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.
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.
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?
First off, if you can see this… thank you for taking time out of your busy schedule to read today’s blog post. I know Q4 is crazy busy, and I hope my blog posts can help you take action t0 save time and increase your profits.
As we all know, the holiday selling season is in full bloom, and I hope you’ve been able to stock the Amazon warehouses with as much quality inventory as you possibly can. It seems pretty obvious to say, but you can’t sell a lot of items if you don’t have a lot of items in stock. To help you continue to make this month your best selling month ever, here are my top ten tips for finishing strong in 2016:
1. Reprice holiday related items. It’s crunch time. Log into Seller Central and check all of your holiday related items in your inventory. Do a keyword search for words like “holiday” and “Christmas” and make sure that all of your holiday items are competitively priced. While some of these seasonal items actually sell throughout the year, there might still be some in stock that you need to reprice. As always, double check with CamelCamelCamel and Keepa to see what prices and sales you could possibly expect. If you have multiples of higher ranked holiday items, it’s probably a good time to lower your prices to get the sale. You don’t want to hold on to these items another full year… especially with long term stores fees coming up in February.
2. The week before Christmas is a Prime spending frenzy! For items sold through FBA, hold on to your prices that you think will sell for Christmas. It’s not rare to see an item going for $15 on December 14th to be selling for $25 on December 19th. This is especially true for items where you’re the only FBA seller or one of a few FBA sellers. On the other hand, if the competition for sales is fierce, you might want to lower your price just a little to sell out before the newbie Amazon sellers freak out and lower their prices too far.
3. Be prepared for an increase in returns. Naturally, with an increase in sales, there is also an increase in returns. Don’t let this make you anxious or worried. It’s a natural part of selling. As you might already know, Amazon automatically refunds the FBA customer the full purchase price when the buyer requests to return an item. If the buyer fails to return the item to Amazon, then Amazon is supposed to automatically reimburse you for the item after 45 days have passed, but many times Amazon “forgets” and needs to be reminded. For more about how to make sure returned items are actually returned to Amazon, check out this popular blog post.
4. Be prepared for an increase in negative and/or positive feedback. If you’re keeping to best business practices, then you’ll most likely get lots of new positive (4 or 5) feedback, but you’ll also get the occasional negative (1 or 2) or neutral (3) feedback score. If the feedback is actually about the FBA process (“my item came 2 days late”) or a product review (“this coffee maker is hard to use”), then it’s up to you to do whatever you can to get the feedback removed. Your feedback score is a huge aspect of your seller metrics. The better seller metrics you have, the more opportunities you’ll have to earn the buy box for your products. To read more about how I handle feedback issues (and how I keep a 100% feedback score), then check out this blog post.
5. Look at sales ranks differently. As you already know, the sales velocity in December shoots through the roof! This should make you look at sales rank differently than during the rest of the year. Here is an example: A toy with a sales rank of 10,000 in July might sell 25 times a week… while a toy with a rank of 10,000 in December might sell 50 times a day. This is important to know when you are out sourcing for inventory. Know that after Christmas and into January, many of these sales ranks will start to return to their normal patterns (slower sales), and it’s up to you to recalibrate your mind to what you need to expect when you’re out sourcing. Again, look at CamelCamelCamel and Keepa to see what prices and sales velocity to expect in January.
6. Be careful with sale prices at retail chain stores. Retail stores are realizing that they need to do whatever it takes to sell their stuff as soon as possible. Often, this means some outrageous clearance sales. But be careful, the items you’re finding clearanced at large national chains might be the same items hundreds of other resellers are finding. You don’t want to be slow moving on these sales. If you decide to buy, you need to get those items to Amazon as fast as possible… and I wouldn’t recommend going too deep. It’s possible that Amazon is about to be flooded with these items from other resellers sourcing at the same sales in their town. Buy fast, prep fast, and ship fast so it can sell fast.
7. Profit from selling items Merchant Fulfilled. We all love selling via FBA, but this week still provides a nice money making opportunity if you are willing to do a little more work. Selling via Merchant Fulfilled can still bring about some nice profits this week for items that buyers need to buy today. The best items to sell MF are those that both Amazon and FBA sellers have sold out of, are backordered, ones that are “Currently Unavailable” on their Amazon product page, and ones with a low rank that you don’t want to risk the extra time it takes to travel to a fulfillment center.
8. Keep sourcing for post-Christmas buyers. On the days after Christmas and well into January, many people have brand new Amazon gift cards burning a hole in their pockets. They head on over to Amazon and look for items to spend these gift cards on, and you want to be sure you have what they want waiting for them. Not only do gift card buyers show up, but so do the people who didn’t get what they wanted for Christmas. They know what they want, and since they didn’t get it, they decide to give themselves the gift they really want. Again, you want to be sure you have what they want when they go shopping for themselves.
9. Buy Christmas-themed items at huge discounts. The week before, and right after Christmas, all of the Christmas related items go on sale at drastically reduced prices. This is a great time for you to stock up for your Amazon inventory. Like I’ve said before, seasonal items sell both in and out of season. I’ve seen Christmas ornaments sell in May, candy canes sell in March, and holiday DVDs sell in August. The stuff sells year round, but especially in July as people have “Christmas in July” parties. So, now might be a good time to buy holiday decor at 75% – 90% off. Again (I might be sounding like a broken record by now), check CamelCamelCamel and Keepa to see what prices and sales velocity to expect throughout the year.
10. Look towards the new year. Why am I talking about the new year in December? I honestly believe that if you wait until the first of January to start thinking about the new year, then you’re already behind in the game and are at a disadvantage. Imagine someone showing up for a marathon without doing any training beforehand. The runner would most likely quit before they even pass the 5 mile marker. Don’t be that guy. When January 1 arrives, we all begin a 365 day marathon, and I want to be sure you are ready for the journey. One great way is to grab my book, The Reseller’s Guide to a Year in FBA: A Month by Month Guide to a Profitable Amazon Business. This resource will help you know exactly what to do and what to avoid for each month of the year.
How about you? What strategies are you implementing to finish strong in 2016? I’d love to hear your ideas, so comment below.
We all know the old saying, “Don’t put all your eggs in one basket.” If you drop the basket, the basket spills, or Amazon suspends your basket (wait, what?) you risk losing all of your eggs.
Spread those eggs out in a few different baskets, and you protect yourself from a number of unforeseen circumstances. One of the baskets can be larger than the others, but you should still have multiple places to keep your precious eggs.
Of course we’re not really talking about baskets and eggs today; we’re talking about how we spend our time and money on our business ventures. This blog is about using Amazon FBA to work part-time hours and make a full-time income. So, if we’re only working part-time hours to make a full-time income, what do we do with the rest of our time? Well, we put that time (and some of our business’ financial capital) into other business ventures to make more income on top of our Amazon FBA income.
Perhaps the most complementary “basket” to keep on the side of our Amazon FBA business is selling on eBay. Many of us who run an e-commerce business started out selling on eBay before we got into Amazon, but there may be those of you out there who started selling on Amazon FBA first. Today we want to share with you the reasons why it’s important to keep an active eBay selling account – or to start one if you’ve never sold on eBay.
Some items are restricted on Amazon, but they can still be profitable to sell on eBay. You might not be ungated in certain categories on Amazon, or you might not be approved to sell items from certain brand manufacturers. Some manufacturers might only restrict a certain product line within their brand (think Disney Frozen or Star Wars Episode VII). Also, you never know when an item will suddenly become restricted on Amazon after you already have it in stock at an FBA warehouse. In each of these cases, do the research and see if you can sell the item for a profit on eBay instead.
Sometimes we receive online arbitrage (OA) items that are damaged in shipment, and it’s easier to sell them on eBay than deal with returning to online store. We do a significant portion of our FBA sourcing online, which means we receive a large number of shipments throughout each week. It’s inevitable that a small percentage of those will be damaged in shipment. If the item can easily be returned to a brick-and-mortar store in our area, we’ll consider returning it. If it’s an online-only store or one we don’t have in our area, we sometimes sell the damaged item on eBay with thorough condition notes and pictures for full disclosure, rather than dealing with the hassle of calling to arrange for return shipping, an exchange, or refund.
Sometimes we have items returned from Amazon FBA sales that cannot be listed again on Amazon, but we can still sell it on eBay.If an item is returned with a damaged box or with wear-and-tear that keeps us from relisting it in new, used, or collectible condition on Amazon, we can easily list it on eBay with thorough condition notes and pictures for full disclosure of any defects, missing parts, or damage to the packaging. This has been especially useful as we’ve transitioned to selling more in the shoes and clothing categories.
Some items require detailed descriptions and multiple pictures because of their rarity or because they are missing parts; these types of listings belong on eBay, not Amazon.If an item is an antique or collectible, we sell it on eBay. If an item is missing parts or has a part that doesn’t work, we sell it on eBay. If for any other reason an item needs a detailed description of its condition or photos of the actual item showing its condition, we sell it on eBay. We’ve found that eBay buyers are more accustomed to reading the entire description and looking at all the photos so they know the condition of what they’re buying. Amazon buyers usually do not read the condition notes as thoroughly, and you’re more likely to have an Amazon buyer complain that you didn’t disclose an item’s condition (even though you did disclose it thoroughly!) than an eBay buyer would.
Sometimes we sell unique, one-off items that we don’t want to create an Amazon listing for. We’ve found certain one-off items have a much better market on eBay than Amazon, and we would rather create a one-time eBay listing than try to create an Amazon product page and keep our fingers crossed that a buyer finds it. These one-off items might include individual board game pieces, Lego minifigures, collectible coins, and sports memorabilia.
Some items sell well through multi-channel fulfillment. We don’t have much experience with multi-channel fulfillment yet, but it’s an area that we are hoping to learn in the near future. Whether you create your own individual listings on eBay or use a listing service, you can send items to an Amazon FBA warehouse, list them on both Amazon and eBay, and see which platform brings you the sale first.
If your Amazon FBA account becomes suspended, you can transition to selling on eBay more easily if you already have an account. If you’re making a full-time income from Amazon FBA, perhaps the biggest reason you should keep an eBay seller account active and in good standing is so that you have a platform ready to go to keep getting sales if for some reason your Amazon account is suspended. Your Amazon account can be suspended, rightly or wrongly, for any number of reasons, and sometimes it can take weeks or months to get it reinstated. You must (repeat, must) have a back-up plan in place before you experience account suspension, so that you and your family don’t suffer unnecessarily from a lack of income while you go through the reinstatement process. Having an active eBay account with good feedback and good metrics will allow you to continue selling online if your Amazon account is suspended.
To read more about protecting your Amazon account from suspensions we highly recommend the book Suspension Preventionby CynthiaStine. I know if we ever got suspended from Amazon Cynthia and her reinstatement program would be the very the first place I’d reach out to.
Now, if you’re just getting started on Amazon FBA and you’ve never sold on eBay, we recommend waiting a while before you rush out to get an eBay seller account. We firmly believe that you should FOCUS while you’re learning. FOCUS = follow one course until successful. Learn Amazon FBA first, get some sales under your belt, start to feel confident in what you’re doing with FBA, and then look into starting an eBay seller account.
As a general rule, we prefer the convenience and ease of sourcing items to sell through Amazon FBA. But if for any of the above reasons we find ourselves with inventory that we can’t sell on Amazon, it’s reassuring to know that we can open up the eBay app, check completed listings for profitability, and do what it takes to list the inventory on eBay instead of Amazon.
Do you sell on eBay? Are there other types of items you would rather sell on eBay than on Amazon? Let us know in the comments!
When Amazon loses or damages one of your inventory items, it is their policy to either 1) find a replacement for your lost/damaged inventory, or 2) reimburse you the replacement value of your lost inventory (less any applicable FBA and selling on Amazon fees, of course).
This is how most people imagine this reimbursement policy being lived out in real life:
“You find a great item to resell, price it competitively at $24.99, and send it to an Amazon FBA warehouse. Amazon accidentally drops and breaks your item, so they now owe you a reimbursement. Amazon takes your $24.99 selling price, takes out the fees as if you had sold the item, and then reimburses you $18.42.”
Unfortunately, this is not how many Amazon reimbursements work out. Did you know that when Amazon reimburses you for lost or damaged items, they have specific rules they are supposed to follow when coming up with the amount they are to reimburse you? It might surprise you to know that Amazon sometimes (not all the time) fails to follow their own reimbursement rules.
Here are the set of factors Amazon is supposed to consider when calculating the reimbursement amount:
Your sales history – Is this an item you sell often, and what is the price you usually sell it for?
The current average FBA selling price – What is the average of the most recent (no number is given) sales prices for that item.
Other factors (Amazon doesn’t explain what these “other” factors are).
If Amazon doesn’t have enough information to establish a reasonable value for an item, then the replacement value is determined based on a default replacement value from the table pictured to the right.
Here’s the deal… I have never ever seen a reimbursement that has followed the above table, so in my experience, Amazon comes up with their own reimbursement amounts based on something other than this table, something a bit more subjective.
In reality, this is how Amazon’s reimbursement policy is lived out more times than not:
“You find a great item to resell, price it competitively at $24.99, and send it to an Amazon FBA warehouse. Amazon accidentally drops and breaks your item, so they now owe you a reimbursement. Amazon takes your $24.99 selling price, and somehow decides to reimburse you only $10.54.”
Did you notice that? If Amazon took your FBA selling price, and took out the correct fees, then they should have reimbursed you $18.42, not $10.54. What’s going on? The truth is, I’m not sure what’s going on, but I do know what to do to get the reimbursement you think you deserve.
How to know if you received a fair reimbursement:
When you get a reimbursement, do some quick research.
Research Part 1:
Take the ASIN and put it in the Amazon.com search bar and find the product page.
Click on the link to view the current FBA offers.
Take 3-5 of the current lowest FBA sales prices and find an average. This number will be your current FBA average selling price.
Input the current FBA average selling price (that you calculated above) on the Item Price line under the Amazon Fulfillment column.
Click the yellow Calculate button.
Write down two numbers: the Cost (Amazon fees) and the Margin Impact (your profits after fees)
Research Part 3:
Repeat Research Part 2, but instead of the current FBA average selling price, use your original selling price you had priced for that item.
Compare your Margin Impact number of the current FBA average selling price (found in Research Part 1) with your reimbursement amount. Also, compare your Margin Impact with your original selling price with the actual reimbursement amount.
If the difference is big, then it’s time to open up a ticket with Amazon and request an additional reimbursement (more on that in a minute).
If the difference is small, then just let it go and move on with your business. Opening up a ticket with Amazon and dealing with getting a higher reimbursement amount can take some time. So, for most cases, it’s not worth your time to fight a reimbursement that is only a few dollars difference. Value your time and only fight a low reimbursement when you think it’s worth the time to dispute it.
When contacting Amazon, choose the option to open a ticket about Fulfillment By Amazon, and then click FBA Issue. Yes, it’s redundant, but it’s how Amazon has things set up right now.
Click on the Something Else button.
Choose your method of communication. Personally, I like to use email because there is a written record of the communication, and I can communicate without being interrupted.
Enter the ASIN in question for the reimbursement in the proper field.
In the “Please Describe your Issue” field, write this: “I received a reimbursement for ASIN __________, but it was not a fair reimbursement amount. I was reimbursed $$10.54, when I should have been reimbursed $18.42. I have calculated the correct reimbursement number using my sales history (My average selling price is $24.99) as well as the current FBA sales prices (the current FBA average selling price is $24.76). Here is the math: $24.99 (my sales price) – $6.57 (applicable fees) = $18.42 (correct reimbursement amount. Would you please approve an additional reimbursement of $7.88 ($18.42 – $10.54 = $7.88)? I would really appreciate it. Thank you for your time.”
Click Send and a new case will be opened.
When you go to the trouble to show the Amazon representative that you’ve done the math and spell it out for them, they are much more likely to approve your additional reimbursement request than if you only complained about your reimbursement amount. You’ve basically done all the work for them and they don’t have much to argue with.
When you open up a new case for an additional reimbursement, someone who works for Amazon will review your case and will reply. When you get a reply, one of three things will happen:
You will get the reimbursement that you deserve. (YAY!)
You will be requested to provide more information such as a receipt or invoice of that item.
You will get a form letter from an Amazon employee that probably didn’t read your entire message and is just responding with a “copy and paste” reply that basically states back Amazon’s current reimbursement policies. They will then close the case.
If Amazon asks for more information (like a receipt):
I don’t know why Amazon asks for a receipt or invoice in order to get a proper reimbursement of a lost or damaged item. It might be in case you never really sent Amazon the item, and Amazon says they lost it, but in reality you never sent it, so Amazon wants proof you actually purchased it to sell on Amazon. No matter the case, I have never sent Amazon a receipt in reply to this response. Here is how I reply:
“I’m not sure why you are asking for a receipt or invoice in order to determine the proper reimbursement amount for this item. The reimbursement amount is supposed to be calculated by looking at my sales history, as well as the current FBA selling prices.”
I would then copy and paste the math I provided earlier so that all the information is in one place for the Amazon rep to make a decision.
If your request for an additional reimbursement was declined and the case was closed:
If you didn’t get the additional reimbursement you expected, the next step is to re-open the case. When you re-open the case, be sure to ask that the case be “escalated” and for that Amazon rep to hand the case off to one of their supervisors. Be sure you use the word “escalate” because the Amazon employees know and understand that word and that you mean business. You can re-open the case and communicate something like this:
“Thank you for your response, but it did not solve the issue. I would like to escalate this case to your supervisor. Please have your supervisor read through our previous communications and reply to me at their earliest convenience. Thanks and have a great day.”
Usually when you escalate a case, your request will be forwarded to the Amazon rep’s supervisor who will more than likely approve your request.
If, after all this, Amazon still doesn’t reimburse you any more, then it’s time to let it go and move on with your business, but the majority of the time you will end up with an additional reimbursement.
For more information about Amazon’s FBA Lost and Damaged Inventory Reimbursement Policy, just click here.
Want more? Two fantastic resources to make sure you’re getting all the reimbursements you deserve are The Amazon Refund Guide (a do-it-yourself book for all things reimbursements) and AMZSuite (a really affordable service that does most of your reimbursement work for you). We have personally used both of these resources and found great success at getting reimbursements!
So how about you? This is how I handle unfair reimbursements, but do you have any more ideas on how to get the reimbursement amount you deserve? I’d love to hear from you in the comments below.
Are you dragging your feet in starting your Amazon FBA business? This post is for you.
Have you already started your Amazon FBA business, but you’re tempted to quit? This post is also for you.
Many contingencies and what-ifs might be plaguing your mind right now when it comes to thinking about building a successful Amazon business, but we want to help fill your mind with TRUTH, not fear – and we want to help you stay the course in building your business, even when the times get tough.
It’s easy when you first hear about the opportunity of earning money through selling via Amazon FBA to get excited and want to learn more. We can start making plans to start a business. We can start talking about what it would be like to have a business. We can start thinking about how we would use all that money we’ll make from our business. But what we really need to do is start the business!
Today we’re going to discuss 4 fears of getting started in Amazon FBA and how you can conquer those fears with the truth. If you’ve already started FBA, going back over these 4 truths will help you refresh your memory about how to keep up your progress in selling online.
FEAR #1: I don’t know enough to start my own Amazon FBA business.
TRUTH #1: You can always learn! And there are plenty of places to learn – some places for a fee and some really great places to even learn for free. Don’t let your lack of knowledge become an excuse for inactivity.
The best place to get a basic understanding of what you need to know for starting an Amazon FBA business is right there within the Amazon guidelines. Every seller must be responsible to read and apply the guidelines for him or herself.
If you’re wanting to learn the big picture about how to sell on Amazon FBA, we encourage you to read Chris Green’s book Arbitrage. For less than $10 you can get your hands on a brand-new copy of this wealth of information.
For a step-by-step video course on how to sell on Amazon FBA, we recommend Amazon Boot Camp by The Selling Family.
If you’re looking for information on taxes as related to selling on Amazon, check out the awesome services of TaxJar.
And as always, you can get tons of information for free here at the Full-Time FBA blog (subscribe to the newsletter for some free PDFs!) and on our YouTube channel. We also have a Facebook group where you can search the archived posts or ask questions.
FEAR #2: I don’t have any inventory to start an Amazon FBA business.
TRUTH #2: There are great places to find inventory all around you – you just need to start scanning barcodes! (We like to use Scoutify for our scanning app because it comes packaged with Inventory Lab for listing and accounting.)
Our favorite places to look for low-cost FBA inventory are
That last one is our favorite place to find inventory when we don’t know where else to look. Look on your bookshelves for books you haven’t gotten around to reading in years. Look through your kitchen cabinets for a gadget you got last year for Christmas but never even opened. Look for old board games that have no missing pieces, but you just never play them any more. All of these items could be potential profits on Amazon FBA.
FEAR #3: I don’t have enough money to start an Amazon FBA business.
TRUTH #3: Yes, it does take some capital to get started with a business.But unlike many businesses that require a great deal of investment up front, you can get started with Amazon FBA with a relatively small amount of capital. In fact, we have a YouTube video that shows how you could potentially start FBA with as little as $500 (and $300+ of that money would go towards inventory!).
If you’re looking for items around your house, at garage sales, or in thrift stores, you can buy inventory for less than a dollar and potentially sell it for $10, $20, $30 or more. The potential return on investment (ROI) for these types of items gives you a lot of momentum when you’re just getting started.
If you are truly strapped for cash and want to start FBA, we recommend saving up a few hundred dollars first. Some people work a part-time job for a few months in order to save up some capital, and others have a garage sale of things around the house to make some money to invest in FBA.
We do not recommend using credit cards or taking out loans to start FBA. There is too much risk involved in learning the business to run up debt in the process. Instead, focus on finding low-cost, high-ROI items and start your business slowly. You’ll be surprised at how quickly you learn and how quickly you can turn your profits into a snowball of disbursements from Amazon!
FEAR #4: I’m just not sure I can do this. Do I have what it takes to run my own business?
TRUTH #4: Maybe you’ve tried out other ventures in the past that haven’t turned out so well, and you’re afraid to experience the same kind of results. The fear of failure is holding you back. This fear is valid and real. But it can be overcome!
You have to disconnect the event of failing from you as a person. You may have failed in the past, but you are not a failure. My dad likes to emphasize this truth to me in a quote from Zig Ziglar: Failure is an event, not a person.
For all of us, there will be times that we fail. No exceptions. This applies to everyone. But you can’t take your failures personally. If you do, that’s where your business will start to break down (or never get off the ground!).
Instead, we learn from our failures. We leverage our mistakes into educational experiences that can’t be gained for any amount of tuition at a business school.
When we’re starting out at any new venture, we’re like a new baby learning to walk. The baby may fall down a few times (OK, a lot of times), but never does that baby decide, “You know what, this walking thing is too hard. I just can’t get it. I think I’ll crawl the rest of my life.” No, the baby gets up, tries again, and eventually starts walking. Then running. Then skipping. The same can be true for any of us in our Amazon FBA business.
Do you have any other fears that are holding you back from starting Amazon FBA? Do you ever face the temptation to quit your FBA business? Let’s talk in the comments!
Today’s post will cover the basics of why you should consider using OA as a sourcing strategy for your Amazon FBA business. In our own business, we started out slowly adding OA as a strategy, but we have reached a level now where our online arbitrage sourcing equals or surpasses our retail arbitrage (RA) sourcing.
Now that we’ve seen the benefits of doing OA, we want to share with you a summary of our thoughts on the strategy. Don’t worry, the next post later this week will cover the ways we’ve learned to deal with the setbacks you might encounter while doing OA. As with most things in life and business, OA has its pros and cons, and we want to equip you to enjoy the positives and correctly handle with the negatives.
8 Benefits of Adding Online Arbitrage as a Sourcing Strategy
1. OA saves time. When we do online arbitrage as opposed to retail arbitrage, we don’t have to spend time driving from location to location looking for inventory to purchase, nor do we have to spend time standing in line to check out. Plus OA can be done with the help of time-saving Google Chrome extensions that make the process go even more smoothly. Time is the one resource we can never get back once it’s spent, so we do what we can to save it whenever possible.
2. OA saves wear and tear on our vehicles. I don’t know about you, but we’ve put tens of thousands of miles on our vehicles over the past couple of years from doing RA. Of course, those miles are deductible when it comes to filing our taxes, but I still would rather not have to replace my vehicle so quickly. Once Rebecca started doing mostly OA last year, the number of miles she was putting on her car for business purposes dwindled down to almost nothing.
3. OA saves wear and tear on our relationships. Because OA saves so much time compared to RA (see #1), we’re left with more time to spend with our family. When I’m gone from 7 am to 7 pm to pick up a big RA haul, I just don’t have as much time to spend with my wife and kids. Rebecca and I still enjoy an occasional RA adventure, and we plan to do some more baseball traveltage. But on a regular basis, I would much rather be at home to have lunch with my wife and see my kids after school.
4. Online stores are open for business 24/7. Some brick-and-mortar stores don’t open until 10am and then close at 7pm. Some aren’t open on Sunday mornings. This can be a huge limitation for folks trying to do RA when they’re not at their full-time job. With OA, anytime of the day or night that we feel like shopping, we can work at sourcing for FBA.
5. OA allows us to source at stores not located in our geographic area. We don’t have a Kmart in the Fort Worth area, but I can shop online at Kmart if I choose. Same goes for many other retail stores across the U.S. In RA I’m limited by the number of stores within a certain radius from my home.
6. OA provides free shipping boxes for our Amazon FBA shipments. When we receive an OA shipment from a retail store, we’re often able to ship the items out to the Amazon warehouse in the same box. We can save time and money by not having to make trips to Home Depot or Lowe’s to buy shipping boxes.
7. OA provides free dunnage for our Amazon FBA shipments. Dunnage is the stuff that goes in the empty spaces of a shipping box you’re sending to the FBA warehouse. We can reuse the air pillows, paper, and even small cardboard boxes that come in OA shipments as dunnage in our Amazon shipments, saving time and money from having to get that dunnage elsewhere.
8. OA allows you to save money by shopping through cash back websites. We typically shop through Ebates and Swagbucks to get cash back on our online purchases, but there are other sites that have similar programs. Your purchases cost the same amount by going through their link to shop, but you get a percentage back on every purchase. The percentage varies by store and can change from time to time, so do your due diligence to figure out how to get the best percentage. Another bonus with Ebates and Swagbucks is that they both have a Google Chrome extension you can activate with one click after you’ve already started shopping, rather than having to navigate to the cash back website before you start filling up your online cart.
I hope we’ve been able to show you some reasons why OA can be a great strategy to implement in your Amazon FBA business. I know it’s not for everyone — some people much prefer the thrill of the hunt in thrifting or RA, and I get that. In our next post we’ll cover a few of the negative aspects of OA and how we deal with them in our business.
One last thing…. if you’re interested in a good review of an OA tool called Tactical Arbitrage, check out this great review from my buddy Nate McCallister.
Are they any benefits to OA we left off this list? Let us know your thoughts in the comments!
If you’re going to do online arbitrage (OA) in your Amazon FBA business, you want to have the right tools to make the process as efficient as possible. We’ve spent a lot of time discussing subscription lists for OA deals in the past couple of blog posts, and today we want to spend some time sharing with you another tool that’s helped us build up the OA side of our FBA business: extensions for the Google Chrome web browser.
It may be possible to use a web browser other than Chrome to do efficient OA purchasing, but I’m not aware of it. When I first read Chris Green’s comprehensive book Online Arbitrage, I hadn’t even downloaded Chrome on my MacBook yet. I was a Safari girl all the way. But now, I use Chrome on a daily basis for my OA purchases, and I get annoyed if I find myself trying to shop efficiently from Safari. It’s just not as easy to do without my favorite Chrome extensions.
So without further ado, here is my list of my 9 favorite Google Chrome extensions for Online Arbitrage:
Hands down, my most used Chrome extension. I look at the data from my Keepa extension first thing every time I pull up a potential OA buy. The extension puts price tracking data right on the Amazon product page, below the product title and picture, and lets me see at a glance whether Amazon is in or out of stock on an item, as well as sales rank and price history for Amazon and third party sellers. I seriously get annoyed now when I pull up a product page on another browser and don’t immediately see my Keepa data. I’m completely spoiled by this extension.
This one runs a close second place to the Keepa extension. When I’m on an Amazon product page, the Camelizer allows me to quickly pull up an abridged version of that product’s data from CamelCamelCamel. I can see the price history for Amazon and third party sellers at a glance. If I want to see a specific time frame of price history or see the sales rank history, there’s a quick link to go to the product’s full page on CamelCamelCamel. Simply put, I cannot make solid OA buying decisions without looking at the data from CCC first. The Camelizer extension saves me valuable time opening tabs in the browser and copying and pasting the ASIN. Every second and every click counts!
Another way to save steps opening tabs is by using the Amazon Assistant. When you’re looking at a product on a retail store’s website, click on the Amazon Assistant extension to bring up potential matches for the product on the Amazon website. Easy peasy. (Notice I said potential matches. As always, do your due diligence to make sure items are a true match.)
Cash back for online shopping is one of the huge perks of doing OA. The Ebates extension makes it super easy to remember to get cash back on your OA purchases. When I first got started doing OA, I tried to be rebellious and just do it without all the extensions. Why, why, why? I was always forgetting to go through my cash back websites first, and I was leaving money on the table by not getting a percentage back. With the Ebates extension, when I first start my shopping session on a retail store website, I click the button at the top of the browser to activate my Ebates account and get cash back without having to navigate to a separate website first. So helpful for forgetful old me.
This one works the same way as the Ebates extension, but for cash back in the form of Swagbucks. Some retail stores (Walmart and Disney Store, for instance) tend to give a higher percentage back if you go through Swagbucks than if you go through Ebates for your purchase. The percentages can change from day to day, so check the information that pops up at the top of your browser window before you choose which one to activate for your purchase.
The Honey extension works by automating the process of applying promotional codes and coupons to your online purchases. You could Google to find those codes and manually input them to see if they’ll apply to your purchase…or you could click the Honey extension before you check out and let Honey do the work for you. I’ve saved tons of money and tons of time by letting Honey search and try codes for me.
Whether you’re on an Amazon product page or a retail store website, Priceblink will attempt to find a better price on the item you’re looking at. It’s a good practice to always glance at Priceblink and see if you could be making your OA purchase for less money at another website.
This one is the only paid extension I have in my list, but at this point I couldn’t meet my OA spending goals without it. If you’re just getting started, by all means learn the ropes of OA with the free extensions and build up enough sales to justify paying for a monthly subscription to an extension like OAXray. But once you’re ready to start spending more of your sourcing budget per month on OA, you might find that a scanning extension like OAXray is indispensable. I know it saves me hours of my valuable time clicking and comparing products on Amazon and retail websites.
Since first writing this post, I’ve started using the Scanalyze extension and find it very helpful. When I am looking at an Amazon product page, Scanalyze adds a box below the product title with the sales rank and sub-sales rank, saving time from scrolling down to the bottom of the page to find this information. Every second of time counts when you’re clicking through dozens of products every day, and I’ve really come to depend on having this information more easily accessible. Additionally, within that same sales rank box I can click “Scanalyze” to go to a separate page where I can see the lowest prices in FBA, new, used, and collectible; the Keepa graph; link to CamelCamelCamel; and (probably my favorite) a clickable FBA calculator to easily refigure my potential ROI based on the various prices listed. Scanalyze comes to you from the folks at Cyber Monkey Deals for $9/month, and it’s well worth it.
So that’s my list. Yours might be different. If it is, let us know. What are your favorite Chrome extensions for OA? Do you use a different browser than Chrome? Let us know in the comments.
Many of us got our start on Amazon selling books or toys. For most of us, at some point after we get our feet wet selling via FBA, the idea comes into our minds to expand beyond those entry-level categories. We hear over and over about the new hot Amazon category of the month that’s guaranteed to cause your profits to explode, and we start to wonder…should I try selling in that category? Will it be worth my time? Are the profits in that category really all that great? Is there inventory available for me to purchase? Will I be able to find good deals for resale?
Those are all valid questions and ones we’ve considered at great length for our own FBA business. Some of those questions lead into another fear we’ll be mentioning in a later post in this series, FOMO, or the fear of missing out. Not every shiny new category that’s currently all the rage is worth pursuing with everything you’ve got, butthere are definitely great benefits to branching out to try new categories:
It’s a good idea not to keep all your eggs in one basket/category. Diversifying your inventory can mean adding greater seasonal profits to your business as well as a nice stream of slow-but-steady profits throughout the year, depending on the category.
You never know until you try something whether or not you will succeed at it. If you’re only selling toys but decide to test out a few kitchen items, you may discover a profitable niche that you absolutely love.
Items for resale are available everywhere, everywhere, and if you pass something by because it’s in an unfamiliar category, well, you’re passing up money. You’re in this business to make money, aren’t you?
So what is it that’s holding you back from branching out into new categories? You know the old adage about how the best way to conquer your fears is to confront them? That’s so very true for me (Rebecca) with these fears about new categories. I look back now and realize how big my fear seemed at the time (big enough to keep us from moving forward in that aspect of our business), but how manageable it all seems now, from the other side of it.
I want to share with you three fears that I personally have dealt with over the past couple of years, along with the corresponding truths that are so evident to me now.
Fear of the Grocery and Beauty Categories – I’m afraid of products with expiration dates. I don’t want to get in trouble for selling an expired product to someone.
Truth – Amazon won’t let you sell someone an expired product, so this fear of mine was completely groundless. When items with an expiration date are checked into the FBA warehouses, the workers note the expiration date (which we have clearly labeled on the product during prep), so that the item can be automatically pulled from active inventory and disposed of by Amazon 50 days before expiration (see Amazon guidelines here).
Now, what I learned later is that I should be more concerned about keeping track of my upcoming expiration dates either so that I make sure my inventory sells before the time frame when Amazon disposes of it, or so that I can create a removal order before Amazon disposes of it. This initially required my setting up a spreadsheet to keep track of expiration dates; we are now monitoring these dates with reminders in our listing program. Expiration dates are completely manageable, and if I had let this fear continue to paralyze me, we would have missed out on a lot of profits over the past couple of years.
Fear of the Clothing and Shoes Categories –I’m afraid of making a bad buying decision with all the variations available. Size, color, so many unknowns. The price and sales rank history on camelcamelcamel.com just isn’t there like it is in other categories, and my scanning apps aren’t working the same way with these items. I’m afraid this is too much for me to learn.
Truth – There’s no way around it, categories with variations are just downright intimidating. But just as with anything else in this business, making good buying decisions on items with variations is a skill that can be learned.
One way to acquire this skill is through education. Read everything you can about selling in these categories. There are ebooks, courses, and guides available for purchase on this topic, but there are also plenty of free resources out there.
A great method for educating yourself is through Facebook groups. Now, I don’t mean go out and join a bunch of groups and post, “Hi, I want to know about selling shoes, please tell me everything there is to know” until someone answers your question. A better, more efficient approach would be to use the search feature within Facebook groups. Type in search terms like shoes, shoe sizes, shoe ranks, etc, and read all the older posts related to the topic you want to learn. You would be amazed at how many people have already asked the very question you want to ask, and you’re likely to learn a ton of great info by reading through the comments.
The other main way to learn how to make good buying decisions with clothing and shoes, I’m sorry to say, is by trial and error. Good old experimentation. We all want to learn without having to pay any type of cost, but sometimes the best way to learn is by making mistakes. Sometimes you really can’t know what your buying parameters should be for a new category until you just test the waters by making some purchases and seeing how they do when you send them in to the FBA warehouse.
Fear of Gated Categories –Getting ungated is hard. Flat files. Ewww.
Truth – Getting ungated is easier now than ever. Especially during periods of automatic approvals (is that still going on?). But even if you are required to submit photos, flat files, or invoices for category approval, there are ways to make the process simpler.
We were grandfathered into the grocery and beauty categories, but we did have to apply for clothing and shoes. For the shoe category, we used the category assistance service offered by The Selling Family. They helped us with every step of the process, responded quickly to emails when Amazon asked us for corrections, and provided all the files we needed to submit. With their service we were ungated in shoes within 48 hours.
For the clothing category, we chose a different route. This time we used the instructional videos from a “do it yourself” category approval course (which is still in beta testing) to go through the ungating process on our own. The videos were very thorough, covering every aspect of filling in the flat files and editing our photos. Again, we were ungated in the clothing category within 48 hours of starting the process with this course. [We’ll update this blog post once this “do it yourself” category approval course is officially released.]
If you’re literate in Excel and really good at following instructions, you could do it the old-fashioned way and complete the process on your own without any assistance. It will take you more time this way, so really the decision comes down to whether you want to spend the time to do it yourself or spend the money to have someone help you.
So there you have it. Our three biggest fears about branching out into new Amazon categories. Shining a light on those fears shows them to be needless — they are surmountable with a little thought and effort.
We’d love to hear from you about your greatest success stories in overcoming your fears of new categories — or the biggest fear you’re facing now that you want some encouragement for. Let us hear from you in the comments!
It seems to happen far too frequently. You buy an item (or multiples of an item), price it just right, send it to Amazon… and your competition starts to lower their prices. What once was selling for $29.99 is now selling for $15.99 only a week or so later. What happened? Why would someone want to sell it for $15.99 when it was selling just as fast at $29.99? It can be maddening if you let it consume you. With experiences like this, it’s easy to see why so many people have the fear of their competition tanking the prices of their inventory.
Just like other articles on our series on Overcoming Your Amazon FBA Fears, this one will be aimed at replacing your fears with truth so you can not only move past your fears, but move forward in your Amazon FBA business. In our previous blog posts about overcoming fears, we replaced each individual fear with a specific truth, but in today’s post, one simple truth will replace all of your fears concerning your competitors tanking the prices.
FEAR #1 – I’m afraid if I buy an expensive item to sell, the price will tank.
FEAR #2 – I’m afraid if I go too deep with inventory, prices will tank and I’ll be stuck with a lot of “dead” inventory.
FEAR #3 – I’m afraid to buy almost anything now. The price of every item seems to tank one it’s finally at Amazon.
THE TRUTH – Prices are always going to be fluid, but making better sourcing decisions will lower the chance that your competition will lower their prices, and could increase your chances that the prices will go up.
Yes, it’s true that some of your competitors will change their prices on the same items you are selling. Sometime the prices will go up, and sometimes they will go down. It’s a natural process of supply and demand. When demand for an item outweighs the supply, then prices usually go up. The opposite of this is true as well. Think about how this applies to your sourcing strategies.
It really surprises me how often I hear other online sellers say something like, “I bought this item for $10, and at the time it was selling for $30… now, it’s selling for only $15. Looks like I need to lower my price to try and break even.” Here are a few of my thoughts about this mindset:
If prices have gone down, then it’s most likely that the supply is now outweighing the demand.
It’s very likely that if you exercise some patience, prices will recover.
If you lower your price to get the sale today, then you’re just adding to the problem.
I’m not suggesting that you should never lower your price in order to sell your inventory. There are times when this is necessary (when the cost of long term storage fees are too much, or when CamelCamelCamel shows that the price history of the item is usually lower than when you first sourced it, etc.), but many online sellers might be surprised just how fast the price of an item can recover, and maybe even be higher than when they first sourced it.
Chris Green says in Online Arbitrage, “More competition? Prices never ‘tank.’ Prices normalize as supply moves to meet demand. I have never seen an item tank and never recover. The market bears what it will bear. Sales rank can never tank unless demand is non-existent, and in that case, items won’t sell at any price (high or low).” I completely agree.
So, as long as sales rank remains consistent, it’s feasible to conclude that the prices will recover. Think about it this way. You go to Target and notice that there is a huge clearance sale on toys. You fill up a cart full of toys at 30%, 50%, and even 75% off. You’re elated because you know that you’ll at least double, triple, or maybe even quadruple your investment.
The only problem with this situation is that hundreds of other online sellers across the nation are also sourcing at the big Target clearance event. After the Target sale is over, you begin to realize that most of what you sent in from Target to Amazon is no longer selling. Why is that? Because Amazon was flooded with an increase of supply while the demand has remained the same. With more supply than demand, other online sellers begin to panic and assume they need to be the lowest price in order to get the sale (read The Buy Box Bible sometime and learn why the lowest price doesn’t automatically give you the Buy Box). With dozens and dozens of sellers seeking the next sale by lowering their prices by a penny or, worse, a few dollars, it’s easy to see how the prices fall quickly.
BUT, this is not the end of the story. As other Amazon sellers sell out, those who are patient eventually get the sale at the price they want. It’s only the end of the story if you decide to lower the price and break even or take a loss. Show some patience and the prices, most likely, will recover.
As with all situations, there are exceptions to what I suggest. Sometimes your business is in a place where you need the capital back as soon as possible in order to take advantage of better selling inventory, and therefore lowering your price to get the next sale might be what you need to do, but complaining about others lowering their prices is not a profitable use of time.
How to avoid buying items with tanking prices:
While it’s impossible to only source items that are “tank proof,” you can make better decisions to insure that you won’t be faced with an onslaught of tanking prices. The short answer to how to avoid buying items with tanking prices is this: Make smarter sourcing decisions. Here’s how:
When you are out sourcing for inventory, don’t just look at the current price, but look at the price history. You can do this by usingCamelCamelCamelon your desktop or smartphone. If you see that in the past the item has had a constantly good price, then it’s likely that the price, if temporarily lowered, will recover sometime soon.
When you are sourcing for inventory at a big sale at a major retail store, understand that probably hundreds of other online sellers are doing the same thing. The best plan is to source quickly and send your items in as soon as possible. That way you’ll get some sales before the prices begin to fall. Then, just be aware that prices will fall, most likely temporarily, but will return to market value once the supply falls. The return of the price will happen even faster the closer you are to Q4.
Unless you are willing to wait it out, don’t go too deep on an item at one of the major retail store clearance sales. You might sell one or two before the prices fall, but you don’t want to be stuck with too many while you’re waiting for prices to recover. The prices might recover in time for you to sell out and avoid any long term storage fees, but you don’t want to risk it by buying too deep.
Create your own bundles. When you create a quality bundle, you can usually avoid competition all together. It’s harder, but not impossible, for other Amazon sellers to find each of the items in your bundle, so you’ll have much less competition and better control over the selling price.
Overall, the key is smarter sourcing, and being a patient seller. Don’t be a self-fulfilling prophesy by complaining about prices tanking, and then responding by lowering your own prices by a large amount. Again, there are exceptions to everything I suggest, but overall this balanced approach to selling both fast nickels and slow dimes provides you with a well-balanced inventory that should consistently give you sales throughout the year. If you’re interested in learning how to source smarter, then check out my coaching page for information about personalized one-on-one coaching.
How do you best handle prices when they begin to fall? What do you do to avoid sourcing items where the price seems to fall soon after? I’d love to hear your ideas and strategies.
At times, I might include affiliate links of items that I endorse. If you click through and decide to purchase the item linked, I will make a small commission on the sale. I promise to never endorse a product only because I have an affiliate link to it. I only want to post links when it is helpful to you and your business. ~Stephen