How to Use Textbook Arbitrage To Finance Q4 Arbitrage

This post is not for fast turn people. If you are one, stop reading now.

Ok, if you are still reading, then I will assume that you understand how real businesses are ran and see a bigger picture than the quick nickel that so many gurus are preaching. With that said, I will show you a plan that can give up 2x, 3x, 4x, 10x that amount of capital to use during Q4.

One of the things it will require is that you do have capital that you can’t put to work during the next 3-4 months. Some will argue that they can turn the capital several times in the next few months and get the same result. Well yes that is totally true….. BUT that requires work and risk and I am lazy. I want to make as much money with as little work as possible. I don’t mind waiting a few months on 200%-500% returns.

Basic Book Arbitrage

I am focusing on textbook arbitrage. That is a special form of book arbitrage. Basically there are a few times each year when you can sell textbooks a crazy high profits. Basically the start of each semester and a few weeks after. Students need books fast for a number of reasons and the Prime prices can be 2, 3, 10 times higher than the Merchant Fulfilled (MF). This happens at a predictable pattern every year.

Also the same textbooks prices and sales ranks totally tank during the rest of the year ( there are random sales, but we are talking in general)

These times ( the rest of the year) is the best time to acquire stock. Even better is the fact that there is a flood of used books hitting the market at the end of the semesters, with summer being the best because most students aren’t in school during the summer sessions.

Starting around the first of May until about the middle of August is the best time to load up on textbooks. Buy them a deep discounts and then sell them at a premium in late August/early September, then start to buy your Q4 products.

Choosing What Textbooks To Buy

There are a few things to look for with textbooks.

First, you have to be able to read the charts and have faith that they will repeat.

Second you have to understand that Prime textbooks sell for a look more than MF textbooks because students need the textbooks fast.

Third, that you can buy penny books and sell them for $30-$50 when they are in demand ( even when there are penny books listed against yours)

Fourth, you can buy books from college students that need quick cash. ( I have a Gumroad course on how to do this, so I won’t be giving away my tricks on this.

How To Flip College Textbooks VIA Facebook and Craigslist With Little To No Competition

Doing AZ to AZ Textbook Flips

I want to show an example of a flip I did in Dec/Jan.

I purchased 12 of these textbooks that were fulfilled via FBA for an average price of $6.67. I ordered over the $35 free shipping price point on my buying account ( free shipping is higher now). I basically bought all the FBA copies under $25. There were several $.01 offers on the listing but I wasn’t worried about them. They weren’t going to be my competition when the students started buying books at the start of the Spring semester.

salesrank

http://www.amazon.com/dp/1602298815

I received the books, slapped my tag on them and sent them right back into AZ.

The students got back to campus and started order their books. I sold all my copies for just a little over $10 profit on my $6.67 investment.

booksale

profit

That is a pretty good return on an AZ to AZ flip ( my other textbook deal from students were at much higher returns)

The whole business model to see what the charts say the textbooks will sell for during the peak sales times and then buy them from other sellers that don’t understand the power of Prime.

Penny Books

If you can find textbook listings that have no or very high priced Prime sellers on them with penny book sellers, you can start to buy up the stock from the penny sellers ( it will be $4 a book from them at the $.01 price)

If you see that you can sell the textbook for $20+, you just need to order the penny book from the MF seller and send it to AZ FBA.

Gift Card Exchange

Here is another way to put money to work with basically no risk.  Amazon has a textbook buyback program ( just Google it) and you can basically trade in your textbooks for a gift card.

It is probably easier to understand if you just watch the video because I actually show examples of how to do it. There is also a Chrome Extension that helps you do it.

https://jvz4.com/c/332845/303337

Summary

Instead of trying to flip inventory over and over all summer at 20%-50% returns, you could source textbooks at deep discounts all summer long ( and don’t forget about the peak time to buy from students starting in the first May) and then cash out when the students go back to school in the fall.

Take those profits ( and the free time you had all summer to do research) and invest the profits in Q4 products.

Trust me, the money ( profits) still spend the same, no matter how hard or how little of work you do to make it.

Using Contextual Search For Online Sourcing For FBA

Contextual search for online arbitrage is one of my favorite techniques to use. It is so simple but so powerful that many people overlook it

What Is Contextual Search?

Generally contextual search is just highlighting and either copying and pasting into a search engine like Google or highlighting and using a Chrome extension to do the copy/paste.

Here is a more detailed explanation : https://en.wikipedia.org/wiki/Contextual_searching

Here is a quick video on how it works

How Online Sourcing Extensions Work

If you do a lot of online sourcing, you most likely are using Chrome and have several extensions installed to help you find sources for products.

I don’t claim to know how the extensions actually work but in general they are grabbing info off the pages you look at and do a sort of contextual search hoping to find a match and get you click on it and set their affiliate link ( yeah that is the only reason they build the extensions, they are trying to make a commission on your purchases )

Most of the times that works pretty good but they aren’t human and can’t make decisions to on stuff that doesn’t match up perfectly.

That is where search engines come in.

Search Engines

Google, Bing, Yahoo and a host of other smaller search engines have bots ( spiders) that crawl web pages and try to figure out what is on the page and classify it ( think SEO, search terms , meta data, etc)

When a user types in something to the search bar, it tries to match up the most relevant pages to the search. Each search engine does it different and returns different results. That is why going with the same search engine all the time might not help you find deals others are finding.

Sometimes it takes a human eye to see that a page may actually be a possible source. You may have to go several pages down in search results to find the sources that other aren’t finding ( that is where the gold is)

Context Menu Search

Context Menu Search is the normal Chrome extension that people are using. It can be customized to the search engines you choose.

Get it here https://chrome.google.com/webstore/detail/context-menu-search/ocpcmghnefmdhljkoiapafejjohldoga?hl=en

I have used this on for a long time and it is free. Works pretty good but you do need to take time to set it up for your own preferences .

I have recently changed over to a new paid extension called OAhighlight.

It does basically the same thing but is somewhat more convenient ( as you will see in some of the following videos)

It is also customizable but it does come with a lot of search engines already installed.

Here are a few videos that show how I use contextual search for online sourcing

Here is something to look at if you are a book seller. I use these 2 on Firefox and haven’t taken the time to figure out the search to add to the OAhighlight extension yet

Bargain Book Mole

http://www.bargainbookmole.com/

Book Burro

I don’t know if you can find the right search links or not ( and I can’t even find the Book Burro webpage) but someone more tech savy than me may be able to. ( If not, at least you know that you can use them in Foxfire and that is another sourcing trick)

Conclusion

Everyone nowadays thinks that they need software like OAXray to source online. The truth is that everyone is doing that and the deals are getting harder and harder to find ( some people are still doing really good at it) but contextual search is an old technique that you should look to use to find hidden gems. It isn’t a fast technique, that is why I recommend using the new extension that does save a little time but you can still do it for free if you take the time to set up the free extension.

Why Multi Packs Make You More Money On Amazon FBA

First let’s define what a multi pack. Say you have a widget. You put 3 widgets into a poly bag. Now you have a multi pack. It is more than 1 of the same product.

Now if you say you put a widget and a rock in a poly bag, that is not a multi pack. It is a bundle. When you have 2 or more different products that are sold together, it is a bundle and many people get this confused.

Quick fact: You are not suppose to make new multi packs on the Grocery category per Amazon policy. People still do but it is suppose to be only used when the manufacture does it. The old listings seem to be grandfathered in and people still sell on them even though they are not from the manufacture

So now that we are on the same page about what multi packs are, now we can look at why they are more profitable.

Amazon Fees Are The Enemy

Every item sold incurs fees from Amazon. You can roughly figure that everything sold FBA incurs about a $4 fee ( slightly less)

This is why many sellers do not sell anything under $10.

Now a multi pack is considered a single item when it comes to fees.

Quick fact: The multi pack are usually listed under new UPC codes and this why they don’t show up when you scan the items in the store ( some are listed under the same UPC and will show up. It is hit or miss)

So take the example that you have 10 widgets.

You can sell the individually and incur $40 in fees ( again, rough estimate) or sell a single 10 pack and incur $4 in fees ( actually it would be more due to the higher selling price) . Which sounds better?

Advantages of Multipacks

Lower Amazon fees

Fewer sellers

Better value for customer

Disadvantages of Multi packs

Usually higher sales ranks

More work to package

Case Example Of A Mulit Pack

Here was a product that I sold. I got 3 of them at a flea market for $3 each.

asdf

http://www.amazon.com/dp/B00FQR7V2C

I had the choice to sell it as 3 singles or 1- 3 pack.

If we look at the return for the single, after fees, I would get $5.80 back, which is a $2.80 profit and 93% ROI. Not too shabby for a product at a sales rank of 7k in beauty.

Amazon Multi Packs

http://www.amazon.com/Burts-Bees-Volumizing-Shampoo-Pomegranate/dp/B006XMHPF2

Now if I sent in the 3 pack, after fees I would get back $21.06 ( if I sold at $29.99, which would be a better value for the customer) . This gives me $12.06 profit and an ROI of 134%, which is 40% more ROI on the same investment. Now we have to note that the sales rank is worse , 135k ( but there is no FBA sellers at this writing)

FBA Multipacks

Now the Fast Turners want nothing to do with this. They will sell theirs the first day it hit the warehouse and wait 2 weeks to get paid.

My 3 pack will also sell ( FBA Toolkit says 1 sells per day at this rank) So I too will get paid 2 weeks later but have 40% more profit in my pocket.

The thing that people focus on is the sale rank. I will admit that I love me a good sales rank but my goal is to make the most money I can, not to have the best sale rank of any FBA seller ever.

So I understand that people have been brain washed into the Fast Turn business model and I know how on paper it works out so good. ( Yeah I remember all the people that were going to retire multi millionaires because of their 401ks. The math proved it. Yet I have never seen it work out for anyone I have known)

So onward. Lets say that you have 180 units of these and you need to be sold out in 30 days.

Simple math for selling the singles. At this sales rank, you are going to blow through them really quickly ( at least that is what you think), FBA Toolkit says 4 of these sell a day ( I am making assumptions that you get all the sales, which doesn’t happen, but let’s go with it)

Well guess what, it is going to take you 45 days. WTF? But you are a Fast Turn God!

Ok, if we send in all as 3 packs, then that is 60 days worth. Still not working out.

Now lets say we sent 90 in as singles and 30 -3packs. It will take 23 days to sell out the singles and 30 days to sell out the 3 packs. Hey, we just made it in the 30 days like we had to.

Didn’t think of that? Huh? Listing your products two different ways. It isn’t an all or nothing thing, but most people look at 7k vs 137k and think it is a no brainer and take the 7k listing every time.

What about the money. Show me the money!

The profit on the 180 singles is $504 at the 93% ROI, but the profit for the mixture of both listings is $613.80 at 114% ROI.  That that is an increase of 21% ROI on just mixing them up.

So I made the assumption that you would sell what the FBA Toolkit predicts ( which won’t happen). Well it is actually more likely on the 3 pack due to the number of sellers vs the sellers on the single listing.

So let’s go the other direction. What if I messed up and this doesn’t sell. Which one do I have the most room to drop prices to at least get back my investment?

Well this one is simple. The 3 pack. ( just look at the profit / ROI)

What about if I have to place a removal order or have product removed? Well the 3 pack will save me money over the singles.

The Take Away

So what is the action steps to take? Well it depends.

You should look at your options. Don’t just jump on the best sales rank as your default. Remember that you are going to have to pay about $4 for everything you sell which will lower you profit,

Next check to see if there is a multi pack listing already there. Not all multi packs listings are worth getting on. Some items people don’t want to buy in bulk.

If there is the no multi pack listing, consider making one. Sometimes you are jumping on the parent listing, sometimes you have to make it. Remember that you are usually selling the unit cheaper in the mulit pack and this makes it easy to use the Amazon ads for product promotion. People look at the single and your ads pops up and it is cheaper per unit.

One last thing to think about. If the product is discontinued and people can’t find it and want to stock up, the multi pack may actually be more attractive to them over the single.

Your objective is to make as much money as you can on Amazon FBA, not source and send in as much as possible and this is a perfect example of how knowing the numbers can help you make more money.

The Quick Start Guide For Profiting On Merch By Amazon

Merch By Amazon is the newest income stream that many FBA sellers have jumped onto but it requires a totally different set of skills. I have decided to put together this little Merch seller start up guide to show people how I personally have done it and hopefully that can help you if you are wondering where to start.

If you are totally new, lost, don’t have a clue, my first advice is to take Chris Green’s Merch By Amazon course.

There are 2 version available and I personally recommend taking the advanced version.

The into version of Merch By Amazon Udmeny

The advanced version of Merch By Amazon

( Here is a little secret. Green sells the advanced  course with 2 other of his courses for $49 on Gumroad as a package. I would go that route myself instead of Udemy. Check out the deal here:  https://gumroad.com/a/790246515 )

It Is Just Paying People $5 On Fiverr, Isn’t it?

Many people will tell you the business model is as simple as paying someone $5 on Fiverr to make the design for you. Well, no it isn’t.

Yes, I personally have done that with some success, but that flizzed out really quickly. I had 1 person out of 4 that was able to actually make the designs but they got out of the business.

Plus there are legal issues with the actual copyright of the designs even though you are paying someone to make them for you.

Here is a little info about copyrights

http://www.aiga.org/copyright-basics-for-graphic-designers/

The work around is to create your own designs. This is where people start to drop off at because it is going to require knowing how to use image software and many have very large learning curves.

Graphic And Image Creation Software Programs For Merch

Most people love Adobe programs and most people that already know how to use the graphic creation programs are using Adobe products.

I am not one of them.

I had no idea how to use Photoshop. If me it was a lot of clicking and cussing without getting any thing to work.

Then there is the fact that you have to pay for Adobe programs. If you buy them outright, they are expensive.

The good news is that they are now on the cloud and you just pay a monthly fee.

I am still too cheap for that.

I am also a fan of open source software. Basically there are free versions of the popular software out there that works almost as good as the paid. ( I am typing this up on OpenOffice, which is the open source version of Word and it works just as good and is free)

So my choice of software to start Merch was GIMP, which is the open source version of Photoshop.

I had no skills at all with GIMP. I couldn’t do the simplest tasks on GIMP.

I tried to watch some Youtube videos on GIMP, but the problem is that they aren’t well laid out and don’t exactly show the beginner step by step how to use GIMP.

Udemy to the rescue!

I really like taking Udemy courses on subjects that I want to get trained on instead of trying to piece together training by watching a 100 different Youtube videos. Time is money and it is worth paying a little to get the training all in one place.

I searched for GIMP training on Udemy and the course I found and took was actually for book cover design with GIMP. It had several hours of training and covered all the basics of using GIMP. Designing a book cover is very similar to designing a tee shirt.

I spent about 4-5 hours of watching videos for the GIMP course. The guy that teaches it is from France and I found it weird that I was learning how to use GIMP on my computer in Indiana from a guy in France.

GIMP For Beginners

I highly recommend taking this course, but with that said, watching and applying the techniques are 2 different things. There is a long learning curve and many people will just quit.

Now I am somewhat proficient in using GIMP but still struggle with it but I have been able to produce a lot of designs that have sold good and I know that there isn’t copyright issues with them.

GIMP has allowed me to create simple designs but there seems to be something missing. I just can’t seem to produce complex graphics.

Then I happened to see this video

This opened my eyes to the fact that there are other programs that can allow you to be more creative. This video uses Adobe Illustrator, which is a paid program.

Well we are in luck because there is an open source version of this called Inkscape.

I found a Udemy course to learn how to use Inkscape.

Udemy

The course is called:   Learn Inkscape now – create vector graphics for free! 

I do recommend this course but not to learn Inkscape exactly. The instructor moves pretty fast through stuff and it is hard to follow along with what tools to use, but the real value is the instructor’s creativity. That makes the course worthwhile. I was amazed on how easy it was to create images with Inkscape.

So while I recommend that you take this course, I also recommend a Youtube course that has 10 videos that show you how to use Inkscape.

Here is the first of the series:

This is going to take several hours of your time to watch. This where people will quit.

Then I would go back and take the course on Udemy

Resources For Merch Tee Shirt Designing

No matter what graphic program you end up using, you are going to need some graphics and fonts to make good designs.

Once again you could pay for images but many have strings attached to them on how many products can be sold with the image on it.

My suggestion is to use public domain images and public domain fonts becasue you can do whatever you want with them.

You just can’t grab any old image off the internet and use it for whatever you want. Most images are copyrighted and you could get into big trouble.

The same goes for fonts. If you use the basic fonts that are on your computer, you designs will probably suck but you can’t just grab any old font from the internet to use. Most are copyrighted or do not allow you to use them for commercial use.

There are several sites that I use but the thing to make sure of before using anything is that you have rights to use it.

http://www.1001fonts.com/free-fonts-for-commercial-use.html

http://www.dafont.com/top.php?l%5B%5D=10

https://pixabay.com/

https://www.wpclipart.com/

http://www.pdclipart.org/

You can also use Google images and click Search Tools and then Usage Rights to find images that you can use.

Making More Creative Designs Quickly

Giving a tee shirt design a vintage, distressed or dirty look seems to sell more shirts. This is suprising easy to do one you figure it out. You can actually double the number of designs you have up by simply doing this.

I made a video on how to do it:

I also made a template to do it that I sell on Gumroad. You don’t need to buy the template since I show how to make it in the video, but the ready made template is easy to use and there is more detail instructions on how to use it that comes with the Gumroad

vintagegumroad

https://gum.co/JTQQe

Merch Business Models

There are several schools of thought to the Merch business model.

Some people think that their designs are worth big bucks. Other like myself think that these are just digital files that are passive income and any money we make on them is good.

One of the biggest problems I see is that people on the 25 shirt tier put up 25 shirts that sell for $25-$30 and make very few sells if any and can’t get tiered up. A great design that never sells because it is priced too high is worth $0.

Shirts that don’t sell stay hidden way down on the Amazon search results. Amazon shows search result of the best selling stuff.

My business model for new sellers on Merch is to create designs that sell fast and sell a lot of even if you make very little off of each one.

Your goal is to get tier up to the 100 or 500 level. At that point you can have a lot of the higher priced, slower selling tee shirts up and have some of them sell every day because you have so many up.

My other business model is to have a ton of designs up that don’t sell very often. I currently am at the 1000 tier level.

Now say that I have 1000 designs up on Merch and they each sell 2 per month.

That is 2000 tees selling in a month. That is a pretty good passive income stream and the bonus is that none of those designs are going to be ranked well. They may be sales ranked 800k to over a million. At that rank, nobody is going to try to copy the design, which is a big problem right now on Merch.

By me designing simple, low priced shirts myself, I can get a ton of designs up on Merch. Even if you were able to get someone to do it on Fiverr, it would cost you $5500 to get the 1000 designs up ( they add $.50 fee to Fiverr for some reason) Not to mention that most likely you won’t find someone that will keep making the designs for $5 ( actually they only get $4 of it) They Fiverr people are only doing the gigs to get you to upgrade to higher levels and high cost services.

Driving Traffic To Your Merch Shirts

Relying on Amazon organic traffic to find your shirt designs is not going to get you fast or great results. With at said, you should try to add keywords and search terms into you tee shirt title, bullets and description.

I am not an expert on that and my best selling shirt actually has no bullets or description.

While I am on that topic, I will say that price is a big fact on selling tee shirts.

Here is a screenshot of a holiday shirt that I priced low and got to 5k sales rank. It took me 5 minutes to make and helped move me to the 1000 tier

30daysales

 

Not every shirt has to be priced like this, but it was a good return for 5 minute of work.

There are lots of ways to drive traffic to you shirts.

One free way is to pin them to a Pinterest board.

The concept is that you create a board for a niche. You post a lot of different things to the board that are not tee shirts and then you randomly add one of your Merch shirts to the board. This looks very natural and once set up, can drive traffic to your Merch shirts.

Here is a video on how it works:

Another thing that many people are doing is running Facebook ads.

This isn’t as easy as you would think because you have to know how to target your ads and it can get expensive.

For this I am going to go back to my old stand by advice, go get some training on Udemy.
With that said, here is the secret.

People were selling t shirts online before Mech came out. They were selling on Teespring and there is a lot of information and courses on how to sell on Teespring.

In these courses they tell how to advertise on Facebook and how to use Pinterest and other social media to drive traffic and make sales.

Here  the Udemy course that I personally took.

Sell T Shirts With Teespring

Here is my advice, don’t be afraid to invest in your knowledge and don’t waste time and money by trying to figure it all out yourself when you came pay a little and fast forward your success.

Here is a quick trick to help your shirts be found in the search engines ( ie Google and Bing) You have to understand that you are trying to be found in Amazon search and Google search.

Take the Amazon url that they send you when your shirt is approved and enter it into both of these.  It will tell the search spiders to come and index the page, which will help send traffic to Amazon when people are searching online,

https://www.google.com/webmasters/tools/submit-url

http://www.bing.com/toolbox/submit-site-url

Conclusion

Merch By Amazon is a good income stream but it takes work. It is also changing daily and the competition is getting stronger everyday, but once you have some success with it, you will find it addictive.

While this article was about Merch By Amazon, I will let you in on the real secret.

People that have been having success on Merch are already moving into another platform that is making them even more money ( they are still on Merch, but just expanding)

What am I talking about?

Shopify!

People are using Shopify to build there own “ Merch” site. They are using print on demand services that print and fulfill and they drive traffic in the same ways they do for Merch and Teespring, but the bonus is that they own the customers ( email lists for example) and they can market to proven buyers.

Yeah here is the catch. This requires work. You have to learn a whole lot more and like I have mentioned several time in this article, that is where people will quit, which thins the herd and is where the profit is.

FBA Taxes: What To Expect And What Your Tax Guy Needs

I have been away for awhile dealing with some family health issues. During that time I was PMed to do a post on what reports are needed/what you need for taxes concerning FBA.

So first, I am not an accountant ( actually I do have a degree in Accounting) so I can’t give tax advice but I can tell you what my experience is dealing with my tax guy.

So the basic thing AZ is going to give you is a report that says the total sales you had, the total fees you paid AZ and how much money they sent you.

From this point let’s say they said you sold $100k, that they charged you $33k and sent you $67k back.

The $67k is the important number. This is what the government thinks you made and wants you to pay taxes on until you take out your cost of goods (COG) and expenses.

So you need to know the value of the inventory you had in stock on Jan. 1 of 2015 and Dec. 31 of 2015. The value is what your cost was, not what it will sell for. Your tax guy needs this.

Now this is a big problem if you aren’t keeping good records or if you aren’t using Inventory Lab. ( this is the #1 reason to use Inventory Lab)

The report that you can run on Dec. 31 from AZ just tells you what you have in stock. It doesn’t give you the value. If you are using IL, it will tell you the COG of that inventory.

So if you aren’t keeping track of this, you need to have a number for the COG. I sure hope at least you coded the cost in the MSKU like I recommend you do on every product.

You would have to go through every single item, take the COG times every unit for every single item you had in stock on Dec 31 to get your ending inventory value ( oh wait, it gets better)

Now we need to know what your COG was for everything you sold for the whole year.

If you are keeping good records, then you would just subtract the ending COG from the total years COG and then you would have that COG for the products you sold through the whole year.

Let’s say that number is $33k. So the tax guy would subtract $33k from the $67k number AZ gives you, so now the government wants to tax you on $34k.

Now if you didn’t keep records, man you are SOL. You are going to have to look at every single sale you made and come up with a COG for each item. This is really hard if you have no record of what each item cost and if you had a lot of sales, you are going to be super busy.

So now that we have $34k left, this is where that tax guy is going to try to take expenses and deductions away to get this number lower. It doesn’t mean that you didn’t really make $34k, it just means that you don’t want to pay taxes on $34k.

Here are some of the things my tax guy wanted.

Mileage. This is big! You get to deduct $.54 a mile for your sourcing trips. So in this case, if you had 1000 miles of deductible mileage, then $540 is coming off of the $34k and you won’t have to pay taxes on the $540. So let’s say you pay 25% tax on the money. You just saved $135 in taxes.

The tax guy will have questions about your car, insurance, usage , etc.

So hopefully you have been keeping a record of mileage. If not, you got some work ahead of you.

Now you can claim mileage even if you don’t find any products while sourcing but I personally want to have a receipt to back up every sourcing trip.

It gets muddy when you mix personal trips with business trips. Think of grocery shopping and you pick up some FBA stuff. Do you get to claim that? Talk to you tax guy.

So my tax guy wants to know other things.

He takes a deduction for me working out of my house. So he needs to know the square footage of my house and the square footage of my work area that is used for FBA. He also needs things like how much my insurance is, the utilities, etc.

So the tax guy is going to come up with a number for what he can take off as a deduction for you working out of your house. Now if you are bigger than that with say a warehouse, the tax guy will need all the cost involved with that.

So the tax guy will take this out off the $34k, making your tax bill lower.

Expenses are another deduction that tax guy will want. Hopefully you have been keeping records of all the boxes, box tape, polybags, etc.

All this stuff is going to come off the $34k.

So how many times you see people in a FB group say ” I am not going to pay for boxes”? Well they don’t realize how little it actually cost them.

Say that you are paying 25% tax. That $1.30 box is going to come off of the $34k, so it is actually costing you $.98.

You are now a business owner and things that you need for your business that make things easier/better you should buy because you are basically getting them as a discount because you take them as expenses.

Your tax guy will be trying to get the $34k down as far as possible because that is what you will be paying taxes on.

There are probably things I forgot to include, but that is the general process of the taxes.

Now if this was your first year selling, now you have a surprise coming your way.

Uncle Sam doesn’t want you to have a free ride and wants the taxes paid before the end of each year.

Most likely your tax guy will talk to you about quarterly estimated taxes.

Basically every 3 months, you are going to start paying taxes and surprise, your first quarterly tax is due on April 15 along with your 2015 taxes.

Now quarterly taxes are a pain. Why? Well you need to pay 90% of what you owe ( which if your business is growing, becomes hard to figure) or you have to a pay a penalty ( actually you are ok if you pay 100% of the last years tax. ie, talk to your tax guy)

So this is a quick overview of the process and this is why you need to pay a tax guy to help you.

You also need to keep good records ( that is why Inventory Lab gets $50 a month)

After Selling On Amazon, What Is Next?

News alert, the competition on Amazon is grow fast. Amazon isn’t exactly the easy money that it was in the past. While this is great for the consumer, it isn’t exactly great for the sellers on Amazon.

We have all seen it, the dreaded “race to the bottom”. Actually if you have studied Economics, it really isn’t a surprise. Markets will hit an equilibrium eventually as competition comes in.

So what are people doing now that haven’t given up?

You have heard the terms Private label, wholesale and bundling tossed around as possible answer to replace RA ( retail arbitrage) and OA ( online arbitrage)

Of the three mentioned, I have personally a fan of the bundling option. ( actually buying wholesale and bundling those products).

While wholesale does eliminate some competition, it really has no barrier to entry and private label does have a really big barrier to entry but there are factories in China that are not interested you being the only seller of their products. I hear many big time PL sellers talking about bundling their on PL products to stand out ( even thought they own the buy box, they still have to convert to sells)

Other people are jumping on the Merch By Amazon train. Right now it is easy money. It is “The Wild West” right now but you know Amazon will be tightening down on it before long. They are going to get rid of 3 pages of the same design that has been copied and copied and copied.

The people that are really making big money on Merch are sending traffic to Amazon. This means that they are paying for ads, have Pinterest boards, etc set up. Most likely these people were already doing t shirts on another platform like Teespring before Merch opened up.

They have learned to send traffic and that is a very valuable skill that can be used for whatever you sell, even your FBA products ( you can send people to your listings on AZ even if you aren’t the only seller)

So what are the experienced sellers doing. Well believe it or not, a lot of them are moving off of the Amazon platform. Yeah you hear me right, they are still selling on AZ but they are moving some of their business off of AZ. ( ever heard of not putting all your eggs in one basket)

Quick story.

There is a guy that I went to school with that was doing this online selling thing before FBA became cool. He was selling on eBay full time. He would buy skids via Liquidation.com, drive there and pick them up and then list them on eBay.

He did pretty good from what I understand. He sold in a niche and started getting repeat customers. Then he decided that he should move off eBay and basically have is own website. He realized that there is extreme value in having a customer base and an email list ( ever hear that the money is in the list?)

Amazon doesn’t let you have access to their customers. You are just a commodity seller on Amazon and as such, you can’t build a customer base or email list.

eBay lets you have some access ( don’t quote, but I think it is 30 days) , so that is a little better. I assume that is what the guy I know did.

So the guy I know moved his business from a eBay platform seller to a website seller. He has a customer base and email list in a specific niche. He doesn’t worry about policy violations and account closing, so he has a higher level of security that most of us FBA sellers.

Many other sellers are starting to see this and are moving to this model. They want to “own” their customer list and keep selling to the same customers.

So how are they doing it?

Many are turning to Shopify. They are using Shopify to build web stores and they are finding companies that will fulfill products for them.

But this isn’t easy.

Putting up a Shopify does nothing for you. You have to get traffic and the traffic has to convert to sales. Way more work than letting Amazon promote for you.

I do know one seller that has had a Shopify store up for a few months and on one sku, they sold over 1000 of them at a profit of $8-$10 in just one month and has a service doing the fulfillment for them. They are paying for traffic and selling products that are selling on Amazon but their customers either don’t know or don’t care.

So some people are going, huh?

Here is a quick example that combines some different ideas.

Say I choose a niche. My niche is the Couch to 5k running training program. I want to market to people that are doing the Couch to 5k.

I could set up my Shopify store to sell t shirts that have to do with running and have a print on demand service fulfill those for me when people buy them from me.

I also want to sell running shorts and running shoes. I will list those on my Shopify store along with the running t shirts and I will actually have them sitting in an Amazon warehouse and when they sell, I will use Amazon fulfillment to ship them for me ( actually they will be for sell on Amazon while in the warehouse and I will also have them for sell on eBay via Joelister)

So now I have a web store that is selling to the running niche. I could be building a customer base and an email list. I am not have to box and ship products to the customer every time I make a sale. I am still having someone else take care of that, but the true power comes from the fact that I can now email my list of customers ( proven buyers) telling them that I am running a sale which is like being able to print money.

How many people are moving into this? I have no idea. The learning curve is steep ( barrier to entry). You have to pay to send traffic and that is not for people that are just getting started selling online.

Honestly most people that are doing this are experimenting right now. They are opening up their Shopify stores for the $29 a month and they know that they won’t be making a profit for the first few months.

They are experimenting with advertising, learning the system, finding suppliers, etc., but they know that if they don’t take the plunge, they won’t and they see the power in moving into this business. model.

They are using the knowledge of what they have sold on Amazon to know what niches to move into with their Shopify stores.

Believe it or not, not everyone buys off of Amazon and the products that sell good on the Amazon platform also can sell good on other sell channels.

Are people totally walking away from Amazon selling? No, but many people are using Q1-Q3 to get their Shopify stores up, learn the ropes, and let the customer lists grow while still running their Amazon businesses.

You can get a 14 day free trial by going through this link Shopify free trial but 14 days is not a good test because this is not an over night business model.

 

 

How To Use The Variation Checker Chrome Extension

This is a new Chrome extension that is not widely available to the general public. It was privately made and not available on the Chrome web store.

You use this extension to find the low priced color/size/variation when you are doing AZ to AZ flips ( Amazon to Amazon flips)

I made a video on how to do it because it is easier to see and explain than reading about.

You can get the extension here: https://gumroad.com/a/852767859

How To Run Year End Inventory Report For Amazon FBA

I am not a tax adviser and this is not tax advice.  Please consult your CPA

With that said, generally all businesses need to know the value of their inventory at year end to provide to their tax preparer.

This is a simple thing to do in Seller Central.  You basically just run a report.

This needs to be done late December 31 or early Jan. 1 ( so basically log into Seller Central and run the report before you head out to your New Years Eve party)

You don’t have to do anything immediately with the report, you just need to run it at that time to show the value of the inventory you have at years end.

Here is a video on how to run the report:

The basic steps are:

Go to “Reports”,  then select “Fulfillment.”.

Click “Amazon Fulfilled Inventory”, then click “Request Download”

After it is complete, download it to your computer.

It is a .txt file that is hard to read.  You should open it up in Excel ( or Open Office or Google Drive ) and rename the file and save it in a safe place.

Here is a really good detailed post on what to do:

http://www.fulltimefba.com/how-to-run-end-of-the-year-inventory-sales-reports-for-tax-purposes/

 

How To Calculate A True Inbound Shipping Cost

Inbound shipping to the Amazon warehouses are a part of your COG. Many times you end up paying more than you think to ship an item in to the warehouse because of dimensional weight.

Dimensional weight is basically how much room the item takes up regardless of weight ( think cubic inches).  Most people have the basic knowledge that big, light items cost a bunch to ship but they don’t usually take it much farther than than.  Depending on the product, this “hidden” cost could total wreck your profit margins.

You could manually calculate this but there is a new Chrome extension that can easily do it for you. ( actually this extension has 2 uses. It was designed to help you determine the dimensional weight of shipping boxes.  You would want to put at least the dimensional weight worth of product into every box you are shipping in to maximum your shipping costs)

I made a video that explains this better and shows how to use it when you are sourcing to make better buying decisions


You can get the Chrome extension by going here:

http://flippingtools.com/

Sourcing From Amazon To Sell On eBay

Amazon is a really big retailer and as such, they are a good source of products to resell on eBay. They are really no different from Walmart or any other big box store when to finding product to resell. Well actually, they are better.

First you can shop on line, which is a big plus. Second, they deliver it right to you door. Third, the products are new ( they don’t have the clearance box wear or tags to be removed) And finally, you can use online tools and alerts to be notified when Amazon is in stock or lowers the price on a product.

In the video below, I show an example of how you can source from Amazon and exactly the products sells for more on eBay ( usually FBA is considered the best place to get the highest sales price, but not this time)