Five Tips to Increase Your Amazon FBA Profits
The eBay & Amazon Seller's News, February 2015 - Volume 16, Issue No. 3
Tips, Tools, News and Resources for eBay, Amazon and Online Sellers
Time is running out and we are quickly filling up our Wholesale Sourcing Conference in Las Vegas Feb 28 to March 1st. Go to www.wholesalesourcingconference.com for information and registration.
Backing up your computer info, listings, inventory and product images is critical. All computers crash eventually. My favorite online backup service is iDrive. They contacted me this week with a special offer for my readers. If you use this link you can get a 75% discount for 1Terrabyte of cloud data and it covers unlimited devices including computers, iPads, Android phones, etc. all of your files are protected with military grade encryption and you can access and share your files from any device. So in addition to back up protection this is a great way to access all your files and data while travelling. This offer is limited to the month of February and will expire on Feb 28th.
Both PayPal and Amazon 1099s are available for download now. If you sold over $20,000 on either eBay or Amazon then both sites will generate a 1099 that shows how much they paid you during 2014. They send a copy of this to the IRS so it's important you download your copy and include it when you file your taxes. Remember you do not owe taxes on the full amount of your 1099. You only owe taxes on the profits you made after you deduct product cost, fees, shipping and your business expenses. If you are looking for a CPA to help you (which I strongly recommend), reach out to Diane Kennedy CPA at Tax Loopholes.com. She is very experienced at working with online businesses. These days Diane has become a very prolific author but she is tied in with a CPA firm Keystone CPA Firm who is very up to date and works with many eBay and Amazon sellers. (Note - I do not have an affiliate relationship with either Diane Kennedy or Keystone).
I have told you before about Jenni Hunt's Grocery and Health & Beauty private Facebook Group where you can get help from the pros if you sell in those categories. The group runs for 3 months and is limited to 100 participants. Here is the link to read about the program.
So let's get started with this month’s articles.
There are, of course, many other ways to reduce your costs and increase your profits -but I think these 5 represent some of the most important and easiest to implement.
eBay came out with their quarterly financial results last week and they were really dismal. At a time when Amazon grew more than 15% in the fourth quarter year over year - eBay marketplace sales were only up 2% in the same period. And this week, eBay and PayPal announced that they would cut 2,400 hundred workers, which represents 7% of their workforce. That does not bode well for sellers as I expect that many of the cuts will be in the seller support area. Although it also looks like eBay India will take one of the largest cuts -they are expected to lose 1000 workers.
eBay's decline started with the leaving of Meg Whitman and John Donohoe taking over the reins of CEO. Since Donohoe joined the company it has just been one disaster after another. His first and probably most critical mistake was to destroy the eBay community and try and transform the site into something that looked like Amazon while doing everything he could to change the culture of the marketplace.
Of course it didn't help that we were hit with a major recession shortly after he took over -but that affected everyone -and although other sites recovered -it seems eBay never really did. Yes, their stock price has done OK -but that is mostly due to the success and rapid expansion of PayPal.
And now eBay will spin off PayPal - so I am not sure where future profits will come from. EBay said they would split its marketplace division from PayPal in the second half of this year. PayPal will be a standalone publicly traded company, which some analysts' estimate could be worth about $40 billion.
EBay is also exploring either a sale or initial public offering of its enterprise division. The Enterprise division helps retailers beef up their online presence. A company spokesperson said the unit did not fit neatly with PayPal or the marketplace division.
The upshot of all of this is the unstated fact that eBay is now for sale. So who would future buyers be? It could be an overseas company that needs a foothold in the US like Alibaba or maybe even someone like Google or Yahoo could be interested.
Depending on who buys eBay it could be good or bad for sellers -there is just no way to know.
Some other changes to eBay are also worrisome. Carl Ichan won his battle to put more board members on the eBay Board of Directory and give investors a greater say in the company. And the best news of all is that John Donohoe stepped down and will be replaced by Devin Wenig, president of eBay Marketplaces. He will become the new CEO after the breakup. Again - that could be good or bad. We won't know what kind of a CEO he will be.
If you are a regular and longtime reader of this newsletter then you know that I used to be pretty eBay-centric. But I am sure you have noticed that over the last year of so I am now covering Amazon with more regularity. In my case, I started selling on eBay in 1999 and started this newsletter in 2000. In 2006 I started multi-channel selling by expanding to Amazon but until 2009 it was a small part of my business. eBay was still my main channel. Now that has changed. Although I sell many of the same products on eBay as I do on Amazon, I typically sell anywhere from 6 to 8 of those items on Amazon for each one that sells on eBay.
I am still going to cover eBay for my readers who still sell there -and I do not advocate that my readers leave eBay, but I am a strong advocate of multi-channel selling. It just makes sense to expand your business to Amazon, Rakuten or Sears.com so you don't have all your proverbial eggs in one basket.
If you are like me you probably made the switch to digital cameras a few years ago, yet millions of people around the world still prefer film cameras. And there are also millions of collectors who collect cameras and lenses.
There is also a market for the cameras, but personally I stay away from those as a camera may look like it works fine, but there could be something wrong with the electronics or something internal you can't see and the only way to test them is to take some photos and get the film developed which is something I just don't want to mess with. But the market for lenses is excellent, so there is plenty of money to be made there.
One thing I like about lenses is it's pretty easy to see any damage. (if you do -walk away). There is no market for scratched or damaged lenses and it's easy enough to find good ones that you don't want to take the risk.
In the real estate world they say that pricing is based on three things; location, location and location. With camera lens its condition, condition and condition. Here are some things to look for when evaluating film camera lenses:
Other factors to look for:
So how much are they worth? Last year I sold a Nikon 300 mm telephoto lens for over $900 and I got over $600 for a Cannon 105 mm (that one still had the box, directions and both lens caps). I paid $250 for the 300mm and $200 for the Cannon
But my best score was a Leica 28 mm f2.5 wide-angle I bought in a thrift shop for $22 that I sold for over $800.
How and where to find lenses
They turn up in thrift shops fairly often but they usually sell within an hour or two of being put out, so you have to visit often - usually first thing when the shop opens.
Garage sales are also good. The thing is people often don't put them out, so what I always do when I go to a garage sale is ask - "Do you have any old film cameras or lenses for sale. If they do they will usually bring out a camera bag. Most people will insist on you taking everything including the camera, but if the price is right and there are some good lenses in the bag you can do that.
The last way is to advertise. Take out a classified ad that says I buy 35mm camera lenses for cash and give your phone number. The thing to remember about classified ads is to keep running them. They often don't work until people see the ad 3 or 4 times.
Returns happen - there is no way to prevent 100% of returns except by not taking them, but if you sell on Amazon or eBay-that is no longer an option.
We have had a no-questions-asked return policy in our eBay listings for the last ten years -yet we get very few returns. When I looked back over the last couple of years, our returns on eBay averaged about 1 out of every 350 sales. It's quite a bit higher on Amazon, about 1 out of every 105 sales, but that is due to Amazon's even more liberal return policy and is more a function of Amazon's customer base. Nevertheless there are things you can do to reduce returns on both platforms.
Here are my tips for reducing returns:
So try these strategies and see how they affect your business. While I was working on this article, Karen got an email from a customer who bought a firepit from us 9 months ago and he said the firepit cover had deteriorated and had tears in it. This is the first time that has happened, so I figured he must have gotten a defective one. My solution is to send him a new cover at no cost. A few minutes later we got the following message back through eBay:
No matter what platform you sell on -there is just no substitute for excellent customer service and believe me despite the occasional expense -it will pay dividends in terms of more profits over time.
Ohio Wholesale sells a large line of small home décor items like decorations, signs, candle holders and other decorative items.
The Sydney Candle Company sells a complete line of Soy candles
Crossroads is another supplier of a wide range of candles.
Nashville Wraps is a supplier of all types of gift boxes, bags and gift-wraps.
Otto Step Inc. is the developer of the Otto Step Pet step...portable plastic platform that simply inserts into a 2" standard trailer hitch receiver. They are a family owned business with product made in the USA.
Lifeforce Glass sells Inexpensive Gifts with Meaning, Socially and Environmentally Responsible, Made in USA from Lifeforce Glass. They are the manufacturer. Imprinted glass stones, granite blocks, and seabeans are just a few of their products and custom work available. Register for wholesale right on their website.
EcoSmart Designs, Inc. is a U.S.-based manufacturer of jewelry and gift products offering a variety of designs, thousands of parts, and a custom production division.
Art And Craftsmen, Inc. is a manufacturer of fine wood products. Their primary goal is to provide the consumer with quality, competitively priced products made in the USA. Art and Craftsmen serves the market through distribution. Contact them on their website to find the distributor nearest you.
Ice Cubes, Inc. sell Ice Trays Created Especially for Those That Serve and Protect! ARMY - FIREFIGHTERS - MARINES - DON'T TREAD ON ME - EMT - NAVY - PARAMEDIC - POLICE - AIR FORCE - COAST GUARD.
MiniMe USA sells the line of MiniMe 3D personalized dolls, iPhone Cases, Samsung Cases.
Fun Express carries wholesale toys, wholesale novelties, wholesale party favors and wholesale decorations and is a leading wholesale supplier to party retail stores, family entertainment centers, amusement parks, restaurants and promotional agencies.
Regal Art & Gift is a designer and wholesaler of gift and garden décor.
Tori Tako Wind Designs , sells wholesale wind chimes products. Located in Salt Lake City, Utah, they also offer decorative flags and assorted wind accessories at a competitive price.
E Silk Flower Depot wholesales Silk Flowers, Artificial Flowers and Fake Flowers
PrimeTimeVideo is a source for VHS movies at the low wholesale prices.
Mingzhou Oriental is an importer and wholesaler in the US specializing in oriental furniture, home decor, gifts, antiques, arts and collectibles.
That’s it for now. See you again in a couple of weeks.
P.S. If you missed the last issue, click here to read it.
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