FBA Alert

When a door slams in your face, open the damn window.

FBA Alert

Grocery, Health & Beauty, and Personal Care are now RESTRICTED categories! This just rolled out, but has only been posted on the category section of seller central. You have to apply for approval to sell in these categories.

I just applied in grocery. I'm praying for approval since this has become a main category for me. I have a sale pending and all of my groceries are listed as active. I'm not sure how Amazon handles category changes (first experience), but I will keep you updated.

UPDATE:  I applied for groceries last night and I was approved. Note - You have to be a pro merchant to sell in any of these categories. I've been selling in groceries for a few months now. I don't have any products in Health & Beauty or Personal Care, but I'm going to go ahead and apply this evening. I will update you when I have news.

UPDATE # 2: I was approved for Personal Care, but I received a phone call about Health & Beauty. The rep told me that if you've been selling in any of these categories you are grandfathered in. Well, I hadn't sold anything in H & B, so I was asked to submit three invoices.

I flat out asked him about submitting receipts, but he told me that they must be invoices with your company's name and address, and the name and address of the buying source (in other words -wholesaler or manufacturer). We talked about retail arbitrage. He said it's okay if we source at stores, but in order to be approved that they have to have actual invoices, and suggested buying a small amount for approval purposes. I explained that I haven't had the opportunity to look into wholesale yet (waiting for the summer), but it was on my to do list, and a plan for growing my business.

The Amazon rep was very nice, well spoken, and knowledgeable. He told me that I could reapply when I'm ready, and that as long as I produce the invoices I should be okay. He explained that they are trying to cut down on counterfeit products.

There is an idea going around that if you order online you'll receive an invoice, but technically that's a receipt, so it remains to be seen if it will be accepted.

Please comment on your experience with the newly gated categories.

READ THE REQUIREMENTS AND APPLY FOR APPROVAL

The Cost of Selling Through FBA

You don't have to be great to start, but you have to start to be great.

-Zig Ziglar

A lot of sellers are fee shocked when they first realize the cost of doing business through FBA. The fees may seem high, but in comparison to any other viable business model, or a brick and mortar store, the fees are still very low entry level. Let's take a look at the fees.

If you're an individual seller (per item sold):

Order Handling - $1.00 for non media ($0 for media)
Pick & Pack - $1.02
Fixed Per Item Closing Fee - $0.99
Variable Closing Cost for MEDIA - $1.35
Weight Handling - $.046 to $2.00 for 1 to 3 lb. small / medium items
Referral Fee - 15% of Sale Price
Storage Fee - negligible (maybe a couple of cents per month)
Long Term Storage Fees - Only charged on items in warehouse longer than a year, and not on one offs.

Fulfillment by Amazon Fees

Oversized and heavier items are subject to higher weight handling fees. It's wise to run the numbers through the FBA calculator before making a buying decision.

More FBA Fee Details - Beware that the 15% isn't straight across the board. It depends on the category, pricing, etc.

That's a lot of estimating when you're in the store scanning. If the item is small and lightweight, then:
Estimate (rounded) - $5.50 + 15% for media items, and $6.50 + 15% for non media items
Example:
Media 
Price: $12.00 - $5.50 = $6.50 - 15% = $5.52 - COGS = Profit
Non Media
Price: $12.00 - $6.50 = $5.50 - 15% = $4.67 - COGS = Profit
If the weight handling is lower, then your profit will be a little higher, but if the weight is higher, then it will cut into your profit (another reason to plug it into the FBA calculator). You probably realize by now that your COGS need to be super low in the above example. I wouldn't pay more than $2-3 to make that kind of profit, and as you can see it's a thin margin. Another reason to look for low cost items that can bring a high margin. And then there is rank to consider. But don't despair! There are profitable items out there. Keep scanning!

What about pro sellers? Pro sellers pay $39.99 per month. After you sell 40 items in a month, you can subtract $0.99 per item from your fees. You're paying $0.99 for the first 40 items either way (just ahead of time as a pro seller), but if you sell over 40 items, and you're not a pro seller, you're literally giving Amazon an extra $0.99 per item. For example, if you sell 80 items as an individual seller, you're paying Amazon $79.20 (+ additional fees and closing costs). If you're a pro seller, you pay Amazon $39.99, and that's it (+ the additional fees and closing costs).

The fees might seem hefty, but think of the cost of rent, utilities, and employees in a retail store! And the best part is that you don't have to store all of that stuff in your house, or deal with customer service. The benefits of FBA certainly outweigh the fees.

Give Yourself Permission

And the weary need rest. Okay...the hyped need rest as well.

Give yourself permission to take a break.

If you're a mother, go get a massage, get your nails done (toes too), and enjoy a day with your family. If you're a son, or daughter, or husband, and mom is an FBA'r, then pack her boxes for her!

Happy Mother's Day!

FBA One Day At A Time

Every step is a step forward.

Today is the day to do something FBA!

This is the busiest time of year for me. I have so much to do right now, I can't turn around without finding another thing added to my overfilled plate. But I'm determined.

There are days that I don't have time to source or prep or pack or ship. Some of the products that I source sit around for awhile. I don't even have time to write this post. I'm typing fast and furiously before I have to rush out the door.

My hair is standing on end. I'm so tired that you could knock me over with a feather. I have to save this post and try to come back to it later...

3 Hours Later

Today is the day to do something FBA!

Phew! It's early evening now. After a full day, I can relax.

Wait! Relax? What is that? I still need to do laundry and wash the dishes and source and prep and ship.

Screeeeech.....

Stop. Rewind. Breathe.

What can I do today to move my FBA business forward? I have a bundle that I need to list and prep.
Focus.
One thing at a time.
I'll adjust a few prices.
Perhaps I'll do a little online research, make a list, and get some sourcing done tomorrow. That's the best part about building an FBA business. The only time schedule I'm on is mine. I don't have a boss. I can set my own hours. I'm not trying to make a million dollars by the end of the month. I can slowly build this business until it starts snowballing on its own.
One day at a time.

Do one thing each day to move your business forward, but don't put pressure on yourself to do more than you realistically can take on. You don't want to burn out before you get started. For me, FBA is a natural break from the rest of my life, but some days I'm just dog tired, and I need a break from FBA.

I think I will finish that hot romance novel tonight (after I finish prepping my bundles). 

Flipped Out Friday

Take charge of your now in order to create a better later.

Did you know that you can see to top 100 products in any category on Amazon?

Simply go to the category of interest, then click on the little link on the bar that says, "Best Sellers".

Now you can see what is hot on the Zon.

But should you run out and buy up as many of the hot products that you can and send them into FBA?

Things to consider before you jump on the "hot product" bandwagon:

• Is Amazon selling the product (most likely)?
• How many other sellers are riding the supposed wave? How low do you have to go on price in order to have a shot at the buy box?
• What is your buying price? A thin margin on a top seller could bite you in the financial rear. If you can get a high ROI, then it might be worth it.
• How long is it likely this product will fly off the shelves? Will the trend last? Is it easily available, or a hard to find? Is the manufacturer making it fast and furiously?
• Is the product seasonal? Will the price drop when the weather changes or the holiday passes?
• Is it a restricted product? Some of the hottest products are restricted for various reasons (Amazon exclusives, counterfeit issues, etc.). 
• What is the category? Hot in toys at Christmas is different from hot in office products in June.

Don't flip out if you see a shelf full of Frozen dolls and fill your cart. Scan. Consider all of the above. Make a smart choice based on your risk factors and financial resources.

BOLO

If opportunity doesn't knock, build a door.

-Milton Burle

BOLO!

BOLO means Be On the LookOut for fill in the blank with a hot product.

Is it a good idea to share a BOLO with others, or not?

This is a controversial topic, so let's discuss the pros and cons.

Pros of BOLO Sharing

• If someone shares a BOLO with you, then you might be able to find the item and flip it.
• Sharing is nice. At least that's what we're taught in kindergarten.
• Some things are hard to find, so perhaps the person who shares can only find one or two, but you find ten -lucky you!
• When you're just starting out, it's kind of nice to get some ideas of what sells on Amazon.

Cons of BOLO Sharing

• If someone publicly shares a BOLO, then a thousand sellers might be able to find it, flood Amazon with it, and create a race to the bottom. As one of those sellers, your hot BOLO just went bust.
• Sharing BOLOs also means sharing the buy box.
• Some things are easy to find, so perhaps everyone will find it, including you, but...refer back to the first con.
• If you found a great item, and you were the only seller, then would you really want a thousand other people to find out your secret? Probably not. And that is why most people won't share their BOLOs.

There are some groups who share BOLOs. And that's okay, but beware that there are many sellers who've reported buying BOLOs only to have price drop like a hot potato by the time the items are checked into the warehouse. 

This is a business with a great network of support groups. There's plenty of room for everyone, but in the end, we are still all competition, so don't expect other sellers to tell you specifically what they sell. And don't give your secrets away. Savor the exclusives because chances are another seller will eventually come along.

BOLO! (I'll share this...)

• Be on the lookout for products that are not being sold on Amazon.
• Be on the lookout for products that are out of stock with no signs of coming soon.
• Be on the lookout for new, undiscovered products.
• Be on the lookout for exclusive opportunities.
• Be on the lookout for ideas for creative bundling.
• Be on the lookout for products with no FBA sellers.
• Be on the lookout for new opportunities to make multipacks.

Amazon's Buy Box

Watching and learning is the first step to planning and growing.

This is the buy box. It's the price on the main listing page. Every seller wants their turn here. Many Amazon customers will buy from who,ever has the buy box, but most especially Prime customers who click the "Buy Now with 1-Click" button (that would be me).

Notice that beneath the words in green, "In Stock.", you can see WHO has the buy box. If an FBA seller has the buy box you will see, "Sold by XYZ FBA Seller and Fulfilled by Amazon.com". If an MF seller has the buy box you will see, "Sold and shipped by XYZ MF Seller".

So how does the buy box work? It's Amazon's secret algorithm and their not telling.

But I will tell you something that I figured out.

I spent a few days studying the buy box in a couple of different categories. I plan to run another experiment this summer to gather more data, but what I discovered is pretty cool.

The buy box rotates every hour. It's kind of random, but tends to rotate between the top (lowest priced) three to seven sellers. It skips around. Some sellers get more turns (usually FBA sellers get more turns than MF sellers). MF sellers DO get the buy box. If Amazon is a seller, they will share the buy box, but they get it more than other sellers.

If you click on the link for NEW, you can see that there are 10 sellers on a page. You want to at least be on that first page if possible (if there are more than 10 sellers), so price somewhere in the top 3 to 7 on the list. If you need to hold a higher price, and the rank is high, then expect to wait awhile before you make the sell.

This is not a perfectly perfect observation, but it was fascinating, and I believe that when I track it again in more categories that I will come out with similar results. But the important thing is that the buy box rotates every hour!

FBA Snapshot - At Home Research

The only person who decides your success or failure is you.

Keep your jammies on.

You can trudge to the store and scan, or you can spend a few minutes taking a few discreet pictures at the store.

It's an FBA snapshot, and it's the best research tool to be found. It's on your phone. It's called a camera.

Quickly snap a few shots of a section of shelf space. Any section. Any product. Get close enough up so that you can get the prices on the shelf.

Now go home, and pull up your pics. Expand them to a larger size to see more detail.

Open up Amazon's website and start your research. Pull up the FBA calculator to figure out profit on potential wins.

Make a list. On your mark, get set, source!

Returns Happen

You can choose to either react or respond to a challenge. 

Returns happen.

Don't take returns to heart. They are apart of doing business. It's not personal. People make mistakes, change their minds, don't fully realize what they ordered, and yes...sometimes they are dissatisfied with the product.

Surely you've returned something at least once, right? Don't you love the "no hassles, instant refund, no big deal" return policies (and attitudes)? Some people will never return anything (even if it's defective) because they feel embarrassed to do so, but many others have no such compunction. They will return something without blinking an eye.

The median return rate in retail is 3%. It's a good idea to plan for returns in your business plan. Amazon will deduct the return amount from your account. Once the item arrives back at the warehouse, Amazon employees will inspect it. If all is well, and it appears sellable, they will return it to the shelf and mark it fulfillable. If they mark it unfulfillable, you can choose to have the item removed or destroyed. If you do a removal order, then Amazon will send it back to you. You might decide it's fine, and send it right back in your next shipment, or change the status from new to used. You might dump it on ebay if you can't resell it on Amazon, or you could donate it.

If you want to see the reason for the return, go to "Reports>Fulfillment>Returns". You will need to put in a date range.

What if a return happens because you messed up? Yikes! Offer a sincere apology and tell the buyer to keep the item, or offer to send the correct item for free, or give them a little extra refund. Bend over backwards to make the customer happy!

What if the return is an obvious scam? Open a case with Amazon seller support. Give as much detail and documentation as possible.

When it's all said and done, you have to just suck up the returns. It is what it is, and not worth fretting over.

Why You Need a Pro Seller FBA Account

It took Thomas Edison 1000 tries to invent the lightbulb. He didn't give up on success. Neither should you.

You can start your FBA business for the small cost of shipping your first box. You don't have to have a pro seller account, but if you're selling over 40 items per month, then you need to upgrade.

Why?

Individual sellers pay Amazon an additional 0.99 cents per item sold. Let's say you sold 100 items in the month of April. You're already paying Amazon $40 for the first 40 items, and if you're not a pro seller, you're giving Amazon another $60! As a pro seller you're banking on selling at least 40 items -that covers your $40 monthly fee ($39.99 actually). Think of all of the things you could source with an additional $60.

But that's not all.

You also get lots of really cool reports. Kick your business up a notch by feeding yourself with information. I'm just beginning to explore all of the reports available, but there are some awesome snapshots that allow you to see how you're performing in different categories.

You also have the ability to run an ad campaign to drive traffic to your listings. The ads cost just cents, plus you have access to detailed performance reports, including impressions and clicks.

In addition, Amazon will collect taxes for you from the different states in which you have Nexus (don't ask me to go into detail here -still learning the ropes).

The advantages of going pro certainly outweigh the disadvantages. Once you're selling at least 40 items a month the decision is really a no-brainer. Go pro!

Bundles and Multipacks

Think big. Be creative. Find a niche.

What is a bundle?

A bundle consists of two or more different items that have something in common, and are bundled together as one product. Items in a bundle should compliment one another and add value and convenience for the customer. Think peanut butter and jelly, toothbrush and toothpaste, shampoo and conditioner...

A gift basket is technically a bundle. Get creative and put together bundles of products with a theme and a target audience. Package the items together in a visually appealing, professional manner. You will need to purchase a UPC code, take quality pictures (with a pure white background), and create a new listing with a detailed description and strong key words. Be sure to include the words, "Bundle of X amount of items, including...(list the items)" in the title, as well as in the key features (the bullet points for the product). Make sure you consider your ROI and estimate your fees. If you subtract 15% of your selling price + another $4, you will have a fairly decent estimate of your profit after subtracting your cost of goods sold (COGS). Keep in mind that they weight, size, and category of your product will make a difference in your fees.

Before you create your first bundle read Amazon's Product Bundling Policy.

What is a multipack?

A multipack is two or more of the exact same item packed together for the customer's convenience. It's not a package of salt and pepper (that's a bundle), but a 2 pack (or 3, or 4, or more) of salt. Multipacks should be polybagged or shrinkwrapped together as a package. You will need to add a label that says, "This is a set. Do not separate." (FBA Flip Side Facebook group members can download a free, printable label file).

Multipacks are usually found in groceries or health and beauty. You multipack items that people will want to replenish quickly like two boxes of the same cereal.

Caution: When you're scanning groceries, you will need to make sure you look to see how many of an item is offered in a listing. Don't buy out the store for an item you thought had an outrageous ROI only to realize once you get it home that it was for a multipack of 6 or 12.

Something to think about: You scan and find that the item is offered in a multipack of 12, but really, who needs TWELVE? Make a new listing with a multipack of 2 or 4. You can even use the same UPC code in groceries and health and beauty.

Another thing to think about: You scan and discover that the item is an add on. The rank is high, but the price is really low. Do the math. You might discover that a pack of 3 will not only get you out of add on status (you have to create a new listing if one doesn't exist), but you can price to win!

Workflow for Split Shipments

The only source of knowledge is experience.

-Albert Einstein

A common question for new sellers: Why are they splitting my shipment? Amazon wants me to send my shipment to three different fulfillment centers!

Screeech....Halt!

Yesterday, I was packing boxes for three different fulfillment centers when I had a thought. How does Amazon decide where each of my items will go?

Never mind. That's too complicated for me to even contemplate. They have engineers and data analyzers and computer whizzes to set all of that in motion. I just need to pack it and send it. They have their reasons, and hopefully their reasons will equal faster sales for me. That's all I need to know.

But what if I only have a few items to send? The shipping will eat my lunch and my profits too! 

When I first started selling on Amazon, I averaged sending in 15 to 20 items per week (and that was an accomplishment in my book). I certainly didn't want to have those few items split into several shipments, so I elected to go into settings and turn on inventory placement. Now I could send everything in one box to one fulfillment center (with the exception of oversized items that were directed to a different fulfillment center). Inventory placement was a beautiful thing. Until the bill hit.

I was aware that I would be charged 0.30 cents per item. I was aware that the charges would show up on my account in about a month and a half. I was warned that they would add up fast. And they did. My payout was obliterated.

I don't regret it. It worked for me, but by the time this happened, I had a few things figured out, and I was buying more, so I dove in head first, turned off inventory placement and allowed Amazon to tell me where they wanted my stuff to go.

IMPORTANT: 

• You can continue adding to a shipment until you're ready to ship, but do NOT hit the approve button until you're finished adding to the shipment (when you're boxes are basically full). 
• Make sure you check "add to an existing shipment", then use the drop down arrow to select the shipment. 
• If you create a new shipment every time you enter a new item, you'll end up being directed to a dozen fulfillment centers instead of 3 or 4. 
• You can also click on "review shipment" to see how many items are being directed to a specific fulfillment center. This will allow you to estimate how much more you need to add to fill your boxes. Sometimes you keep adding, yet one fulfillment center only has one or two things. If you don't have anything else to add, you can remove those items and wait until your next shipment. Try to avoid removing an entire shipment. It is said that Amazon frowns on this, but most especially if you've already approved the shipment. 
• Also, be sure to actually ship the boxes the same day or within a couple of days after you've approved the shipment. I often finish a shipment on Saturday night, and drop the boxes off at UPS after work on Monday afternoon. 

WARNING: Continue checking your "review shipment" after adding new items. Check it again after you click approve. Before you click approve, Amazon might move your items around!

Phew! That was the hard part.

Now onto a workflow. 

The majority of the time my products are split to the same three fulfillment centers (FC). I bought three medium sized clear plastic boxes. I wrote the names of the FC's on removable labels, and placed them on the boxes. I also numbered the boxes: 1, 2, 3. After I add a product, I click on "review shipment" to see which FC Amazon wants me to send it to, then I place the product in the appropriate box.

Once my three boxes are full (or even overflowing), I estimate which sized shipping boxes I will need (sometimes I need two boxes for one fulfillment center), approve my shipment, double check the packing list, then begin labeling and packing. This helps me to keep everything organized and  acts as a way to double check myself before I place even one item into a shipping box.

When I first turned off inventory placement, I had about 30 items to send. I mostly used 12 x 12 x 12 boxes. Today, I dropped off 5 boxes with 63 products headed to three fulfillment centers! I'm always working to improve my workflow. Next on the wish list is a Dymo LabelWriter 450 Turbo Label Printer! 

Thoughtful Thursday - Overwhelmed By FBA

When you're overwhelmed, take a step back and breathe, then categorize your tasks, and tackle one at a time.

I've noticed in the various Facebook groups (join The FBA Flip Side Facebook group) that a number of new sellers (or people contemplating this whole FBA biz) often express feeling overwhelmed at the sheer amount of information. I confess that I feel it when I think about taxes and insurance. The very thought makes my head spin! I've decided that my life doesn't give me enough wiggle room to take the time to delve deep into these topics, so I'm putting it off until the summer when I have more time to get all of my business ducks in a row. Sometimes you have to focus on one thing at a time - learn it, conquer it, then move on to the next thing.

Here are some steps that might help you to break down the tasks:

1. Read the information in Amazon Seller Central and take notes. Watch videos, listen to podcasts, watch and listen to spreecasts, and ask clarifying questions in support groups. Take the time to get the basic information down before you begin your journey.

2. Learn your scanning apps by scanning things in your house. I made the mistake of scanning in the store first. I couldn't find anything with a good ROI! Why? I didn't realize that the app I was using showed the lowest price -including USED  merchant fulfilled prices. Scan your house and push every button to see where it goes. Check it all online at Amazon. Get familiar with your app and Amazon's listing page.

3. Make yourself a notecard with category rankings (or put your notes onto an app like Evernote). I was constantly asking myself if something I scanned was a good rank or not. I made mistakes in the beginning because I didn't know the difference. Top 1% is best. Top 5% is great. Top 10% is good. Top 15-20% is not unreasonable if the ROI is good.

4. Choose a category that you know best as a buyer and stick with it for awhile. Scan absolutely everything in a 12 foot section of a store. Keep in mind that you might find one good buy in 20-30 scans. Patience is key! Do a little research before hitting the stores. Check the sale's ads. Look at products on Amazon (ranking, price, number of sellers). Take pictures of a category and research them at home. Focus on one category in one store. Get to know the store layout and sale's trends. Sign up for the rewards card! Look for coupons. Stay focused in that small space and work to fill one box.

5. Watch the videos on Amazon (and YouTube) that show you how to list and pack. It's not that hard, but there are rules and procedures with which you need to familiarize yourself. When you first begin, buy products that are small, lightweight, and don't require special packaging like polybags or shrinkwrap. Venture into these things one step at a time.

6. Before you begin this journey, or after you've tested the waters to see if this business is a match for you, you will need to get your business ducks in a row. Don't let this piece overwhelm you! Make a list and focus on getting one task accomplished at a time. You don't have to have everything figured out when you send your first box. Just get started. You can put things in order as you learn what you need to make your business a success.

Take a month to learn as much as you can before you step into the FBA waters. There is a lot of information out there, and some of it is wrong. Always refer back to Amazon's Seller Central, and if you're unsure about something, contact Amazon and ask. This is a fairly simple business with a low entry cost. Take it one step at a time.