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Don’t Forget Books When Selling Amazon FBA

There’s a lot of excitement about retail arbitrage and for good reason. You have brand new inventory that is (hopefully!) popular and fast-selling. However, it is also riskier for a new seller. You are spending more per item on inventory and your mistakes cost you more. And believe me, you will make mistakes. We all do. That is why I will remind everyone NOW to reprice for the August 15 long-term storage fees assessment that is coming up. You have about a month to sell off your poor performers and mistakes that are a year old. I have two blog posts that address the need to move out inventory and how to use Amazon’s advertising to clear out slow movers. You know what I will be doing before I leave on vacation next week!

Ok, back to our regularly scheduled programming…a lot of people dismiss books for the glamor of new stuff and I think it is a mistake. I sell books every single day. My margins on books are terrific because I know how to find them cheap. It is common for me to price books at 10X what I paid and more. For those on a budget, it is hard to beat books for return on your inventory dollar. I wrote a post about book sourcing back in 2012 that covers many of the basic sources available to almost everyone no matter where they live.

I recently read Peter Valley’s new books “Book Sourcing Secrets: Every Source of Cheap Books to Sell for Huge Profits on Amazon” and “Recycler Riches” which was bundled with it. Even though I’ve been selling books since 2010, I learned some new things and I thought I’d share his book with you. Peter is definitely worth listening to. He did over $130,000 in sales selling used books on Amazon last year and shows his numbers. In his introduction he states that he makes over $80,000 a year selling on Amazon overall so books are clearly a significant portion of his inventory.

Peter’s book is a good guide to find inexpensive books. While it is short (110 pages), he gets right to the point and shares a lot of information. There is no fluff in the book. He shows you with his numbers why books make for a good FBA business. He has over 40 relevant and realistic sources which are more than enough to get anybody started…or re-started. Sometimes when one source dwindles or goes away, we are stumped for new ones. Peter’s book got me thinking about other sources that I’ve not tried yet.

His core sources of books are all ones that I’ve used from bookstores to library sales to thrift stores and so on. The surprise was there were a lot of supplemental sources on his list that I’d never thought of before. That’s saying something after four years of selling books online. I also appreciated his approach to his sources. He describes how they work and how he researches them. A section for each source called “Profit Hacks” gives tips for maximizing the sale/event/opportunity. He also uses personal stories to clarify a point and/or inspire his reader. Where the source is one he doesn’t use himself, he often finds another seller to share their story about that source.

For example, I was inspired by a story he gathered from one FBA seller that makes $3,000 a month selling books (net) anddumpster diving who gets all of his book inventory dumpster diving. He spends six hours a week sourcing and then a few hours processing. He started with $400 to buy equipment and now clears $36K a year working part-time with no out-of-pocket inventory costs….my kind of story! While I have successfully gone dumpster diving for other things in the past (lamps, appliances, vacuum cleaners), I didn’t think about it for books. Now I will.

I thought I knew pretty much everything there is to know about rummage sales, but I learned that many of them have preview sales just like Friends of the Public Library sales. He talked about how he’ll make a lump sum offer for all the books at some rummage sales that look good. He’s only been successful two out of 15 times, but those two were very profitable for him. I admired his persistence and wondered how many times I would ask before giving up if I didn’t know that it could be successful. That’s the kind of information I found most valuable in his book – the possibilities and the strategies that have worked.

bird nomenclatureI was very interested in the University Press sales section and am going to look into that for myself. There are a number of university presses/publishers within 100 miles of me and I’d never thought about it before. He told a story that involved Scientific Nomenclature of Birds in the Upper Midwest as an obscure book that seemingly no one would read and I had to laugh because I know it and other nerds who’ve read it…

Peter’s organizational skills are helpful and throughout the book he shows you not only how he researches opportunities, but also how he organizes them so he can maximize his time, gas, etc. He conducts research before he goes to a garage or estate sale to determine whether or not it is worth his time. He shares exactly what he looks for. In fact, he pretty much opens the kimono in every part of the book. His theory is that he can share his secrets because relatively few will ever follow through or will actually do it the way he does it. He protects his personal sources, but happily teaches others how to find theirs – an approach that I agree with wholeheartedly. His book was clear enough that I’m going to share part of this book with my virtual assistant so she can conduct my online research for me.

What you won’t find in Peter’s book is much discussion about rank, how to use your tools, listing, supplies or any of that side of the business. He assumes that his readers know the basics.

There were a few things that he said that I disagreed with. He talked about how he would not let a book store proprietor see him scanning because they take great offense. I have never had a problem with this and I shop retail bookstores all the time. However, he had obviously had this experience so my two cents is to use your common sense. I always try to be polite, quiet and to buy a lot of stuff. That usually soothes any retailer feelings. Peter also buys a lot more books at higher ranks than I do. I strongly suggest that new sellers put books down that are over 1 million in rank. It is not because higher ranked books won’t sell – they will eventually – but because you need to build up a volume of fast selling books before adding a lot of long tail books into the mix. People who tell me that books don’t sell for them are usually selling a lot of long-tail books and not enough quick turnaround books.

Another thing that Peter is up front about is that he doesn’t always follow the rules for book condition. He says that he’s never had a problem listing used-like new as new. As long as no one is complaining, then Amazon’s happy. They care about happy customers. I tend to be more conservative. I have a 100 seller rating with Amazon and I want to keep it that way. Amazon is fairly forgiving of honest mistakes here and there, but consistently not following the rules could get you banned for life.

Lastly, he is adamant that you need to be at a book sale when the doors are open or it is not worth going. While I can see his point and appreciate how fast he works a section, my experience has been that I find lots of books that the dealers leave behind – especially in really large sales. I can’t always be there when the doors open (I do when I can, obviously), but there are some sales not to be missed and I don’t think people should write off a sale if they can’t make the first hour. In a blog post from last year, I detailed how I was the only scanner for two out of the four days of a large sale and left with hundreds of books every day. Some sales just can’t be worked in a few hours.

Recycler Riches

Another brand-new book he is bundling with Book Sourcing Secrets is Recycler Riches. This is a 31-page eBook that dives deeply into one of the sources he mentions in his book – recyclers. If you are interested in buying books in volume for pennies per unit, it is worth the $47 price of Book Sourcing Secrets for this book alone. It is very detailed about how to approach a recycler; what they need to hear; how to negotiate; what you can expect in terms of books worth selling and even how to work the books once you have them. From hiring help to purging leftovers to repricing, I highly recommend this book to online sellers interested in a large-scale operation. What I liked about this book is a lot of the advice would work for any source that delivered pallets of books – thrift stores, auctions, storage units, remainder sales and more.

He interviewed Adam Bertram in detail for this book and asked him extensive questions about his former operation (Adam is doing something else now). From as detailed as what kind of truck he rented to pick up books from recyclers to how to find the right kind of recycler – the one most likely to have the higher quality books. A large scale operation like Adam’s is fascinating. He was generating about $25K-$30K a month (net after Amazon’s fees but before costs for employees – $4K – and other out-of-pocket expenses) from books he bought for 4-8 cents a pound. At the back of the book are two pages of resources to find a recycle company near you.

As far as I know, there is no other book out there like this – and I looked. I was so impressed by Adam’s operations. Even though he processed hundreds of thousands of books a year, his company was a small operation consisting of him, occasional help from family members, a few employees and an empty 800 sq. ft. apartment.

I wish Peter’s books were available in a Kindle-optimized version and I wish the PDF version was indexed so I could click on a chapter heading and go right to it. Book Sourcing Secrets would really benefit from indexing because it is the kind of book where you want to jump ahead to the sources that interest you the most. These are minor things and I’m hoping Peter will consider them in the future.

In conclusion, Peter Valley’s new books are genuinely useful and he shares everything. You get insight into the minds of two highly successful Amazon FBA booksellers and learn from their experiences. I think every new FBA bookseller (and even some old dogs like me!) will benefit from having such a comprehensive sourcing guide. It is natural once you find some sources to stop thinking about other sources – but you shouldn’t. Sources change all the time. Some of your favorite sources today may be undercutting you or out of business tomorrow. If your Friends of the Public Library sales are too competitive, then branch out and consider the other 40+ sources on the list. If you think you might like to scale up your book operations, then I highly recommend you read Recycler Riches. It will be bundled for free with Book Sourcing Secrets only until Monday, July 14 at midnight so act now to get your copy.

Besides my sweet Tess going to heaven, I’m grieving a friend who took his life recently. This double loss has impacted my ability/desire to work right now. I am going on vacation July 15-30 and may not get a new post out until early August, just a heads up. In the meantime, I will be teaching two live classes in Atlanta and Wilmington, NC and will be posting photos and updates on my Facebook fan page. I am so delighted to be able to meet some of you personally. On a personal note, I want to say thank you so much to my incredibly kind-hearted readers. I received many wonderfully supportive emails and posts about Tess and was so moved.

I make a small commission if you buy Book Sourcing Secrets through my link. You can also go directly to Peter’s book information page from this non-affiliate link if you prefer: http://www.fbamastery.com/book-sourcing-secrets-ebook-every-source-of-cheap-books-to-sell-for-huge-profits-on-amazon/. I only act as an affiliate for products I’ve used/read and can personally recommend like Peter’s book. It is important to me that this blog represents information that is valuable to the FBA community – newcomer and old hand – and I’m careful about my recommendations. I turn down a lot of requests every year that I don’t find suitable.
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The Amazon FBA Seller at Home

Recently a fellow seller asked the question on Facebook about how do you spend your time when you go full-time selling Amazon FBA? “Tell me about your day,” he said and it made me think. I was tempted to be a smartass and say “I’m up to my armpits in books,” but there was a more profound question behind the question. He was asking “What should I do? How does it work when there’s no one to tell you what to do?”

When you’ve worked for corporate America for most of your career, you can find yourself a little lost when your time is suddenly your own. When you transition from part-time to full-time it is more than simply having more time for the business. Having a “day job” provides a focus, a discipline, time constraints and rules. You run your FBA business in the pockets of time that are left over. Sometimes, that actually makes you more efficient than when you have the whole day to work your business.

For many people, they’ve never worked out of their homes before so there are additional issues as they learn to work from home. I’ve worked from home off and on since 1994. I’ve had the fancy corporate office with employees and outside freelancers, and I’ve had the desk in my home office as I telecommuted and then, I’ve moved the entire business back to my home and had employees working with me from my home. I’ve lived the dangers and joys of working from the home.

I’ll never forget, for example, the day I was talking to a new employee about one of her projects. We were in my kitchen and I was vigorously spraying baby roaches whose egg sac had dared to enter MY house in a paper shopping bag. There was no way I was not taking care of that right away…but I think she found it a surreal first day. At least I didn’t ask her to help!

Rather than write out my typical day (is there such a thing?), I thought I’d talk this week about what is important to me when working from home. In case you are wondering, yes I DID learn all these lessons the hard way. Hopefully you won’t have to.

Remember your promises to yourself

Remember all those things you said you’d do if you had more time? Eat better? Work out? Get eight hours of sleep a night? Spend more time with your loved ones? Do them. Make them a priority. These activities will take a piece of your day and at first you may worry that you are not getting “enough” done, that you “should” be working. Shake all that off. A happier healthier you is a more productive you. The time you save by not attending meetings at work can be used to take care of yourself. I find that bike riding in the morning (you have to be done before 10 if you live in Texas) or yoga later in the day makes me more alert, efficient, creative and just plain happier. Working at home means better food at a lower cost and with greater control over the evil triumvirate of sugar/fat/salt.

I’m a night owl and often work late. While sometimes I have to be up with the starlings, I no longer feel guilty sleeping in. I love it. I didn’t know how sleep deprived I was until my husband got a CPAP machine for his snoring. Sleep is like my secret weapon now. I’m a better person. It was like I had been living a half-life. It was like Dorothy landing in Oz. I’m not kidding. Sleep. At first you might sleep a lot because you are way behind. Eventually you’ll catch up and start doing things like waking up before your alarm clock(s). Gasp! It’s true. Many professional and Olympic athletes will skip a morning workout for sleep because it is better for their performance. Now that you work for yourself, keep this promise. It will make your business better, I swear it.

I put this point about promises first because taking care of yourself is usually the first thing out the window when you are nervous about your future financial security. I remember a long period of no work in the early 2000’s after I sold my first business. I was so anxious I was having panic attacks. I didn’t enjoy my free time and put myself in a tailspin trying to generate income. It was ugly and eventually everything imploded with me – health, wealth, happiness. This advice about the promises to yourself? I learned it the hard way. Don’t make my mistake!

Turn off the internet, watch TV later

Biggest time suck ever. Record your favorite shows and watch them later. Limit your Facebook/Pinterest/YouTube/etc. time until you’ve accomplished something first. This is probably the number one mistake I see people make who are working from home for the first time. They turn on the TV for some noise and to keep them company and suddenly they have watched three episodes of Murder She Wrote. Don’t let it happen to you! Turn on the radio in another room or buy yourself a white noise maker if the house is too quiet.

At home with no one cracking the whip or no deadline pressuring you, you may be shocked at how much time you spend online. I just cut myself off during most of the day because I’m no good at portion control when it comes to social media. If you see me on Facebook during the day, I’m probably in a waiting room or standing in line somewhere with my phone.

Set office hours

When you work for yourself, you get to choose your hours. I love scouting during the week but I often have to work weekends for book sales and estate sales. My goal is to spend my weekends with the family as much as possible. We eat dinner together every night year round. These things are important to me. This means I will work at night sometimes and I will sometimes do kid stuff and house stuff during the day. During the summers, I tend to do a lot more of my work at night than during the day simply because my son and his cousins are off from school.

What’s important is to have a plan to work that works for you. Some people are morning people and are most productive before noon. Others are like me and are more productive in the afternoons and evenings. Plan your activities according to your personal preference. That’s the joy of working for yourself!

Now, for the hell of working for yourself from home…your office is always open. People working from home often fall into the trap of working all the time. The office is right there and they can’t tear themselves away. Without meaning to, they find themselves working 60-70 hours a week and thinking “why did I think this was a good idea?” They are exhausted and sick of the house. This is why I strongly recommend you set office hours for yourself. If you want to continue to work 40 hours a week, figure out what hours in the upcoming week will be spent on work. Maybe it is 9-5 every day just like when you had your job. Maybe you work a lot of hours Friday-Sunday and then few hours on the other days packing, shipping and repricing. Maybe you work four hours a day during the week and then 4-6 hours a day during the weekends. I will often shut the door to my office as a physical reminder that I’m done working for the day. I need to do stuff like this because I’m a recovering work-a-holic and can easily find myself working instead of living.

Lastly, maybe you don’t set hours but you set weekly goals you want to accomplish. There is no rule that you have to work 40 hours a week! What you want to do is build your business. In my case, I don’t have a huge inventory budget. There would be no point to me shopping six days a week because I’d run out of money early in the month. So my goals are to get out one decent sized shipment a week. I have UPS come on Fridays and I try to have a lot of boxes ready to go. Someone else with more resources may be having UPS pick up three times a week or even daily. I keep a steady pace that has helped me grow over time.

Jessica Larrew mentioned in a blog once that she and her husband each work about 25 hours a week on average and they have a very successful business. The point is, when you work for someone else, they want their 40+ hours from you and they’ll fill up your time. When you work for yourself, you can focus on what makes you money and drop most things that don’t. It is very liberating. If you are focused during that time and cut out distractions, you will get a lot done.

Make a plan for your feelings

Sounds weird, right? But here’s the thing. When you go to work every day, you are in a professional mode. You may have had a fight with your sweetie or be sad or angry, but work keeps you focused (most of the time) and you deal with your feelings differently than when you are home. When you are home – often by yourself – there is no buffer or structure. You may discover that you are feeling your feelings more than you did at work and it can be stressful. If you have kids at home when you are trying to work – you may find yourself frustrated and grumpy by the constant interruptions. You may find that your house is eerily quiet during the day and you are distracted by the silence which gives you time to ruminate.

I’m pretty disciplined in my work at home except when I get the blues. I used to watch hours of mindless TV to numb the feelings. This is OK for an occasional day here and there, but actually makes me feel worse. I’m overall happier when I’m doing stuff that I think is important. Now if I’m having a down day, I read and sleep. I try to exercise and take care of myself. I’m an introvert so going inwards recharges me. You may be completely different. Maybe being with people recharges you. In that case, go out. You might find yourself really lonely at home. Find a Starbucks and set up your business there for a few hours (repricing maybe?). Or call Amazon and ask them a question about your business. Chat for a few minutes with a friend. Go to the gym. Break up your day so you are not alone all day in front of your computer listing and shipping. You will be happier and more productive overall.

Even introverts can get lonely in this business. We spend a lot of time alone in stores and at home working. This is why I like to go to yoga classes during the day when I can. It is also fun to have pals in the business that you can call or text with your latest cool deal. That is part of the fun of being part of the ScannerMonkey online community – friendly scanners who get it. I have friends that I like to go scouting with as well. Not only do we cover more ground with our divide and conquer approach, we get to squeal together when the deal is super wonderful.

Get dressed

 While it is nice and comfy to wear your PJs all day…don’t do it too often. Getting dressed tells your mind that you are ready to work now. You are ready to spring into action. It has been proven that getting dressed in the morning makes people more productive. There is something about jammies that makes you slower and more inclined to nap. Save them for sick days. Being dressed also means you will not be embarrassed when a neighbor or the UPS guy knocks on your door or shamed by your sweetie coming home from work and seeing you unwashed. You will not feel grubby and stinky at the end of the day. All that being said, my work uniform usually consists of a t-shirt and jeans or yoga pants and a t-shirt so I’m still pretty comfy.

 Make a three-goal list for yourself

When you were working the business part-time, you probably focused on the essentials because you didn’t have a lot of time – scout, ship, reprice. Things like sales tax, increasing the amount of seller feedback, wholesale vs. retail arbitrage and so on were put on the back burner. Now you will have more time and the confusion sets in. Where should you be spending your time? My suggestion is to spend most of it the same way you did before – scout, ship, reprice – and take all the other issues and elements and make them side projects. Take them one at a time rather than tackle everything at once. Make sure you are focusing on buying and selling inventory first and foremost.

I learned the three-goal list technique from one of my favorite Zen guys and one of the most accomplished and productive guys I’ve ever seen: Leo Babauta. He wrote the books The Power of Less: The Fine Art of Limiting Yourself to the Essential…in Business and in Life and Zen Habits: Handbook for Life. In a nutshell, this recommendation of his is that you select three big goals that you want to work on. They can be personal, business, whatever, but they have to really matter to you. This is not a “honey-do” list of chores but a life-affirming list of accomplishments you want to achieve. Assuming that one of them involves building up your Amazon.com business to a certain level, every day you would work toward that goal until you reached it. Before you did anything else that day (if at all possible), you would take action on that goal. In this way, you will accomplish something really important to you every day. Naturally a really big goal has lots of parts and may take time to reach. Here are two of my three current goals:

  • Consistently earn $5,000 a month (after expenses and reinvestment) in my Amazon.com business so we can…(I have an exciting list here of things to do with the money – money itself is not inspiring)
  • Be healthy enough not to require any medications

These need to be goals that provide juice and keep you motivated. Every day I work towards these two goals and another. Sometimes I do a lot, sometimes a little. Sometimes my “to-do” list under the first point is incredibly long but I don’t plan to do it all in one day, week or month. I break it out. What is great about this approach for me is that it simplifies what is most important to me and I have a sense of accomplishment every day. According to Leo, you don’t drop or add a goal until you’ve achieved one. Once I’ve achieved my first goal, for example, I will replace it with something new but until then, no new projects.

Now am I saying I only do three things a day? No way! What I’m saying is that these are my “big rocks” and the sand of life has to fit in around them. Once I’ve checked off something towards my three goals, I have plenty to do as a mom, wife and business owner. What this approach does for me is helps me to strategize and then execute on that strategy. Once I have my goal, I work backwards towards what it will take to reach it. I’m forced to look at my activities in light of reaching the goal and determining if they make sense or not. In this way, I get something done that matters to me and my life isn’t consumed with housework, homework and chauffeur duties.

Writing this blog, for example, is a double win for me because I get to help other people which makes me feel good, and the blog supports sales of my book and video which are part of goal #1.

Review expectations with your family

Don’t be surprised when you move into the house to work, that your family might not get the memo that you are working. Home is so associated with downtime, chores and weekend stuff that – without realizing it – your spouse may suddenly expect you to do more around the house during the day. If this is also your plan; all is well. If you are like me, however, this is a recipe for marital disaster.

I’ve spent time off and on over the years setting boundaries and expectations with my husband about the times when I’m working from home. I had to make it clear that I’m still working and that is my priority. If I get in a load of dishes, fine, but it is my choice and there should be no expectation that I will do domestic chores during my working hours (cockroach killing being an important exception). To my mind it is no different than if I was going to an office.

I’m OK as a multi-tasker, but I do better when I’m focusing on one thing at a time. When I’m in “work mode,” I don’t want to be disturbed and NO, I won’t remember to do something else outside of that. I often lose track of time when I’m writing or working. I once set a pan of boiling eggs on fire because I forgot about them. My husband sets timers to remind me of things. He’s a smart man.

On the other side of the family, they have rights too. You have now moved work into their home – the place where they like to relax, sleep and play their music way too loud. They want to be able to live in the house too. This is why having office hours is important. You can tell them when you will be done and ready to be with them. One thing I learned early on was that it bothered my husband if I kept working when he came home.  Now I make a point to stop for a few minutes to chat, hug and catch up even if I still have work to do.

When we adopted our son and I moved the business home, I did so specifically so I could spend time with him. I cut my business back and I picked up more of the chores. I made a commitment to stop working at 3:00 p.m. and pick him up. This was our decision as a family. Everything changed.

When I started my Amazon business, I had a full-time business run out of my home, care of my son and then Amazon. It was crazy. My husband has a full-time job, too, and we had to revisit expectations again. He picked up more of the home chores, we gave our son some chores and we talked as a family about making it all work. I fully expect we will have future conversations about work and home because that’s life – it is always changing.

Plan for fun

Because you will likely be at home more than you were previously, you might think that you will have more time with your family. This is true to an extent: but are these quality hours? I’m home for my son after school to nag him about his homework, make dinner, drive him to his various activities, etc. He sees me cooking and running around but we aren’t necessarily having quality time together. Those of you with teenagers know what I mean – you mostly see the tops of their heads as they text their friends about how lame you are. Because the business is at home and because there are likely a jillion other things to do around the house, it is easy to forget to have fun together. Life becomes one long to-do list and set of logistics.

Early in my marriage I started scheduling fun for us just like any other appointment. There’s a time and a planned activity. To the best of our ability we have fun together at least once a week. My son and I have made a game out of snagging movie tickets to reviewer previews and usually are able to see a couple of movies a month for free. Free always makes the movie better than expected.

A friend of mine just took an amazing trip with her son to England where they hiked across England…one coast to the other. They had built up their hiking legs during many months of training beforehand so they could hike 20 miles a day in rough terrain. They were rewarded with the most astounding experience, views and adventures during their nearly three weeks in England. I couldn’t wait to see her FB pictures every day. I am so inspired by her story. One of the things I loved about it was she got to spend lots of hours every week with her son before the trip as they hiked around North Texas. This is a journey neither she nor her son will ever forget. She paid for it with her Amazon.com business. It really got me thinking. This kind of experience is why we work and if you’re going to plan for fun, plan BIG.

Tess at restAs a final note, there are a lot of benefits to working from home – be sure to enjoy them! One of my favorites is that it is always “take your pet to work day.” My sweet dog Tess went to heaven this week and I miss her terribly. She always supervised my work with genuine interest and made sure I had fun every day.




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Christmas in July with Amazon FBA…

While most of the world is focused on vacations and keeping the kids occupied during the (long! long!) summer months, retailers are gearing up feverishly for Christmas. The question is…are you? Early bird shoppers and budget planners start shopping for Christmas in September. My sales start their steady upward climb in August and conclude with their highest sales in November and December. If this is your first holiday season selling Amazon FBA, here’s what you can expect starting in August:
  • August – increased sales for birthdays (toys, party supplies) and back-to-school (I finally will sell off the rest of my Tinkerbell erasers), college dorm organizers, textbooks and school calendars (18-month)
  • September – continued sales of textbooks, back-to-school, Halloween, fall foods and décor, Christmas begins
  • October – Halloween, party supplies, Thanksgiving, gourmet food galore, candy and other meltables, Christmas
  • November – Thanksgiving & Christmas
  • December – Christmas
  • January – Returns and gift card purchases for first two weeks. Valentine’s Day gifts, candy and party supplies.

If you are sighing right now because sales are slower than you like, change is around the corner. August is only six weeks away. The big retailers are getting ready for Christmas now by first clearing out the old stuff and then stocking the new. This Retail_Flipping_cvr_smlgives us two great shopping opportunities. Even though August is the biggest month of the year for birthday parties, stores routinely dump last year’s toys in July, so keep a look out. I’m a big fan of Steve Lindhorst’s book** Retail Flipping which taught me how to time my purchases for maximum sales later. He’s created a retail calendar that shows when stores are clearing out valuable merchandise in different categories so we can buy low and sell high later. Just learning that the stores have big toy sales in July was worth the cost of the book to me – but there’s more. You can check out my blog post on the concept of timing HERE.

Stores that don’t normally sell toys or not as many toys (think about Fry’s, Home Depot, grocery stores, etc.) will start stocking them in August and September and/or giving them expanded shelf space. Every store will bring out their special holiday items early. Even if you don’t sell toys, there will be holiday opportunities in your categories. Last year I sold doggie costumes (so cute!) at Halloween, mincemeat from September onwards and special beauty supplies during the holidays. Items that sell year-round like bedding will jump in sales around Christmas as kids get new Avenger comforter sets and Hello Kitty décor for their rooms. Expensive appliances sell like hotcakes. New and Like-New books jump in sales, collectible games and toys…you name it just about everything sells more over the holidays.

We are half-way through June which is an excellent time to plan for Q4. It is easy to spend time working in your business and forget to work on your business. Time to put on your CEO hat. Unless you are already a super-seller with huge lines of credit, there is far more inventory out there than you can possibly buy. The trick is to make your inventory dollars count. If you are on a budget like me, you will be replenishing during November and December from sales from September and October. To get your strategy session started, answer the following questions for yourself and your business:

  1. Which categories bring me the greatest returns? If you don’t know or are guessing, I strongly suggest you spend an hour or so looking over your past sales. Compare cost to the actual sale price.
  2. With which categories do I feel the most competent? You tend to make better decisions in categories where you have some knowledge of the brands, products and buyers.
  3. Where do I spend the most time in my business? Can I reduce it? The holidays are insane. You will be working harder than any other time of the year. You need to figure out where your time is best spent. I am currently sending up hundreds of books while I have helpful elves like my niece with me. Starting in July/August, I won’t be doing nearly as many books because they take a lot of time. One hundred new pet toys take a lot less time to process than 100 books. Some people take advantage of Amazon’s stickering service this time of year (20 cents/unit) so they can get boxes up to Amazon quicker. Others arrange for regular UPS pick-ups at their house (free for a year with new UPS Connect program).
  4. How much am I willing to invest? You’d be surprised how many people spend without a budget and then stop when the money is gone. Don’t max out your credit if you’re not sure you can make payments on the back end. Also, if you can’t pay back the credit extended in six months or less, it is probably a bad idea because you will be spending a lot on interest. When budgeting, don’t forget that you will have expenses as well. You can’t put it all into inventory.
  5. What products have brought me the best returns? Why? Replenishing and selling the same products over and over again may seem boring when there is an exciting world of new products out there, but repeat sales are your key to financial success.
  6. What items in my current inventory are turning over the fastest? What might turn over faster during the holidays? Inventory turn is the name of the game. You need to balance items with high returns but slower turn (like many appliances) with items with faster turn even if they are for a lower profit per unit. Skip McGrath talked about this in a past blog where he determined whether an item was a better Amazon or eBay item. Often he would sell on Amazon for lower margins if the turnover was higher.
  7. Where are my greatest failures and/or smallest margins? Doing the same thing over and over again and expecting different results is the definition of insanity and yet many sellers find their failures painful and ignore them rather than learn from them. I’ve greatly reduced my purchases of new toys simply because I found that I had to reduce my margins over and over again to compete. In addition, they required a lot of my attention. In the name of efficiency and my sanity, I dropped out of the toy frenzy. I sell a lot of collectible toys and games that I find at estate sales, thrift stores, etc. Your decision may be different from mine. During the holiday season I will be watching my sales closely every day and repricing, but food and bedding tend not to be as volatile which makes it a faster and easier process for me.
  8. What expenses will increase during the holidays? In every business there are two types of expenses – fixed and variable. Variable expenses rise and fall with the volume of the business. Fixed expenses stay the same regardless of your level of business. Some expenses can be both – like employees. You have fixed costs per employee like salary and benefits, but your variable costs also rise every time you have to hire a new person like buying another computer or moving into bigger office space. Fixed costs like rent/mortgage, electric, etc., must be covered and suck up all your profits if your sales are low. Shipping costs like boxes, tape, stickers, polybags, etc., are variable costs that rise with increased sales and reduce when sales shrink. When buying and pricing your new inventory, you need to make sure it will cover all these costs. One of the biggest mistakes I see new sellers make is not charge enough for their merchandise and then wonder why they aren’t making any money – their expenses are eating them alive. Summer is an excellent time to take stock of your expenses. Can you reduce your cell phone bill and other monthly bills? Often you can with just a little research and a few phone calls. Having larger shipments with more boxes will reduce your shipping costs. Check to see if there are supply sales you can take advantage of (Uline has regular sales, for example) and buy in volume for a lower cost per unit of items you know you will need. If you take stock now, you will be prepared this fall. I have been out at midnight buying boxes and tape – not fun.
  9. Cleaning TimeIs my inventory fresh and clean? When you are working fast and furious it can be easy to let things like listing errors, repricing and old inventory slide. You want to go in to the fall with everything priced well, all listing errors fixed and old inventory cleared out (as much as possible). If nothing else, there is a long-term storage fee assessment coming up. Take a page from the big retailers – sell your losers now and re-use the cash for fresh inventory.
  10. What is my diversification strategy? Don’t put all your eggs in one basket if at all possible. You want to spread your risk over categories and product lines. Sellers of Disney Frozen merchandise woke up recently to a nasty surprise that all their listings had been suspended while Amazon looked into some fraud issues.   This caused quite a bit of upset among those who had thousands of dollars of Frozen merchandise in the warehouse – most of it toys. Those who had a more balanced inventory of multiple categories and product lines were calmer and more able to wait and see what happened because they were still selling stuff every day. Even if nothing dramatic like this happens, there is always the risk of a product becoming oversaturated with sellers who are busily driving the prices to the bottom. Until your sales are substantial (which is a subjective term, I realize), you probably want to diversify. I sell books, for example, because they sell every day. I don’t make a fortune off of books, but they are steady, easy to find and really cheap. I usually only have 1 or 2 of a particular book at any given time so there is no great loss if I have a loser on my hands. I also sell brand new products from retail stores in beauty, grocery, pets, toys, baby, kitchen and home. When you are out scouting, be sure to look in all your categories and think about where you want to put your money ahead of time so that you won’t accidentally spend all your money in one place. Obviously, if you have a small budget, then you will be buying fewer items. In that case, you need to be very selective and find items that are both high margin, low rank with few other FBA sellers (if any). This will take a LOT longer to find and you must be patient because every dollar needs to work hard for you. When you have a bigger business, you can afford more long-tail sales and/or items that are lower margin but fast turnover.
  11. Am I ready to be really successful? Most businesses aren’t. (What the..?) As a former turnaround consultant, I can tell you that as many businesses fail from success as do from failure. They are not prepared for the volume, they make new hires before they can be covered by the business and without understanding all the costs each employee brings to the business, they over-extend themselves on inventory, buy new equipment prematurely…and on and on. They don’t ramp up properly and it destroys them. Now that I’ve scared you half to death, I’ll tell you that growth can be managed with some planning. In addition to examining your successes, failures and expenses, you need to look closely at your current profit and loss and plan for the future. Think carefully about the items you want to buy and how you would handle a lot more business. Would you need to hire some help? Is there equipment you want to buy? Create a plan that says “at $X cash flow per month, I will buy Y,” and consider what other expenses might be occurring at a higher cash flow. I’m an annual tax extender. I do this so I can work with my CPA in the summer when she is not overwhelmed and business is slower for me. It is when I look closely at what is working, how much I made and so on. My CPA set up my books in such a way that I can pull a report that shows my variable costs and my fixed costs separately. I can see the hills and valleys of my cash flow and my expenses – which often have some lag. In other words, my expenses will often come before the increased cash flow. Looking at this information at least once a year helps me make better decisions throughout the year.  The fewer fixed costs you have in your business, the greater the chances for your long-term success.  It increases your flexibility in down times.  This is the same reason financial planners tell you to buy less house than you can afford. This year, my son is going to a public school which will free up quite a bit of cash for our family. I have already planned ahead how I will spend that money so it doesn’t get frittered away. Some of it will go towards inventory, some of it towards a family savings account. Because I will have more inventory dollars, I need to plan for that growth – it is a happy problem to have, but a very real one. Amazon has also offered me a large loan as well as Kabbage. I have successfully used and paid back loans from both companies before so I am trying to decide now if I’m ready for a larger loan and on what exactly I will spend it.
  12. How much money do I need for myself? This is another question that needs to be answered and then stick to your guns. It is easy to keep pouring money back into the business. If that is your plan, then fine. You will grow faster. There are some FBA sellers who take out a large chunk of money after December and then keep the rest of their cash flow in the business for the rest of the year to keep it building and growing. This snowball strategy works well for those who have other jobs and who see their FBA businesses either as bonus money and/or who plan to switch over once their sales reach a certain level. In my case, I needed money right away and I needed it every month. I started with $200 and had very little time to spend. I don’t have credit cards, which keeps me out of a lot of potential trouble but also means I have to stop spending long before I run out of deals. These factors mean my business grew slowly, BUT I have a stable business that produces for me. If I wasn’t able to take out money every month, it would not be worth the effort to me. I’m at the point where I want to be able to take out more money from my business each month so I realize I need to spend more on inventory. Taking a loan from Amazon would be great…but paying it back over 6 months not so much. If those months are slower, then I’m taking money from myself to pay back Amazon. It will take some thought and planning on my end. I’ve already decided that if I take the money, I need to do it now so my payback is during the bigger months of Aug-Dec.

I know what you are thinking: “This sounds like a lot of work!” It is and it isn’t. Amazon has some helpful reports that you can use to drill down into your data. If you use InventoryLab, it does a P&L by product for you automatically (see my post from March on InventoryLab). ScanPower has a lot of data, too, it just takes more spreadsheet work to tease it out (see my New ScanPower Unity Data Report). Depending on what system you use for bookkeeping, you may be able to print these reports pretty simply. I use QuickBooks Online which lets me drill down deeply into my books.

Once you do the work, you will realize the benefits immediately in your sales and future inventory purchases. You will make better decisions and realize more money from your business. You will stop wasting time on profit-sucking activities and spend your time on making money. You will head into the fall with a plan which will make it less stressful for you.

Also, you will be able to turn off the online noise and focus on your plan. What I mean by noise is all the firestorms that rip through the online FBA community on Facebook and other online hotspots on a regular basis. One bad story will blow through cyberspace at the speed of electrons distracting us from what we should be doing…selling. If you find yourself spending hours online every week reading FB posts and worrying, something is wrong. It would be better for you to spend those hours in a store scouting for the perfect deal and educating yourself, or planning on how to make your business more profitable.

What about you? Are there other questions you ask yourself to help plan for the future? Do you have an approach to 4Q that works well for you? Please share in the comments below!

*I receive a commission from sales of Steve Lindhorst’s book Retail Flipping, but I won’t recommend books that I’ve not personally read and used in my business. If you would prefer to go to his site directly without the affiliate link, click http://www.retailflipping.com

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Grocery – Yum! FBA Sellers Eat It Up

old spice basketLast year I wrote about Jessica Larrew’s book Liquidation Gold and how it helped me make money in liquidation grocery stores. She had another book come out recently – Grocery Goldmine –about finding deals in regular grocery stores and I have to admit, I was skeptical. I had looked around grocery stores before and only found stuff when the store was being remodeled or otherwise having a huge sale. The idea of finding regular priced inventory that I could sell on Amazon.com just didn’t seem possible to me.

I’m happy to say that she and co-author Beth Maus were right. I’ve been buying stuff at my local Albertson’s, Krogers, Wal-mart and Target grocery stores and selling them on Amazon! Yee-haw! Sometimes they are sale priced, but what I’ve learned is that they often go on sale. For example, before Amazon Pantry (see my previous blog on this), I was selling Old Spice body washes of all kinds. I discovered that they are almost constantly on sale in one form or another. The best sale is the two for $7 sale, but I often could find the bottles for under $4 and resell for around $12 a bottle. The two for $7 sale seems to run every six weeks or so. Even though I lost a few to the pantry (and the multi-packs weren’t worth it), I’m still selling some of them regularly and it is so easy to pick them up when I’m in the store.

Old Spice High Endurance

Some stores are better priced than other stores, naturally, and I’m gradually learning where to go for what foods. I was surprised at the selection and value pricing in Target’s grocery section (even though I shop the other departments all the time). I’ve shopped Sam’s Club, too, but with mixed results. I am not the only FBA Seller shopping Sam’s and so I have some inventory languishing up there waiting for the low-ballers to sell out. One of the things I learned from Grocery Goldmine was what to look for when scouting. In other words, I’m not going to scan all the 50,000+ items in a typical grocery store. As my son often says, “ain’t nobody got time for that.” The book helped me focus my search so I didn’t waste time.

Since I started in grocery stores, I’ve bought and sold body washes and loofas, cake mixes, soup mixes, bread mixes, corn bread mixes, spice mixes, coffee, cereal and those drink powders you put in your water bottles for flavoring. I’ve been pleased with nearly everything so far because they sell relatively fast. Most of my items are gone within the first month which is awesome.


The book is set up like a workbook and there is a lot of math in the examples so you can see margins and how the authors make decisions when standing at the aisle. Once they find an item that is a good seller, they can sell it again and again with no need to buy in huge quantities. This keeps inventory dollars freed up for more high-turning inventory.

I’m still learning and I had to make the Walk of Shame a couple of times as part of my learning curve. For example, even though they warned about it in the book, I didn’t read the fine print carefully enough on a deal. I discovered when I got home that I only got the sale price on the first four of dozens of cake mixes I bought at each store. It was excruciating to return around 60 cake mixes to the harassed young lady at customer service while the line behind me stretched and people fidgeted while trying (unsuccessfully) not to look annoyed as I delayed their ciggy and lottery ticket purchases. Lesson learned: 1) read the fine print and 2) pay attention to the register when you are checking out. I learned the hard way to not get distracted by children, trashy magazines or my own fatigue.

I also found a lot of Moon Pies for $1 a box that were selling great with no other FBA sellers or very few. When I got home it occurred to me that the coating on the Moon Pie, as well as the marshmallow filling are meltables. What was I thinking?!? I was thinking “cookie” more than coated. I’m not the only one who has made that mistake. Two FBA sellers are selling Banana Moon Pies right now. Amazon hasn’t pulled them, but it is very likely that deliveries to the South where it is already in the 90s will be a sticky mess. Marshmallows and chocolate both melt at body temperature. Lesson learned: think meltables before checking out. When I followed up the 60+ boxes of cake mixes with 30 Moon Pies of different flavors, the clerk called for back-up. It was more awful than I can adequately describe to hear her snap at the poor stock boy. Plus, I’ve been craving Moon Pies.

Jessica and Beth also cover things like buying with coupons, rain checks, price matching and more. So far, I’ve not tried any of these techniques as I’ve found plenty of stuff to buy right off the shelf. Once I get a steady group of regular items, I can see how they would save me money. The book also covers expiration dates (unlike liquidation groceries, most grocery items have plenty of time to sell) and how to decode the numbers on candy and other items to learn expiration dates when they are not obvious.

I appreciated learning how the ladies decide to create a bundle and/or add new items to the Amazon catalog. The discussion of multi-packs was also useful because it can be tricky to figure out at what point does a large multi-pack become too bulky and too heavy to sell. I find that scanning in grocery takes longer the first time since I often will look at multiple offers before deciding whether or not to buy something. If an item has a very low rank, the chances are high that Amazon is selling it for an unbeatable price. If I look at a hot item and Amazon is not selling it, my first thought is that Amazon is out rather than Amazon is not selling it. One clue will be the scarcity of other FBA sellers. In those cases, I’ll either pass on the item or I’ll look to see if it is worth selling as a multi-pack.

With the launch of the Amazon Pantry, I’m more cautious about selling solo items. New Orlean’s King Cake Kit? Yes. Those are unlikely to be added to the Pantry. Brand-name Body Wash? No. Look for a multi-pack or bundle.

Something else I hadn’t thought of before reading the book was the huge variety of seasonal items that sell very nicely in the off-season (like the King Cake Kit) and even limited edition foods/packaging that are store exclusives. While I often look for exclusives in Toys, I had never thought about it for food or beauty. This 3-pack below is a store exclusive.

Dove body wash

Food and Health & Beauty overall are more work than other categories like Toys. Most items have to be poly-bagged with expiration dates and “this is a set” stickers. It can take a lot longer to scan during a scouting session and there is certainly more to think about like meltables, multi-packs, etc. However, I feel these disadvantages are off-set by the fact that these items are consumables and will continue to sell and sell. Because they can be found in most grocery stores, your supply is always available. Once you find a nice-selling item, you can sell it for a long time.

There are millions of items in these two categories – many of which have yet to be added to the Amazon catalog. The potential for continuous growth in this category is awesome.

Both of these ladies have successful full-time Amazon FBA businesses selling primarily food, health & beauty. Seeing how their minds work and how they approach their businesses was very helpful to me. I’m very excited about this category for my business and can see it becoming a larger part of my overall inventory.

If you are interested in learning more, you can buy Grocery Goldmine HERE or Liquidation Gold HERE. I make a commission if you buy through these links, but you will pay the same price if you go directly to her site at http://www.jessicalarrew.com. I occasionally take advantage of commissions as a way to help compensate me for the time I put into my blog, but I won’t recommend products/services that I’ve not checked out first.


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Worried about Amazon Pantry or Amazon Supply?

pantryAmazon is constantly coming up with new innovations in its quest for world domination…er customer service perfection. These create mixed feelings in the FBA seller community because change is scary and because Amazon doesn’t always act in our best interests. In this concern we are not alone. I imagine all of Amazon’s partners have these moments. Two innovations that have recently been launched are the Amazon Pantry and Amazon Supply. Supply has actually been in beta for about two years. I’ll tell you later why you’ve not heard of it before.

The Pantry is more likely to impact our businesses. What Amazon is doing is allowing busy consumers to order what it calls “pantry” supplies for a good shipping price. It will provide all kinds of conveniences:

  • Easy ordering of your favorite non-perishables – limited choices=faster shopping
  • Ability to remember orders/brands for faster re-order
  • Fast payment through 1-click, etc.
  • Separate website from Amazon.com
  • Fill a large box for $5.99 and get it delivered in 2 days
  • Buy individual items rather than large multi-packs of your most frequently used goods
  • The Pantry keeps track of your order and lets you know when your box is full so you can decide to fill another box or not
  • Can buy Tide, cereal and other heavy or large-size items and get a flat shipping rate
  • Good prices on pantry items – not jacked up
  • You are buying directly from Amazon – no third-party sellers

I don’t know if they are sending out reminders to keep the pantry stocked, but I bet they will. Having represented a grocery chain in the past, I can tell you the Pantry is worrisome. They are not only fighting off Wal-Mart, now they have to seriously compete with Amazon.com. To some degree the “3-mile” rule will still hold true and the convenience of dropping in day or night for some ingredient or wine will keep people in the stores, BUT consumers don’t like to go grocery shopping.

Many of the more profitable shoppers will now drift over to Amazon for the very goods that make up the foundation of a grocer’s bottom line. It’s the Tide®, not the eggs that make them money. This is both good and bad for us as sellers. More people will be buying online which is good, but our sources for inventory will be closing over time which is bad. Rather than fiddle while Rome burns, let’s make some money!

What does this mean to us?


  • We will probably like the Pantry as consumers
  • The Pantry is currently limited – basic supplies like salt, pepper, soap and Tide – not the fancy stuff like chickpea spice
  • If Amazon is out of something, Pantry customers will have to go to Amazon.com to get it
  • Most of the items Amazon is selling in the Pantry never were good opportunities for us since Amazon sold them already at a price we couldn’t beat
  • If people don’t have a full box of goods they want to buy, they may choose to buy off of Amazon.com instead
  • People may not want to pay an extra $5.99 shipping (remember, Prime members are spoiled!)
  • For the short-term, our bundles and multi-packs should still sell as the Pantry is so new most consumers don’t know about it
  • Amazon Pantry is a separate website which some consumers won’t like
  • If someone wants to buy a mix of pantry and other goods or only a few pantry goods, they may decide to buy off of Amazon.com and get free shipping


  • We are now excluded from selling single items that are in the Pantry. Period. No solos on Amazon.com either.
  • Pantry customers will not see their other choices. If they want six “Singles to Go” drink mixes, they will likely buy six individual boxes from the Pantry rather than a multi-pack from one of us
  • The Pantry will expand over time
  • Once Amazon adds an item to the pantry, it will probably no longer be a good seller or as good a seller on Amazon.com in any form/bundle/multi-pack
  • Pantry goods show up on Amazon.com which will help consumers find the Pantry

For those of us who are currently selling items that Amazon has added to the Pantry, we will probably not be replenishing those goods once they sell out. I’m going to wait and see on that. I do have several multi-packs up there that Amazon added to the Pantry as solos. We’ll see.

From a competitive perspective, my approach is going to change a bit as I focus on items that are not in the Pantry. When I was scanning earlier this week, I would look at multiple offers for my desired products and I saw several where the department said “Pantry” instead of “Grocery.” So the good news there is we can find out if something is a Pantry item before we buy it.


  • If you pick up something and see on your scanner that it is sold as a solo item, check the offer to see if it is a Pantry item
  • Look for unusual items that are not in most people’s pantries and/or are harder to find – exotic spices, mixes, smelly tinned fish, ethnic ingredients…that kind of thing
  • Look for regional goods that are unlikely to be added to the Pantry
  • Consider more bundles rather than multi-packs
  • Just like discontinued toys, discontinued foods still offer us an opportunity (check those expiration dates closely!)
  • There are brands that Amazon does not sell (the manufacturers don’t want to work with Amazon) which are opportunities for FBA sellers

Lastly, don’t panic! With the changes in category restrictions last week, there was a lot of panic and speculation that turned out to be nothing for most of us – a real tempest in a teapot. The Amazon Pantry does mean change for us, but we still have opportunities. Competition is a fact of life in sales and we compete every day against Amazon, other FBA sellers, MF sellers…we can handle this!

Amazon Supplyamazon supply logo

Amazon has been very quiet about this program. It won’t affect most of us, but it is sending waves of panic through the distribution community. If, for example, you provide electrical supplies to electricians or medical supplies to hospitals…you are very unhappy.

This is Amazon’s business-to-business site that will one day be the Amazon.com of B2B. They already provide over 2.25 million items compared to the average small distributor that offers around 50,000 SKUs. You may know that most contractors don’t buy their supplies from Home Depot, but do you know where they actually go? Small mom and pop distributors are usually in cheap industrial areas with no frills. They tend to specialize and run deep rather than broad. Their prices are better than a retailer because their costs are lower. Many of them are also selling online with the offer of in-store pick up or on-site delivery. Amazon can’t offer that, but with their ability to drive down prices and offer depth along with free 2-day shipping….they are going to be a huge profit source for Amazon one day.

Since most of us shop retail arbitrage, this won’t impact us. Like the Pantry, only Amazon sells on Supply. Unlike the Pantry, I found many items that were on both the Supply and the Amazon.com site. So while we can’t sell on Supply, we can offer our competing goods on Amazon.com – assuming we are approved for that category.

If you sell a lot of office supplies, you may want to check out Amazon Supply to see if you are competing with Amazon, but even so these are industrial office supplies in larger quantities rather than a box of paperclips. I doubt many FBA’ers sell reams of paper. Amazon Prime members get free 2-day shipping on about 100,000 items on Supply. In addition, Amazon Supply offers free 2-day shipping on orders over $50.

As a business owner, you may want to look at Supply as a source for your printer ink/toner, tape, packing paper, Dymo compatible labels or to have reams of paper delivered to your office. Amazon Supply also sells cardboard boxes for good prices and free shipping over $50…a great deal if you don’t live near an Uline.com. If you’ve always wanted to own an industrial kitchen sink or a 3-D printer…Amazon Supply sells it.

As a FBA seller, it is good to be aware that it is out there. If you have a line on new specialty hardware that you think would sell great to a business, check to see if it is already on Amazon Supply. Much like the Pantry, Amazon Supply is somewhat limited in its suppliers. In other words, it is not working with all the medical suppliers on the planet, just the big ones. If you have something that is special and not being sold on Supply, it might be sellable on Amazon.com – check with them before you drop a few thousand dollars. Depending on the item, you may not be able to sell it on Amazon.com because some B2B items are tracked and monitored. Sometimes it is required that the buyer prove they have permission to buy. On Amazon Supply, Amazon can handle this function as well as take line of credit payments, allow businesses to designate authorized buyers, fill orders by phone, offer certificates of conformance (for raw materials) and other services that some businesses require.

Amazon Supply can and does ship HazMat items that we can’t, which is another reason you may see something on Supply and not Amazon.com. Amazon Supply has been up and quietly running for about two years in beta. This means any impact from items being pulled to Supply has already happened. If you see a good rank on a Supply type item on Amazon.com, it is safe to assume that is going to stay that way. Unlike Pantry which shares the same buying audience as Amazon.com, Amazon Supply’s audience is truly different. They are unlikely to cross-shop for their businesses. They have accounts and purchase authorizations with Amazon Supply that they don’t with Amazon.com.

This is why I wanted to write this post – to reassure people that Amazon Supply is not something to worry about right now unless you are a mom and pop distributor. It might be a useful supplier for our businesses and won’t stop us from selling competing items on Amazon.com.

Did I overlook something important about the Pantry or Supply?  Please leave me a comment below!

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Co-mingling – Stop Inventory-Transmitted Disease!

it can happen to you posterIf you’ve been selling for a while, you’ve probably run into the idea of co-mingling. You may have even gotten an invitation from Amazon to co-mingle some of your FBA inventory with theirs. Sounds cozy, right? What could go possibly go wrong? Well, it is a lot like those health films you used to watch in school. Yep. Co-mingling can lead to an inventory disease – gasp! The problem is so bad right now that the WSJ wrote about it this weekend [download PDF WSJ story on comingling here]. And they normally love Amazon.com.

So what is co-mingling? Basically, you send in naked inventory to Amazon without stickers. They mix your stuff in with theirs (blush). When someone orders that product, the Amazon workers grab the first one off the shelf and toss it on the conveyor belt. They do not make any judgment or decision about the product (totally amoral!).

The sellers who co-mingle most are generally buying large quantities of merchandise (perhaps from a wholesaler) which is being sent directly to the Amazon warehouse. If you want to learn more about how it works, Amazon has a YouTube video about it.


  • Easy for seller – no stickers required
  • Can ship inventory directly from wholesaler to Amazon warehouse without the extra step of needing to put on individual stickers
  • Saves money on shipping
  • Saves time
  • If you are buying goods from a manufacturer, your product is the same as the one Amazon is selling
  • Allows Amazon to ship products to customers faster and less expensively


  • No control over product received by buyer
  • Other sellers may not be as scrupulous as you
  • Chance for knock-offs and fraud is much higher
  • Sellers are not held responsible for their inventory – no accountability
  • Buyers could ding you for someone else’s mistake and you have no recourse
  • Manufacturers are forced to restrict their products from third-party sellers in order to protect the integrity of their brands

Please note: Since this post went live, I’ve learned that I was wrong about this paragraph. Amazon does not co-mingle without our permission. See Paul’s comments below. I’m grateful to have this explained to me and all of us which is why I left this paragraph in here:  And to add to the shame, you might be co-mingling without even knowing it – gasp! gasp - womanFor certain very popular products, Amazon co-mingles the inventory anyway. You have your sticker on back, but they just grab the closest one to fulfill. I had this happen on more than one occasion where a buyer returned a “defective” toy. I had it returned to me to see what had happened and to see if the product could actually be re-sold on Amazon, eBay or CraigsList. I was puzzled to realize that the item I got wasn’t even mine! It was some other seller’s sticker on the bottom. (One time I also had a product returned that I don’t even sell – go figure.)

Fake FrozensSeller Robbie Moon posted pictures earlier this week of Frozen dolls he had ordered from Amazon (not a third-party) that were so clearly knock-offs that anyone could tell. It wasn’t subtle. He thought that Amazon was selling knock-offs. Most likely, Amazon was co-mingling and had some fakes in the mix. The question asked online was “don’t the workers notice?” Maybe they do, but they don’t have the authority to do anything about it. They just pull and pack. They can only pull out damaged inventory. It is up to us to send in good merchandise. The bad sellers out there are hurting all of us.

Stories like these and the WSJ story are why I don’t send in naked inventory. While I can’t stop Amazon from co-mingling my stuff, I at least have some recourse if they do – my stuff was stickered and I can prove it was not a knock-off. If a buyer complains, I can find out immediately from the FNSKU whether they are actually holding my product in their hands. My sticker is my inventory prophylactic.

Amazon will get a handle on this and we may or may not be happy with their solution. Right now they are pulling third-sneeze posterparties out of certain brands – a move that none of us likes. Just this week they started requiring that sellers be pre-approved to sell in Beauty, Health, Personal Products and Grocery.  This is a clear move to get a handle on the bad sellers and you can bet that some of the bad apples will be gone shortly.

For those of us with good metrics and an established history, we were grandfathered in.  If you were selling in those categories and aren’t sure if you are still approved, look up “restricted categories” in SellerCentral’s “Help.”  Click on grocery, go to the very bottom of the page that comes up to apply.  If you are approved, it will tell you so.  Check in health, beauty and personal products as well.

Regardless of your selling categories, I strongly suggest you protect yourself by stickering your inventory. Amazon offers a service of 20 cents a unit to sticker your items for you once they get to the warehouse.  See the comments below for the URL.

I mentioned my blog post to Bob Willey in passing and he said “add me to the list of people against co-mingling.”  So don’t just take my word for it!

Just remember my friends – it can happen to you!

All that being said, I would love to hear from sellers who co-mingle and like it. Perhaps there is another way to protect yourself from problems besides abstinence? Please leave a comment below!

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Interview with Success: Your Best Amazon Tool

I love meeting other sellers and learning about their businesses. I always learn something new and find myself inspired anew in my own business.  For this reason, I thought I’d occasionally interview some other sellers and share their stories with the community.

Steven ZollmanRecently I had the opportunity to speak with a remarkable young man who started selling Amazon FBA in December and is already on track for $100,000K in sales his first year selling on Amazon. A freshman in college, Steven Zollman proves that an inquiring mind is our best tool in this business. He lives in a rural area in Missouri with few stores, doesn’t own any tools besides his phone, a laptop and a regular printer, and yet he’s building a business while going to college. Steven’s story proves that the best tool for your FBA business is already sitting between your ears. The pictures are Steven’s from his Facebook page.

Q. How did you get into selling online?

In high school I looked for ways to make money online. I originally started with eBay and I was mostly selling video games that I found at garage sales. At the time I thought Amazon was mostly books and I wasn’t interested. eBay was OK but I wanted a way to generate a bigger income and I kept looking online for opportunities. That’s how I discovered that Amazon was more than books. I started selling my video games on Amazon in July 2013. I started casually, but after the first month I upgraded to a Pro Seller because I was selling more than 50 games a month on Amazon. I continued this way for several months until I stumbled on the concept of retail arbitrage in a YouTube video.

I began sourcing toys in December and I’ve sold more than $80K worth of merchandise since then.

Q. As a college student, you must be very busy already – how do you find time for your FBA business?

There are only a few stores near where I am. We have one Walmart and Walgreens nearby. Everything else is about 50 miles away if not further. My nearest Target is an hour away. I get paid every two weeks from Amazon and I plan my shopping trips. On Thursdays you will find me at ToysRUs since I get an additional 10% off by using my TRU card. Over the weekend I will shop in the cities that are hours away. I also go to my local Walmart and Walgreens, but they don’t have a lot of deals since they are the only game in town. I then fit in my packing and shipping around my school schedule.

I’ve also had success with online arbitrage. In addition to TRU, Walmart and Target, I will buy things on eBay or Amazon and re-sell them on Amazon.

Zollman boxesQ. You buy items on Amazon and then sell them again on Amazon for a higher price?!?

Yes! I love online arbitrage because you also get free boxes and packing materials and it is so easy to get the merchandise back up to Amazon.

Q. What do you buy?

Anything that makes sense although I sell about 80% toys right now and about 12% old video games and specialty VHS tapes as I find them. I’m looking to diversify a bit and get down to about 50% toys and 50% other items like Health & Beauty. Toys are really competitive and the prices fluctuate a lot.

Q. What tools do you use?

I run my business lean. I have my smartphone with ProfitBandit on it, a laptop and regular printer (which I already had) and that’s it. I use Amazon to list my products and I use the camera on my phone to scan barcodes. So far that approach has worked for me. When I tell my friends about selling on Amazon, I point out that they can start very small and build. I started with only $500 and look where I am now! My next tool purchase will be a Bluetooth scanner. I know it will make me faster at scanning. I spend a lot of time scanning right now and with my phone I have to sometimes scan a barcode several times before it is grabbed by ProfitBandit.

I buy my boxes and tape at Walmart. I don’t use polybags (yet) and I’ve not bought a lot of books about selling FBA. I get most of my information and support from groups like ScannerMonkey and videos on YouTube. And, of course, from Amazon itself. I am crowd-taught, basically.

Q. What are your goals for your Amazon FBA business?

Zollman amazon numbers

A. When I started school last fall, my goal was to sell about $100K worth of inventory by the time I graduated. It seemed like a stretch goal to me at the time. Now I have to set new goals for myself! As you can see from the picture, most of that $80K or so that I’ve sold has been in the past five months since I started retail arbitrage and FBA. My next goal is to double my sales each year from the previous year.

Q. How do you balance putting money back into your business with taking money for yourself?

A. Right now I don’t take out much money for myself. I live with my parents and have minimal expenses. My strategy is to pour nearly all of the money back in and ramp up the business faster to where it is snowballing. I started with $500 and quickly realized that the biggest impediment to my business was having money for inventory. I take out a few hundred bucks for fun once in a while, but I would rather live lean and build faster at this point.**

[**Gross sales on Amazon.com doesn't equal dollars in your pocket. I did not ask Steven for specifics, but when I look at reports like the one above or gross sales numbers from other sellers in general, I guesstimate in my head that they are spending about 1/3 of that figure on inventory, 1/3 on other expenses like Amazon fees, returns, shipping supplies, etc. and that about 1/3 is profit. In this case, it would be reasonable to guess that Steven has made around $26,000 ($80,000 X .33) so far from his business.  He is plowing that money back in so he can snowball and grow faster. Many of us - like me - have to take out some of the profits each month so our growth is slower. It is inspiring to see, however, what is possible and that more inventory dollars = more sales!]

Q. Zollman toysWhat would you tell newcomers to do to be successful?

  1. Scan everything. I will spend hours at a time in one section of a store scanning. You have to scan a lot to find good deals.
  2. Keep it simple. Buy as little as possible in the way of technology and tools until you’ve got good sales building.
  3. Go to garage sales, thrift stores, estate sales, flea markets, etc., at first if you have limited money for inventory. The margins there are awesome. Start there and do retail arbitrage when you have more than $1000 to spend on inventory.
  4. Learn from other sellers. I share BOLOs (“Be on the Lookout”) and learn from other sellers’ BOLOs. I also learn from reading in groups and watching videos.

Q. What about your friends? Have any of them started their own Amazon FBA businesses?

No. They think it is too much work and would rather stick to their jobs.

Q. I bet they’ll think differently when you start taking money out of your business! You mentioned watching videos and FBA groups when you got started – which ones do you recommend?

Bonafide Hustler, Global Voodoo, and ScannerMonkey spreecasts.

I had to remind myself as we were talking that he was a freshman in college! Steven is out there hustling and proving that if you want to build a business on Amazon.com you can. Period. It doesn’t matter if you live in the country, if you have very little money to start with or if you don’t have all the tools or books.

A strong desire backed by hard work and a willingness to learn are the tools that will serve you best in this business. Happy scouting everyone! By the way, if you would like to ask Steven any questions, you can find him on facebook or chatting with the monkeys on ScannerMonkey.

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Rank, Risk, Reward – Make Your Money When You Buy

riskProbably the number one concern I hear from new sellers is “I can’t find any good inventory!” They’ve gone to a store or two, scanned and walked away with nothing. They are frustrated because they know other sellers are shopping the same stores and finding stuff. Or maybe they are buying stuff but it isn’t selling and they are frustrated because all their money is tied up in inventory. They are discovering that, much like real estate, your money is made pretty much at the point of sale. It is hard to redeem poor purchases later.

They want to know, what is the trick? What am I not getting? This is a hard question to answer definitively because it varies. Sometimes, they are doing nothing wrong, per se, they are just impatient or had other expectations for their business. Over time, however, I’ve seen some commonalities. I’m calling these the Five R’s: Rank, Risk, Reward, Repetition and Research. If you are struggling with what to buy, see if any of these potential problem areas sound like you:


Rank is by far one of the hardest things for a newcomer to understand. On the one hand more experienced sellers say “it is a snapshot in time and only an indicator,” and on the other we say “rank is the first thing I look at.” Rank tells me that something has sold on Amazon.com at least once. This provides comfort that it might sell again. If the rank is really high, then it has been a long time since it last sold. That’s the snapshot part. There may be different reasons for this:

1)      Not a popular item;

2)      No units for sale or

3)      Not priced competitively.

Reasons two and three offer us an opportunity. I will often buy a higher ranking item if it is sold out reasoning that my unit might be quite welcome on Amazon and will likely not have competition (yay!). If I can make my margin at a lower, more competitive price that is an opportunity if I think everyone else is overpriced.

If something is low rank, then it is selling more frequently which assures me that I can turn my money faster. In my classes, private sessions and in my book I share some rank ranges that I use as guidelines for when I’m shopping. With new shoppers I am conservative because I want them to experience inventory turnover and get some money going. How did I acquire my ranges? I experimented. I would try things at increasingly higher ranks and see how long they took to sell. I would use inexpensive items I bought at thrift stores, estate sales, etc. as my experiments. Over time, I got comfortable within a range and would generally stick with it. Rank for me is my first test as to whether or not I should buy something – but it is not the only one. If the rank is within my range, I’ll look to other factors like is Amazon selling it? Are there a lot of other sellers? Are the prices overall good for my margins? While it is OK to have high ranking items in your inventory, make sure that they are the outliers and not the bulk of your inventory. It is great to have a long-tail sale that nets you big bucks when it sells – but that could be months or even years from now. You need stuff that is selling every day and making margin for you.


When I buy an item with a high rank or no rank, I am taking a risk. Every time I add a new product to Amazon’s catalog I’m taking a risk. If there are zero other sellers, for example, I might think my item is super-cool, but maybe no one else does. The first time I bought a Harley Davidson comforter set, the rank was over a million (!) in bedding and there were no sellers. They cost me $25 and I sent in three priced at $125. They sold in less than a week. I then went to every BigLots in the Dallas area and bought all I could find.

I sent them in the first time because I had faith in the Harley Davidson brand and that I would ultimately sell my comforters. Other things I’ve sent in that I thought were adorable took months and months to sell even one unit. Witness the Disney Tinkerbell erasers I bought last August – I just sold my first one last week, alas. Hopefully I’ll sell the other 13 before long-term storage fees. At least they are small and storage is cheap.

Sometimes the problem I see with a seller’s inventory is that there is too much risk in the mix. The seller may be more of a gambler than a business owner. Every successful business owner I know does not like to gamble. They only go to Las Vegas for conferences because they think it is ridiculous to throw money away on a rigged game. Or, they have a pre-set gambling limit and they stick to it. Most of us don’t buy lottery tickets either. If this concept is incomprehensible to you, now is the time for some self-reflection. An addictive, adrenaline-fueled personality will show up in a seller’s inventory in a bad way with lots of risky buying decisions. The potential reward may be terrific, but the chances of success small.

What, then, is the difference between Risk and Gambling? Acceptable risk has safeguards built in and relies on experience and patience rather than luck. Acceptable risk is boring, calm and steady. While all sellers get lucky sometimes with awesome deals, we don’t build our businesses on chance. Most of our business is “bread and butter” type purchases that have ranks in our range, a good margin, and not too much FBA or Amazon competition to torpedo our margins. The “home runs” are fun, but we win the game with steady base gains (I so rarely use sports analogies). If we spend money on riskier inventory with high rank – or even no rank if it is a product you are adding to the catalog – then we balance it with other, proven inventory. We know when we buy that we may never make our margin on this risky item and it is acceptable because this item is an outlier in our inventory and not the bulk of our inventory.

Acceptable risks means setting limits on yourself – keeping within your budget, not overextending, scanning patiently until you DO find that great deal, not putting all your inventory dollars for the month into one purchase.

Over time, finding good inventory becomes easier and easier because you are experienced. Things that seemed risky a few months ago are now part of your regular purchases because they’ve proven themselves. You also have a greater bulk of good selling inventory so adding more experiments affects you less and less – kind of like seller feedback on Amazon.

A lot of people start like I did with very little money to spend on inventory. I tell them to start with books, video games and collectible games primarily. Why? Because they are easy-to-find, cheap and the risk is low. It is like giving a teenager a car. I’m of the “old beater” school of thought because I know my son is going to make mistakes and quite possibly damage his car while he is learning. I’d rather he make those mistakes in a cheap old beater (with good seatbelts!) so he will have greater success later when he can afford a more expensive car. If a book never sells and you spent $2 on it (plus storage fees), that’s not a big deal. If an appliance never sells and you spent $75 on it…that might be more painful. Especially in the beginning when your inventory dollars are tight.

Lastly, if you have ever gotten into financial difficulties in the past because of gambling or compulsive shopping – this business is not for you. It will only feed into your problem. Some people I’ve talked with on the phone I can tell by the words they use and how they talk that they are gamblers or compulsive shoppers. I am saying here what I don’t feel comfortable saying to a stranger on the phone – be honest with yourself. Don’t do this business until you get a handle on why you gamble/spend.


I personally advocate spreading the risk in the beginning which is why I like books and inexpensive items mixed in with other inventory. This is a slower growth plan, though, and some people want to buy the high reward items right from the beginning. Their reasoning is “if I’m going to spend $75, I’d rather buy one appliance/toy/whatever and make $100 off of it in a few weeks rather than 75 items for $1 and eventually make $150 off of it over time.” This is great if the item actually sells in a few weeks, but you can’t count on that.

Or they may think “I’ve got to make BIG MONEY, right now!” I call this the Wheel of Fortune school of thought. It is a lot likewheel-of-fortune-bankrupt-game-tv-show-spin gambling to me and there’s that “bankrupt” slot that gets sellers all the time who try to fly too far, too fast, and tie up money in inventory that they can’t get out right away. Late last summer I reviewed someone’s inventory that was full of high dollar items. They weren’t moving at all because they were the kind of items that people don’t buy that often and/or were the kind that are often given as gifts. I told her that they would sell over the holidays and that I thought they were all great items. Because she needed to make money in the meantime, I talked to her about taking what few dollars she had left and buying books and collectible games.

In addition to buying lots of high dollar/high reward items, another issue I often see is not enough margin. This frequently comes from either not understanding Amazon’s fees or from not understanding their other costs. I’ve seen some sellers working themselves to bankruptcy because they didn’t understand what kinds of margins they need to make.

When I buy something, I fully expect to sell it for a price such that I will double my money – at a minimum. Because Amazon fees vary based on size, weight, etc. and because my costs may vary on these same factors, I look at the “net” on my scanner as a starting point. I add in my projected out-of-pocket business costs and figure out for how much I need to sell that item. If it seems reasonable that I can sell it for that price in a timely way based on the other sellers, I buy it. To be clear, if I’m spending $10, I expect to make at least $10 after I deduct all my expenses (including my initial purchase cost).

I get lots of questions about the exceptions to this rule like “what if it is selling fast? Would you lower your margin requirement?” The answer is I might, you shouldn’t. What the…? Here’s the deal, no purchase is made in a vacuum. It is made in the context of all your other inventory. That margin not only has to reward you for what you invested in it, it also has to cover returns and losses.

The fact of the matter is Amazon will lose stuff, customers will return stuff and lie about why, sometimes your great deal will be torpedoed because Amazon will drop its prices to dizzying lows, other sellers will race to the bottom and have zillions of units to sell before you can sell yours or you will be forced to lower your prices and take a smaller margin. You will have storage fees and on and on and on. It is part of the business. So can you have items in your inventory that are only making you $5 for every $10 you spend and make money on volume? Sure. A few items like that in the context of a much larger well-performing inventory base are perfectly fine. But most new sellers don’t have that yet so I advise them to put that item down for now and keep looking for a better margin.


You have to scan a lot. Many new sellers aren’t finding stuff because they aren’t scanning enough. I recently went with a friend to a book sale for a couple of hours. I walked out with four large bags of books (about 50-60 books). She walked out with seven books. I scanned several hundred books in that time. Because her Scanfob wasn’t working that day, she had to use her phone camera to capture the barcodes. I felt my two hours was well spent. She did not. She scanned a fraction of the books I did. It was a bummer. The next time she goes, it will be a much better experience.

paul coelhoWhen someone tells me they are scanning a lot and not finding anything, I ask them what they mean by “a lot” and frankly it usually isn’t. They are not moving fast and they are not scanning often enough. If you spend a few hours somewhere, you should have scanned hundreds of items. I ask about how many scans they did (your SerialMagic Gears will tell you if you have Android) and it is very low.

You need to scan, repeat, scan, repeat, scan, repeat, scan, repeat until you are in this lovely Zen state called Flow where you are 100% personally efficient and effective…where you feel calm and fulfilled at your task. It may take a lot of practice.

Especially in the beginning you have to scan like crazy. Most of the time the answer will be “no” and you are scanning fast to get to the “yes.” During this time you will not only be developing your patience muscles, you will also be learning about the types of items that are likely to be good candidates.

When I go to a store now, there are whole categories and types of products I avoid there because I already know they are unlikely to bear fruit for me. There are also brands that are either restricted or practically impossible because they have their own store on Amazon. I will go to the most likely items first which makes me more effective. This is what you learn from experience. You can be more successful in less time. There is no way to circumvent this learning curve so plan to spend hours and hours in the beginning scanning stores.

You should also scan a lot of different stores. I had to wean a client off of his Target habit. He found great things there, but on the days when there wasn’t much, he didn’t have anywhere else to turn to for inventory and his sales would slow as his pipeline narrowed. Or, even worse, he would buy “Just OK,” so-so and bad deals because he felt he had to walk out of the store with something to show for his time – don’t do this! Jim Collins has it right when he says Good is the enemy of Great. By broadening his horizons and getting him to scan other stores as well, he now has choices and places to go when one store is a bust.


Tools matter. At the book sale, the difference was dramatic. We both had ScanPower, but my friend’s ScanFob wasn’t working. We were using the same scouting criteria and we were the only scanners in the room during “members only” night. While many people cannot afford ScanPower and ScanFob in the beginning, I tell them to make those tools one of their early purchases after they’ve made some money. This example is why. You can do more in less time. Also, the quality of the data is important.

With changes at Amazon, our scanners now are showing us the most competitive offers according to Amazon – and not necessarily all of the offers. This means that if you see something promising, you need to click through to Amazon’s site to see it more completely and make sure that there aren’t other offers that would make your deal less exciting. This adds time to the process which is a bummer but – as I mentioned before – most of the time the answer is “no” which you can usually tell from rank, Amazon’s price, etc., without having to do research.

For items with no offers or where you feel the offer is too high, you may need to do extra research through the “Hot List” of research sites. ScanPower includes direct links to eBay completed, Google UPC and other sites in its product. This is a neat feature because the UPC/ASIN is already filled in for you and you click right to the answer instead of trying to type on your smartphone screen. Other scanning tools may require you to type in the URLs into your browser.

I saw a product yesterday that was ranked a bit on the high side, but had no sellers. When I checked www.camelcamelcamel.com, I saw that Amazon normally sold that product for $79.99. I assumed that it would have a lower rank normally if there was product in stock. The item was so cheap, I knew my clients could easily charge less than Amazon and still make their margins. I told them to buy it.

When people ask me “Do I have to buy ScanPower Mobile?” or “Do I have to have a ScanFob Bluetooth scanner?”  I tell them no…BUT they’ll want to as soon as they can afford it.  Acquiring high producing inventory is the most important part of our business – you want to be as efficient and accurate as possible.

Remember the difference between me and my friend at the book sale?  I also took my son with me to a book sale this weekend.  He had to spend time examining each scan and looking at the cheat sheet I gave him – he’s still new to this.  However, he walked out with nearly 40 books to my 67 in a two hour period. He had the tools.


It was a stretch to find the “R” for this last thought so it is technically not part of my “5 Rs”: you have to be willing to makeGood-judgment-comes-from-experience__quotes-by-Will-Rogers-43 mistakes and learn from them. Perfectionists will find this business frustrating because there are so many variables beyond your control and because you will make mistakes. Try to manage your risks such that your mistakes when you make them will not affect your overall business too much. In past blogs and my book I’ve talked about mistakes that I’ve made that hopefully you can avoid.

As an experienced business owner of 20+ years, I knew I would make mistakes and I planned for them the best I could by spreading my risk and not spending too much in any one type of inventory purchase. I originally didn’t use credit so I couldn’t get overextended (Last year I tried Amazon’s Lending Program and Kabbage). I also read avidly and learn from fellow sellers on their blogs and in their books.

Several years in and I am still learning and growing. I still make mistakes sometimes (anyone want about 20 Spiderman action figures? Just kidding – I’m donating them to charity) and I have yet to figure out how to make good wholesale decisions – all my experiments have been failures so far.

I’m always fascinated by other sellers’ stories and what I’ve noticed is that most made mistakes early on that helped them ultimately be a better seller. Sometimes when someone posts their numbers or gives a short synopsis of their story, it can appear that they magically started FBA and made zillions. Bibbidi-bobbidi-boo! John Groleau is a good example of this. He has realized tremendous sales numbers selling FBA in a short time. He is an inspiration to me. When you read his book, however, you realize that he had years of online and other sales experience before he ever tried FBA. He made mistakes and learned from them years ago when McDonald’s was putting Beanie Babies in its Happy Meals. [If you don’t remember the fist fights and fury…you are young, my friend!] He also had years of relationship building that has helped him in his FBA business. In short, he paid his dues. His fairy godmother was not around to help!

Be kind and compassionate with yourself when you make mistakes. Look at them as a sign that you are actually doing something right – you are taking action to build a business – and see what lesson you can take away for next time. If you have a lot of mistakes in your inventory right now but you’ve learned from them, then they were simply a necessary part of your business growth. It will get better. Will Rogers had it right.

Do you have additional advice you would share with new sellers? Please leave a comment below! Happy scouting!

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To Advertise or Not to Advertise?

promote girlOne of the great features of using Amazon.com as your selling platform is that Amazon will do a lot of the heavy lifting to sell your product for you.  Not only is it the world’s number one online retail site, but there are all kinds of secret algorithms at work to make your product pop up during searches.  For example, when you shop for something yourself you’ve probably noticed that Amazon will give you recommendations based on your search. It will tell you that other people who bought this product also bought another product with it. It will show you similar products and it will even show you products from other online retail sites that are similar to your product. Not only that, Amazon will follow you to Facebook. Suddenly all the Amazon ads on Facebook are based on recommendations for you from Amazon based on your previous browsing history. It is scary how darn efficient Amazon is.  All of these recommendations are based on what Amazon knows about you, the keywords you used to search, what is most popular in your search category and…advertising.

Yep.  Amazon’s ads are so slick they look like Amazon itself. Because they are constantly promoting other options to you, you may not even realize that someone has paid to be one of your shopping options. So what does this mean to you as an FBA seller?  It means firstly that Amazon is constantly promoting your goods to targeted buyers for free.  If your product’s rank is the lowest in a particular category or search term, your item will be at the very top.

advertising avengers 1

Next, if you are an FBA seller, your offer will appear before the merchant sellers when a buyer clicks through to the “all offers” pages. So even if your offer is not the lowest price, it will appear before a merchant seller in the buyer’s eyes. This is a huge advantage and you don’t even have to pay for it. Thirdly, the mysterious Buy Box.  If your product is close to the lowest price plus shipping (within a few percentage points), your offer will rotate in the Buy Box with other similarly priced items.  Amazon estimates that approximately 70% of buyers buy from the Buy Box so this is no small advantage.

Despite this incredible support by Amazon, sometimes a product doesn’t sell or sells so slowly that you despair of ever unloading the 200+ you bought wholesale.  At this point you may ask yourself as I did, “is it time to advertise?”  Let that answer be a resounding “YES!” I recently experimented with advertising on several items and the results blew my socks off. Just like everything else that Amazon makes money off of, advertising is an easy and pleasant experience on Amazon.com.  It is faster and easier than Google Adwords and better in so many ways.

To get to the point, for about 50 cents to a dollar a day total, I jumped started several products which are now selling multiples for me every week.  I know it is the advertising because the dog toys had been sitting gathering dust for over a year.  Yep. I had to pay long-term storage fees on several hundred dog toys and I was mad at myself. I should have advertised sooner but I was busy and didn’t want to learn something new and “someday” stretched into a long time, blah, blah, blah.  Don’t make my mistake!  I’m so excited about advertising now that I’m looking for products to advertise so I can turn my inventory faster.

If you’ve ever used Google Adwords before, you will find Amazon to be simpler, more elegant and faster.  If not, my new Step-by-Step will help you create your first ad (you will need to login to my free FBA Library to see it).  For those of you who are curious about the product I’m selling, let me state for the record that I am NOT making my desired margin on these dog toys.  It was a mistake all the way around to buy them.  By advertising, I’m getting them out of my life and recouping my costs, but I’m not making the money I should on them. Doing better than breaking even is a victory at this point.  When I first bought them, I thought I’d be able to sell them for much higher but there were so many low-ballers that bought at the same time; that they sat there for months and months selling below my cost.  Once I was the last seller standing, I raised my price, but the hit from the long-term and the monthly storage fees cut into my margin a lot. Even when I was the only seller, they barely moved.  That’s when Amazon’s email about advertising came into my inbox and I clicked the link…

A few things to know about Amazon ads:

  • You have to be rotating in the Buy Box – it won’t work if your product is significantly higher than the other sellers
  • When someone clicks through the ad, your product will be in the Buy Box every time (nice!)
  • You pay per clicks not views/impressions
  • Amazon keeps track of impressions for you, also
  • Amazon keeps track of your key words for you so you can refine your search terms over time
  • You have a maximum bid and spend per day, but Amazon will only charge you the minimum required
  • Your items must be new

Q. What about items that are selling already? Are they a good target for advertising?

A. Yes! Since reading Jessica Larrew’s book on Liquidation Gold* last year I’ve been buying a lot of grocery items in bulk. Because expiration dates are an issue with food found in these stores, I’m advertising several of my food items even though they were selling a few units a week without advertising. I wanted to see if advertising increased sales or not.  The short answer is YES! Absolutely. I went from about 1-2 sales a week to 4-5 sales a week on one item I was selling by the case.  This tells me that even items that are selling might benefit from advertising.  If I have enough margin in the item to support a few dollars a week in advertising, then I should do it.  Inventory turn is the name of the game and I usually have a lot of margin in food items from liquidation stores – even with the extra weight of selling in multiples.

Q. Should I advertise with something where I don’t have a lot of units?

A. This depends on your margin.  If you have a high-margin item that you want to turn faster, it may be worth settingsorry_charlie up an ad – only you can say what your time is worth. The nice thing about Amazon ads is they can be turned on and off at will and they will turn off when you run out of product so you are not paying to promote someone else’s inventory. Depending on how long I work on my keywords, I can set up an ad in 5-10 minutes. Advertising is only for new items, however, so all those long-tail used books and collectible games you have? Sorry Charlie.

Q. How quickly will my items sell?

A. This is hard to say. It is still based on popularity and what people want when they come to Amazon.com. If your item is very niche-oriented, there just may not be that many buyers.  I’m selling food and dog toys right now which have a broad consumer appeal. What I have noticed is that as my ads work and my items sell, my sales accelerate.  This is because Amazon’s other algorithms come into play to push the item further up in searches for free. So while my impressions and click-thrus may stay about the same from week to week, I see sales from non-advertising efforts increase also.

Q. How much does it cost?

A. I set all my ads at a maximum of $5 a day.  That means that if Amazon reaches $5 for a particular ad in a day, it will turn it off.  What I have discovered is that I’m actually spending around 50 cents a day for my particular items and search terms…combined. This is the case for several reasons.  While I have set bids at around 10-30 cents per ad, that is also the maximum.  Most of my ads are actually getting placed for one-to-three cents per ad which means I’m paying very little for each click-thru.

Q. How does bidding work?

A. Bidding is your maximum, but Amazon will only charge you the minimum required to place the ad.  If you look at each ad exposure as potentially being competitive, it makes more sense.  Your search term is “Walden Farm,” for example and you’d like your product to appear at the bottom of a page where a customer has pulled up a Walden Farms item.  They are buying salad dressing and you’d like them to know they could also buy Walden Farms ketchup, for example.  There are only so many slots down there (6) and you want one of them.  You are now competing with an unknown number of other advertisers who are selling Walden Farms products.  You are willing to pay up to (15 cents in my case) for that spot.  You only have to pay when they click-thru.  If you are the only bidder or the other folks have bid less for that space, then you win it at the lowest possible price.  In my advertising so far, I’ve never paid full price for an ad which is why my daily spend is usually 50 cents to $1 total for five products.  This is partially because I also use very targeted search terms.

Q. What are good search terms? How do I find them?

A. Amazon will make a few suggestions for you, but they are pretty obvious.  You can use free search term tools from Google (savor the irony here) or you can simply guess and refine.  In either case, you will be checking in with your ads regularly to see what terms are working best for you and eliminating the ones that don’t. The more popular the search term (“dog toys” for example) the more you will pay if there is a click-thru.  On the other hand, there will probably be fewer click-thrus with such a broad term.  In my case, I’m focusing on niche search terms because they are more likely to turn into sales for me.

There are a lot of dog toys on Amazon, but fewer “dog toy ball,” “dog toy tennis ball,” “dog toy rubber ball,” you get the idea.  I pay less for those search terms (they are not as competitive) and they are more targeted to what I am selling.  In setting up your search terms, be sure to use the brand name, item attributes and categories.  If yours is a certain color try terms with and without the color to see which produce better for you. Brainstorm a lot of possible search terms in the beginning. Pretend you are the buyer – how might you look for a product? How might you browse and stumble on an item?

I have a food product that falls into several categories – spices, chickpea, Indian, Asian, garbanzo beans (the package says “chickpea” but people often use “garbanzo bean.”), etc.  Be sure to make your terms short and long.  In the previous example, I use “garbanzo bean” but I also use “garbanzo” for each term. I spell “chickpea”, “chick pea”, “chickpee” and “chick pee” because some people are bad spellers.  Don’t use plurals.  Use “spice,” “bean,” etc.  The reason for this is you will get the plurals automatically but if you use plurals you will NOT get the single automatically.  Be sure to include the brand name.

Q. Is it easy to do?

A. Incredibly easy.  I tried to do Google Adwords for my book and it was a lot more difficult to set up.  I needed help from Google just to get set up.  I gave it up, ultimately, because Google would not allow me to promote my book (they didn’t like the title).  You will never run into that problem on Amazon!  They like selling stuff.

Q. Are there things you can’t sell with an Amazon ad?

A. I still can’t sell my book, ironically.  At least, not through Seller Central.  You can only sell your own inventory through SellerCentral.  I’m trying to figure out what Amazon offers publishers so I can promote my book and video on Amazon. Sigh.

Q. I have several items that are merchant-fulfilled. Can I use an Amazon ad?

A. Yes.  You have to be in the Buy Box.

Q. I have an online store outside of Amazon.com.  Can I promote my products on Amazon?

A. Yes. If you’ve ever scrolled down to the bottom of a listing, you’ve likely seen “Product Ads from External Websites.” These are ads from outside sellers. Learn more HERE. When I looked earlier this week, they were offering $75 in free clicks when you sign up for Amazon Product Ads. I don’t know any more about it than that so please read everything carefully in case bidding, etc., works differently.

advertising avengers 2

If you’ve got a few slow sellers in your inventory mix that you’d like to get out the door, consider advertising. I was pleasantly surprised at how inexpensive and easy-to-use it was. I suggest you start small and experiment to see how it works for you.  Don’t bid more than you can afford to spend.  Your results may vary from mine.  Once again, here’s the link to the page on my FBA Library that has my free Advertising Step-by-Step with screenshots and directions. You will need to login or set up your free account to see it.

Have you tried advertising on Amazon.com? Please share your results in the comments below!

*I make a small commission if you click through this link. You are welcome to go directly to Jessica Larrew’s site at www.jessicalarrew.com if you are adverse to affiliate links. If you are curious about my personal experience reading and using her book, read my previous blog post titled Find Sales Gold on Amazon.com with Liquidation Stores from last August.

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Virtual Help for Real FBA Tasks

If you’ve read my blog for a while, you know that I use a Virtual Assistant.  When and how to get help is a question that FBA sellers often face when they get to a certain size/level of activity.  In my case, I’ve used an assistant in my day job for years. When I first published my Make Thousands on Amazon in 10 Hours a Week! book, I had my assistant help with design, layout, setting up my book and blog, HTML, etc., but I was still handling my FBA business myself.  Over time, I brought her into the Amazon business.  Since so much of an FBA business is technology-enabled, it is easy to delegate certain tasks if you are willing to take the time to train your assistant.

Currently, I have a weekly commitment with her and I spread her time out over my Amazon business, tasks related to my blog or marketing my book, and my day job.  She is mostly Amazon/blog/book now with a few hours a week focused on my day job or other tasks.  Here’s what most people ask me about working with a Virtual Assistant:

Q. What are the benefits of working with a VA?

A. The biggest benefit to working with a VA is you can delegate tasks to them that you do not like to do or do not have time to do. They work when you are sleeping (mostly) so you can get quick turnaround on tasks.  If the work can be done over the internet, consider if working with a VA will save you time to focus on what is most important to you.  They are less expensive than workers here in the U.S., more skilled, better trained and less entitled. I’ve had assistants since 1988 and what I have learned is that a good assistant is worth his/her weight in gold and nearly as hard to find.  Most of the time finding a good one is as much about me as it is about them. If I want a quality assistant, I need to be a good boss. I could write a book on this topic alone (but I will spare you!).

Q. How will my VA work with me?

A virtual assistant is flexible and will work with you the way you desire.  I use Skype with my assistant for IMs and the occasional phone call. We also use email a lot, of course.  If I want her to see my screen or vs. versa, we use http://join.me along with a Skype call for training. For sharing documents I’ve used free collaboration programs like Google Docs and others (that I was using with my clients, basically).  She is in the Philippines so the time difference between us is 13 hours (she is nearly a day ahead of me). We communicate directly by IM or call in the evenings or early mornings my time.

Q. How much does it cost?

A. It varies depending on the kind of work your VA will do for you.  I found my current assistant through a professional company in the beginning and they quoted me a rate after assessing my needs.  You can pay anywhere from $5-$15 an hour depending.  Over the years I’ve paid $5-$8 an hour for administrative support but your results may vary.  If you want someone who is trained on Quickbooks, for example, that will cost more than someone who will mostly use powerpoint, word and excel.

Q. What is the commitment?

A. I am committed for 15 hours a week on average. Sometimes I’ll have a heavy week one week and then a lighter week. I pay twice a month. I’m running three businesses. Your needs may be less or more than mine. Generally you hire a VA by the project or with a weekly commitment of some kind.

Q. Where do I find a VA?

A. There are hundreds of VA companies. The smartsheet is like a yellow pages of VA companies – mostly smaller shops. This article on the 20 Places to Find a Top Notch Virtual Assistant is also good. I suggest Angie’s List, the Online BBB and a google search to determine reputations.  You want a VA and/or VA company where you can check their references with actual customers. Don’t just read stuff on a website. In addition, check out http://www.fourhourworkweek.com/blog/outsourcing-life/ by Timothy Ferris.  He’s written quite a bit about the topic. Some of his blog posts include names, ratings from customers and more. Chris Ducker is also known as a VA guru.  Check out his blog at: www.chrisducker.com.  He has a helpful article that lists resources for business owners looking for a VA and wanting to know how to work with a VA.

Ducker also owns a company that acts as a matchmaker between business owners and VA companies called Virtual Staff Finder. I have not used them, but I know a couple of business owners who used them to find their VA.  They were very pleased with the service. It took a lot of the pressure and research time off their shoulders.

I suggest a professional company with offices in the U.S. as well as overseas to begin with.  They will likely have a large base of assistants to choose from. They take care of all the taxes and foreign requirements but you can talk to an American if you have questions/problems. American based companies have greater transparency and accountability which helps and many of them bond their workers.

Q. What kinds of tasks are appropriate for a VA?

A. Just about anything you can think of that does not require a physical presence. This includes bookkeeping, taxes, research, reservations, programming, HTML, etc.  Here are some of the Amazon FBA tasks my VA handles for me:

  • Correct listing errors
  • Reprice my books (I handle other items myself) using my repricer
  • File and pay my sales tax for all the states where I am registered (we use TaxJar.com)
  • Track reimbursements
  • Monitor listing changes for me
  • Update listings with pictures, etc., as needed
  • Run reports from SellerCentral
  • Dispose/Return unsellable and/or very old items as appropriate
  • Compile certain reports for my CPA
  • Petition Amazon to remove negative feedback
  • Set up advertising accounts for me on facebook and google
  • Set up my affiliate program with Amazon (embedding HTML into my blog, etc.)
  • Source images for my listings and size them properly

Q. Is it safe to turn over my passwords/credit cards/bank account/private information/Quickbooks/SellerCentral logins to my VA?

A. Yes and No.  It is always a risk to share private data with anyone, but I’ve had more trouble with assistants in the U.S. abusing my credit cards and financial data (three) over the years than overseas (zero). Trust is something built over time. Most professional companies bond their workers and provide some level of guarantee.  Amazon.com, my bank and Quickbooks allow me to set up special accounts for my assistant such that they have limited access/capabilities (can’t transfer money, for example). This gives me some control. They never know my login and can’t make admin-level changes like I can. I set up my bank account, etc., with all the different states myself. My assistant can file and pay my taxes but she can’t move money out of my bank account in any other way. That being said, I have a good relationship and a high degree of trust with my VA. I have given her my credit card number in the past to handle certain transactions for me.

Q. How do I pay my VA?

A.  With my first VA company, they took a draw from my bank account (like a subscription or car payment – I had a contract with them). Currently I use PayPal and, occasionally, Xoom.

Q. What are the pitfalls of working with a VA?

A. Obviously there are tasks you can’t assign to a VA like doing your filing, running errands or cleaning off your desk (sigh, I do miss that).  Also, since you are working with someone overseas there can be language and communication issues that can lead to mistakes and add time to projects in the beginning as you are learning to work together.  The onus is on you to be an extremely clear communicator.  If you’ve never managed people before, I don’t recommend a VA as your first experience in management. I’ve been managing teams of people virtually here in the U.S. since 1994 so the transition was easy for me.

Besides communication issues, there are cultural issues to consider. As a people, Filipinos tend to be shy and non-confrontational, for example. If you want an assistant that will give you feedback, make suggestions to help your business improve and generally learn from his/her mistakes, you need to create a safe environment for them to do so. They are more likely to take criticism to heart and be genuinely distressed if they displease you. This is another reason to take on the onus of clarity and communications. It keeps the relationship calm and productive if you say, “Oh, I see now that I was unclear with my directions previously. I meant to say….” rather than “you did it wrong! fix it!”  This is beyond simple diplomacy and tact – it also helps you get what you want done quickly. A distressed assistant can stay that way for a while which is bad all the way around. I have found with my assistant that I rarely have to say something twice. She catches on very quickly and remembers.

American culture and management style tends to be much more aggressive, brusque and blunt. This typical style will not work with a Filipino assistant. It doesn’t work all that well with American assistants, truth be told.

Others have struggled with getting their VA to understand what they want because they make assumptions and/or don’t know how to break out instructions in a logical way.  Also, inexperienced managers tend to lash out and blame others for problems and errors, which lead to poor results. If you can keep it firmly in mind that all communications issues are your responsibility, you’ll find working with a VA a good experience because you can work together to form a great team. Your patience and ability to learn from your own mistakes will lead to increased loyalty and productivity from your virtual partner.

Q. Is a VA an employee or a contractor? What are my tax reporting/payment obligations?

A. Most Virtual Assistants are employees or contractors of the VA company you hire.  There are no obligations on your part to report their salaries, etc. The VA company is a vendor to you.  In my case, my corporation contracts directly with my VA and was required to fill out additional (heinous!) paperwork for Uncle Sam proving that she is a foreign national and is meeting her tax obligations in her country.

Q. What country is best for hiring a VA?

A. I have worked with an Indian VA and several from the Philippines.  I prefer the Philippines. English is their national language so your VA will have excellent communication skills.  There is an accent, but it is easier to understand than an Indian accent, in my opinion. Every VA I have ever worked with from the Philippines was exceedingly polite, cheerful, helpful, accountable, professional and hard working. They are eager to learn and eager to please which is refreshing and much appreciated. I’ve hired assistants (employees and virtual) in the U.S. for over 25 years and I know talent when I find it.

Q. Can I work with your VA?

A. Maybe. With her team, she has the capacity to work with far more people than me. She has done a great job for other FBA sellers for whom I made a referral. She knows how to set up sales tax in different states, perform various tasks on Amazon.com, set up websites/blogs, use HTML, etc., and is a resourceful person that I like and trust. Because of this, I’m happy to make referrals to help her business grow. However, I don’t want to waste her time with non-serious inquiries and flaky people.

If you want a referral, please be sure that you can commit to a certain amount of time per week (at least 5 hours) and know what tasks you want done either on an ongoing basis or as a project (like setting up in different states for sales tax or redesigning your blog).

If you want to try a VA to see if the concept works for you, I suggest working with one of the many professional VA companies out there first. They spend time teaching you how to work with your VA to make the relationship productive on both sides. They also have many built-in reporting and accountability mechanisms so you always know what is happening on your account. It is a good way to test the waters and to get help managing your VA in the beginning.

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