Flipping Groceries on Amazon FBA

Due diligence results in just rewards.

Ready to flip some groceries?

Thing 1: You have to be approved to sell groceries on Amazon.
Thing 2: Groceries are fast turns, great replenishibles, but you have to watch the price and ranking carefully.
Thing 3: Don't get attached to any one grocery product. Be ready to give it up when the going gets tough.
Thing 4: You CAN make multipacks (see my post about this topic).
Thing 5: Keep scanning. Groceries are not a needle in a haystack, but you do have to spend time searching.

Let's go grocery sourcing!

• Keep it simple. Take your phone (loaded with Evernote). Choose one section (like coffee or tea), and snap pictures of all of items in this section.
• Bring it home. Open your desktop to Amazon, and to the FBA Calculator. Open up your pictures and save them into a folder. Example: Coffee_Walmart
• Focus on one picture at a time. Search for the first item on Amazon. Look at price, rank, number of sellers, and the different multipacks available. Run it through the FBA calculator. If it's a winner, make a note in Evernote with item, price, fees, profit, # in package (like a 2 pack or 4 pack), rank, and aisle # in store.
• Go through an entire picture. You might find one profitable item, or not. Once you've gone through a picture, rename it Finished with the # of potentially profitable items that you've found.
• Once you've found several potential items, take your list to the store and buy 3 to 5 to test out. If they sell out within two weeks, then plan to pick up another round on your next trip out. I never go too deep with groceries. It's a competitive category, and it doesn't take much for the price to drop and eat away your profits. 
• Don't forget to check the expiration dates. Try to find grocery products with a year out.

Keep Track of Replenishible Groceries

• The best way to keep track of replenishible groceries is on a spreadsheet. FBA Flip Side Facebook group members can download my spreadsheet from the files.
• I could source groceries all day long, everyday, but I believe in diversification, so I've made the conscious decision to refill my groceries once per month. Before I go out to pick up groceries, I run through my list to check price, rank, profit, and the average # that is selling per week. I'm willing to drop a dud, or a grocery item that has dropped dramatically in price. Sometimes the price for the item goes up at the store causing my profit to burst. I keep items on my list for a recheck each time I shop.
• Keep an up to date replens list in Evernote.
• When you list a grocery item, begin your SKU with a code that indicates grocery (GRO), so that you can search by the first three letters and bring up all of your grocery inventory at once.

Keep In Mind

• Grocery replenishibles should be a fast turn. Based on your averages, send in enough for a month. You should sell out in a month, but if you don't, go back to the listing and do a reevaluation.
• Your profit margins are usually a little smaller than other items, but always aim to double your money.
• Check the weight of your grocery item and compare it to the listed weight. If the listed weight is heavier than the actual weight, snap a picture of the item showing the weight, and open a case with seller central to get it corrected. Incorrect, higher weights effect your fees!
• Make new multipacks and variety packs if none are available, but check that the individual items are selling on their own first.
• Shrinkwrap or polybag your grocery items. Don't forget your expiration date label! And if it's a multipack label, add a label that says, "Multipack of #. Do not separate."
• Don't forget your coupons!

On your mark, get set, go grocery sourcing!

Pricing Your Products for Amazon FBA

Keep your face to the sunshine and you cannot see a shadow.

~Helen Keller

The ultimate goal: double your money or better.

If you pay $3, then your goal should be to make a minimum of $3 profit.

When you're out sourcing and making buying decisions be sure to take a look at the 5 lowest FBA prices. If you can double your money by selling your product somewhere in the five lowest FBA prices, then you're good to go. Make sure you have a little wiggle room in case the price drops dramatically or the item simply doesn't sell after 90 days. Don't forget to consider fees, as well as shipping and handling (especially weight and size of the item) when figuring your total investment and profit margin.

If there isn't an FBA seller, then look at the average merchant fulfilled prices + shipping, and list your product  somewhere in the middle range of the five lowest sellers.

On the first of every month go to Manage Inventory to cull out products that are not moving. Let's say you have ten pages of inventory. The oldest inventory is on page 10. Start at the end and work backwards. Evaluate prices, rank, and your cost to determine whether you should hold, or cut your losses and knock your price down to cost. If the item is a seasonal item, you might want to hold out until the next season. You have to determine whether you consider the item a long tail item, or simply a dud. If it's long tail, you might tweak your price, and if it's a dud, you probably should cut your loses and price to break even (or to make a few dollars vs. 100% ROI).

A few unwritten rules (not Amazon's rules and not real rules, but common thinking among many sellers):

• Don't undercut other FBA sellers unless the product is truly unreasonably priced, or not moving at the lowest FBA price after 60 days.
• Don't play race to the bottom just to gain the buy box 100% of the time. Play nice. Share.
• If Amazon comes in as a seller on your product, then price your product 20% above Amazon's price and hold out until Amazon sells out. Don't freak out. Just hold. You will get your turn at the buy box.
• You don't always have to have the lowest price. It's okay. Really.
• If you're the only seller, then price based on what you consider reasonable and fair. If the item isn't moving after 30 days, then lower the price a little bit. Keep tweaking until you find that sweet spot.

Pricing is not a science. There are no hard and fast rules. You just have to tweak and play until you get it right. It's a guessing game, but while you're guessing, don't forget to run your numbers to make sure you don't price yourself out of a fair profit.

Make Your Own Photo Background Prop

Once you replace negative thoughts with positive thoughts, you will begin to have positive results.

~Willie Nelson

Amazon requires simple, clean photos with a pure white background. 

I've learned a couple of things to help me get my photography from point A to point B. For one, use a white sheet of paper, white poster, or white foam board for your background if you're taking pictures of products with color. If an item is in a polybag or is light / white in color, then do as the film guys do, and use a green screen (green / or blue background). 

I've been laying my products down on top of a poster and snapping my pictures. One of my biggest problems I have is keeping my own shadow out of the picture. I haven't invested in lights yet (on my wish list), so I have to make do with house lights during the day when I also have natural light coming in through the windows (not the most ideal). 

I wanted to be able to stand my products up, or at least lean them against my background, so that I could snap the picture easier (and even use a tripod). 

I thought about it and thought about it, and I came up with this:

I went to Home Depot and looked around until I found two small pieces of the same size wood. These were already partially painted white. I have no idea what they are supposed to be used for, but they did the job I wanted, so I bought 4 pieces.

My hubby gorilla glued the pieces together for me. Sweet man!

I went to Walmart and bought two pieces of foam board for a couple of dollars. The foam board has blue on one side and white on the other side. I cut the pieces in half (one half about three inches bigger than the other half), then I used the larger half as the "stand up piece". I attached velcro to the wood blocks, then to the foam board (one wood "stand" on each end of the foam board). 

Next I sat the standing foam board just on top of the other piece to create a photo background. I made one for a white background, and one for a blue background.

Now I can stand my products up and take my photo. 

A couple of notes: I didn't mess with trying to get a pure white background. That is something that has to be done in a photo editing software program. I use Photoshop.

I probably should have sat in a chair to get a better perspective with this photo, but I wasn't shooting for Amazon here. I just wanted to show you how the background prop works. I also should have put these items against the blue background (or at least the pad of paper).

The reason I used velcro is to change out the background from white to blue and back.

Disclaimer: I am a complete amateur photographer, but I do know that light is everything in photography. I see tabletop photo lights in my future (Hubby? Are you reading this?).

Photo Tip: I learned something the other night. This works for all cameras (not cell phones, but real cameras). If you press the button just halfway first (you will hear a little sound, but it won't snap a picture just yet), and allow your camera a couple of seconds, it will auto adjust to the light to give you a better picture.

Playing Categories

Plan for today, tomorrow, and the future. 

I needed to run into a craft store today to pick something up for a current little at home project. I haven't been in this particular store for quite some time. In fact, I haven't been in this store since I started FBA. As I was walking around searching for Mod Podge, I noticed a ton of potential profit. Yes, I'm going back.

But that's not the reason for this post. As I was driving home, I thought about the craft category, and ran through my mental one off list until I found that yes, I have sent in items in this category. And then I thought about how I sent in a few items in the baby category. And I wondered if I've hit every open category.

That's something that I need to investigate. You see, when Amazon gated groceries, personal health, and health and beauty, sellers found themselves either grandfathered in or in a bind. I was grandfathered into groceries and personal health, but I missed out on health and beauty because I never listed anything in that category. Now I have to jump through hoops if I want approval. If only I would have sent in some shampoo or something! Right?

So now I'm thinking that I should check each open category and make sure I have sent in some products, and if I hadn't, then I had better get to sourcing. You never know when Amazon might decide to gate a category, so better safe than sorry. Now there isn't any guarantee that selling a few items in a category will grandfather you in, but at least it's a step in the right direction. You're increasing your chances to call safe, and get a homerun. 

The Sourcing Jar

A penny saved is two pennies earned.

Did ol' Ben Franklin say that? There was a time when a penny saved was a penny earned, but today, you can turn your penny into two pennies.

Have you ever heard of the tale about the grain of rice? 

Once there was a greedy king who didn't share the stores of rice with his people. One day soldiers with wagons were taking the rice collected from the fields to the storerooms. A bag had a hole, and a young girl saw it, then she followed the wagon and collected the rice that fell out of the bag into her skirt. She took the rice to the king. He was so happy that she gave back the rice that he granted her anything she wanted. She asked for a grain of rice, doubled each day for 30 days. He laughed and granted her the rice. She was wise, and pretty good at math (the king was a dolt and not so good at math).

Now you do the math.

First Day - 1
Second Day - 2
Third Day - 4
Fourth Day - 8
Fifth Day - 16
Sixth Day - 32
Seventh Day - 64
Eighth Day - 128
Ninth Day - 256
Tenth Day - 512

Are you getting the idea?

I thought so.


So what does this have to do with a penny, a sourcing jar, and FBA?

Save a jar of change. When it's full, take it to one of those coin drop machines (check your bank or credit union to see if they have one that is free of charge), and dump your change. Take the money and go sourcing. Buy products that you can double (or more) your money after fees, shipping and handling. Take the profits and and invest in more products. Rinse and repeat until you reach your goal, or your storehouse is full, and you're ready to take a payout to the personal checking account.

Cha-ching!

Multipack Guidelines for Gourment & Grocery Amazon FBA

Do not rely on hearsay for your answers. Always go to the source to prove or disprove (and to document) interpretations and assumptions.

I asked, and Amazon answered.

There has been some confusion about Amazon's guidelines for third-party sellers creating multipacks in Gourmet & Grocery, so I asked Seller Central to please clarify.

My question:

Are third-party sellers allowed to create listings for multipacks in grocery if a listing is non existent? I am not referring to manufacturer created multipacks, but third-party seller created multipacks. Are we allowed to shrinkwrap and polybag multipacks and create new listings? (I wanted to be clear as possible. I gave examples as well).

Amazon's first answer:

Answer : Yes, You may list seller-prepared and packaged variety packs of single-serve hot beverage products (coffee, tea, etc.) in the Grocery & Gourmet Food category that adhere to the guidelines outlined here. These guidelines do not apply to manufacturer-created or seller private-label variety packs.

Failure to adhere to the following guidelines may result in buyer dissatisfaction, product delisting, or both.

The product detail guidelines for Grocery & Gourmet Food seller-prepared and packaged variety packs of single-serve hot beverage products are as follows:

1. Custom variety packs are permitted only in unit count sizes (cups, pods, capsules, etc.) that are in multiples of 10 (for example, 10, 20, 30, 40, etc.)

2. If a variety pack contains more than one type of product (for example, both tea and coffee), then the types must be in equal proportions (for example, 10 coffee pods and 10 tea pods) or as close as possible to equal proportions if the number of serving units is not evenly divisible.
>For example, for a variety pack containing 3 types of products (coffee, tea, and hot chocolate) for a total of 20 pods, you would include 7 pods each of two products (tea and coffee) and 6 pods of one product (cocoa) to equal 20 pods in the variety pack.

3. The type, brand and flavor of every unit contained in the pack must be clearly specified on the detail page.

4. You may not label variety packs with a custom brand name (for example, your company name) because seller-prepared variety packs contain individually branded units. Instead, you should use the following approved brand name for these products: "Custom Variety Pack."

I realized they assumed I was talking about coffee and tea, and then it dawned on me that if we can create multipacks of these items, then why not other items, so I asked again.

------- 
Q: I understand that we can't brand the multipacks, but can we shrinkwrap and polybag, and create a listing if there isn't a listing available for the number that we want to multipack? 
------- 
A: Yes, you may create listings for multipack & shrinkwrap and polybag it as earlier if they are adhering to the FDA labeling requirements for food products and not in line with how we would like products sent to our customers. 

------- 
Q: Are sellers allowed to make multipacks of other grocery items? 
------- 
A: You may list seller-prepared and packaged variety packs of all products listed in Grocery & Gourmet Food category that adhere to the guidelines outlined in the previous email correspondences. These guidelines do not apply to manufacturer-created or seller private-label variety packs. 

The answer is YES. Sellers may prepare and create listings for multipacks (and variety packs) in Grocery.

Using Evernote to Help You In Your FBA Business

Everyday you make new choices that effect tomorrow. What are you going to do today to earn sales tomorrow?

It's a app.
It's amazing.
It's EVERNOTE.

OMG! Where has this app been all of my life? I've been exploring this app recently, and let me tell you, slice bread has nothin' on Evernote! It's the coolest app ever!

What can it do to help you with your FBA business?

The number one thing it can do (and this is ridiculously exciting) is that you can snap a picture and make a note with that picture. Why is this so exciting?

Think about it. You're in Walmart, and so are all of the people of Walmart, and all of their children, and they're everywhere. You can edge your way into that section of cake mixes that you've dying to scan. People keep asking you to move. They reach over you, around you, through your legs (well, hopefully not through your legs). You begin to wonder why you're in this business, and surely there must be a better way.

Snap!

A picture that is. Snap a picture of the section you want to scan. In fact, snap several. Then key in a note with the store name / location, and anything else you want to remind yourself.

Then go home and research to your heart's content in your underwear!

That's what you can do with Evernote!

But that's not all. You can create notebooks, then create notes within your notebooks. You can have notebooks for stores, categories, replenishables, BOLO's, and so much more! And you can have notebooks for home, work, and other online ventures. How awesome is that?

But that's not all! And this is the part that I'm totally pumped about - you can download Evernote onto your desktop and sync your notes with your phone! Think about it: you can type a list on your computer with all of the information you need for a quick referral for your replenishables, sync, then open it up on your phone when you're out sourcing.

I haven't even explored everything that Evernote can do for you as a seller, but what I've discovered so far is an absolute lifesaver.

Don't forget to save an Amazon category ranking's chart to your Evernote notes. (Members of The FBA Flip Side Facebook group can access their chart in the files. It's FREE. Oh, and so is Evernote -FREE that is.). Note: There is a premium Evernote subscription. I might bite in the future, but right now all of my spare pennies go into the sourcing jar.