Finding the Perfect Product for Amazon FBA Sellers
The eBay & Amazon Seller's News ~ November 15, 2016 ~ Volume 17, Issue No. 17
Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
Giving thanks - Thanksgiving will be upon us soon. While you are giving thanks to family and friends, don't forget your UPS guy or gal, customers, contractors and employees if you have them.
A nice hand-written card will usually do the trick, or you can add a low cost food item such as a package of cookies.
Speaking of the holidays, Amazon has a free holiday social media toolkit to help you promote your Amazon business. It has ideas for posting frequency, suggested text and more.
Conventional wisdom says it is too late to send FBA inventory to Amazon in time for Christmas, but that is bad advice.
Realize that right now, it is taking up to 3 weeks for shipments to get to Amazon (But some can get there faster, so anything you send today will most likely not arrive in time --or at best, a few shipments will get there faster. If you ship today or tomorrow, that could mean you get at least a few days exposure to sales before Christmas.
Also, the few days after Christmas (until about January 15th) are excellent selling days for two reasons:
1. There are a lot of folks who buy belatedly for people they forgot.
2. A lot of people get Amazon gift cards as Christmas/ Hanukah gifts - and they start spending right after Christmas (Last year Amazon sold over $3 Billion in gift cards in December alone).
Finally, there is one more related factor: There are plenty of bargain hunters right after Christmas. So if you have any leftover inventory --or slow moving products, be sure and put them on sale to take advantage of these folks.
Stocking Stuffers at Amazon
Last year in the month of December, Amazon buyers typed the term "Stocking Stuffer" into the Amazon search box over 2 million times. Other highly searched terms were "Stocking stuffer for women," and stocking stuffer for men. (I don't know how many times this occurred on eBay, but I am sure it was substantial.)
To take advantage of this you want to do 3 things:
Doing all three of these things will almost always increase your sales. I did this last year starting the week before Thanksgiving. The items I did this to, increased their sales over 15% from the same period in the previous year (I don't know how many times it was searched on eBay, but I am sure it was substantial).
Stocking Stuffers at eBay
The eBay search engine looks for keywords in three places - the title, the first 100 words of your description and the item specifics. Now, you may hesitate to put the words "stocking stuffer" in your title --but I have tested this with over two-dozen items of jewelry -- and it works.
If you really want this to work on eBay - be sure and put the words "stocking stuffer," in all 3 places. (Also restate any important keywords in all three places). This can take a bit of creativity on your part, but it is worth the effort.
Just a reminder that through December 31st I'm offering $20 off most of my US products as well as 10 pounds on my UK products!
Products costing less than $20 are excluded from this offer. Use the coupon code SAV20SKIP to get your discount on my US site. After you enter the coupon code, be sure and click the button that says APPLY
That coupon does not work on my UK shopping cart, so I have just lowered the price on all my UK products by £10.
FedEx added to Amazon's Partnered Carrier program
To use FedEx as a Partnered Carrier, select Small parcel delivery (SPD) in the Shipping service section when creating a shipment, then select FedEx.
Learn more about Partnered Carrier options. (Note - you have to be logged into Seller Central to access this link)
Amazon has raised fees on books. Will this finally be the end of penny book sellers? Read the full story in the eCommerceBytes Blog.
You may think its too early to think about something in March ó but believe me the time goes fast.
Next year (2017), the ASD Wholesale trade show in Las Vegas will be held at the Las Vegas Convention Center from March 19 -22 (Sunday - Wednesday). Here is the link to register. I am not speaking this year, but I am attending and can usually find some time to meet with folks who are my readers (I canít guarantee that as I also need time to attend the show, but I always try to meet with as many folks as I can).
If you act now, there are plenty of great hotel deals (After you register, check out the hotel booking deals through the registration link).
The Westgate Hotel (formerly the LVH) is right next to the convention center (easy walking distance) and they have some good deals if you book soon. Call them at 1-855-516-1090 (You can get better deals by calling them instead of going online).
If you want a little luxury - I have a special deal with the Wynn and Encore Suites Hotel. You can get a luxury room at the Wynn Hotel - or a King Suite at the Wynn Encore (right next door to the Wynn). The deal for my readers is $149 per night - the regular price is $295 per night (Sunday through Thursday - which covers all the dates of the show).
Call 1-855-770-7171 and mention registration code JOYV before you register. This deal defaults to the Wynn Hotel, but if you call before CHRISTMAS and ask while you are on the phone, you can usually upgrade for free to a King Suite next door at the Encore (Which is where I always stay).
If you sell online - you need to learn about Shopify. Here is a link to read
the new Proven Shopify Course.
Lightening Deals can be a great way to generate additional sales during the holiday season. First log into Seller Central and then use this link to see how to create lightening deals.
Read about the three mergatrends that will power Amazon stock for years.
Amazon and eBay announce third quarter results.
Over at eBay:
Lets get started with this monthís articles:
So what is the perfect Amazon FBA product?
The short answer is, "Anything I can make a decent profit with." Let's look at some of the issues related to finding the perfect product:
Lightweight and Small
The perfect product would weigh less than 5 pounds and fit the standard size guidelines (less than 18 in length). The lower the weight, the lower the weight based handling fee. And if the item is not oversize the pick & pack fee is only $1.06 instead of $6.
The ideal product would be over $300 because items that sell for more than $300 have no order handling fee, zero pick & pack fee and zero weight based handling fee.
Also, remember that the fixed fees become a lower percentage of your cost as the price of an item goes up. Although I sell a very few items under $20, the average price of all my items is closer to $40. Almost 30% of the items I sell on Amazon are priced over $75 and about 10% are over $150.
When you sell on FBA realize that your return rate is higher than with merchant fulfillment. So be sure to build the cost of returns into your margins. From personal experience my returns on Amazon are higher than they are on eBay. But I still make more money on Amazon even with returns factored in because my sales are so much higher.
The absolute perfect item is one that you are the only seller, but this is hard to do. When you are the only seller, you always win the buy box. You can't always find that situation, so the next best thing is to look for products that have few competitors (See next item for the next best thing).
Compete with Non-FBA Products
If you are the only seller in FBA then it is much easier and more profitable to win the buy box (or at least the sales). OK- this is a little complicated so read carefully.
When Amazon chooses the seller who wins the buy box, it is based on the seller's account standing and the seller's total price including shipping. But, if the item is in Amazon's warehouse (FBA items), then Amazon assumes the item will qualify for super saver free shipping and discounts the shipping price to zero. Look at this example:
This seller is charging $19.00 and is in FBA. Now look at this other seller for the same product:
This seller is only asking $16.00 but she is a non-FBA seller so she has to add on $3.00 for shipping - Total $19.00, the same as the seller in the Buy Box. (The Buy Box is the first listing to come up when you select an item from the search results)
So it's clear that even though this is a tie -Amazon usually features the FBA seller first.
There are 5 other sellers of this product and two of them are cheaper than the FBA seller, but Angel Smiles is the only FBA seller and is winning the buy box. (Sellers who are within about 1% of each other will rotate through the Buy Box. It is not dependent on the absolute lowest price). This number used to be 2%, but Amazon recently lowered it
Find a Product That Can be Bundled
What if you find a great product and there are ten other FBA sellers and the only way to compete is to lower your price? That's not always smart since you can start a race to the bottom. This is because many large sellers use automatic re-pricing program that will lower the price under you.
The answer to this is bundling or multi-packing.
Bundling is when you create a new product by adding a related product to it. For example, your competitors are selling the same line of pepper mills as you are. When that happens, I create a new product and listing by adding a small package of peppercorns to my pepper mill.
Multi-packing is nothing more than creating a new listing for a larger quantity than your competitors listing.
Here is a product that I multi-pack:
All I did was create a two-bottle set. Now I appear right alongside the seller with one bottle when someone searches for balsamic vinegar. If you think people don't do this, you would be mistaken. We average about 4 of these bottle sets per week for $16 a set. (My cost is only $6.00 for the two bottles).
Here is an example of a product I bundle:
Note Ė this is out of stock at the moment, but there is a shipment on its way to Amazon
There are other ways to bundle items. You can add a book to something. What if you found a great deal on some statues of Buddha? Bundle it with the book, Buddhism for Dummies.
NOTE: When creating bundles, the primary item in the bundle cannot be from the BVMD (books, music, videos, and DVDs). So in the example of the Buddha, you would list the statue of Buddha as the primary item in the appropriate category. You would not be allowed to list the book in the books category with a bundled statue of Buddha.
So if you're wondering how to find the perfect Amazon product, you've now got part of the answer. Finding the perfect product involves understanding of how Amazon works and a good deal of creativity on your part.
Guest Article By José Calero of LapWorks, Inc
Summarized from China Law Blog Title: China NNN Agreements.
Protecting your IP in China is as simple as executing an NNN agreement. NDA's (Non-Disclosure Agreements) as we know and use them, have no value in China because they are not enforceable.
What is an NNN agreement you ask? It's a Chinese legal agreement that applies to three basic rules:
This NNN agreement is not for everyone because it can be expensive. It would have to be written by a Chinese lawyer in Chinese, governed by Chinese law and exclusively enforceable in a Chinese court. Even though we buy products inexpensively from China, that doesn't mean Chinese lawyers are going to be cheap or inexpensive. The cost to produce an NNN agreement is around US$2,000.00 or one-fifth the cost of a Chinese patent.
But if your product is of a type (high tooling costs and/or high unit manufacturing costs) that would require an NNN agreement, then it's worth the money. Your only other option for legal protection in China is a Chinese patent. The NNN agreement is your best choice for forcing your Chinese factory to keep your idea or invention secret, confidential and private.
To be clear, the NNN agreement does not replace a Patent. It only forces the Chinese factory to keep your idea or invention confidential as described above. You may never have a need for an NNN agreement if you order products off the Chinese factory's shelf or if your idea or invention requires little or no tooling or will sell for under $30.
There are other considerations, however. It is common practice in China for individual companies to belong to a consortium of manufacturers. Those are a community of companies with a wide variety of manufacturing capabilities. So if your supplier belongs to one of these consortiums and he signs an NNN agreement with you, he would not consider himself in violation of the NNN agreement if he shared your information with some other consortium member. Their rational is that they see themselves as one big company so they aren't in violation of the NNN agreement.
Therefore, it is important to understand the type of group with which you are dealing and to make clear in writing that:
Because Chinese companies know that breaching a well drafted China-centered NNN Agreement will likely lead a Chinese court to order a freeze of their assets, there are three typical responses to the NNN Agreement:
As you can see, executing an NNN agreement will take some time so if it looks like this is something you'd like to do, get started early before you turn over your most valuable IP to the wrong company. And remember always that "no one ever had their IP stolen in China by a stranger".
If you use a Chinese agent, they can usually handle the NNN agreement for you at a much lower cost than using a lawyer.
About the Author
José Calero is president and founder of LapWorks, Inc. - a technology accessories company designing and providing holders, stands and mounts for iPads, tablets and notebook computers. José designed the first portable laptop desk in 2000 that has sold over 1.7 million units to date. He is also a Viet Nam veteran honorably discharged and was awarded The Purple Heart.
Guest Article by CJ Rosenbaum, Esq. and Robert Segall of Amazon Sellers Lawyer
There is now legal precedent showing that despite Amazon's reputation for being above the law, they can and will be held liable if they infringe on their third party seller's intellectual property. A 2013 case demonstrated that sometimes, it is not only third party sellers who infringe on intellectual property rights, but Amazon as well.
In Ayse Sen v. Amazon.com, Inc., Amazon allegedly infringed on Ayse Sen's trademark, "Baiden". Additionally, they were accused of unfair competition, and false advertising1. The parties eventually settled the dispute. The settlement included an agreement that, if Sen ever violated an Amazon policy in the future, they will be notified of their violation, and then provided a full 30 days to correct their violation. This is strikingly different than Amazon's current procedure of suspensions, which typically leaves a seller suspended without warning.
What does this mean for a third party seller?
If you are a third party seller on the Amazon platform, it is important to know there is precedent in your favor. Today, your dispute will likely be handled through arbitration because when you contracted with Amazon, you signed an agreement to arbitration. What is arbitration? This is a hearing that occurs outside the courts. An arbitrator makes a final judgment and this decision is binding.
Intellectual Property rights are taken seriously, and if you notice that Amazon has infringed on your rights, this Sen case's settlement works in your favor. Amazon agreed to stop using the trademark in addition to providing a 30-day comfort period when their policies are violated. These 30 days are crucial because it provides the seller with time to correct the issue without having to lose days of business as you would with a suspension.
If you notice Amazon has infringed your rights, contact an attorney, make sure your allegations have merit, and know that there is legal precedent that could be used to help resolve your issues. Amazon has agreed to cease their infringement along with the added bonus of providing the seller time to correct their mistakes. If this happens to you, rest assured these issues can, and will be resolved.
1 AYSE SEN v. AMAZON.COM, INC., No.12cv2878, SOUTHERN DIST. OF CA, 2013.
About the Author
Amazon Sellers Lawyer is a legal team that is dedicated to defending sellers' rights by applying legal strategies to protect their accounts and handle account suspensions, complaints and policy violations. Founder, CJ Rosenbaum started his practice in 1994 where he represented entrepreneurs who operate both online & brick & mortar businesses. CJ is also a courtroom lawyer and litigator. CJ has represented various people across the United States, has taken countless depositions and tries more cases each year than most lawyers do during their entire careers.
I have written about this in the past, but I keep getting email from folks who read it, and want more information. So I thought I would revisit it again.
There are three major ways to win the buy box on Amazon:
Let's look at the last method:
With eBay, the way their search engine works, there is no guarantee you will get first place in search. On Amazon, if your product is unique to you with no competition, then you automatically win the buy box when a customer searches for a given product that matches yours.
If you are the only seller of a given item, then you have no direct competition.
So how do you go about finding and negotiating such a deal? Let me give you a real example of one of these deals I am involved in now.
Last year Karen and I attended the Seattle Gift Show. That is a wholesale show open to retailers and resellers only - the general public is not admitted.
Walking around in the jewelry section we found a line of jewelry we liked. It was made by a small company that makes it here in the USA and the owners of the company were there in the booth.
We looked at the jewelry and decided to place a small order (about $600 worth at wholesale). I then started to chat with the owners. I explained that we sell on eBay and Amazon and asked them if they would agree to give us an exclusive for their product on eBay and Amazon. Here are the reasons I gave them:
That is the main part of our sales pitch. The other part is just being very nice and engaging so they like you --and will trust you.
After talking with them it looked like they didn't quite understand and they really had no knowledge of how eBay and Amazon worked, so I suggested they think about it and we would give them a call in a week or so to discuss further. They thought that would be a good idea. After the show we went on a short trip to another trade show. When we returned, we emailed them and set up a time for a phone call to discuss.
This gave them some time to formulate some questions that we answered to their satisfaction and we struck an agreement.
My readers often ask "what kind of contract we sign." The answer is, we rarely do that. (I have a formal contract with one company that insisted on it, but in most cases we work on a handshake or just exchange emails laying out the details). The items you need to address in the agreement are as follows:
As for number 5, do a market test before agreeing, so you have a god idea of how much you want to commit to.
So, how do you locate these companies? In this example we found the company at a trade show -in fact of all six deals I currently have, I found all but one at a trade show. The other one was a company I contacted through their website, after noticing their product was not listed on eBay or Amazon.
I have to say that the company that I contacted online was the hardest one to negotiate with. This technique works far better in person that is does working through email.
The other category we sell in is locally produced gourmet foods. We find these at farmer's markets and street fairs. Here again I just make the same argument.
These are easy deals to do, because these folks have a website but they don't think of eBay and Amazon as a place to sell their sauces, spices, teas, jams, honey, etc. And once I say I will buy in case lots, they are immediately interested.
My approach is pretty similar to what I do with folks at trade shows. If we see a product at a farmer's market we are usually dealing with the business owner, so we make the same pitch. I currently sell 15 items in the gourmet food category and 4 of them are items we have an exclusive on.
You may be tempted to ask the supplier to drop ship or sell on consignment. You can try - but these are very difficult deals to do and asking makes them think you are a real amateur. The one exception is if the item is very large and heavy. When you run into this, it is OK to ask about drop shipping. (We have this arrangement for our large wood burning firepits).
So there you are. If you are not ready to do this today, you might be in the future
If you email me asking how to set up an exclusive deal to sell on eBay or Amazon, I will refer you to search my newsletter archives for this article. So why not add to your favorites or print it out now?
Like my article on negotiating exclusives this is a subject I have written about before. But it continues to be a topic I get a lot of email questions about so I have decided to write about it again.
When you perform a search on Amazon you get a list of items that match what you typed in. When you click on an item, the page that comes up first is called the Buy Box. Amazon looks at all sellers of a given item, including themselves and awards the buy box to the lowest price seller when you include shipping. However, there is a catch to this. There are two types of sellers - merchant fulfilled, whereby you ship the item to the customer when it sells and FBA. FBA stands for Fulfilment By Amazon. This is where you send your goods into Amazon and when they sell, Amazon ships them to the customer for you. And there is a big difference when it comes to pricing.
When an item is in Amazon's warehouse it qualifies for Super Saver free shipping. Therefore when comparing prices, if Amazon sees the same item being offered by two sellers - one who is merchant fulfilled and one in FBA, it assumes the FBA seller's shipping cost to be zero. Here is an example:
Say I have an item in FBA that I am selling for $89. You go to sell the same item merchant fulfilled and see that Amazon assigns a shipping credit of $6.90. You decide to under price me and sell your unit for $86. This means your total selling price to the customer is $92.90, which is still higher than my price of $89 with zero shipping. To actually under price me and win the buy box, you would have to list your item for $82.09.
There are a couple more twists to this. Amazon has something called the Two-percent rule. What this means is that Amazon considers any price that is within 2% to be essentially the same price. So if your price is within 2% of my price, Amazon would rotate us in and out of the buy box at different times. There is some controversy about this. There is no question Amazon used to have this rule, but lately sellers have been noticing that it doesn't always apply, and Amazon will not answer any questions about how their search engine works for pricing. It looks like Amazon has phased out the two-percent rule. Sellers who have tested this claim that the new number is 1%, but I have not been able to substantiate this, so take it with a grain of salt
And there is one more twist. In addition to price, Amazon also looks at seller's reputation. If your account is not in good standing, if you have low star ratings or poor feedback then even though your price is lower, you may not get the buy box based on your seller standing and reputation.
The Atlanta International Gift & Home Furnishings Market - This is not a wholesale source per se, but this is one of the largest wholesale trade shows in the country for those who live in the Southeast.
NMR refers to itself as the "purveyors of pop culture." Their site features gifts and collectibles with characters DC Comics, Harry Potter, Once Upon a Time, Star Trek and more.
Global Prints has been involved in the wholesale and retail poster business for over 20 years. Their offerings include posters from movies, TV, maps, music, nature and more.
Autotec features remote control toys and drones. They have a wide variety of RC cars.
Trinity Candle Factory's triple scented candles include jar candles, votive candles, pillar candles, tea light candles, fragrance oils, wax tarts, travel tins, reed diffusers, oil burners, jar warmers and gifts.
Florapathics is an all-natural aromatherapy brand that offers over ninety 100% pure therapeutic-grade essential oils, and a line of handmade soy aromatherapy candles, body care, and facial care lines.
Galaxy Army Navy Store sells Camouflage Clothing. Vintage Fatigues. Outdoor Products. Military Surplus. Camping Gear. Work Wear. EMT. EMS. Hunting Apparel. Security Uniforms. T-Shirts. BDU's and Dog Tags. (NOTE: They are not a true wholesaler, but their prices on many (most) item are low enough that you can mark up to sell on eBay and Amazon).
Real Action Paintball is a Manufacturer of firearm replica paintball. They also sell paintballs, tactical gear, and accessories. Provides forum, event listing, dealer listing, and wholesale info.
Portmeirion Group Designs LLC designs, makes and sells tableware that is "oven-to-table", microwave, and dishwasher safe. Some items can even go from freezer to oven (providing the dish is at least half full with food or liquid).
Wright's Hosiery, LLC has been in the wholesale sock manufacturing business for over 30 years.
Super Wholesale is a wholesale distributor and direct importer of home and garden accessories. Business to Business only.
Mingzhou Oriental is an importer and wholesaler in the US specializing in oriental furniture, home decor, gifts, antiques, arts and collectibles. Wholesale only.
Toby's Specialty Foods and Gifts offers over 40 gourmet specialty food and gift lines.
Ergo Chef designs and manufactures ergonomic innovative Kitchen Knives and Gadgets to make food prep enjoyable and cooking more fun. Available to retailers, distributors and OEM.
Hollon Safe is a manufacture of several types of safes. Drop ship program for all models of safes including depository safes, gun safes, home safes, and commercial safes.
Best Dressed Tables is a specialty online boutique of fine tablecloths.
Thatís it for now. See you again soon.
P.S. If you missed the last issue, click here to read it.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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