Tag Archives: Fears

Is There Still Room for New Amazon FBA Sellers?

One question I am consistently asked since launching fulltimefba.com back in 2013 is this… Is there still room for new Amazon FBA sellers?

Most people ask this question out of two fears they are experiencing:

  1. The fear of not finding enough profitable inventory to sell on Amazon.
  2. The fear of too many competitors who will tank prices so I’m never able to get a sale.

I totally get it. When you’re new at selling on Amazon (or even still in your first year), you experience the pains of being a newbie.

You might laugh at me, but I thought some similar thoughts back in 2011 when I first started selling on Amazon. I thought, “Will I be able to find enough inventory to sell, or will I waste my time sourcing for inventory that just isn’t there anymore? Will I actually be able to sell the inventory I buy, or will my competitors tank the price and steal my sales?

And that was back in 2011…

If you think you’re too late for the Amazon FBA Profit Party, then I’ve got some great news for you:

I totally believe that the profit potential of Amazon FBA is still in its infancy. That’s right… still at the beginning. If you get started now, then you’re still joining in on the ground floor of what’s possible with Amazon and FBA.

You might be wondering how I’m thinking this when the Amazon FBA program started over 11 years ago. That’s like ancient, right? Well, to help you see things in the right light, you need to have the correct perspective. In the rest of this blog post I’ll share with you the reasons I think there is plenty of room for new Amazon FBA sellers:

1. Amazon is taking over the world – and needs your help!

Over and over again, it seems as if Amazon consistently does something that changes everything. From launching an online bookstore in 1994, to moving beyond books in 1998, to making free 2-day delivery everyone’s expectation starting in 2005, to opening FBA warehouses to 3rd party sellers in 2006, and so much more (CreateSpace on-demand book printing, Kindle tablets and ebooks, Amazon Fresh, Amazon Echo, Merch on-demand T-shirt printing, and so much more.).

Over and over again, Amazon continues to revolutionize online shopping and the expectations we have a shoppers. The more Amazon expands, the more Amazon will need you and I to sell on the Amazon platform.

2. Buyers are only just now starting to buy more items online.

You might buy many items on Amazon throughout the year, but you’re not the average person. It would shock you how many people in the US still think that Amazon.com is just an online bookstore. I still come across many people who have no idea that Amazon sells clothes, shoes, or groceries. Here are some eye-opening stats for you:

Right now, 62% of Americans buy on Amazon at least once a month, with the amount of time between purchases decreasing every day. As we look toward the future, 67% of Millennials and 56% of Gen Xers prefer online shopping over in-store shopping; this leaves so much room for growth as more people start to buy on Amazon more often. Overall, Americans only spend about 36% of their monthly shopping budget online, and every year that number keeps getting bigger and bigger. Because more and more people are shopping online every day, Amazon is depending on 3rd party sellers (that’s you and me) to find the inventory to stock the FBA warehouses.

3. Without 3rd party sellers, Amazon would lose over 50% of their sales.

A huge benefit that only 3rd party sellers can bring to Amazon is the incredible amount of product selection and increase in customer choice. Third party sellers can find inventory to sell that Amazon can’t. This, combined with the fact that only 16% of manufacturers in the world sell their items directly on Amazon, means that 84% of manufacturers still don’t sell on Amazon – leaving a huge hole on Amazon that you and I can fill with inventory. In other words, our inventory sourcing efforts are vital to the continuation of Amazon’s success. In fact, if Amazon stopped 3rd party sellers from selling on Amazon, they would lose over half of their annual sales (which would equate to billions of dollars lost for Amazon).

4. Only recently did Amazon finally surpass Google as the starting point for online shoppers.

Before 2017, online shoppers would start on Google (or other search engines) in order to search for the items they wanted to buy online. Google could send these online shoppers almost anywhere… to Amazon, a specific brand’s website, eBay, a specific retail store, or to an unlimited number of possible store websites. Only just recently, starting in 2017, do a majority of online shoppers (over 50%) now start their online shopping experience on Amazon. This is huge for the future of Amazon and how much Amazon needs new sellers to find inventory to sell on Amazon.

5. Many Amazon sellers have no idea what they are doing, which can be to your benefit!

I can’t tell you how many times I see a listing on Amazon where there are 100 sellers, but only a few are actually competing for the sale. These other sellers are throwing their money away on storage fees for inventory they are not selling. If you take the right steps in your Amazon business, then you can set yourself up for long-term success. For info about how to start a successful Amazon FBA business from the beginning, then check out JumpStart Amazon.

Showrooming -the practice of visiting a store in order to examine a product before buying it online at a lower price.

6. Mobile sales are only now starting to generate momentum.

It’s amazing to see the growth of sales that are generating directly from their smartphones. The term showrooming (see image caption) wasn’t even a thing a few years ago, and now it’s a normal occurrence. In fact, over 50% of online shoppers use their smartphone to buy online… and over 60% use their tablets. These numbers are only going to increase the more people start to learn about shopping online via their smartphone and tablets.

Source: Business Insider (source link below)

7. Amazon keeps attracting more and more customers every day.

Here are just a few things Amazon does that almost every savvy online shopper has now come to expect: Amazon Prime free 2-day shipping, easy reordering, easy returns, and easy refunds. Why does Amazon do this? So that more and more people will come to Amazon to shop… and it’s working! I know my online shopping expectations have been influenced by Amazon. It’s annoying to me when I order something online elsewhere and it doesn’t arrive in 2 days. And that consistency by Amazon keeps me (and millions of others) coming back for more.

I’m not exaggerating when I say millions, because Amazon has over 300 million accounts. Back in 2015, 50 million people had a Prime account. In 2017, that number has grown to almost 70 million Prime members. Again, these numbers are growing every year. With more buyers, Amazon needs more sellers to stock the Amazon shelves with inventory.

Seriously, I could go on forever with even more reasons (see the source links at the end of this post for even more stats), but I hope by now you get my point. The growth of Amazon and their need for you to fill up their FBA warehouses with inventory is still at the very early stages.

If you start your Amazon FBA business now, I guarantee that in a few years, you’ll be so glad you started “way back in 2017.” There will seriously never be a better time to start.

If you’re ready to start your Amazon FBA business with a plan that will lead you toward long-term success, then I invite you to check out the JumpStart Amazon course.

In JumpStart Amazon, you will know exactly, step-by-step, how to build up a successful Amazon FBA business from scratch. From setting up your seller account to finding profitable inventory to knowing how to best use your profits, I’ll show you the proven strategies for how to start your Amazon FBA business off on the right foot.

After you experience JumpStart Amazon, you’ll be able to:

  • Understand multiple proven strategies to find profitable inventory that sells quickly on Amazon
  • Know the right steps that will help make your first Amazon paycheck a big one
  • Easily decipher the most misunderstood aspect of selling on Amazon
  • Recognize the right inventory items to sell and which ones you should avoid
  • Handle brand and category restrictions with ease so that you can sell even more products
  • Know the biggest problem with sourcing inventory (and how to overcome it)
  • Know the strategies to have your products sell more often than your competition.
  • and so much more!

So, now I’d love to hear from you. Are you excited about the huge growth potential of selling on Amazon? What fears do you still have about selling on Amazon? How have you tried to overcome these fears? What excites you most about selling on Amazon? Answer below in the comments.

Source Links: Invespcro, Bigcommerce, SellerLabs, BusinessInsider, SeekingAlpha.

Overcoming Your Fear of Handling Sales Tax

Fear of Sales TaxToday we have a guest post from Mark Faggiano. Mark is the founder and CEO of TaxJar. We hope you find the information as helpful as we have.

I get it. Sales tax can be confusing and intimidating. The rates change from location to location. The laws change from state to state. And don’t get me started on the legalese. What the heck is “nexus” anyway?

TJ_logo_color_office_pngAs the founder of TaxJar, I talk to eCommerce sellers of all experience levels every day. Over and over I’ve found that several common fears prevent sellers from tackling sales tax. These include:

1. Sales tax is governed at the state level – Sales tax laws are created at the state level, so there’s no central, overarching “IRS” for sales tax in the U.S. For this reason, one state might consider some items (like groceries or textbooks) taxable, while another might not. Or one state might want sellers to file their sales tax returns on the last day of the month while another will want to hear from that same seller on the 20th day of the month.  Dealing with multiple states’ laws can present a major challenge right out of the gate for eCommerce sellers.

targetstore2. Sales tax laws were written for brick-and-mortar businesses – Another reason sales tax can be so intimidating? The laws simply weren’t written with eCommerce sellers in mind. The language and thinking around many sales tax laws simply don’t apply.  For example, sometimes shipping charges aren’t taxable if a customer has the option to physically pick up a product at your location. This is, of course, impossible for Amazon sellers (among others). States are still interpreting their laws when it comes to online sellers.

3. There are a lot of rumors and misinformation out there – I demystify sales tax misconceptions every day. Common rumors include that online sellers don’t have to charge sales tax at all, or that Amazon takes care of all sales tax obligations if you use their sales tax collection service. Sales tax can seem much more complicated when you’re trying to untangle fact from fiction.

But fortunately…

gettting-startedGetting started is the hardest part – How many times have you dreaded a task like going to the gym or tackling a stack of laundry only to find that things are smooth sailing once you get started? Sales tax is the same way. Once you get started, it all clicks into place. Remember – states want you to collect sales tax from your buyers because it funds their budget items like roads and schools. And tools like TaxJar are here to help when you get stuck.

Now that I’ve talked about why sales tax is so intimidating, let’s demystify it together.

The 5 Basic Steps to Sales Tax Compliance

1. Determine your sales tax nexus states.

“Nexus” is Latin for a “tie” or “connection,” and sales tax nexus simply means that you have a tie or connection to a state that requires you to collect sales tax from buyers in that state. As I mentioned above, every state’s laws are different, but a few common factors generally create nexus: having a location or personnel in the state, attending a trade show in the state, or having other ties, such as a 3rd party affiliate or trade show presence, in a state.

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

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

sales-tax-permit2. Register for a sales tax permit in your nexus state(s).

Once you’ve determined your nexus states, your next step is to register for a sales tax permit in that state.

Don’t skip this step! Most states consider it unlawful to collect sales tax without a permit. (They’re suspicious, and afraid you’ll tell customers you’re collecting sales tax while really keeping that extra percentage of the sale in your pocket.)

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

When you register for your sales tax permit, the state will tell you how often and on what dates they want you to file a sales tax return.

tax3. Collect sales tax from your buyers.

Once your business is registered to collect sales tax in a state, your next step is to ensure you’re collecting sales tax from your buyers in that state. If you sell on multiple channels, be sure you’re collecting sales tax on all of your shopping carts.

Out of the most popular shopping carts, Amazon has one of the most sophisticated when it comes to sales tax settings. To use Amazon’s sales tax settings, you’ll need to be a Pro Seller and then tell Amazon in which states you’d like to collect. You can find step-by-step instructions for setting up your Amazon sales tax settings here.

tax_return14. Report how much sales tax you’ve collected.

When it comes time to file your sales tax return, your next step is to report how much sales tax you’ve collected from customers in each state.

Unfortunately this isn’t as simple as sending the states a single amount. The vast majority of states want you to break down how much sales tax you’ve collected by city, county and other special taxing district. In essence, they require you to help them distribute the funds collected to the right part of the state.

This is where sales tax automation can help. Tools like TaxJar will integrate all of the channels you sell on and give you all of your sales tax collected in return-ready reports. As your business grows more complex, automation takes sales tax off your plate.

Tax Return5. File your sales tax return(s).

Now that you’ve reported how much sales tax you owe, your final step is to file your sales tax return and remit payment to the state.

You have a few options here. You can take your sales tax report and file online, or you can let a sales tax automation service file your sales tax for you. Either way, be sure you file on time to avoid fine and penalties. Some states will even give you a sales tax discount for filing on time! That means you get to keep a small amount of the sales tax you collected in your pocket!

Also don’t forget to file every time you have a sales tax return due, even if you don’t owe any sales tax to the state. Some states will fine you or even revoke your license for forgetting to file.

And that’s it – you’ve successfully mastered sales tax!

I know this is a lot of information, but most sellers tell me that once you face the learning curve, handling sales tax will become just another routine (but not necessarily fun) part of your business – like counting inventory or recording expenses.

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

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

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

Overcoming Your Fear of Training Your Competition via Outsourcing

Fear of Training Your CompetitionWe all need help.

Especially when it comes to running an Amazon FBA business, we need help in order for our business to grow. Sure, there are days when I feel like no one can Tetris the contents of an FBA box quite as well as I can, but in reality my business has more potential to grow if I put down the tape gun and let someone help me.

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

There’s one task, however, that many Amazon sellers fear outsourcing more than all other tasks. Sourcing. The actual task of going out and scanning the aisles or the garage sales for inventory to resell.

Over and over we get this question when we tell people we’ve outsourced some aspects of our sourcing:

“Aren’t you afraid of training your competition?”

I can tell you emphatically that the answer is always NO. I don’t at all fear training a competitor. I’ll get into the reasons why I don’t have this fear in moment.

scrollAfter your business reaches a certain level of inventory and sales, it becomes harder and harder for one person to go out and buy enough inventory to maintain business at that level, much less grow beyond that level. It can become tiresome or even impossible to maintain that level of sourcing without becoming more than a one-man-show.

Sourcing is a more specialized skill than removing stickers or packing shipping boxes. Sourcing requires analyzing information and making decisions, and those decisions carry with them a certain amount of risk. Part of what makes each Amazon FBA seller able to excel in their business is their ability to make smart sourcing decisions.

Many sellers fear that if they teach this specialized skill to someone else in order to get help with their sourcing, they risk having that person take their newly acquired skills to go out and start their own competing Amazon business. Here are a few more questions we often get about training other people to source for us:

  • What if they see how much money you’re making at FBA and decide to quit working for you to start their own business?
  • What if they go to the stores in your area and buy all the good inventory for Amazon FBA before you can?
  • What if they get to all the garage sales in your town before you do?
  • What if they keep working for you, but they keep all the good inventory for themselves and only give you sub-par inventory for your business?

worry1We get it. Those are legitimate questions to ask and legitimate risks you are taking when you train someone else to do your sourcing for you. But we feel that the benefits far outweigh the minimal risks. We would rather have the help we need sourcing today than fear something that might or might not (and honestly, likely will not) happen tomorrow.

Here are the reasons we do not fear training our competition to source for us:

1. Not everyone wants to run their own business.

If you’ve been selling on Amazon for any amount of time, you know the time, effort, and money required to invest in running an Amazon business. The return on that investment can be great, but it still takes an upfront investment and ongoing effort to actually do the work of running the business. Not everyone wants to go through that effort of setting up an account, setting up an LLC, setting up programs like Inventory Lab, getting ungated in certain categories etc. Not everyone has the money to invest in a few tools and some inventory (we think it can be done for about $500 to get started) – or wants to spend their money that way. Some people really only want to work for someone else and not have to deal with the responsibilities and headache of being the one in charge. They just want to earn some extra money and be done with work for the day. Just because you train someone to source doesn’t mean that person automatically will want to become the boss.

Abundance_624_3512. We have an abundance mindset when it comes to finding Amazon FBA inventory.

This reason is even bigger for us than the first one is. We truly believe there is more inventory to be found than there are sellers on Amazon. We know for a fact that there is more inventory to be found in our geographic area than our own small business can handle purchasing. If we train someone to source for us and they decide to leave and start their own FBA business, we do not at all worry that we will run out of inventory in our area.

We live in the Fort Worth-Dallas area and belong to a Facebook group of local FBAers. That group has over 200 members. Think about that for a moment. That’s almost 200 people doing FBA in this metropolitan area. Our business has grown year over year since I began selling through FBA in 2011, so I know for a fact that the increasing number of sellers in Fort Worth or Dallas is not affecting my business. Each seller has their own business model, their own strengths at sourcing, their own personal preferences for categories on Amazon. If you send 5 resellers into the same store, it’s likely that all 5 of them would come out of the store with a different set of inventory.

I’m truly not worried about my business if I train someone to help me source and they decide to strike out on their own. There is an abundant amount of inventory in this geographic area, from online stores, and from wholesale sources. Whether you live in a large city or a small town, there are abundant sources for Amazon FBA inventory available today.

If you decide to train someone else to source for you, you only stand to gain from the help. Your business only stands to grow from the increase in inventory. But that other sourcer cannot replace you. No one can source like you. No one has your unique gifts and abilities at making decisions for your business. No one knows your own business like you do and your categories like you do.

If you train someone and they leave to become one more seller on Amazon, bless them in their endeavor and get back to your own business. You have just proven that you can train someone well enough to give them confidence to be independent. Get out there and train another person now.

3d-cover1-738x1024(If you’re ready to take the leap to train someone to source for you, we highly recommend Ryan Grant’s book Outsourcing Sourcing. We used this guide when we hired our first sourcing help and found it tremendously useful.)

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

Have you tried enlisting help in sourcing for Amazon FBA? Are you afraid of training your competition or do you have an abundance mindset? We would love to hear from you in the comments below.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Overcoming Your Fear of Going Deep on Inventory Items

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

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

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

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

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

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

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

#1 How much capital do I have to invest?

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

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

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

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

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

#3 How many sellers are on this item?

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

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

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

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

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

#5 What is my source for this item?

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

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

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

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

Overcoming Your Fear of Creating Listings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Overcoming Your Fear of Selling Oversize or Add-on Items

Raise your hand if this has happened to you before (don’t worry, none of us can see you sitting there at your computer).

You’re out doing some sourcing, and you scan an item with your Amazon Seller app. The rank is good, and the return on investment (ROI) is decent. You buy the item (or even multiples of the item), bring home your find, and start to list and pack your next shipment. But when you list the item, it’s assigned to a separate fulfillment center from the rest of your shipment. You double check, and sure enough — that great item turns out to be oversized. There goes your ROI, you think to yourself. All the profits will be eaten up in shipping and fees.

Or this…

add-on-1-haznYou find a smaller sized item that you can buy for next to nothing. You’ve got access to a large number of these items, so it would be possible to make profits off this item over and over again. There’s just one liiiiiittle problem, when you look a bit closer at the Amazon product page:  The lowest offer is for $9.49, and the item is an add-on (meaning it cannot be purchased separately, but must be included in a total order of $25 or more shipped from Amazon). Will the item really sell? Is it worth it to invest in a product that is an Amazon add-on item?

Today’s installment of our blog series “Overcoming Your Amazon FBA Fears” will cover these two situations and their implications: selling oversize and add-on items. If handled incorrectly, these big or small items can cause problems for your shipments or lower your ROI. But if given the correct forethought, these types of items can mean big profits for your FBA business.

Let’s dive right in and address these fears!

1197095556709556181Leomarc_caution_overload.svg.hiFear of Selling Oversize Items: I’m afraid that selling oversize items will eat into my profits — the FBA fees are too high, and the shipping costs can be outrageous.

Truth: There are huge profits to be made in selling oversize items! If you’re doing the right research and handling your shipments correctly, you can minimize your fees and shipping costs and make a ton of money back on your investment. Even better, because a lot of inexperienced sellers have this same fear, your competition will be reduced, and you’ll get more sales for taking the time to learn how to best handle oversize items.

We love to sell oversize items. This year alone we’ve sold dozens of a particular oversize item that we purchased for $3-$7 a piece, and we’re selling it for $40-$50. We end up averaging $20-$28 of profit per item — and who doesn’t like that kind of ROI?

mmIcDKXuAPVMZ4_wCJEaEnQWe’ve also sold two of an item that measures 21″L x 44″W x 28″H. It required some extra work and about an hour of time apiece to make boxes big enough to ship them to Amazon, but we sold them quickly and made $450 profit from the two of them. That is $450 in our pockets after we took out our cost for buying the items, the Amazon fees, and the cost of shipping them to FBA. You tell me — is $450 profit worth that two hours of time? For us, the answer was yes.

So how do you make sure you’re getting big profits out of these big oversize items? The key is making sure you’re being strategic at two points in your process: when you’re scanning and when you’re putting your shipment together.

Profit Bandit AppFor scanning, you must make sure you’re not depending on the Amazon Seller app for finding oversize items. The free Amazon Seller app does not tell you if an item is oversize; nor can you tell from just looking at the product page. But if you’re using a third party scanning app like Profit Bandit, Scoutify, or ScanPower, you will see a note stating the item is oversize and you will see the extra FBA fees included in the profit calculations. Just like with any other item in these apps, you can see right away if you will be able to get a good ROI. No need to fear!

When you’re putting your shipment together, the best way to reduce your shipping costs is to ship multiple oversize items at one time. Shipping one oversize item individually can be a big drain on your profits because that item will be sent to a separate fulfillment center. Shipping several oversize items together gives you a better overall shipping rate and spreads the cost across several items. If we’re putting together a shipment that only has one oversize item, we leave that item off the shipment and hold it until we’ve got a few more to send in. Since we love sourcing oversize products, it usually doesn’t take us very long to find more oversize items to add to the next shipment.

Fear of Selling Add-on Items: I’m afraid add-on items won’t sell. I’m afraid they won’t bring me enough profits to make it worth the investment.

add-on-itemTruth: Honestly, we agree that the profits don’t make it worth the investment to sell add-ons. We don’t intentionally buy items to sell as add-ons, but only sell items this way when another seller drops the price below $10 and we have no choice in it becoming an add-on. In this situation, we just make the best of things and do what we can to sell our items.

There is a way, however, to make big money off small items: sell them as multi-packs or as bundles. We found a grocery item at a liquidation store that was small, light weight, and inexpensive — all the criteria of add-on items. We created a 12-pack of it and sold dozens (this was before Amazon decided that only the manufacturer is allowed to create multi-packs). Since creating a multi-pack listing is no longer an option, you can instead search on Amazon for one that has already been created. Take a few extra seconds to enter the text title of your item into the search field instead of scanning the bar code UPC — you may find that a profitable multi-pack already exists, just under a different UPC. Be sure to include out of stock items in your search so as not to miss those.

If a multi-pack is not an option, then creating bundles might be your answer. Creating bundles takes a little more time and some creativity, but the payoff can be huge. If you’re hesitant about creating a listing for a bundle, be sure to check the blog for an upcoming post on Overcoming Your Fear of Creating Listings.

Today we want to challenge you to do some sourcing outside your normal comfort zone. If you’re sourcing today, try to look at the bigger items or smaller items that you normally skip. See if you can find a profitable multi-pack or an oversize item with oversized ROI. Let us know in the comments what you find!

Overcoming Your Fear of Selling Used Items on Amazon

Selling Used ItemsI’ve heard it many times before, both online and in person:

“Selling new items on Amazon is easier.”
“Selling new items on Amazon is much safer than selling used items.”
“Does Amazon even allow me to sell used items?” 
“Selling used items on Amazon is a pain. It’s not worth my time.” 
“Isn’t it easier to get suspended on Amazon for selling used items?

It surprises me just how many people are afraid to sell used items on Amazon. It’s money that people are leaving on the table. Now, I admit that the majority of what I sell on Amazon is in new condition, but we make good money from items that are no longer in new condition. Used items remain a staple of my online selling strategy. There is so much money that can be made selling used items, but as with anything profitable, you want to be sure you are doing it the right way. 

fear-300x260Today, my goal is to erase your fears of selling used items. I want to replace those fears with truth, equip you with the knowledge you need to move forward, and challenge you to apply what you’ve learned. Soon enough, you’ll have the confidence you need to sell used items on Amazon without worry — and increase your bottom line as well. 

Important note: Amazon’s guidelines state that used items must be in working order and include all their parts. Unlike eBay where you can tell the buyer in your description if a piece is missing, you should never list a used item on Amazon and note a missing piece in the condition notes.

Here are my responses to several of the myths of selling used items on Amazon:

MYTH – Selling used items on Amazon is not worth my time. New items are just easier.
TRUTH – While processing new items to sell might not take up that much time, it doesn’t mean that selling used items is a waste of time. Determining if it’s a waste of time all depends on which used items you’re selling. If it’s a collectible (used) board game, then the ROI of the board game needs to be high enough in order for you to take the time to BoardGameBook Minimake sure all of the pieces are present. If I bought a used board game for $2 and can sell it as collectible for $40, then it makes sense to me to spend a few minutes double checking that all the pieces are there. Used books only require an extra few seconds of your time as all you need to do is flip through the book and note if there are any highlights, notes, folded pages, etc., in the condition notes. I’ve purchased boxes of used books for a few dollars per box and ended up making hundreds of dollars from that same box. Used items, as long as they are complete and in working condition, can be a valuable addition to your sourcing strategy. 

MYTH – Amazon won’t let me sell used items.
TRUTH – In almost every category, Amazon will allow you to sell used items. Be sure to check the Amazon Seller Guidelines, but there are only a few categories where you are not allowed to sell used items. The main categories that used items are never allowed is Baby, Shoes, Clothing, and Grocery (used groceries? gross!). Used items are also not allowed in Toys & Games, but they do allow “used” items to be sold as “collectible.” Amazon sees collectible toys as toys that are no longer able to be bought at most retail locations… and are therefore, collectible. Again, as long as the item is complete and in working condition, you can sell it in almost any category as used.  

MYTH – Other than books, people don’t like to buy used items.
TRUTH – People buy used items all the time. I’ve sold many toys and games in collectible condition that were obviously opened and used before. Some people want to buy a used item because it will cost them less. When it comes to toys, some parents know their kid will probably destroy the toy in no time, and they would rather pay less to get them the toy they will not open-lego-moulding-box-kittake good care of. Others know that buying something as “used, like new” is basically getting a new item in an open box. If the item is hard to find, the rank good, and the profit potential great, then selling a used item on Amazon is something you should consider. We have sold used Lego sets for hundreds of dollars a set. When the sets are retired by Lego, they become hard to find, and collectors are willing to pay $300 for a complete used set rather than pay $600 for a new one. (Bonus BOLO: look for complete used Harry Potter Lego sets, and you can make a ton of money. Find an incomplete set? You can often sell the individual minifigs for a tidy profit as well.)

MYTH – Selling new items on Amazon is just safer than selling used. If I sell used items, that will probably increase my chances of getting my seller account suspended.
TRUTH – As long as your used items are complete and in working condition, then you will likely not be increasing your chances of Suspension Prevention 1getting your Amazon seller account suspended. Cynthia Stine, author of Suspension Prevention: Get Reinstated and Protect Your Amazon Seller Account, says that one of the main reasons Amazon sellers get suspended is that they try to sell used items as new. She says that from the hundreds of people she has helped reinstate their seller account privileges, none of them were because of an item listed as used. Selling used items, unless they are broken or incomplete, will not increase your chances of getting your seller account suspended. 

The bottom line is this: If you’re avoiding used items, then you’re leaving a lot of money on the table. 

Your Homework – Look around your house for items that are used, complete, and still have the original box. Think used board games, used kitchen appliances, used DVDs, used video games, etc. Scan these items and see at what price other Amazon sellers are selling that item in used condition. If you no longer want these items, then do an experiment and send a few to Amazon. Be sure that the item is complete (including instructions, if applicable), and be sure that you list the condition as detailed as you can in the item description. 

Now, I’d love to hear from you. Do you sell used items? If not, what’s stopping you? What used items do you try to stay away from? Do you have any “home run” stories you’d like to share about selling a used item? I’d love to hear from you, so comment below.