Posts Tagged ‘amazon’

2013 Last Minute Holiday Preparations

October 18, 2013 Leave a comment

Despite the just ended government shut down, my online sales have been going well.  It looks like it’s going to be a strong Christmas season!

Here are some last minute things you should take care of now, in case you’ve fallen behind:

First, make sure you have up to date information on total cost associated with every sku you sell.  You need to know what your margins will be at any given sales price, so you can set your prices correctly based on competition.

Second, if you sell on an online marketplace like Amazon or eBay, spend some time checking out your competitions’ pricing strategy.  Remember, people can set prices differently based on day of the week and time of day, so start sampling your competitions’ prices throughout the day for several days in a row, and keep it in a spreadsheet.

Third, decide what your sales strategy will be for each of your products.  E.g., if you don’t have a lot of inventory on a strong selling product, you may want to raise your prices now and let other retailers sell out their inventory, so you can sell at a higher margin later in the season.

My next post will be right around Halloween, and traditionally my sales slow down in the days leading up to Halloween.  So there should be some extra free time in the next couple of weeks to spend on looking for more products to sell.

Good luck, and let me know how your holiday sales are going!



Private Label Manufacturers

September 13, 2013 Leave a comment

Last week I talked about selling private label products as a way to avoid intense price competition on Amazon.  Of course, to do that you have to find private label manufacturers.

This November there’s a private label trade show in Chicago.  I’ve never been to this particular trade show, though I plan to attend this year.  The organizers say there will be over 1000 companies exhibiting their products.

The ASD trade show is in Las Vegas in March.  That trade show is not dedicated to private label manufacturing.  But it does have over 2000 manufacturers and importers exhibiting their products, so there’s a good chance you can find manufacturers to work with.

If you attend either show, please send me an email and let me know how it went, and how valuable you thought it was.


Finding an Amazon Niche

August 30, 2013 Leave a comment

If you’re selling on Amazon, you’ll eventually notice that just about any product can get into a price war.  Someone decides they’re going to undercut everyone else to take the volume, and survive on thin margins.  Usually it’s a large seller with lots of volume.  Check out any of the most popular toys selling on Amazon as an example.

What can sellers who are just starting out do?

My suggestion is to start with products that aren’t going to invite a lot of price competition from large sellers.  E.g., you can focus on products that have good but not great volumes.  Products that rank in the 10K – 50K range are often good candidates.  Do make sure you track their sales rank for a couple of weeks to make sure they never drop below about 50K.

If you have a reliable source of used products of a single sku that can also be a good choice.  Most of the high volume / thin margin sellers want to concentrate on new products.  If you go this route it’s important that your source of products be pretty stable.  It takes time to create a good listing, so you need to sell a lot of products to make it worth your while.  A notable exception to little competition selling used products, though, is books.  There’s a lot of competition in used books.

Products that need preparation before being sent to an Amazon warehouse can also be good candidates.  Some high volume sellers handle their own fulfillment, but many send their inventory to an Amazon warehouse for FBA fulfillment.  If they do, they probably don’t want to spend the effort on a lot of manual, time-consuming product preparation, and will skip selling such skus.  However, if you’re fulfilling your own sales, you don’t have to worry about prepping the products to send them to Amazon.

You can also sell unique products, like your own art work or craft work.  A clever example of this I read about was someone who could print t-shirts on demand.  He had a program that generated random messages, and create an image of a t-shirt with that message (so he didn’t have to actually make a t-shirt with that message until an order was placed).  Then he had a program create an Amazon listing with the message, using the image created earlier.  In this way he was able to quickly create millions of unique t-shirt listings on Amazon, and of course no direct competition.

There’s no limit to the number of ways you can succeed selling on Amazon, but it will take a lot of effort to come up with a reliable way you can win.  The important thing is to actively work on finding a way to win, rather than just trying to compete on price, or hoping no one else starts competing with you.


I’ve updated my list of potentially good products for you to sell on Amazon for August.


Amazon FBA Fees Update

March 29, 2013 Leave a comment

There was a recent addition to FBA Fees that I want to mention.  For those of you not familiar with Amazon’s ‘Fulfillment By Amazon’ service, it’s a product fulfillment service where you ship your inventory to Amazon, and when an order comes in on Amazon for one of your FBA-fulfilled items Amazon does the pick, pack, and ship for you.  They also handle any customer problems with the order, such as returns.  It’s a great deal, and if you sell any reasonable amount of volume on Amazon I recommend you consider using their FBA service.

To date Amazon did not charge a fee to process customer returns.  Obviously it does cost them money to process a return, so doing this for free was a real gift to FBA sellers.  Unfortunately, they’ve decided to start charging a fee to process returns, with the fee being equivalent to the fee they charge to fulfill the order.  If you look at a transaction report from March or onwards (assuming you had any FBA returns), you’ll see these fees in your report now.

While it’s unfortunate that processing returns is no longer free, I still feel FBA is a good deal.  It frees you from having to touch every individual order you receive.  It also frees you from having to process returns and from most order-related customer interactions.

If you do use FBA, you need to account for the return fees when setting your price.  Of course, you need to know what percentage of each sku you stock gets returned on average to effectively do this.

Having no returns is the best way to minimize the cost to you of return fees.  Avoiding low-quality manufacturers is your best bet here, over the years I’ve dropped a number of manufacturers whose products sold well, but the merchandise was often defective.  It’s bad for both your customers and you if the merchandise is often defective.

Some types of products, though, just naturally have a higher return rate even if the merchandise isn’t defective.  Anything that must ‘fit’ correctly, and there’s no way to guarantee a fit without the customer physically having the product in hand, is an example of this.  For these products it will be especially important to factor the cost of returns into your price, or you will end up making little or no money on these items.

I should mention that the FBA service can also be used to fill non-Amazon orders.  When you get an order on another channel (Sears Marketplace, eBay, etc.), you enter the order into your Amazon seller account and they take care of the pick, pack and ship for you.  This isn’t quite as automated as your orders from Amazon, since the order information must be entered into the Amazon system.  If you don’t have high volumes from outside of Amazon this isn’t a problem, and if you do have high volumes outside of Amazon there are services available to automatically transfer this order information to Amazon for you, for a fee.


My monthly list of potentially good products to sell online has been updated for March 2013, if you haven’t checked it out yet this would be a good time to do so.


Selling on Amazon – Starting Your Online Retail Business

March 16, 2013 Leave a comment

As you probably know from my previous posts, I recommend that anyone who is just starting to sell online start on Amazon.  Of the marketplaces I’ve sold on they’re the easiest.  They let you do as much or as little as you want.  If you want to just have your listings show up on Amazon, and do all of the order fulfillment and customer support yourself, you can.  If you want to just buy products, send them to an Amazon warehouse, and have no more to do with the sales process, you can do that, too.

Your desired level of involvement will change over time as your sales grow and your objectives change.  At first, with small volumes, you may as well handle the order fulfillment yourself, it doesn’t take much time or storage space.  Eventually you’ll reach a point where it’s taking a lot of your time and holding you back from growing sales, and you’ll want a fulfillment service to take that over from you.

The two things that generally constrain your sales are time and money.  Time to find new products to sell, which should always be a big part of the time you spend on your online business, and money to buy additional inventory.  As a retailer you can only sell what you buy, so having capital to buy more inventory is essential to growing your sales.

In terms of time, always keep track of how much time you’re spending on each aspect of your business, and actively spend time every week thinking of ways to reduce it.  Reducing how much time you spend on any activity will free up more time to look for additional products to sell (to help, here is a free list I update monthly with items to sell on Amazon).  This isn’t rocket science, if you actively spend time thinking of ways to become more efficient every week you’ll find them.  Maybe not every week, but you will find them.

Money is trickier.  I recommend that you not borrow money.  Not every product you sell is going to sell well, you don’t want to borrow money to buy inventory that you can’t sell.  If you’re just starting out and don’t have much money for inventory, you can look for one-off products to sell in outlet stores and the like.  It’s a lot more time intensive to sell one-off products, and I don’t know of a way to really ramp up to large volumes doing that, but if you’re just getting started and need a way to generate profit to but more inventory it’s a path that can work.

Amazon Inventory Health Report

January 18, 2013 2 comments

In a previous post I discussed keeping track of the profit and margin you receive on each item you sell.  This week I want to talk about knowing how well each item is selling.  I.e., you may be making a lot per sale on a particular item, but if you only sell one item per year it isn’t very interesting.

Since I use the Fulfillment By Amazon (FBA) program extensively, I’m going to discuss keeping track of inventory health using an FBA report in this post.  If you don’t use FBA, or use other fulfillment methods as well, you can do the same things, but the mechanics will be different.

Amazon provides an Inventory Health report for your FBA-fulfilled items: Reports => Fulfillment => Inventory Health => Download.  It’s organized by both SKU and ASIN, so you need to have a spreadsheet that maps either of these to the product manufacturer and product name.

The fields that I find most interesting without further processing are: Sellable Quantity, Inventory Age 365 Plus Days, and Units Shipped Last 365 Days.

Obviously, anything that’s been sitting in inventory for 365 plus days is a problem (I actually look at anything that’s been sitting in inventory more than 90 days, which is also available in the report but requires a little processing).  If something has been sitting in inventory for a long time you need to either mark its price down so it will sell and you can use whatever money is left on a better-selling item, or have it destroyed so you can stop paying inventory fees on it.

Units Shipped Last 365 Days is useful because it tells you what your best sellers are.  This, in conjunction with your profit per sale, gives you a pretty clear picture of where your profits are coming from.

Finally, the ratio of (Units Shipped Last 365 Days / Sellable Quantity) tells you what you need to make sure you re-order from the manufacturer soon.  Some items are seasonal, and sales around Christmas typically far exceed those of the rest of the year, so you need to apply some judgment as well.


I updated my list of what to sell on Amazon for January.  It gets updated about once per month, so check back regularly.


Selling One-Off Products

December 14, 2012 Leave a comment

I’ve read many articles about selling one-off products.  E.g., going to flea markets or thrift stores and buying a box of something, then reselling the items individually online.

I can see where someone could make money doing this.  The margins can be quite high, so selling them for any reasonable amount of money will have a good return on the money you’ve invested in this.

But as I’ve mentioned before, there are generally two things that limit your business growth: money, and time.  Selling one-off products can limit the amount of money you need, but in terms of your time it’s very expensive.

It takes a lot of time to go through flea markets and thrift stores, and to create a listing for a product.  If all you’ll ever have to sell is one box of whatever it is you found, the amount of time you have to invest in each product you sell is very large.  But you need a lot of volume to really make money on retail, and spending a lot of time on each product – finding it, preparing it for sale, creating a listing – makes getting good volume very hard.

If you’re just starting out, and really desperate to make some money quickly with very little to invest in inventory, selling one-off products may be a good way to go.  But to really ramp up volume and sales, you’ll want to transition to finding products you can re-stock as needed and sell for a long time.


Reminder: Congress is working on bills to require online retailers to collect sales tax in all states, rather than just states where they have a physical presence. There are literally thousands of tax districts in the United States, the time and cost of collecting and remitting the correct sales tax could easily be prohibitive for a small retailer. Ask your Representative and Senators to ensure any online sales tax bill requires a simplified method for collecting and remitting the tax, such as a flat sales tax paid to the Federal government, which would distribute the funds to states proportional to their populations.