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.
You 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!
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?
We’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.
For 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.
Truth: 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!