Tips For Making Money Selling Online

Amazon Trade In Program: Hack For Getting AZ Gift Cards For Amazon FBA Sourcing

Sometimes you don’t have to sell stuff to “make” money and in this post I want to show some techniques to use when you know something has value but are at loss to capitalize on it.

You can actually buy used stuff on Amazon. Primarily people know about books, but you can also get CD, DVDs, games, electronics and a whole bunch of other things ( nothing like Health and Beauty, Grocery, etc though)

Pro tip: If you are a RA sourcer, when you see beat up boxes, don’t automatically assume it is unsellable and not scan it. Check to see if it can be sold as used.

With that tip you might ask why bother with anything else that I am going to say next. Well, that is somewhat true but not always ( and there are reasons I will cover later)

Amazon Trade In Program

Amazon has a trade in program that gives Amazon credit ( just like gift cards). It shows up on certain product listings and says something like “ Trade in for $68.21 credit” .

They give you a free shipping label and will ship it back for free if they test if and it doesn’t work/meet requirements.

Generally you get immediate credit to spend on Amazon ( of course if they don’t accept it, they will charge that back to you credit card)

So far, so good.

Now the catch is that the UPC/ISBN needs to match up exactly. So you are going to need stuff with the original box/package.

Also they have a warehouse that test this stuff and sometimes they don’t get it right ( I have a Tivo that they said didn’t work and it worked when I plugged it in it worked just fine)

The trade in price is usually way less than the Used Amazon price or eBay price. ( once again, why bother with this then? )

Why Trade In To Amazon Instead Of Selling?

So if I can sell it for more, why would I bother with trading it in?

First, electronics, games, etc are the place where the scammers live and play. They know that they can order your product, take out the good one and replace it with their broken on, return it and Amazon or eBay will side with them 99% of the time.

So selling these type of items are somewhat dangerous to your bottom line when you have no control of refunds.

Second ( and I am not a tax guy or lawyer so this is not advice) but Amazon doesn’t send out 1099s ( you should always report any income on your taxes). I am not sure if gift card credits are considered income in the tax laws.

So let’s have an example. Say you can sell something for $140 used and after fees, you clear $100. Now say that you can trade it in for $90. Which is better? Well most people will say that $100 is better than $90 but say that you pay 20% taxes on your income. Now the $100 is actually $80. Now which is greater?

Take this a step farther, and say that you return $120 after fees and after taxes you clear about $100. Now the $100 is greater than the $80, which is true, but now you have to consider the risk. Say this is my Tivo and some guy has a Tivo and it is broke. He orders mine and does the swap out and gets a refund from Amazon. Now I am out say the $25 I spent for the Tivo and am at a loss now.

Now if I had traded the Tivo in and gotten $80 and the same guy buys the Tivo and does the swap out, that is Amazon problem and not mine. So is the $20 difference in the trade in vs. the selling used worth it?

Third, some items that I can’t sell on Amazon ( DVDs, CD) will actually trade in for more on Amazon than they sell for on eBay.

When I am at library book sales, I look through the DVDs specifically to trade into Amazon ( most other sellers skip these because they can’t sell DVDs)

Fourth and finally the biggest thing is that there is sort of an arbitrage opportunity with Amazon gift cards ( credit) that you can use if you are doing Amazon to Amazon flips ( AZ to AZ).

Disclaimer: These techniques aren’t for million dollar a year sellers, but more for part time, small time, cash strapped, etc seller.

Let’s go back to my example of the Tivo player. You can buy it for $25 at Walmart but the box is beat up and shelf worn, so you can’t sell it for $249 FBA New, but can sell it for $140 used like- new.

Now you have the option to sell it or trade it in for $80.

If you sell it, you might make $100 after fees but

A) have to worry about if it will be returned ( mine was)

B) The price may drop

C) You don’t know if/how long before it will sell. Figure a week at least to get it into the warehouse and then if it sells that day, up to 2 weeks before you get paid. Overall, probably at least 3 weeks to get $100.

Now if you trade it in, you will have the $80 credit today to spend on AZ to AZ flips.

So you forfeit $20 to avoid the risk and to get your profit today. ( not taking into account the tax due on the proceeds)

Will you be able to make more than the $20 in the next 3 weeks from your AZ to AZ flips with the $80 you have?

Repeatable?

So the guy with only $25 to his name could actually get some traction when he found the beat up box Tivo that all the other resellers past up on, but that is a one off and probably not repeatable, is it?

Well maybe, maybe not. It works great for that stuff you find at the thrift stores that you probably shouldn’t be selling as new ( pro tip: you better only source products from places that have UPC codes on the receipts/invoices and that is considered “new”)

Actually thrift store is a great place to use this technique to buy something for $7 and trade in for $70 like I did with this video game steering wheel.

But how can you or I do this more consistently ?

Well go to the biggest thrift store in the world:

eBay!

Actually there is a little bit we need to look at first.

(There is a video below that explains this a lot better)

If you look at the the discount gift card sites, Amazon cards usually only get about 1% discount. Honestly that is hardly worth the effort to go there and buy the cards if you are just spending a few hundred dollars or less.

So the game plan is this. We look for items that we can buy on eBay and trade in for more on Amazon to get the equivalent of a discounted Amazon gift card.

So here is a simple example:

You have $100 to source with and want to do some AZ to AZ flips, but instead you source from eBay and do the trade in with Amazon to have more than $100.

So you buy some DVDs from eBay. They are brand new, have a UPC code that is easy to confirm matches up with the required AZ UPC and then you do the trade in and have more money to do the AZ to AZ flips.

We buy 3 sets of DVD complete TV series for $100 and the trade in value is $120.

At first the $20 doesn’t sound like a lot for the hassel but let’s do the math.

If you take the $100 and divide it by the $120 ( 100/120= .83) you get 83, which means you are getting a 17% discounted Amazon gift card,

But wait, you go through eBates and get 2% cash back from the $100 you spent. So you are getting close to 19% bump on the products that you source on Amazon to do the flip.

So if you have a flip that would pay 30% and add the 19%, you are looking at 50% flip.

So it really can be looked at it as a way to bump up our ROI or in more simple terms, it allows you to buy more and make a little more. The end result is more money in your pocket.

You “made” $20 extra and then made the 30% ( $6) on the flip so you actually made $26. I know this doesn’t sound like a ton of money, but over the course of a year it can be a lot of extra money.

If you are trying to build a bankroll, after the first cycle without using this technique you would have $130 ( $100 plus the $30 profit) .

Using this technique, you would have $156. ( $100 plus the $30 plus the $26)

After several cycles, the 2 examples will really start to separate as the “extra” starts to earn more and more.

So How Do I Find These?

Nothing special is needed to find these. You look through eBay, have the AZ Trade In page open and do copy and paste of UPC/ISBN. Do this over and over until you find items that trade in for more than they cost

Now I am lazy and have a Chrome extension (eBay To Amazon Trade In)  that sort of make this easier and  I show how to do this ( and give a few more tips) in this video.

How To Find UPC Codes On Walmart.com Website

Walmart is one of the largest retailers in the world and many Amazon FBA sellers source products from there.

One of the issues resellers have is finding the all important UPC codes. Walmart has them on the site but they are hidden away in the source code.

In this post I want to show how to find these codes.

UPC Codes For Both OA and RA

First, let’s look at why we even bother with finding these UPC codes.

There are actually a lot of different whys to finding these codes.

I personally am not using them for OA ( online arbitrage) but for RA ( retail arbitrage). I want to use either the Brickseek website or the Walton app to see local stock levels to pick up stock.

Other people want to do a Google search of the UPC to hoping find other sources of stock on other websites to do OA.

And there are probably other reasons, but these are the 2 that stand out to me.

Digging Into The Code

So I am not a techy, but here is the process to find the hidden UPC code in the Walmart code. ( there is an easier way that I will show after this)

First you need to be on a Walmart product page (duh!)

Next, you hit Control “U” This opens up the source code of the page

( now don’t be freaking out because of this)

Next hit Control “F” . This is to open up the search function

Next type “UPC” and hit enter

You will see UPC highlighted and the UPC next to this.

Now you can copy this code.

Note: If this is a 3rd party seller on Walmart.com, you might not find a UPC code.

The Easier Way

So this is too much work for me, so I built a Chrome Extension for this.

WM UPC Finder

So on this same page, I just click the WM UPC Finder icon and it pulls this up automtically ( along with an actual bar code)

That is a lot less work!

Using The UPC For Sourcing

I made a video on how to use this for sourcing but first here are the tool I use in the video

When searching the UPC code I am using an extension called OA Highlight for this but you can use Google search for this.

I am also using RA Seek to be able to highlight the UPC and shortcut to the Brickseek page to see local Walmart stock levels.  You can manually do this by copy/paste the UPC code on the Brickseek website

I am also using the Android Walton app to do the same thing as Brickseek with my phone

The video below will show you how to make all of this work

 

How To Check Product Restriction And Hazmat Status When Doing OA For FBA

How many times have you sourced product via OA ( online arbitrage) for Amazon FBA and when you sent them in, you found out you were restricted or that they were hazmat?

If your answer is anything other than “never”, then you know the sting of eating the cost on those products.

In this post I am going to show how to do this manually and show you my simple work around to make it even easier.

The Hard Way

Most people are going to tell you to try to list it and see if you are allowed to sell it.

This in essence is the right answer, but it is a pain in the butt to do this if you have a lot of 1’s or 2’s of a products.

Since I do mostly RA ( retail arbitrage) I am using the Amazon seller app and it simply tells you (***most of the time) if a product is restricted or hazmat.

This works great if you have the product in hand like you do with RA but when you are doing OA, you don’t have a product to scan.

The process is simple.

You go to seller central and try to list the product.

Then this should pop up.

Now you would enter the UPC or asin ( or do a title search)

In this case, if I try to list Nike socks, it show that it is restricted for me

So pretty simple but time consuming. The AZ seller app would have just put a big red RESTRICTED across the screen.

So now I will tell what I know about determining if a product is Hazmat:

I don’t know! Truthful.

Either I see it with the AZ Seller app warning or when I try to ship it in and Amazon says I can’t.

Here is a Reddit about it

Yeah that sort of sucks.

The East Way

So here is the easy way. I actually built a Chrome extension for seeing if a product was restricted and after people started using it, they were like “Hey you can find out if a product is Hazmat with this”.

Simple dumb luck that I made it but if it works, let’s go with it.

So with this extension you highlight UPC codes and it turns them into barcodes. Then you can scan the bar code with the Amazon seller app which tells you if it is restricted and if it is hazmat.

The Chrome extension I am using is call UPC Detective and you can get it here:

https://gumroad.com/a/118043763

When you highlight a UPC, the barcode pops up and you can scan it with your AZ seller app

This works great if there is a UPC code on the page. Sometimes there isn’t a UPC code and you need to grab the ASIN and take it to a ASIN to UPC converter website

http://www.upcbarcodes.com/dashboard/asin-gtin-converter/

Then you would highlight the UPC code it spits out and then scan the barcode with the AZ seller app

In this case here is the scan from the AZ seller app and notice the hazmat warning on the right side

So there you have it. That is the easy way to check restricted and hazmat product on Amazon FBA when you are doing online arbitrage.

 

 

FBA Wholesale, Cheap Beer and How Brick & Mortar Sellers Ruined Amazon

With RA and OA getting hard, massive Amazon restrictions, counterfeit claims galore and no invoices to save you, many Amazon FBA sellers are trying to move to sourcing wholesale ASAP.

I personally thought it would be a piece of cake to switch over but then I learned that the brick and mortar sellers that are now flocking to Amazon have a different way of doing stuff and I want to cover what I have been learning in this post.

I have seen Amazon FBA get crowded.  Really crowded in the last year or so. It is very obvious in the price action of products. The “rush to the bottom”  is extremely fast due to more people trying to supply products to Amazon.

This was/is to be expected. It is basic economics.

While I understand it, I don’t have to like it.

I like me some high ROIs and have pretty much lived and died by the 3 x 1 rule  ( sell at 3 times the buy price and that usual makes 100% profit. Buy at $10, sell at $30.  AZ takes $10 and I make $10 profit) when sourcing. I have found that it is very hard to do that anymore.

I always joke around that RA is dead ( or OA is dead) but it will never die because people will always be able to find arbitrage opportunities. With all the software that is constantly scanning websites, people will find that RA gives the best chance of finding arbitrage opportunities.

Basically you never know what someone’s local store will price clearance products at or what discontinued item you will find locally, so RA will never die.

The problem is that while you can still find stuff like this, you may not be able to sell on Amazon because so much stuff is becoming restricted. ( hint, hint: list that stuff on eBay. Despite what many Amazon sellers think, eBay profit spend just as good as Amazon profits. Actually I am doing this a lot more when I find good deals and am restricted from selling or the packaging is not in “new” shape)

The second problem is that there has been a rash of counterfeit claims and Amazon suspensions.

Some may be natural ( honestly I don’t even know how people make the claims. I have never seen that check box on my options when I have returned stuff to Amazon) but it seems that brand owners are filing claims and other Amazon sellers are doing this to get rid of competition ( while some say that it isn’t happening, trust me, it is)

The problem is that Amazon wants sellers to be sourcing from legit sources. While sometimes a Walmart receipt will work to save a seller, Amazon really wants invoices. They are moving to a total invoice system and nobody knows when the Walmart receipts will no longer work.  

So RA is sort of a Russian Roulette type of thing. You may never have an issue but then again, you could be put out of business in an instance.  This is why many Amazon sellers are looking at wholesale ( or private label).

Enter The Traditional Brick & Mortar  ( and cheap beer)

The word is out that Amazon is a good place to sell products on. Tons and tons of retail stores ( brick and mortars) have opened up Amazon seller accounts. They want a piece of the action.  They know people are buying online and they need to make more sales to add to their bottom lines.

Big deal. So what?

Well they play by a different set of rules than I ( or you ) do.

Hold on, here come that cheap beer reference.

The cheapest beer that a college student can buy is Keystone ( think canned piss) . You know beer is cheap when it comes in a 30 pack.

Well in the retail world ( the brick and mortar) there is a term called ‘keystone pricing”.

Simply stated, keystoning is selling at double the wholesale price.

So they buy at $5 wholesale and sell at $10 retail.

Keystoning is what retailers strive to achieve. ( and most fail at it).

If they keystone, that are making a great profit after overhead.

This works great for selling locally in a store. It is actually my 3 x 1 rule that I like to follow. They are getting close to 100% profit this way.

Like I say, they rarely do this good on all products.

Ok, but where is this going?

Well this is the issue.  They generally don’t change how they do business regardless if it is local or online.

So this is the issue. They aren’t playing by my rule of making as much money as possible on every Amazon sell. They list products, keystone the wholesale price and that is what they sell the product for on Amazon.  

They are happy campers. They also don’t understand Amazon and the fees.

So as long as I have sold on Amazon, I have used the amount of $4 as the minimum fees that Amazon charges on every product that I sell.  With the recent changes in Amazon fees,  it would probably be safer to use $5 as the figure. As I say, there is a $4 nut to bust on every product.

For example, I find something on clearance at Walmart for $1,  I probably need to sell it for at least $5 on Amazon to just break even ( more like $6 now).  This is probably something that most sellers know ( if not, now you know why you are losing money)

So let’s run an example.

Joe Blow Brick & Mortar decides to open an Amazon seller account.  They are selling XYZ widget in their local store. They are paying $5 for these wholesale. So they decide to send some into Amazon.

If they follow their normal way of doing business, they will keystone these widgets.

They will price them at $10 ( double the $5 wholesale price)

Now they don’t understand that there is a $4 (or probably $5) nut to bust with the Amazon seller fees.

So if you are following along at home, $10-$5, is $5.  Then you take out $4 or $5 for the Amazon selling fees which leaves either $1 profit ( not counting the inbound shipping fees that need to come off this) or $0.

Joe Blow Brick & Mortar is selling these left and right and pretty happy because they are keystoning them and think this Amazon thing is the best thing since sliced bread.

They aren’t making anything off of these!  If they were doing this locally, they would be killing it.

You or I am on this listing and we are just shaking our head and trying to figure out how to get rid of our stock because they keep sending in stock and we can’t get ours sold at a profit.

So what use is this information?

Well it is about ASP ( average selling price). FBA sellers love to get a high ASP. The higher the selling price, the lower % the Amazon fees are compared to the selling price.

So say the wholesale price is $20.  Joe Blow Brick & Mortar will price at $40. Now the Amazon fees might be $10, so the profit is $10 ( $40-$20-$10= $10)

Now there is a chance to profit on this product if you are selling against Joe Blow Brick & Mortar.

Here is the issue.  Most FBA sellers hate to invest a lot per unit.  I am not a fan of paying $20+ per unit because of Amazon’s return policy.

If I pay $20 per unit and make $10 profit and get a return, I have to sell 2 units to cover it. Actually the $20 isn’t my issue, the low ROI is. The lower the ROI, the more units I have to sell to cover the loss of a return.  

If you make 20% ROI, you have to sell 5 units to cover 1 return. This is no big deal on some products that rarely have returns but some categories have lots of returns.

So now we know how Joe Blow Brick & Mortar is going to price against us. How do we deal with it?

Before we look at that, let’s look at the other big facts.

It is hard to get wholesale accounts if you are an Amazon seller compared to a brick and mortar.

Joe Blow Brick & Mortar can pretty much open a wholesale account at will.  You and I will have problems getting approved.

So I find these widgets at Walmart. They are on clearance. I list them and can make a good profit below Joe Blow Brick & Mortar price because I got them even cheaper than wholesale.

Now Joe Blow Brick & Mortar is used to MAP ( minimum advertised pricing).  They get pissed that I am selling these for less than MAP and they contact the wholesaler or Amazon.

Now I am not an authorized seller of this and get knocked off the listing or a counterfeit claim against my account. Now my account is in limbo and I am hoping my Walmart receipt will get my account out of hot water.

Now if I have a wholesale account for these widgets, I have to play by the wholesale rules ( like MAP). Depending on the wholesale price, map might not even be profitable after fees and Joe Blow Brick & Mortar might not price over that.

Then here is the biggy. Joe Blow Brick & Mortar probably has a relationship with the wholesaler and probably orders more than just this widget. They may be able to get way better pricing than me and if they get it cheaper, they can keystone cheaper (if there is no MAP) and I can’t ever get close to making money on these widgets.

Dealing With Joe Blow Brick & Mortar

First, I want to avoid Joe Blow Brick & Mortar at all possible.  There are ways to detect these type of sellers.

Sometimes they have a sellers name that screams brick and mortar.

Some only sell MF ( merchant fulfilled). Normally we like to get on listings with no FBA sellers until they contact the wholesaler or AZ and get us shut down.

Sellers with massive feedback is a sign of sellers that operate on low margins and while they may not be brick and mortars, they get better wholesale pricing and will under price you 99% of the time. It is also very hard to get the buy box from these sellers even if you price the same.

Second, you need to focus on ASP. Source products that have a higher cost per unit. That gives you more wiggle room and also eliminates most normal 3rd party sellers.  You can still profit is a seller that keystones jumps in the listing.

Third, think about doing something different like bundling  or multipacking your wholesale products.  Most of the time Joe Blow Brick & Mortar won’t mess with you.  They are too busy and probably only scan the UPC code and will never see your listings.

Summary

More and more traditional brick and mortar seller are bring their wholesale to Amazon at the same time many of us RA/OA sellers are trying to get into wholesale to save our business.  They are literally killing  the Amazon as we have known in the past and Amazon wants this. 

Realize that Joe Blow Brick & Mortar plays by a different set of rules and has easier access to products. They can sell safer on Amazon because they are doing what Amazon wants. We are not doing what Amazon wants.

Use your knowledge of how Amazon works, which Joe Blow Brick & Mortar probably has no clue on, to help keep him from ruining your listings.
Finally, it you will have the most success bringing products to Amazon with no other sellers on your listings.  I you do chose to get on a listing with other sellers of wholesale products, you should only get on listings with 1 maybe 2 other sellers ( seller without massive feedback numbers).  If you get on a listing  with 25 other sellers, you general will be toast.

Many people are doing well with wholesale but the high ROI that many of us are used to is not usually possible with wholesale and most of the reason is due to new sellers coming to the platform that play by different rules and has different goals than most old school RA scanners.

Why You Are Failing At Amazon FBA

There are a lot of people that start FBA and either quit or never really get any traction. They would tell you that FBA is all hype, no real money to be made in it but it is not true. They failed and I want to take a look at why.

Size Matters

The first reason that your WHY isn’t big enough.

I would love to say I thought of this on my own but honestly I learned it for this presentation that I saw live ( check out the video below, it is well worth your time to watch it)

So what does it mean when we say our WHY isn’t big enough?

Basically the reason why you are doing the business. Your motivation is not big enough.

For example say you are doing Amazon to get money for buying your kid some high priced pair of fashionable jeans even though they have plenty of good pairs.

How motivated are you to do the extra work to make the money?

Probably not super motivated.

Now say you are doing Amazon to buy medicine for your kid that keeps them from having seizures?

How motivated are you to make the money?

Really freaken motivated!

The example given in the video is that you are asked why you are doing FBA and you say to make a million dollars.

Not specific, not going to happen. Not a good enough WHY.

I personally am guilty of this.

I do FBA full time but honestly haven’t tried very hard and pushed it to the next level.

Why?

Well lots of reasons.

Mostly because I didn’t really have to.

Here is a some signs and signals that your WHY isn’t big enough
Signs and signals that your ‘why’ isn’t big enough:

* procrastination

* self-judgment

* embarrassment

* self-doubt

* indecisiveness

* confusion

* fear of making a mistake

* fear of failure

* apathy

* all talk but no action

* inconsistent action

( From http://www.streetdirectory.com/etoday/what-do-you-do-if-your-why-isnt-big-enough-eloppc.html)

How many of these apply to you ?

Most apply to me.

The honest truth is that we are our own worst enemies. The struggle in not doing the business, the struggle is overcoming our minds.

So what the video above and see if any of the above signs point to you. If they do, then you need to figure out your WHY and if you find that you don’t have a WHY, then maybe you shouldn’t be doing FBA right now.

Comfort Zones

We don’t want to get out of our comfort zones, but everything we say we want is outside of our comfort zones.


I suffer from this too. Private label is out of my comfort zone and everything that I want from my business is setting on the outside of my comfort zone, right next to Private label.

How to get out of your comfort zone is not my area of expertise but I have several conversations at the conference with other sellers about private label and how they got the guts to do it.

Most basically said that they just did it. They took the chance.

One guy said that he mentally considered the money he was investing as a loss already. (he was sending $500 for a product)

He said that made it so much easier. He said that after considering it a loss, he was happy when he got a return. Made him feel really good, which cause him to get out of his comfort zone easier and more often.

You need to figure out how to get out of your comfort zone. The hint is when you feel scared, you are at the edge of your comfort zone. At that point, it is time to just take a leap of faith.

Connecting With Other Sellers

Are you scared to make friends with other FBA sellers? Scared that they are going to steal all your products ideas and put you out of business?

Almost every successful FBA seller with tell you that making connections is one of the things that really causes their business to grow.

On the other hand, most unsuccessful sellers are lone wolfs. They think every seller is out to get them and they keep to themselves.

Which are you?

If you haven’t made connections, now is the time to start.

Like I have said earlier, I am recently back from an Amazon resellers conference.

Meet a ton of other resellers and have so many great conversations and learned so much about reselling and what other people are doing.

And not once did I worry about someone stealing my ideas and people told me what they were selling and I didn’t try to steal their ideas.

Seeing what they were doing gave me new ideas of my own.

So if you are hiding away from other resellers, open yourself up to connecting and you will be surprised how much that will help your business.

Training

People fail to take the time to learn how to do this business right. They do one of 3 things usually.

They try to wing it

They get the wrong training ( or worse pay for some way over priced training and get totally ripped off)

They get the right training product and don’t take the time to got through the training.

When it comes to training, I have been recommending the same training for a long time and the priced is stupid cheap ( I think that people may think it isn’t good since it doesn’t cost $1000.

You should read Chris Green’s Aribrage from front to back before doing anything with FBA ( cost about $9 new, $5 used)

http://www.amazon.com/Arbitrage-authoritative-guide-works-work/dp/1478251891

After doing a little retail arbitrage that you learned how to do via Green’s Arbitrage book, the next step is to go through Green’s Online Arbitrage book.

Now this book is more expensive. ($70 for the used black and white version and up to $170 for the new color version)

http://www.amazon.com/Online-Arbitrage-Sourcing-Secrets-Products/dp/1500333824

I wouldn’t buy the book.

I would either sign up for Kindle unlimited and read it for free or go to Udemy and take the course for $30 (it is the same as the book)

https://www.udemy.com/onlinearbitrage/learn/v4/overview

Actually, I would go to Gumroad and get a special deal he has that has 3 his courses, the 2 arbitrage books and his course on Merch By Amazon, all for $49

Why You Are Failing At Amazon FBA

https://gumroad.com/a/790246515

So you can get all the training materials for $50 but you have to actually sit down and go through the material.

Most people won’t do this. This is why people fail. This is why accounts get suspended.

Did you take the time to learn how to do FBA? Did you try to piece together the training by finding different sources online?

If so, that could be a reason you are failing.

One other training I just started recommending ( because it just came out out) is Stephen Smotherman’s How To Keepa Camel.

This training helps you understand how to read charts better and make better buying decisions. I would say that you need to have gone through Green’s training fully first before taking this training ( it is a lot more costly)

I did a review of the training in a blog post

http://www.arbitrage411.com/amazon-fba/stephen-smothermans-how-to-keepa-camel-book-video-course-review/

While it is no fun taking the time out to learn how to do something, it is very important to learn what you need to know before investing a bunch of money in inventory. So many people do this backward and lose a ton of money learning the hard way.

Wrong Business Model

This is where I step on toes but the truth is that the barrier to entry is almost non existent for FBA and some people aren’t business people.

There are a few business models that while they work for some people, they honestly don’t work for the majority.

This biggest example is the Fast Turn model.

This appeals to people because it is presented in compounding math.

10% return every 2 weeks for a year is a shitload of a return ( on paper)

It does work for some but the issue is scaling.

This is a business model that is great if you are broker than shit and don’t have much money to invest.

You can quickly build up your nest egg by turning it over every 2 weeks.

That works great until your nest egg grows so big that you you have problems spending all of it every 2 weeks and/or the processing of that much inventory.

Basically you get overwhelmed and the business model breaks down or you start hiring employees and getting a warehouse, etc.

Now you have overhead.

Still there are people that make this work, but it gets harder. The 10% return doesn’t work so good when you have overhead and payroll to meet.

Margin is very important to a business.

Almost all the successful FBA sellers I know protect their margins as best that they can ( ie they want to make as much as possible off every single product that they sell)

So while you may have started out as a Fast Turner, maybe it is time to adjust your business model. You have to remember that you aren’t Walmart trying to sell on paper thin margins. They have large systems in place to make it work and just like the retail world, there are very few other retail businesses that can survive doing what Walmart does.

So take a look at your business model. If you are working your ass off and it seems like you are barely making any money, you might have the wrong business model.

Conclusion

FBA works and if it isn’t working for you, you need to figure out why. Hopefully one of the points in the article sticks out to you and you can adjust and make this business work for you. The hard part is that you have to accept responsibility for your failure and then fix it. Harder said than done for most people.

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.

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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.

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/