mind as you source for inventory throughout the year. During the summer, if you come across some items  you think might take longer than six months to sell, or if you find multiple items you think might not sell out in six months, then consider holding on to them and don’t send them to Amazon until after August 15. That way, you’ll be buying even more time before the long-term storage fees are calculated. You could even merchant fulfill these items you are storing at home before you send them in after the long-term storage fees are accessed.

Of course, this strategy is not for everyone. Hopefully, your sourcing skills have gotten so good that most of your inventory sells within the first few months of hitting the FBA warehouses. If you’re looking to learn more about how to know exactly how long it might take for an item to sell on Amazon, be sure to watch my free tutorials on how to understand Keepa, and how to understand CamelCamelCamel or check out my book/video course, The Reseller’s Guide to How to Keepa Camel: Using Amazon Sales History to Make Smart Sourcing Decisions.

Now, I’d love to hear from you. Do you have any strategies that help you gain more time to sell your inventory without long-term storage fees? Do you have some helpful tips on quickly selling your inventory so that long-term storage fees aren’t even an issue?

The Biggest Mistakes I Made With My First Wholesale Order

About 6 months ago, my very first wholesale order was delivered to my house… Of course, I had to take a picture. We worked as fast as we could to prep and send this huge wholesale order to Amazon. As soon as our wholesale shipment arrived at Amazon, we started to see some sales… but then things started to go terribly wrong. Sales started to slow and prices began to tank.

To make a long story short, I ended up actually losing money on my first wholesale order. Sure, I was able to get almost all of the capital back, but overall it was a massive failure.

If you know me, then you know that I’m a “glass half full” kind of guy, and I was able to turn this epic failure into a learning experience. Since mistakes were made, I thought I’d share with you the 6 biggest mistakes I made in my first wholesale order (and the last mistake was the biggest) so that you can set yourself up for successful future wholesale orders.

1. Ordered too many items

When ordering products from wholesalers, the items you buy usually come in cases, so buying only one of an item is usually not a possibility. I knew I was going to need to buy multiples, but I must have had my head in the clouds because I bought way too many items.  I honestly should have known better.

Any time you try something new, it’s usually best not to jump headfirst into the deep end… but instead to wade in slowly until you get used to the water. In my first wholesale order, I went way too deep and ended up with plenty of inventory that took forever to sell. Some of them I may even be paying long-term storage fees for soon.

2. Spent too much money

I mean, waaaaaaaaaay too much money. When you’re dealing with a wholesale supplier, they’ll usually have what is called a Minimum Opening Order amount. Different wholesalers will have different minimum amounts that they’ll need for your first order. They have these so the wholesale supplier knows that the buyer is a serious buyer and will be worth the time and energy to work with.

For my first wholesale purchase, the Minimum Opening Order was around $350, but I think I got caught up in the excitement and totally blew past that minimum. I ended up tying up a lot of my sourcing capital that could have gone to my retail or online arbitrage sourcing.

When you make your first wholesale order, be sure to not go too far above the minimum. Not only do you not want to use too much of your sourcing capital on a method you’re not yet confident in, but you’ll also want to make sure the items you order meet your expectations. Once you find success in your opening wholesale order, then you can go back and get more.

3. Ordered time-sensitive goods

I ordered items that were focused around a specific season, and for the wholesale order to be successful, I needed these items to sell quickly. It turned out they didn’t all sell in time and when the season passed, I had to drastically lower my prices in order to get the sales and to avoid any additional monthly or upcoming long-term storage fees.

It’s probably best to order items that should sell well all year long when it comes to your first wholesale order. I ended up putting all of my eggs into one basket hoping that all these items would sell by the end of that season, and I ended up paying for it.

4. Didn’t Negotiate

I’ve negotiated deals to get a better price most of my life. I can do it at garage sales, thrift stores, and at retail stores with store managers. Most of the time I’ll say, “If I buy all these items, will you give me a discount since I’m buying so many?” Most of the time I can get a small percentage off of the overall total. That one question has saved me thousands of dollars… but for some reason, I just never thought about it with this order.

Now, don’t get me wrong, I understand trying to negotiate a better deal on the first order isn’t always the best way to introduce yourself to a supplier, but remember mistake number 1 and 2 from above? I ordered way too many items and spent way too much money. If I was ordering the minimum, I would not have asked for a discount, but since my first order was a great deal higher, I think I could have negotiated a better deal.

5. Made faulty assumptions

I made two very incorrect assumptions that cost me both time and money. My first assumption was assuming that my shipping was going to be free. I guess with all of my online purchases in the past, I assumed an order this big would qualify me for free shipping. I had no basis for this assumption, and when I saw the final shipping costs, it ended up eating into the profits I had calculated.

I also assumed that the items I was buying would not come poly-bagged. My first wholesale order had many items that were going to need poly-bagging in order to send to Amazon. I ordered a ton of poly-bags and suffocation warning labels so that when the items arrived, I could bag them up and ship them to Amazon quickly. As it turned out, the items were sent already poly-bagged and had a printed suffocation warning label on them. So now, I have what seems to be a lifetime supply of poly-bags in my office.

When you are making your first order, don’t be afraid (or too proud) to ask your supplier questions. Even if you think the questions are elementary, go ahead and ask so you are able to make knowledgable decisions.

6. Didn’t realize difference between a manufacturer and a distributor

This ended up being my biggest mistake. If I could have known this and applied that knowledge to my wholesale sourcing strategy, then most of the other mistakes from above could have been avoided.

When you purchase from a manufacturer, you’re buying directly from the maker of the product. You’ll be able to buy your inventory with the highest possible discounts. You might have to go a little deeper when buying from a manufacturer, but knowing you’re getting the best deals usually outweighs how deep you might have to go.

On the other hand, when you purchase form a wholesale distributor, you’re working with a middle-man who needs to take his cut of the profits. The distributor buys directly from the manufacturer and then marks up the inventory so that he can make a profit. Then the distributor offers up these wholesale items to us with smaller minimum orders than the manufacturer requires.

As you may have guessed by now, my first wholesale order was purchased from a distributor. When I got my huge wholesale order processed and sent to Amazon, I immediately began to see some sales come in, but after a short time the competition started to come in (who probably got their inventory from the manufacturer at better prices) and the prices tanked quickly.

In the end, I was able to recoup almost all of my capital back from that first wholesale order. I know some people will think that it was a waste of time and money, but I don’t see it that way at all. While the order ended up not meeting my expectations, it did provide many valuable lessons. I have taken these lessons and applied them to future orders and have seen great success.

Aside from my first wholesale order, I simply love sourcing and creating wholesale orders.
I’ve found some great companies to work with and have reordered many items over and over again. I’m most thankful to my wholesale mentors Dan and Eric from The Wholesale Formula. After taking three different courses on selling wholesale items on Amazon and not finding the success I was looking for, finally the teachings from The Wholesale Formula just plain worked!

Right now, the the free video series from The Wholesale Formula is closed, but it will open again sometime in the near future. If you want to be notified when the free video series opens again, be sure to click here and join the notification list.

 

Do you have any worries about making a wholesale order mistake? Have you ever placed a wholesale order before? Did you make any mistakes? What did you learn from your mistakes? I’d love to hear from you in the comments.

How to Find Profitable Wholesale Accounts For Amazon FBA

In my previous blog post I gave you my top 9 reasons why you should consider adding wholesale sourcing to your Amazon FBA business. You may have read that post and started thinking, “Great, Stephen, I’m convinced. I definitely want to try out wholesale sourcing, make my business more streamlined, and protect my seller account. Now where do I find profitable wholesale suppliers?

That type of question is where we end up any time we want to make a change in our business. “OK, I see my sticking points, and I’m ready to press on to get beyond them. But how do I take that next step?

With finding wholesale suppliers, your possibilities are really only limited by your creativity. Ultimately, you want to find unique wholesale accounts where you can develop a great business relationship with your supplier and provide an awesome product to Amazon customers.

Let’s discuss the top four ways you can make that connection and find profitable wholesale accounts:

1. Trade Shows

All throughout the year you can find a trade show going on in areas all across the U.S. (Or in other countries! Don’t limit yourself geographically) and in all niches of products. Think trade shows for toys, bridal products, baby items, kitchen gadgets, home and garden, crafts, you name it.

Beyond those niche trade shows, you can also find larger trade shows and markets where you can find products across all categories presented in one show. The biggest trade show out there is called ASD, and it happens in Las Vegas every March and August.

If you live in a big city, chances are there are trade shows and markets happening nearby throughout the year. I recommend doing a Google search for trade shows in your town or somewhere you can travel to, and check out what’s coming up in the months ahead. Most of these types of shows are free to enter, and you can walk around the exhibits, talk with the exhibitors, and see what types of products are available at the different booths.

One thing you should keep in mind is that two different types of exhibitors set up booths at trade shows: manufacturers and distributors. A manufacturer would be a direct connection to the source of the product, without any middle man. If you get a wholesale account with a manufacturer, you will likely need to make purchases in larger amounts, but you will get a better price per unit. With a distributor, you are usually dealing with a middle man. You can make smaller purchases, but you will pay more per unit.

2. Trade Show Websites

Even if you can’t attend a particular trade show, you can benefit from signing up for the show and doing research on the exhibitors. On the trade show website you can get access to the vendor list and their contact info, which you can then use to call or email for more information on the products they offer.

Whether you attend in person or make contact through the trade show website, it’s all about making connections with the vendors, asking good questions, and developing a relationship that could lead to a mutually beneficial arrangement. You will need to have a resale certificate to open a wholesale account once you have made that connection, so be sure you have your certificate on hand before starting the process to open an account.

If you are interested in more details about how to maximize the opportunities on trade show websites, check out the book Trade Show No Show by Jim Peterson and Jim Cockrum.

3. Product Packaging

This may seem overly simplistic, but finding wholesale sources really doesn’t have to be that complicated!

Pretty much every product you can imagine is going to have the manufacturer’s name and contact info printed right on the product’s packaging. If you can only find the name or part of the contact info, use Google to find the rest of the info, and you’re one step closer to making contact and finding out how to open a wholesale account.

If you have an awesome retail find that you would love to sell more of, check out the product packaging for that contact info and see if you could start buying that product at wholesale prices.

One strategy you can use to get an edge on your competition is to think of products that are made locally to your town or area. What is your area known for? Food products can be especially profitable, if there’s a local favorite that can’t be found in other parts of the country. Find these types of products on your local shelves, get the manufacturer’s info off the packaging, and start making contact.

4. Amazon Best Sellers

Again, it doesn’t have to be overly complicated to find great ideas for wholesale sources. You can research the popular items in your favorite category by checking out the Top 100 sellers and looking up their manufacturer’s info online.

To make it even easier, we have created a quick link, fulltimefba.com/bestsellers, to take you right to the Amazon best sellers page, where you can drill down from the main Amazon categories. Once you find a product you are interested in researching, click to go to the product page, and you should see the name of the manufacturer listed below the product title. You can then do a Google search for their contact info and start the process of opening a wholesale account.

Note: I do not recommend opening wholesale accounts with companies when Amazon is selling the product. Even if you think you can get a great wholesale price, Amazon is likely getting an even greater volume discount, and it’s too hard to compete. You should also check out the sales history on CamelCamelCamel and Keepa to see if Amazon is out of stock now, but might have been on the listing in the past. There are plenty of other products out there, so move on to ones where Amazon isn’t currently on the listing or doesn’t seem like they’ll come back in stock in the future.

There you have it, my top 4 ways to find products where you can open a wholesale account. The key to getting those accounts is to just make contact. Get the door open, start a conversation, ask for a catalog, ask what you need to do to apply for an account – it really doesn’t have to be more complicated than that.

Last week, I shared with you a free video that showed you how to find amazing wholesale opportunities with a strategy unlike what anyone else is teaching. Well, today I have another free video about wholesale.

In today’s free wholesale training video, my buddies Dan and Eric will show you:

– How to recognize awesome potential wholesale products
– How to avoid purchasing bad wholesale products and wasting $100’s or even $1000’s
– How one good account could make you $1000 per month (and how to find accounts like that)
– The top 3 factors for great wholesale products to sell on Amazon
– The free tool you can use to make better wholesale decisions
– Why the number of Amazon competitors is a meaningless number (and what number you really should be focusing on instead)
– And so much more!

To access today’s free video right now, all you need to do is click here.

Remember, these free videos are only going to be accessible for a limited time, so you need to click here and watch today.

Do you have other tried-and-true places you like to look for profitable wholesale sources? If you would like to add to my list, we would love to hear from you in the comments!

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.