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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.

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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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ScanPower To Offer Seller-Specific Services

I usually post once a week, but this week there’s a lot going on. Since so many of my readers use ScanPower, I wanted to quickly share what I’ve learned about ScanPower today and then post my regular blog on Friday. If you don’t care about SP’s changes – check back on Friday to read my post about working with a virtual assistant.

Chris Green and Paul Retherford hosted as live Spreecast today about the changes to their program. If you didn’t see their email about these changes, click HERE. Some of the changes are significant. Listen to the 1-hour replay at the bottom of this blog post.

Why the Changes?

The short story is that Amazon is insisting that ScanPower toe the line with how they (Amazon) want their data used. Currently SP has been doing workarounds to get us the quantity data, but that is going away by tomorrow. In addition, Amazon will be making competitive offers available, not necessarily all FBA offers. Who decides what is competitive? Amazon does. They are aggressively trying to bring down prices on their marketplace and to get us to compete solely on price.

What’s Going Away?

  • Quantity in stock for FBA sellers
  • Lowest 5 FBA offers if they are not competitive (i.e. offers significantly above the Buy Box are not included)

What’s Coming Up?

  • Workaround for lowest 5 FBA offers issue – SP is making it one-click from SP Mobile to the Amazon FBA/Free Shipping offer page. That way you can confirm before you buy whether or not there are non-competitive FBA offers.  After all, our idea of competitive is different from Amazon’s.
  • More accurate Amazon offer – sometimes the Amazon offer gets mixed in with the FBA offers. This will be improved with the switch tonight/tomorrow.
  • Faster data – SP is thinking about having a book sale contest against other scanners to show their increased speed. You should see it within a week on your phone.
  • Ability to see your own offer highlighted if it falls within the competitive offers range.
  • Ability to see other sellers’ feedback/rating
  • Buy Box data – if you know that the Buy Box is currently $10 that may impact your decision to buy something where you need to sell it for $30 to make your margin.  Since 70% of all sales on Amazon are from the Buy Box, this is valuable information.
  • Fix to the multi-pack issue where smaller screens can’t see that it is a pack.
  • Ability to enter a price and see a net based on your personal expenses and Amazon’s fees. Also, profits. Should be out this summer.
  • More data manipulation and reporting features based on your sales.
  • Seller-specific features just for you!

What does SP mean by Seller-Specific?

  • Features that pull directly from your seller data on Amazon.com like…
  • How many units you currently have in the warehouse of a particular item (great if you are scouting to replenish)
  • Information on whether or not you’ve bought this item before
  • Your personal sales history of a certain item (again, great for replenishing – if you sold 30 in the last month and you are buying more, buy 30…that kind of thing)
  • What would you like it to mean?  Submit your request for a seller-specific feature and they may name it after you!

What Happened to Gateway?

Gateway is the free version of ScanPower Mobile. It has fewer features but is free which is great for beginners. It will be re-launched in about two weeks.

My Thoughts

Amazon’s position is not very supportive of its FBA sellers, but very much in line with its fanatic devotion to its customers. These changes, while disappointing, are not unique to ScanPower.  All the third-party scouting and list tool providers are in the same boat.

ScanPower is confident of its abilities to innovate and bring new advantages to FBA sellers going forward.  Some of the seller-specific features sound exciting and ScanPower has been the industry’s innovator for the past five years. The integration of all its products is a strong selling point for me personally as I use the repricer, the data reports, list, mobile…etc.

Today’s Spreecast was an interesting forecast of things to come.  Smooth implementation will be crucial, though. The launch of Unity was rough.

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No Time for FBA? Try These 7 Steps

Many people who read this blog are part-timers like me.  We look at the Amazon FBA program as a way to make good money in our limited time, but often struggle with the demands of our day jobs and family. Even full-time FBA-ers sometimes find themselves in the weeds dealing with distractions and tasks that take them away from their priorities. Last night the folks at ScannerMonkey invited me to speak to their group of FBA sellers about how to squeeze out the time to work this business.  If you missed the live interview, be sure to check out the video at the bottom of this blog post.  In addition, here is a summary of my seven-step approach to being more efficient in my business.  Do you have tips for how you are more efficient?  Please share in the comments below!

7 Steps to Create More Time for FBA

1.   Eliminate–something has to give

2.   Prioritize–you can’t do it all at once

3.   Focus–your most productive activities

4.   Leverage technology

5.   Organize your workspace

6.   Delegate ̶ minions, elves and virtual assistants

7.   Plan/Combine activities wherever and whenever you can

Eliminate ̶ Something has to give. You can’t add in FBA without taking something out. Here are some of the things I gave up to make time:

  • Nearly all of my networking and other professional groups
  • Cut back on time with my friends
  • Cut back on TV (I record everything now and binge-watch when/if I have time)
  • Making dinner every night.  My husband and son now help out and we eat lots more spaghetti than we ever did before.
  • Fancy meals (I’m an adventurous vegetarian) with lots of prep. My new approach to meal creation is “assume I’ll be tired.”
  • Saturdays/free weekends – there are many book sales, estate sales, etc., that only occur on the weekend. I take time every weekend for my family, but I also know I will be working part of the weekend.

Prioritize ̶ There is no way I can handle everything related to our business at once or even every week.  Since I only have limited time each week to work the business, I have to determine what I’m going to do with that time. Basically, I take care of my top two priorities and then fit in the others as I can over the course of a month. Here are my priorities:

1.   Sourcing and Shipping ̶ I follow Jon Groleau’s axiom to “Always be sourcing”

2.   Customer service ̶ keeping Amazon’s customers happy means I get to keep selling so if an issue pops up, I deal with it in less than 24 hours

3.   Sales tax (monthly ­ now delegated) ̶ talk about a time suck.  I’ve trained my virtual assistant to file and pay for me now. What a relief.

4.   Taxes (annually in March and August) ̶ I have a CPA but there are a lot of tax obligations for a C Corp. I extend my taxes so I can deal with them in the summer when both of us are more relaxed (me and my CPA).

5.   Education, learning, reading blogs, etc. ̶ I love reading books by other sellers and learning something new, but it is low on my list.  I just read Jon Groleau’s new book and recommend it for inspiration.  I don’t spend much time on facebook or other social media because I don’t have the time and I can get sucked in so easily.

6.   Reporting/Admin ̶ I hate this part of the business and do as little as I can get away with legally. I have a Neat scanner that helps me with receipts and online filing so I can reduce paper filing.  I have a terabyte drive that is backed-up real time. This saves me a lot of time and provides peace of mind. I record purchase price of my items in ScanPower (you can do this in InventoryLab, too, click for my recent blog post) as I go.

Focus ̶ What stores are most productive? Can I do a cluster of stores near each other? What types of items have the biggest margin and/or bang for my buck? What categories are best for me? What trade­offs am I willing to make? Some categories are steady and profitable but take more time to process ­ like grocery.  Books take time because when you have 300 books, you have 300 separate MSKUs most of the time. But they are high margin items with a cheap entry price. Collectible games are work, too, but can be extremely profitable. Over time I’ve determined for myself what kind of inventory works best for me in my timeframe. I do books, food, beauty, pets, appliances and some baby right now. I sell both new and used.

Leverage technology ̶ Good scouting and listing tools are a must.  You can hobble together a cheaper solution from Amazon and ProfitBandit, but when time is a priority, spend the money. It is worth it. I can’t imagine the additional hours I would have to spend scouting without my Scanfob and Scanpower Mobile solution or listing without a tool.  ScanPower List and InventoryLab are both good tools. I’m not as familiar with some of the others. You will eventually also need a repricer once your inventory gets to a certain size. Many of my readers start small with minimal investment which I completely understand – I did too – but I tell them to use their early sales to buy technology. Your business will expand much faster.

Packing centerOrganize ̶ It is worth the effort to get organized. Make it easy to assemble your boxes and clean up your inventory. Protect your supplies jealously and don’t let anyone use your stuff but you. I created a shipping center in my office with a magnetic peg board and organized polybag boxes so I could grab my supplies easily when I needed them.  You need scissors, tape guns, un­du, sharpie pens, poly bags, Scotty peelers, measuring tapes, packing paper, stickers (mine say “Heavy” and some have the suffocation warning on them) and boxes all within easy reach. Don’t let your supplies get buried underneath your inventory!

Delegate ̶ I now have minions (grumpy sons forced to help instead of texting friends), elves (my niece and nephew who think it is fun to help Aunt Cynthia, plus my very supportive husband) and a virtual assistant. They are all helpful.  I count on my VA for regular support.  She does a lot of the admin stuff like fixing my listings, repricing, HTML stuff on my blog and much more. I have a CPA who handles my bookkeeping (most of it is automated) and filing needs. I have a housekeeper who cleans and does laundry for us on Fridays. I paid Dell for unlimited tech support when I bought my laptop which has been awesome when I needed help and so affordable. If I could train my dog to do more than keep the kitchen floor clean…I would! I’m a big believer in delegation so you can focus on what matters.

Plan/Combine ̶ I set routes for myself and combine errands with scouting so I can maximize my time. Anyone stuck with me during these times…like my son…is put to work.  He’s actually very good at finding high value stuff.  He found a brand new scuba wetsuit at our local thrift store for $12.50 earlier this week.  They are normally fairly expensive. I make special trips into Fort Worth and the mid­-cities area when I have at least $500­$600 to spend on volume buys. Otherwise it is books, thrift and local stores for me. I also used to combine packing/shipping time with education time by listening to FBA Radio and ThatKat! podcasts while I processed inventory.  TV time with the family often includes de­-stickering and book sorting, or reading and watching or paying bills and watching…it is almost impossible for me to watch TV without doing something else (except Downton Abbey…that requires my full attention!).

I look ahead to book and other sales and plan them on my calendar. I use Frank Florence’s Book Sales Found service to help me find sales less likely to be filled with other scanners. It definitely makes a difference.  I’ll work both but being the only scanner at a sale is like shooting fish in a barrel, I fill my boxes much faster.  I figure out every week when I’m going to source. [I am an affiliate of BSF as well as a customer]

UPS comes to my house every Friday after 5:00 p.m.  This keeps me disciplined and focused on getting out a shipment every week which means I usually source on weekends and early in the week, process during the week and pack up on Friday before my son’s violin lesson.  If I don’t already have an inventory plan at the beginning of each week, I make one. While it is only $9 a week for UPS to come to my house, I hate to waste money.  Thursday nights are usually inventory prep nights at our house.

If you are finding it hard to find time for your business, hopefully one of these steps can help you create more time.  See my video with ScannerMonkey for more!

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The Big Prime Brouhaha

Amazon’s decision to raise its rates on Prime membership affects so many Americans (est. 20-25 million); people were talking about it all around me during lunch today.  The folks at my table agreed that it wouldn’t affect us – we’ll still be Prime members – but there’s a bit more to the story than that.  Amazon is being sued because some customers claim that the free shipping isn’t free (read the ABC story here). They are claiming fraudulent pricing practices and that Amazon is encouraging third-party vendors to increase their prices to Prime members by the amount they charged others for shipping.  I know my fellow FBA sellers are silently chewing on the irony here.  So what’s going on with all the Prime Brouhaha and how does it affect us as FBA Sellers?

First of all, the new price of Prime.  This is a tempest in a teacup and we can ignore it.  While it is quite likely that some current Prime members won’t renew and numbers may drop instead of the sharp upward trajectory we’ve seen in the past few years, the fact is I made money selling on Amazon three years ago when the number of Prime members were a LOT smaller than today and I’ll continue to do so.

The people who continue their Prime like my friends at the table (and me!) are rabid fans of Prime.  Twenty dollars more a year is nothing.  Many of us pay more in annual fees for our AMEX cards than for Amazon Prime.  The typical Prime member today (who most likely signed up when they bought a Kindle Fire) buys 10 or fewer items a year.  These guys will most likely drop off unless they are also big consumers of the free streaming video and the free Kindle books and games for Prime members.

I can easily place 10 orders on Amazon in an average month with much more during the holidays.  I’m the Prime member that buys all your stuff.  I’m also the third-party seller that helps Amazon offer Prime on over 20 million items (up from 1 million when the program was introduced). While we won’t really know until the new prices go into effect, my perspective is that the heavy Prime users will spend even more than they do today.  In addition, while Prime memberships may temporarily drop and slow down, Amazon will continue to add incentives to make it a super deal for customers.

Prime is the gateway drug to full-on Amazon addiction and they aren’t going to mess with that.  They’ve done their research and concluded they could raise their prices by up to $40 more a year and still continue growing.  If it turns out to be Amazon’s “New Coke,” they’ll fix it.  So pay no attention to this particular Prime bogeyman. He’s toothless.

Next, the lawsuits about the Prime program.  These are worrisome because Prime is that gateway drug and we want the whole world to shop on Amazon, right? However, there isn’t much we can do about it so I suggest: 1) Try not to think about it; 2) Be suspicious of any phone calls where people ask you a lot of questions about the Prime program and; 3) Don’t join the class action suit (it only encourages this kind of behavior and is kind of hypocritical if you are an FBA seller…).

Amazon has not answered any of the claims yet so right now it is mostly saber-rattling on the part of the plaintiffs. Lawsuits are filed all the time against huge wealthy corporations in the hopes of a settlement of some kind.  As FBA sellers, we know the claims are incorrect.  Amazon’s policy on price-fixing is quite clear and enforced.  At one time or another I’ve read just about every word on SellerCentral and not once does Amazon give advice on pricing beyond providing its FBA calculator so you can decide for yourself whether to use FBA or merchant fulfilled.

Amazon does not directly encourage us to raise our prices to include the shipping costs charged by merchant-fulfilled sellers. We do that because the opposite is true.  The extra dollars are going into our capitalist pockets.  And yet the lawsuit claims Amazon advised FBA Vendors to include the amount they would have charged for shipping in their item prices in order to maximize total revenue and profit margins. Amazon disguised this price increase by giving priority to FBA Vendors, showing their items first in the results of a Prime Member’s product search.” [Emphasis is mine]. If this can be proved, then we can all wring our hands and be upset because Amazon’s reputation is so important to our business model. The reality is we all tell ourselves about this strategy because it makes us more money. Check back in to the issue in a year or two. These cases never move fast.

Oh, and to answer some questions I got this week.  No, don’t change your prices because of this news.  You’ve done nothing wrong.  If the day ever comes that third-party sellers are required to price a certain way, Amazon will tell us….but it won’t happen.

This will certainly not be the last time that Amazon draws fire for something or other.  Traditional brick and mortar and other online retailers are furious/jealous of Amazon’s success with the Prime program. They see the writing on the wall and they don’t like it. Attempts to discredit Amazon.com will be ongoing as the company continues to grow.  Many of us remember the brouhaha about the Amazon warehouse workers. Some people quit selling on Amazon because of it. Obviously, I was not one of them.

Every business with which I’ve been involved over the past 20+ years has had some hiccups. I’ve never represented the perfect corporation.  My job was reputation management so I’m perhaps more jaded than most. However, I have learned that there are at least two sides to every story and usually four or five. A lot of the stuff you see in the news was made up by someone like me and the agenda is pretty obvious once you know that. A fire or cute rescue dog will beat out a complicated business story any day of the week. When you see a story heating up online and on the news, remember that their job is entertainment and attracting followers. Everything else is far down the list.

As an FBA seller, your best bet for success is to keep your head down and work.  Avoid the noise. Don’t get sucked in and sidetracked. If a particular activity isn’t pushing you towards your financial goals, eliminate it or push it down the priority list.

Take it from a recovering workaholic. You are worth your full attention. Your family is worth it. Your work is important.  Your life is important. All this other stuff is noise and distraction.

When another Amazon storm whirls in, compare the importance of the issue to your FBA business and financial goals. Most likely, there won’t be a correlation. When Amazon informs you that you need to do something new or different, then it’s important.

Happy Selling Y’all!

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Find Your Profitability with InventoryLab

InventoryLab logAs many of you know, I use ScanPower List and Mobile in my business to make me more efficient. I’ve used them for about three years. During that time, other programs have been introduced but I’ve not spent much time investigating them because I’m pleased with what I have and I’ve invested time learning how to use ScanPower.  However, since new sellers do have more options now, I’ve asked my fellow FBA sellers to share their experiences with other solutions and what they like about them. 

The good news for the FBA seller is it seems like a lot of the new options are robust with lots of features to make your selling life easier. What is important when selecting a listing/scouting provider is to get one that makes sense to you and helps you in your business. Today’s guest blog is from Ray Lunaburg. He switched to InventoryLab from ScanPower a few months ago after the Unity2 introduction. His thoughts and opinions are based on his personal experiences. If you have follow-up questions for him, please post in the comments below and he’ll get back to you.

I switched over to InventoryLab’s listing program and SellerEngine’s ProfitBandit scouting tool from ScanPower List and Scout last year when ScanPower updated its software to Unity2.  I had been interested in InventoryLab’s built-in bookkeeping and if I had to learn something new, I might as well give InventoryLab a try.  I’m glad that I did.  I find that it not only helps me list my products efficiently, but it easily tells me which items are/were profitable.  It also makes it easy for me to determine profitability on merchant-fulfilled items, not just FBA. I enter my costs at the time of listing and shipping so there’s no need for “double-entry” later. Here’s my process and pricing for inventory listing now that I’m using InventoryLab vs. ScanPower:

Inventory Lab:

1. Source the item using Profit Bandit ($15.00 one-time charge)

2. Remove Stickers

3. Enter item using a Listing Service (InventoryLab – $40.00 per month). Record item cost and shipping costs as I go.

4. Pack the item

5. Ship the item to Amazon

6. Reprice the item as needed [on Amazon.com’s SellerCentral – I have to use "Manage Inventory" one at a time]

7. Sell the item via FBA or Merchant fulfilled. InventoryLab pulls sales information from SellerCentral for me.

8. InventoryLab updates the profit/cost per item for me as items sell. A dashboard shows your profit/cost based on your actual selling price and cost. There are charts I can pull up as well.

Scan Power:

1. Source the item (Scan Power Mobile bundled with List – see below)

2. Remove Stickers

3. Enter item using a Listing Service (ScanPower – $60.00 per month bundle price or $40 without mobile app). Record item cost.

4. Pack the item

5. Ship the item

6. Enter the cost of the Product into Quickbooks or a Spreadsheet Template***

7. Reprice the item as needed [ScanPower has a built in Repricer included]

8. Sell the item via FBA or Merchant Fulfilled

9. Export a report from Amazon and compare it to the Excel template or Quickbooks report for Profit or Loss

10. Tally, Massage, Tweak until you get a dollar amount

***Note from Cynthia: ScanPower now offers a data report that can be exported into a spreadsheet that includes your item cost assuming you’ve been entering it as you go – thus reducing double-entry. It does not do any calculations for you.

The listing function of both products is similar and takes the same amount of time. You just scan in your barcode/ISBN and adjust the condition, notes and price as needed. InventoryLab does not have a scouting tool nor a repricer. I’m OK with ProfitBandit as my scouting tool, but I hope that InventoryLab will add a repricer in the future.

The main advantages of InventoryLab are the reports and bookkeeping. Knowing the profitability of an item helps to determine if you should continue selling it. We all understand intuitively if we are making money or bleeding. It’s extremely convenient to see it in a graph which InventoryLab provides. I can add travel expenses and my price per hour of labor into InventoryLab as well as my actual shipment and box/packing/tape costs.  This allows me to calculate my P&L by shopping trip as well as per item. This level of expense integration helps keep my actual costs per item as close to reality as possible. In addition, InventoryLab keeps track of the sales tax collected for me by Amazon and Amazon’s fees for being a Pro Seller, collecting sales tax, etc. The sales tax is counted as income and then deducted as an expense when I pay it, for example.

IL shipments

I particularly like the fact that InventoryLab automatically calculates my profitability for me when an item is sold. The interface is friendly and easy to use. Everything is all on one screen without needing to open up different screens for pricing, notes, etc. InventoryLab also offers very responsive customer service – something that I felt was lacking at ScanPower.

Profit report

InventoryLab also keeps track of after-shipment expenses like my returns and reimbursements for which is very handy and an important part of knowing whether or not you are making money. I know there are separate services that do this and there are reports inside of SellerCentral, but it is nice to have it bundled as part of my InventoryLab program and to not have to click around on multiple screens to find the information. It is much easier to see if there is a problem with a reimbursement or return when the report is right inside of InventoryLab.

IL reimbursements

Returns report

From my perspective, the main disadvantage to InventoryLab is no built-in repricer. The main disadvantage to ScanPower is no built in accounting or profitability reports. While ScanPower now keeps track of your out-of-pocket inventory item cost for you, they do not make the data more meaningful to you. I’m happy with InventoryLab and encourage new sellers to try their free trial for themselves. Even though the website says “Beta” on it, the product has been out for more than a year and is robust.

This is Cynthia again.  I pulled screenshots from both InventoryLab and ScanPower to see the differences between how the Listing actually works. I’ve noted the differences for you below:

 InventoryLab screenshot


  • Easy to add expenses as you go – no double entry later into a spreadsheet or accounting program
  • You can get the net on any price you choose – merchant fulfilled as well as FBA. Takes into account your out-of-pocket cost for the item as well.
  • Automatically pulls P&L for you when an item sells so you can see right away if it was a good product for you
  • Works with a wide range of thermal label printers
  • All the information you need is all on one page and you can see it in a glance – condition, number of units, cost, pricing, printing…everything


SP price screen SP Notes screen


  • Provides net for current FBA offers
  • Tells you how many units each FBA seller has at the warehouse
  • More detailed note capabilities beyond Condition
  • Integrated with ScanPower Scout for easy import of items bought on shopping trip – no need to re-scan
  • Integrated with Repricer (see “Floor” and “Ceiling” options for how you can help control your repricing within a profitable range)

One of the points I make to new sellers is to get a handle on your expenses and true profits. When I talk about Amazon’s FBA fee hikes every year, I include a spreadsheet that I use to help me create some of my scouting rules for myself.  Ray’s experience indicates that InventoryLab does a lot of that work for you – a really helpful benefit for busy FBA Sellers! 

Since this post was first published, InventoryLab has generously offered my readers code to extend its free trial to a full month. Simply type in FB30 during checkout to get an additional two weeks for free! This offer is good through March 2014.

Do you use another service like Listtee, SellerEngine or ASellerTool? I’d love to hear from you for a future blog post!

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Your Magic Magnifying Mind

magnify-brainI was listening on the radio to a TED Talk the other day by Matt Killingsworth who studies happiness.  He built an iPhone app Track Your Happiness that lets people report their feelings in real time.  Among the results from over 15,000 people in 80 countries, he learned that the more our mind wanders the less happy we are. We’re often happiest when we’re absorbed in the moment.  His conclusion was that a wandering mind is an unhappy mind.

Even when we are thinking about pleasant things in our mind wandering, we tend to be less happy than when we are just focused on what we are doing at the moment. If we are focusing our minds on other things – even happy things – we will 1) not be enjoying what we are doing at the moment and 2) be unhappy in the near future. He also learned in his research that we tend to mind wander about 30% of the time on average.  So what does that mean for the intrepid Amazon FBA seller?

This means that to be happy in our work, we need to avoid distractions and be happy with what we are doing right now.  Sounds a bit like Zen, right? Be. Here. Now. But this isn’t just philosophy.  This is advice in urgent need of practice.  Happiness has a direct impact on our success in the business – particularly in the early days when we are still creating our systems and processes for the business. The past few weeks I’ve gotten an increase in unhappy calls and emails from FBA sellers. Here’s a summary of what I heard:

  • Amazon is changing the rules
  • I’m afraid of losing my selling privileges
  • I’m afraid of making a mistake
  • I’m not good enough/smart enough/motivated enough to do this business
  • Other sellers are doing better than me
  • I want to make $X and I’m not
  • I can’t make money with Amazon’s new fees
  • I don’t know where to find inventory
  • I’m afraid

What was interesting to me was how many of these folks mentioned that they had read something on Facebook or heard something on a podcast or visited a blog/group that triggered these feelings. That is the power of mind wandering.  With all the connectivity provided by social media and email, one bad story can blow through our community like a tornado. And then what happens? We see panic selling, poor buying decisions as people feel they just have to buy something and get it up there, “races to the bottom” to sell something, poor business practices and people dropping out because the business makes them feel badly about themselves and their futures. When we focus on our fears, we find a lot to fear. Positive affirmations and fake optimism don’t work either. Our brains are pretty smart, after all. How to get back on track, then?

  1.        Find the bright spots
  2.        Avoid distractions
  3.        Make a plan
  4.        Take it one step at a time
  5.        Prioritize
  6.        Be disciplined
  7.        Let go

Find the Bright Spots – It is easy to get distracted by the negative and let it overwhelm the positive.  Chip and Dan Heath, authors of Switch (one of the best books I’ve ever read) talk about bright spots and how focusing on the one or two things that are going right can often provide the answer to what is going wrong. Rather than say “I have 20 things going wrong,” they will have you ask yourself “why are these two things going right and what can I learn from them?” You then build from your own success. Are you unhappy with your business right now?  Stop reading this blog right now and think of at least three things that are going right in your business – no matter how small or seemingly insignificant. Now ask yourself “Why are these things working? How can I learn from these experiences and take them into the rest of my business? How I can I build on my strengths?”

You can download the first chapter of Switch from the link above if you want to know more or from Amazon if you have a Kindle.  This concept of bright spots is related to the concept of our “Magical Magnifying Minds” as presented in the original AA Big Book. Magical magnifying minds simply states that things we focus on become bigger. In the story, a resentful alcoholic who blamed his wife for his problems changed his life and their marriage by focusing his magnifying mind on all the things about her that he liked or at least didn’t dislike. Not only did he notice for himself the things she did for him, but he began to genuinely appreciate her and thank her.  His sincere gratitude in turn led to her opening back up to him and recognizing all his good qualities and why she married him in the first place.  They both became much happier and fell in love again. What started out as a difficult task turned into an easy joy for him.

You don’t need to be an alcoholic to make this technique work for you. My husband and I have been married for 20 years and I have re-focused my mind when I find myself resentful and blaming. The change in our relationship was so dramatic the first time that I felt like a complete ass. It finally sank in, ahem, that I was the problem and not my sweetie. My mind was choosing to focus in on the negatives instead of the positives and I was making myself unhappy. When I focused on his good qualities, he changed! Hee hee. In reality we both changed for the better.

That is true for many things in life. It is often us that’s the problem not the other person or thing in the case of Amazon.  They will change the rules.  How we perceive these changes is the difference between happiness and unhappiness in our businesses. When a new rule or fee change upsets you, make a list of what you do like about your Amazon business. Make those attributes bigger with focus. Look for the bright spots so you can build a solution to your latest problem. This will affect not only your happiness, but also your success in the business.  This is why happiness in our work matters.You become what you think about all day long

Avoid Distractions – Our wandering minds love Facebook, Pinterest, groups, videos, podcasts…you get the idea. It is fun to make friends and learn things. The dark side, however, is that tornado of bad feeling that can blow through the community when someone complains a lot or tells a scary story. The other issue is there is a lot of conflicting advice about Amazon’s FBA program.  One person will tell you to do things one way another person will have another suggestion.  You can drive yourself crazy trying to follow everyone’s advice. There is always this little gnawing of doubt that says “maybe I should be listening to so-and-so.” If you find yourself growing anxious from what you read or hear on the blogs and groups, I suggest you cut back on your social media time. Put your blinders on and focus on what needs to be done in your business.  It doesn’t matter what someone else is doing or how they are measuring success. What matters are your business and the work in front of you.

Make a Plan – One of the best ways to avoid distractions and keep your head down is to have a plan.  Confused by all the gurus out there? Pick one and stick to them for a while.  Tell yourself, “I’m going to follow this person for one month and not look at the rest.”  After a month, evaluate your experience.  Was their advice helpful to your business?  I suggest one or two at a time because the point is that you don’t want to deal with conflicting and confusing advice here.  You want to make your business better, more efficient, more profitable, etc.  You have questions and want to learn. Some of your questions are Amazon oriented some are business oriented like where to find good inventory, etc. Keep your eye on your prize and ignore the other stuff.  When I started I went to Amazon with a lot of my questions.  I read their help section, I called them all the time about their side of the business. They were a reliable source of information.

Next, prepare a weekly plan for yourself.  In my case, I started out with approximately 10 hours a week to work my business.  I had to decide what to do in that time that would make me money so I focused in the beginning with getting inventory up there. I planned my scouting trips.  Consistent shipments – even if they were small – made up the bulk of my plan. Because I had limited dollars, I did a lot of books, thrift stores, estate sales, etc. and saved up money to buy more toys and retail arbitrage for Q4. As my business grew, I was able to buy more new stuff year round but books and used items like collectible toys and games still make up a large part of my inventory.  Because I take a lot of my money out of the business each month, I often have to fall back on books and used items. I don’t have credit cards and run my business on cash.  Other sellers are able to keep more of their dollars in their businesses and/or they have credit and thus buy more new items and build up their inventories differently than me. So my plan is different from many other sellers including my Dad and my friends who are in the business.

Take it One Step at a Time – Admittedly step-by-step is my thing, but that’s because it works. It is easy to get overwhelmed. There is so much to learn and know about Amazon. It took me months to feel comfortable in SellerCentral and Amazon is constantly adding new things.  Rather than trying to learn it all at once and being frustrated, I suggest you learn things as you need them and for the other things, put them in your plan. Every time you find a new issue that concerns you – from negative feedback to sales tax, put a time to review the issue in your plan and then let it go until you reach that time. Maybe you allow one hour a week to explore/learn about new issues. I suggest no more than two new issues per month if that many.  For example, I tell a lot of people not to worry about sales tax right away.  If you are buying inventory in your state, you are paying sales tax at the point of sale.  Make some money first. Learn the business. Then tackle sales tax in your state.  After you’ve done the paperwork on that and are comfortable filing with your state (usually a few months to learn everything), then look at other states. Don’t feel like you have to do it all at once.  Remember, you are small in the beginning and only one person.  Treat yourself and your time with respect and compassion.  It will all get done over time.

Prioritize – Sometimes my to-do list can grow into 20 or 30 items which is overwhelming and discouraging. A helpful approach that I learned years ago from Leo Babauta of Zen Habits was to focus in on one thing at a time. He suggested that I have three habits/tasks that I’m working on at any given time. There can be lots of steps to these tasks, BUT I’m only focusing on three at a time. Some goals will take months to accomplish, some only a few hours.  I set aside time every morning where I work on these goals.  That way, no matter what comes up later in the day to distract me, I will have accomplished tasks that are truly meaningful to me and that move me forward to a larger goal. This is how I’ve written and revised my book, created a video and found time to write this blog.

In terms of your Amazon business, I suggest you prioritize your issues this way:

  1. Affects my ability to sell on Amazon (compliance with Amazon’s rules)
  2. Impacts my sales on Amazon (increases productivity and/or profitability)
  3. Administration (measurement, reporting, filing, taxes, etc.)
  4. Business (learn more about how to be a better business owner, fill in the gaps in your education. Don’t understand P&L? Set a time to learn it)

Whatever goals you have for yourself on your business to-do list, see which category they fall under and then designate an order in which you will tackle them.  Don’t add a new item to your list of three things until you’ve completed a current goal. You want to only have three items at a time on your “must do” list and work on them every single work day until they are done. You don’t have to work all day on these three items.  There will be other items you must accomplish in your life and business, but your happiness and your productivity will increase significantly if you are making progress every day on your most important goals.

One tool that some people find helpful is Evernote.  It allows you to clip anything you find from your computer, smartphone, tablet and the web and to organize and save it for later use.  See a story about an issue that interests you?  Clip it and promise to look at it later during your “issues” time. You can easily pull together all your research on a topic together in one place even if you are researching on different devices and platforms. In this way you don’t feel like you have to deal with it right now when you might perhaps be better served by processing your inventory or repricing. Does it seem overwhelming right now to even think about new software like Evernote?  Then don’t. Put it on your list for a later time. Focus instead on your three priorities for today.

Be Disciplined – This is a commitment to yourself that you will follow your plan and you will deal with concerning issues over time.  You will focus on the bright spots and you will avoid distractions.  Sometimes it seems that the hardest commitments are the ones we make to ourselves. Your happiness matters and all of these techniques will help you focus and be happier in the moment. This happiness will make you more successful which will make you happier in the long run as well. It is a virtuous cycle. If you get off track, promise yourself you’ll get back up.  Successful business owners are not gurus of positive thinking who never have a bad day, they are real people who know how to bounce back and keep going. They have a commitment to themselves to not stay in a bad place.

Let Go – If you have your plan in place, let everything else go.  Focus on what is important today and right now – not in the future. Your wandering mind will attach itself to all kinds of worries if you let it.  Since it seems our minds are programmed to wander, the best thing you can do is to be aware of when you are wandering and gently bring your mind back to the present moment.  No judgment, no anxiety.  Be kind to yourself.  “Oh! I see that I’m worrying over XYZ issue. I want to focus on getting this order out instead. I can come back to XYZ later.” One of the interesting side effects of the Track Your Happiness app was that people became happier while using it. Why? Because the program would interrupt their thought patterns and it would make them aware of what they were doing and how they were feeling in the present moment. They were suddenly more aware of the small everyday things that were good in their lives.  Their minds were focused on happiness and they found it. They could re-focus in a moment without trying to force themselves into happiness or fake a feeling.

people-seem-not-to-see-that-their-opinion-ralph-waldo-emersonYour best resource in this business is yourself:  Your mind, your resilience, your creativity, your patience, your persistence, your willingness to learn, your confidence in yourself, your ability to focus…and your happiness.  These characteristics all feed into each other.  You get to decide whether or not they create a negative cycle or a positive one. That’s the power of your magical magnifying mind.

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Amazon’s Annual Fee Hike

pineapple-drink-606263-mIt is time for Amazon’s annual FBA fee hike! Hooray. Not.  I’ve updated this annual blog post and spreadsheet with the new information that takes effect on February 18, 2014.

Get a doughnut, a cocktail, or whatever you need to get through this. It is number-crunchy stuff but extremely important – the difference between success and failure as a seller (no pressure).

While scouting tools will figure out Amazon’s fees for you on the fly, you need to know in your head your other out-of-pocket and overhead costs so you can make wise inventory choices. You need to know when you are in the store if something might be oversized or not and what that may mean to your profit margin. Sometimes a few cents can make a difference.

Amazon’s new fees go into effect in about a week and the spreadsheet further down shows some previous sales of mine with the new fees incorporated. If you have my book, the numbers in there are outdated, but you can use it as a foundation to create your own spreadsheet. Your expenses will likely be different from mine.

For those of you using ScanPower Mobile & List, your on-screen data will automatically reflect the new fees starting on February 18th.  I’m assuming this is also true for the other tool providers. This analysis is to help you create your own spreadsheet to help determine profit based on your business expenses. It will also help you create your own “Rules of Acquisition” when scouting (yes that was a Ferengi reference).

Here is a link to my new FBA Library that includes a bigger PDF of the spreadsheet below in case the numbers are hard to read. You will need to register to access the spreadsheet (plus other Step-by-Steps and popular blog posts). It is free.

What’s New?

Monthly storage fees will increase as well as Pick & Pack and Weight Handling Fees across the board. If you use Amazon’s Inventory Placement Service, those fees are going up. Those who sell apparel will have some new fees in May. Other fees like multi-channel fulfillment, long-term storage and zero-fee fulfillment are not affected.

Overall, most of the fees are only a few cents higher. It looks like they used a repricer to get these weird numbers. Just like last year, the fees increase steeply as the size and weight of your inventory item increases. Amazon is incentivizing its sellers to ship smaller items, basically.

If you sell apparel, a new fee will go into effect in May. Amazon has not posted the fees yet. If you sell apparel, be sure to go to “Help” in Seller Central and read more about this particular fee.

Size Matters

Not sure if your item is standard or oversized? Here is the current tier of sizes. Each has its own fees (see below for chart):

  • Small Standard-Size (up to 15” X 12” X ¾” and no more than 14 oz.)
  • Large Standard-Size (up to 18” X 14” X 8”, up to 20lbs)
  • Small Oversize (up to 60” X 30”, up to 70 lbs)
  • Medium Oversize (up to 108”X 22” [130” combined sides], up to 150 lbs)
  • Large Oversize (108” X 57” [165” combined sides] to 150 lbs)
  • Special Oversize (over 108”, over 150lbs, i.e. big screen TVs)

Please note that the weight handling fee is based on the outbound weight. That means your product, plus the box and packing materials.  The “combined sides” is the total of the length plus width of your item or the two biggest sides.

Fee Changes – Pick & Pack and Order Handling

I’ll pull this all together in the spreadsheet further down. Here are the new fees. These are IN ADDITION to the $39.95 a month you pay to Amazon to be a Pro Seller. “Media” includes books, CDs, DVDs, video games and VHS.  “Non-media” is everything else, basically.

Pick and Pack $1.02 for all Small Standard-Size and Large Standard-Size Media and Non-Media.$4.03 for Small Oversize.$5.07 for Medium Oversize.


$8.12 for Large Oversize.


$10.25 for Special Oversize (like TVs).

Order Handling $1.00 for Small and Large Standard-Size Non-Media only
Weight Handling Small Standard-Size Large Standard-Size






Small Oversize



Medium Oversize



Large Oversize



Special Oversize

$0.46 per pound for Small Standard-Size$0.55 for Media and Non-Media up to 1 lb.

$0.82 for Media up to 2 lbs

$1.34 for Non-Media up to 2 lbs

$0.82 + $0.41/lb. Media over 2 lbs

$1.34 +$0.39/lb. Non-Media over 2 lbs


$1.34 up to 2 lbs

$1.34 + $0.39/lb. above 2 lbs


$1.91 up to 2 lbs

$1.91 + $0.39 above 2 lbs


$61.62 up to 90lbs

$61.62 + $0.80/lb. above 90 lbs


$124.08 up to 90lbs

$124.08 + $0.92/lb. above 90 lbs

Outbound Shipping Weight Calculation
    1. Dimensional Weight*
Following industry practices, for all Units with a volume greater than 5,184 cu. in. (based on length x width x height), we will use the Dimensional Weight if the Dimensional Weight is greater than the Unit Weight. The Dimensional Weight is the volume of the Unit divided by 166.
    1. Packaging Weight
The Packaging Weight (box and packing materials) will be 2 oz. for Standard-Size Media, 4 oz. for Standard-Size Non-Media and 1 lb. for Oversize products.
    1. Rounding
The weight value of the Unit (either Dimensional Weight or Unit Weight) plus the Packaging Weight will be rounded up to the nearest whole pound.

*You can find dimensional measurements for every item you have in inventory inside your SellerCentral under “Inventory Amazon Fulfills.” The measurements are on the far right of the screen. Something has to be pretty darn big to have a volume greater than 5,184 cu. Inches.

cubic feet image

Where you will see the biggest increases are for large items like Ping-Pong tables and large-screen TVs. If you’d like to see more examples on Amazon.com, log in to Seller Central, go to “Help” and then search for “Fulfillment by Amazon Fee Changes.” Amazon gives examples of the fee changes for different sized items at the bottom of that page.

Fee Changes – Inventory Placement

If you wanted to reduce the number of inbound shipments (and warehouses) where you sent inventory, you used to be able to pay Amazon a flat per-unit fee. If your item is under 1 lb. or less (Standard-Size) or under 5 lbs (oversize), your fee remains the same. Once again, the bigger your item, the more you pay. Please note for this service that the fee applies to everything in your box even though you may only be adding one or two additional items.

Standard-Size $.30 for 1 lb. or less$.40 for 1-2 lbs$.40 + $.10/lb. above 2 lbs
Oversize $1.30 for under 5 lbs$1.30 + $.20/lb. over 5 lbs

Fee Changes – Monthly Storage Fees

Your monthly storage fees are based on the total cubic feet of your inventory and the month of the year.  Fees have only gone up a few cents per cubic feet:

January-September     $.48 per cubic foot

October-December     $.64 per cubic foot

A recent storage fee for me was just over $90 – about 200 cubic feet at $.45 cents.  Under the new fees it would be $96 a month.

This is Amazon’s way of encouraging fast sales rather than long-tail sales.

Making Your “Rules of Acquisition” Based on These Fees

For the accountants and other financial folk I will state for the record that this chart does not represent all of my expenses accurately.  I own another business that covers a lot of my overhead like my space, office equipment, computers, cell phones, printers, office supplies, etc. This is why it is important to create your own chart.  You will likely have other expenses that need to be included in order to create your Rules.

Updated Fees spreadsheet 2 6 14_001The actual sales price is the price at which I SOLD my book. Amazon’s fees include its commission, the order handling fee of $1, the new pick & pack and weight-based fees. Plus there is a variable closing fee for media of $1.35.

In the next section, I’ve included my other costs. Besides the out-of-pocket cost, I figured out what my average listing fee is per item based on the $39.99 cost from Amazon, Scan Power and other related programs, and then the actual number of items I sell per month. This fluctuates, but 20 cents is a good average for me after comparing several months’ worth.

I base my shipping estimate to the warehouse on a typical cost of 50 cents per pound that I get when I use Amazon’s UPS account. Again, this varies somewhat depending on which warehouse and how many total pounds of items I have in my shipment. More weight=less cost per pound. I send a lot of books which are generally closer to 25 cents a pound.

For our purposes, I assumed that it would take around 8 weeks for these items to sell and that I would pay one month’s storage fee. Of course, that varies too, but I do try to turn my inventory quickly. Lastly, the “Miscellaneous Expenses” cover things like tape and boxes, labels for my Dymo, costs for things like ScanPower List & Mobile, etc. I pulled together a year’s worth of expenses and then broke it out by the number of items I sold in a year to get this figure. Your number could be MUCH different than mine. Be sure to do this calculation thoroughly and don’t leave out any expenses.

In my case, for example, overhead like my cell phone, utilities, tax preparation costs, etc., are paid for out of my main business.  My “day job” as it were. In your case, these may be new costs for you and you need to figure it into your overall profit and loss.

If you are just starting out, take the cost of the supplies you used in your first month and divide by the number of items you sent in to Amazon. So it might be one quarter of a roll of tape, 8 boxes, 300 labels, that kind of thing.

In the case of my CD, I decided to lower the cost and break even rather than pay the 50 cents to have it shipped back to me or disposed of by Amazon. It was sitting out there in storage and the value had changed significantly since I bought it.

With the coffeemaker, I sold it for less than my original list price, too. Luckily I had enough margin that I could lower my price and still more than double my money. Ideally, I like to double my money after fees and expenses – like the diaper disposal sack – or better. You can see from my chart why I find books and media so appealing.

Notice on the very bottom that I included my 2013 totals for the same products.  This is to show you the difference the new fees make.

Aside from the CD which was just a mistake, these new fees wouldn’t be enough to discourage me from buying these items again. This is because I had really good margins built in.

If I bought the Cuisinart based solely on the number I saw on ScanPower ($71.13), I might be upset later if I hadn’t accounted for the extra packing and shipping weight on my end in my mental calculations.  This is a particular concern with appliances, food and beauty where the items can be really heavy.

My Rules of Acquisition

So now that I have a handle on my costs, I’ve set some Rules of Acquisition for myself. I talk more in my book about my rules of thumb. With the new fees, I’m not interested in paperback books unless I can sell them for at least $7. When I get to a book sale, I look at the price sheet and I subtract that cost from the “net” prices that ScanPower gives me.

Would I sell a book for $5.99? Possibly. My rule is a starting point. I would also look at other factors like ranking, whether or not there are a lot of FBA sellers, if Amazon is selling the book, and so on.

As you can see, my Rules of Acquisition go hand-in-hand with my Rules of Pricing. I have to be able to price high enough to cover a little bit of loss or discount down the road.

You will create rules of your own as you go along. My friend Lynn, for example, refuses to buy anything oversize (i.e. over 18 inches), not only because of the extra fees, but because it is a hassle for her. She knows that her shipping and supplies go up with oversized items as well as weight fees and the oversize fees. I will buy big. I have a supply of boxes in bigger sizes for my toys, bedding, appliances, collectible games & puzzles, etc.donut

I’ve recently embraced food and beauty. I avoid baby items that are most likely to be recalled like strollers, cribs, etc. That’s just me. Some folks I know are only selling toys or only selling books and media. There is no right or wrong to this – just personal preference and comfort level. The most important thing to do in this business is to act and to start scanning everything in your chosen categories.

Send in inventory and make some money!  Amazon will continue to raise its prices every year which means you will continue to do what retailers do around the world which is…pass along the costs to the consumer.

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Don’t Let Your Inventory Get Sidelined!

I know I promised you another exciting “Dark Days of January” post about fees and reports, but I just couldn’t think that hard this week.  My brain is elsewhere.  Luckily, I found this great video from Amazon.com on how they receive our packages at the warehouse. It covers all the things that can go wrong with your inventory and how you can minimize the chances of your inventory getting pulled to the side for problem solving. This apparently is one of the ways inventory can get lost or damaged.

It is mind-boggling to see the warehouse in action. I couldn’t help but notice how beat up some of those boxes were that were being checked in at the warehouse. This is why I primarily use new boxes from Uline.com rather than used boxes from book sales, stores, etc. I have had very few boxes or items arrive damaged at the warehouse.

Amazon Warehouse Video

In addition, a year or so ago I had a guest post from an Amazon warehouse worker who offered great advice on how to pack your inventory correctly for the warehouse. If you have inventory questions that aren’t addressed by the blog or the video, please leave me a comment below!

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Time to Kill Your Darlings

GOOSEIf you have old items at the warehouse, you got an email from Amazon this week with an estimate of how much you are going to owe (gasp! My heart!).

Every six months Amazon clears the dead weight out of its warehouses by assessing its FBA sellers long-term storage fees. They politely call it “aged inventory.”  Anything that has been in the warehouse for a year at the cut-off date could cost you a lot more than your typical monthly storage fee. Oh, and yes, this is in addition to normal fees.  The long-term fees are meant to be expensive enough to prompt us to take action.  So, if you’ve been selling for more than a year…consider yourself goosed.

The best way to avoid these fees, of course, is to sell your old stuff.  The assessment date is February 15 so you have a few weeks to sell.

In today’s post I’ll cover how to find out if you owe long-term storage fees and how to have items returned or destroyed.

First, look at your potential long-term storage fees.  You can find the report in SellerCentral under “Reports” and “Fulfillment.”  You want “Recommended Removal” at the bottom of the page on the left-hand side.  You do NOT want Long-term storage fee charges” under “Payments.”  This is a historical report of the last time you were assessed, NOT your upcoming potential charges.  Ok, click on “Recommended Removal.”

Recommended Removal 1

You can look at your report on screen or you can click on the tab and download a file you can open in Excel or another spreadsheet program. You also have the option to pull up data by individual SKU or ASIN. On-screen you can’t sort the data so I’ll download as well as look onscreen. The report shows you your original MSKU and details about the product. The reason I say “original MSKU” is that I’ve been selling some of these items for years.  The scrapbooking books at the warehouse are not three years old, for example. I keep sending in more as I find them.  You also see that Amazon recommends that I remove 1 Paint Idea book even though I have two up there.  This is because we are allowed to have one unit at the warehouse without extra charges. The point of the fees is to avoid warehousing huge quantities of items for long periods of time.  So, 1 item is OK. Two or more will cost you.

The exception to this rule is if the one item up there has been up there for a year without selling a unit. In other words, if I have a slow selling book up there, it can gather dust for nearly two years before Amazon will charge me long-term storage fees. After that, they’ll charge me.  If the item is very valuable and the monthly storage charges are low, then it is worth sending it in to Amazon.

You will also notice that I have an unsellable item where it says “No Listing.” I have to look into this immediately. I can’t sell what isn’t being listed. If I can get it to be listed again, I won’t be charged since it is only one unit. Here’s what I do with the report:

  1. Download and sort by number of recommended removal quantity from highest to lowest
  2. Reprice all items where it makes sense.  Try to sell by 2/15
  3. Determine which items I want to keep at the warehouse (and pay the fees)
  4. On 2/14 arrange to remove or dispose of all other items left on this report – kill my darlings
  5. Learn from my mistakes

Books make up most of my ancient inventory and they are generally pretty small.  The fee is based on total cubic feet of excess inventory.  They will charge you $22.50 per cubic foot. Now many items like books, dog toys, etc., are much smaller than a cubic foot. This is why they charge you by the total cubic feet of excess inventory rather than a per-unit charge. Last August, I paid just under $65 which means my total excess inventory was just under 3 cubic feet – not bad.

On 2/14, I download the report again. Hopefully it is smaller because I’ve sold off some inventory.  At this point I need to decide what to do with each item – stay, destroy or return to me. My decision is affected by:

  1. How much the item is selling for on Amazon
  2. Whether or not I think I can sell the remaining units in the next 6 months…and for how much
  3. The cost to destroy it vs. the current price on Amazon
  4. The cost to ship it back to me and then back to Amazon at a later date vs. the long-term storage fees
  5. Whether or not I think I can sell it through another channel like eBay

My first question is “how much will this cost me to keep?”  There’s an easy way to figure that out. Go to “Manage FBA Inventory” under the “Inventory” tab.

Amazon fulfilled inventory 1

I’ve pulled up one of my items from the recommended removal report here.  As you can see, the unit volume is .072. If I multiply .072 times $22.75, I get $1.62 per item or $179.82 if I keep all 111 units…which I won’t. These darn dog toys were a huge mistake. I’m going to have to sell them below cost. I bought a lot of them wholesale and apparently so did a lot of other people.  I had them sent directly to Amazon rather than to me. It was convenient, but now I have a lot of them up there costing me money. If I had bought them retail, I would have sent in maybe 30 to see how they sold and waited to replenish.  These are actually popular toys – they are just selling at ridiculous prices.

Ok, enough hand-wringing. Good-bye my darlings!  From this screen I can create a removal order if I want to which is handy for one or two items. However, since I have a lot of items to look at, it is easier for me if I go back to the original “Recommended Removal” screen.  From there I can remove/dispose a large number of items efficiently.


From the main screen of the “Recommended Removal Report” (see previous picture), click on the “Begin Removal Process” button. You will need to go through your inventory twice – once to dispose, once to return items.  On the first screen, choose whether you want your items returned to you or disposed of.

I’ve decided to start with items to be returned to me.  I will go through the report now and click “Delete” for all the items I do NOT want sent to me. In other words, only the ones I want sent to me will be unmarked.  As I go down the list, I can decide how many I want sent to me.  The report shows me how many they recommend I have returned.  In gray underneath this number is the actual number that is in the warehouse. In this way, I can have fewer or more units sent back to me. I will repeat the process for “disposal.”  This time when I go through the report, I will “delete” items I do NOT want destroyed.

Since this is all about money, I will often have to decide if I want to have something returned or simply destroyed (and good riddance).  For standard-sized items Amazon will charge me 50 cents per unit to return an item.  If the item is oversized (one side is longer than 18 inches, basically), the cost is 60 cents per unit. If I choose to destroy the item, it will cost me 15 cents for a standard-sized item and 30 cents for oversized.

For small items, the return fees may be about the same as the long-term storage fees. In that case, I’d most likely leave the item up there. Looking at the dog toy mistake again, the storage fee is $1.65 per item.  To have that item returned to me and then mailed back at some future date would be $1 in costs to me.  I would save 65 cents per item which is $65 for 100 units – real money.

For books that are now being sold by lots of sellers for less than $4 on Amazon, I will just have them destroyed. I don’t have to think about it. Items that I can sell for more than $10, I’ll usually have sent back to me.  Because lots of sellers have rules like this for themselves, Amazon created a cool new service called “Automated Long-Term Storage Removal” where you can arrange for Amazon to automatically either return or destroy inventory that is subject to the fees. You can set a price limit per product to determine whether your inventory is destroyed or sent back.  They’ll send you an email ahead of time telling you how they plan to take care of your inventory. At that point you can make adjustments if you want to. You have to go and create your settings before each assessment date – it won’t be a “set it and forget it” kind of thing. Still, it could save you time.

To set this up, you need to go to “Settings” inside SellerCentral. It is on the far upper right-hand side of the page.  Under “Settings,” choose “Fulfillment by Amazon.”  You will find, among other things, a way to automate the removal of your unfulfillable inventory as well.  Scroll down to the bottom.  You will see “Automated Long-Term Storage Removals Settings.”  Click “Edit.”

Automated LTSR

The default for this report is “Disabled.”  As you can see, I’ve selected the option to set price limits.  All I need to do now is fill in my email address, determine my limits, put in my address and hit “Update.”  It is pretty straight forward.

Unless you have a lot of old inventory, it will probably take longer to read this blog post than to actually take care of your long-term storage fees. Amazon makes it pretty easy once you find the right report. If you reprice now, you may be able to sell most of your aged inventory before the deadline.

Taxes, reporting, filing and planning…they don’t call these the dark days of January for nothing. Isn’t this fun? Next week we’ll cover Amazon’s annual FBA fee hike. I know you are as excited as I am.

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