Source for Products in Your Underwear

Work smarter, not harder. Efficiency is key.

Why should you waste gas when you can source for products from the comfort of your home in your underwear, PJ's, or naked (who cares, right)? Sourcing online has its advantages, but if you're like me, you probably have already checked Walmart.com and Target.com only to come up bust.

There are people who do all of their sourcing online. They don't fight the crowds or other scanners. They use their computer and their noggin to find everything they want and need. There are advantages and disadvantages to this approach.

Advantages
You don't have to leave the comfort of your home, put miles on your car, or pay for gas. You can avoid the screaming kids, and the lady who always knocks into your basket to get by. You no longer have to endure the odd stares, or nosy comments and questions about the contents of your shopping cart.

Disadvantages
You have to pay for shipping (unless you can find a coupon), and wait for the arrival of your products which cuts down on your time to get it into FBA.

Every time I looked online, I came up empty handed. One day I had an idea for a bundle, and headed to Walmart to pursue a specific home & kitchen product. I was surprised that I couldn't find this particular product at a reasonable price. I went home disappointed, but then I decided to do an online search. I had to go a bit deep, but I eventually found the item and a price comparison site. Walmart had the highest price! The lowest price was on a site that I'd never heard of. I went exploring.

And through this discovery, I had a major ah-ha. Everyone and their dog sources online at all of the well

known stores. If Walmart can sell it, so can Amazon. The reason I kept coming up bust on my online searches was because I was searching in all of the wrong places. This small site that I found has great prices, and lots of interesting products. I ordered my item, and filled my cart with other items. Then I bookmarked this site and created a folder specifically for online FBA sourcing.

What did I learn? Search deep and find small shops that not everyone in the free world has heard of. As you're searching: think bundles. I found an item sold by Amazon with a low rank. I knew that even with the low price this site offered that I couldn't make a profit. I considered making a multipack of 2, but as I scrolled down I found two complimentary items. Bundle!

My new goal is to find one or two new sites each week that the whole world has yet to discover. I'm searching for small mom and pop online shops with great bargains and quality merchandise. Before I order, I always look for a coupon code. Take the time to see how the site advertises. Like their Facebook page if they post their coupon codes. Sign up for their emails (use an email just for this purpose to keep your email from being cluttered). You can spend your time trying to beat all of your competitors to the Walmart clearance rack, or searching nomorerack.com like everyone else, or you could take the time to search for the elusive, smaller companies and get an edge on your competition.

Now I still like going out and about and sourcing. It's fun! But sometimes I get weary of not finding what I want (especially when I'm thinking about bundles), so I've turned to online searches while sitting in my pajamas and drinking my coffee.

The $50 Retail Arbitrage Sourcing Challenge for FBA

If there is a will, then there is a way.

I posed a question on the FBA Flipside Facebook group. What would your retail arbitrage sourcing strategy be if you were limited to $100? As the discussion got going, I wondered what you could do if you only had $50 to spend. The challenge was on.

I dumped a jar full of saved change, and took a small box of books (about 10) over to Half Price Bookstore. Cha-ching! I had my $50.

I started my day at Tuesday Morning. I've had a lot of luck in the clearance section, but I haven't been scouting in awhile (life). I found two baby items for 0.39 cents (on clearance for 80% off), and five home & kitchen items. It's a shame that out of twenty or so of the baby items, I found only two that were unopened. The rest had been taped back closed! As I was sourcing, I thought of an idea for a bundle. Unfortunately, I only found one item that would work, so off to Walmart I went.

At Walmart, I was disappointed that they did not have the item I wanted for my bundle idea (I'm going to keep searching), but I did come up with another bundle idea! I bought five home & kitchen items to go with a grocery item. I'm throwing in a recipe to make it an exclusive bundle. I will send in five of my new bundles to test out.

I spent a total of $52.26, so I went over by $2.26. Not bad. But what profit do I expect to bring from my low budget sourcing? I was able to figure out everything except for my bundle, since I haven't listed it yet, so I'm estimating my fees (going higher, rather than lower).

My expected profit after fees, shipping & handling: $101.65

I can hang with that!

The challenge is on. You've got $50 to source using retail arbitrage. Leave your results in the comments.

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.