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Is Amazon Inventory Placement A Good Deal for Sellers?

The eBay & Amazon Seller's News, December 2015 - Volume 16, Issue No. 21

Tips, Tools, News and Resources for eBay, Amazon and Online Sellers
by: Skip McGrath

In This Issue:

Musings from and about eBay, Amazon and The World Wide Web

  1. Is Amazon Inventory Placement A Good Deal for Sellers?
  2. Does it Make Sense to Upgrade to Professional Seller on Amazon?
  3. After The Holidays Selling Strategies
  4. New Wholesale Sources for eBay and Amazon Sellers

"Whenever you see a successful person, you only see the public glories, never the private sacrifices to reach them." ~ Vaibhav Shah


Musings

This is our last issue for the year. We usually publish twice monthly but only once a month in December. So look for our next issue in early January.


As you may imagine December is a big month for our product sales on eBay and Amazon but my book sales tend to die during December, so I usually run a sale on my books. (I apologize in advance for anyone who just bought a book before the sale but I can't go back and undo that)

I am offering 25% off all my products from now, until Midnight Christmas Eve. Just use the coupon code SAV25SKIP. After you enter the coupon be sure and click the button that says APPLY or it will not take.

PLEASE READ CAREFULLY - If you want to buy more than one book you will need to buy them separately because my shopping cart will only discount the last item sold. If you add more than one item to the shopping cart it will only take the discount on the last item added. We have tried to fix that but our shopping cart provider just will not do it.


Jenni Hunt is running here private Grocery and Health/Beauty Facebook training group again for another quarter.

Grocery and Health/Beauty is one of the best categories to be selling in! And, it's a great year round category for steady sales.

These two categories provide an extensive amount of opportunity for selling replenishable items. Most of the items are consumable making the customer need them over and over again - and this can create a solid foundation for your reselling business.

I've always found the best grocery and HBA items when I combine store sales with coupons... and as I've been doing this for years now - I have noticed the trend that these deals cycle around. For example - One product I buy frequently is Dr. Teal's Epsom salts. 4-5x a year they go on sale for B1G1 at our local store. We stock up and make a consistent $7/item.

Frankly, you don't need coupons and sales to do well in these categories though. Wholesale can do quite well for resellers. Usually with wholesale you don't benefit from as high of a ROI but, I'm happy to take a lower ROI if the revenue is consistent. So combine the fact that these are (mostly) replenishable items then I'm not so concerned with the lower revenue because I can sell more over and over again. And remember, my newsletter wholesale sources often feature sources in these two categories.

These are topics the group are prepared to discuss and strategize with in the new Private Niche Group for online grocery and health/beauty sellers.

They still have room - and are just getting started... so come on in!

The session runs from December through February - it's OPEN NOW so come on in!

Learn more here.


I just heard about some new product of interest to Amazon sellers. Price Checker 2.0 - Amazon Profit Calculation Software for Wholesale Supplier Lists quickly finds the profitable items from any wholesale product list. The software pulls from amazon.com and amazon.co.uk simultaneously to open up the UK market to you as well. Follow the link for a free demo license for up to 20,000 items.

I have not personally tried this so I am not endorsing it, but it looks very interesting and I wanted to bring it to the attention of my readers. Once I use it for a bit I will write about it in a later issue.


Cyber Monday was huge for Amazon - Amazon sold $500 worth of products per SECOND, $30,000/min., $1,800,000/per hour or $43,200,000 per day.


Lets get started with this month’s articles:

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1. Is Amazon Inventory Placement A Good Deal for Sellers?

If you don't know what Inventory Placement Service is, it is a service whereby when you create a shipment, Amazon will let you send it to just one warehouse, so you don't have to break up your shipments to several warehouses.

By default, when you create a shipping plan, your inventory may be split into shipments to different fulfillment centers. Amazon selects the fulfillment centers you ship to based on the products you're shipping and where you are shipping from. This may include multiple shipments for individual Merchant SKUs.

This option enables you to send all Units of a single Merchant SKUs to a single fulfillment center determined by Amazon during the shipment creation process at a per-unit cost. In addition, most Standard-Size products will be combined into the same shipment. Certain products, including those in the following categories, may be shipped to different fulfillment centers even if you have enabled the Inventory Placement Service:

  • Apparel
  • Jewelry
  • Shoes
  • Media
  • Oversize products
  • Products with special prep or handling requirements.

If you do not want to split your shipments, you can sign up for the Inventory Placement Service. When you enable this service, you send all of your inventory to a single fulfillment center, and the shipment is split up by Amazon at the fulfillment center. A per-unit service fee applies

So is this a good deal?

Well, as you can imagine Amazon doesn't do this for free. There are fees associated with it.

Standard-Size per unit (includes all Standard-Size product size tiers)*
1 lb. or less $0.30
1 - 2 lb. $0.40
Over 2 lb. $0.40 + 0.10/lb. above the first 2 lb.
Oversize per unit (includes all Oversize product size tiers)*
5 lb. or less $1.30
Over 5 lb. $1.30 + $0.20/lb. above the first 5 lb.

There is no question that this service is a huge time saver and can also save on shipping costs. I use this service most of the year and Amazon sends most of my shipments to a warehouse in California (I am in Washington State). So I save money on shipping, because when I don't use the service I am usually shipping to East coast warehouses. I only have one oversize product and most of my products are fairly light weight, so the fees work out for me when I run the numbers and factor in the savings on shipping.

But, I cannot answer if this s a good deal for you. You will have to analyze it based on where you are located, whey most of your shipments go to, and how much your items weigh.

There are some other drawbacks however you should be aware of. Just because Amazon sends your products to one warehouse it doesn't mean they will leave them there. What I often see is when my goods arrive in California, are received and then they show up in reserved status for a week or so while Amazon ships them to another warehouse.

This means that your inventory is not available for sale right away. That is a major drawback this time of year when there are very few selling days left to Christmas. So if you are using this service you may want to turn it off during November and December.

If you do want to use this service, here are the instructions:

To change your inventory placement settings:

  1. Under Settings, click Fulfillment by Amazon. (You must be logged into Seller Central)
  2. Under Inbound Settings, click Edit.
  3. Under Inventory Placement Option, click Inventory Placement Service.
  4. Click Update.

[top]

2. Does it Make Sense to Upgrade to Professional Seller on Amazon?

There are two types of sellers on Amazon - Basic and Professional. As a basic seller you can still use FBA, but the selling fees are different. You pay the basic sales commission based on your category (15% in most categories) plus 99¢ per item sold.

As a professional seller you pay the same commission, but the 99¢ fee is waived. The monthly cost for Pro seller is $39.99 so if you sell over 40 items a month then it is actually cheaper to become a Pro seller.

There are several other advantages as well.

The most important advantage is if you are a basic seller you can only sell items already in the Amazon catalog. If you want to sell a unique item or create a bundle or multipack, then you need to make a new listing. You can only do that if you are a pro seller.

There are several other advantages to being a Professional Seller

  • Manage inventory using feeds, spreadsheets, and reports
  • Manage orders using order reports and order-related feeds
  • Use Amazon Marketplace Web Service to upload feeds, receive reports, and perform other API functions
  • Amazon-set shipping rates for all products
  • Seller-set shipping rates for non-BMVD products
  • Make listings inactive when you want to stop selling for a period of time (for example, if you are unable to fulfill orders for any reason, such as family emergency, inclement weather, going on holiday or vacation, etc.).
  • Promotions, gift services, and other special listing features
  • Eligibility for listing placement in the Buy Box
  • Ability to collect U.S. sales and use taxes on your orders

I think you will agree those are pretty substantial advantages. Also if you are selling less than 40 items a month you don't really have a real business and are just dabbling.

The ability to create unique items allows you to do private labeling and bundling which are two of the more profitable techniques on Amazon, so even without the other advantages I think that is a good reason to make the investment.

[top]

3. After The Holidays Selling Strategies

Well the holiday season has been going great so far. As I pen this, there are still some selling days left until Christmas. Our strategy this year was to triple our inventory and it paid off, but I am still running out of top sellers, so next year I will be quadrupling.

But the holiday selling season will soon be over and sales will go back to normal, so how to maximize your sales the rest of the year?

First of all, remember that Christmas is not the only holiday. Valentines Day will be upon us soon and then there is Mother's Day and Father's Day. If you have any items to sell for Valentines Day, you want to get them into Amazon rather quickly, as buyers start looking in early January. Same goes for Mother's Day and Father's Day. I try to get my inventory to hit FBA at least 45 days before the actual holiday.

Also you want to keep sourcing inventory all through December because January is usually a good month. There are two reasons for this. People return things to Amazon they did not want and use the refund to buy something else. The other reason is a lot of folks get an Amazon gift card for Christmas and often wait until January to use them.

The other issue to consider is seasonality. Spring is just around the corner and people start buying Spring items in February and Summer items in April, so give some thought to planning inventory purchases in time for those seasons.

Having said all that the single biggest item in driving your sales year round is to have lots of items for sale. If you only have 40 or 50 SKUs on Amazon, unless they are top selling items, you will only see a sale or maybe two a day. Whereas we have about 900 SKUs on Amazon and we average about 25 to 30 sales per day. So if you did well financially over the holidays use some of that money to source more products to sell.

Lastly as things slow down in January and February, use that time to review your listings. Check pricing, photos and descriptions. Fix any mistakes and while you are at it do some keyword research and update your keywords. I updated keywords in about 100 listings last January and February and saw an instant increase in sales of those items.

I use and recommend Merchantwords for Amazon keyword research. And if you sell on eBay I find the same keywords I use on Amazon, also work well for eBay. Merchantwords is normally $29 a month but if you use this link, my readers get it for only $9 per month for life.

One last thing. Inventory control is very important. One of the most profitable things any seller can do is get rid of underperforming inventory. Its very easy to find your slow moving inventory. First click on Manage Inventory in Seller Central then click on Inventory Dashboard. Now look across the top of the page for a link to Inventory Age. Click on that and you will see a report that shows how many items you have in Amazon and how long they have been there. Here is a screenshot of the header row.

No matter what time of year it is, this is a business that takes constant attention and management. Any attempt to put any online selling business on autopilot will fail.

[top]

4. New Wholesale Sources for eBay and Amazon Sellers

Remember, if you do not see wholesale information on these websites, just use the contact form on the website to request it.

Dallas Wholesale sells wholesale handbags, wholesale totes, wholesale purses, wholesale luggage and wholesale charm bracelets.

MjibSports Inc. sells wholesale men's private label denim jeans in 5-pocket and carpenter styles. Work and casual wear. Small orders welcome. Bulk discounts. 1000's available. Fast shipping.

Med-FRESH is the Herbal Distributor of HUMIDIPAK, world's first 2-way humidity control. They are the Primary Distributor for Humidipak Herbal Applications, Humidipak.

SLEEFS designs and produces custom compression gear. Everything from arm and leg sleeves to headbands, bandanas, t-shirts and jerseys. You can find a wide range of designs including flags of the world, camos, solid colors as well as licensed teams and their own original designs. Multiple sizes from little kids to adults.

Merling Inc. - Blanket Depot is a Wholesale Distributor of licensed merchandise, featuring NFL and MLB, Harley, Disney, and more.

Artisano Designs sells Wholesale wedding favors designed and distributed in both the US and Canada. They design and manufacture party favors ideal for weddings, bridal showers, baby showers or any occasion. Bulk wholesale pricing and fast drop shipping internationally. (Always be careful with anyone who says they drop ship. Test them out first for reliability and quick shipping).

Lil Baby Cakes is a leading diaper cake baby shower gift company and a popular diaper cakes supplier.

Desperate Enterprises is a manufacturer and wholesale distributor of Tin Signs with licenses such as Coca-Cola, John Deere, Jack Daniels's and 100's more.

3 Eagles Trading Co. is a source for Native American related products. They design and create bumper stickers, decals, key chains, auto tags, cloisonné pins, stained glass, necklaces and other items for the Native American trade and Veterans organizations.

Panaria Since 1972, PANARIA has been serving the industry as an importer and distributor of innovative novelties, toys and gift items.

Tool Logic sells compact, high quality, multi-function tool kits, including wholesale survival knives with unique and unusual gifts for birthdays and men

Patchmagic is a Designer, manufacturer and wholesale distributor of quilts, bedspreads, coverlets, pillows, sheets, dustruffles, rugs and other accessories.

Well that is it for 2015. See you early next year. I wish all my readers a happy and wonderful holiday season and hope the new year brings you success, good health and happiness. Next year marks the 17th year we will be publishing this newsletter.

Skip McGrath
The eBay & Amazon Seller's News

P.S. If you missed the last issue, click here to read it.








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