eBay & Amazon Sellers – Control Your Inventory for Profits
The eBay & Amazon Seller's News ~ June 22, 2017 ~ Volume 18, Issue No. 10
Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
There are just a few days left on the sale we are running on my books and training courses. All of the books and training courses sold on SkipMcGrath.com are 25% off, through the last day of June 2017.
Just use the code JUNE25 at checkout. To get the discount, just paste this code into the coupon box on the last page of checkout.
Do not forget to hit the APPLY button, or the discount will not take.
Important - If you want to buy more than one book, my shopping cart cannot handle coupons on multiple purchases. So if you want to buy more than one product -you need to buy them one at a time. If you put multiple items in your cart, the coupon will only apply to the last item entered. So buy one book at a time to make sure you get all your discounts
This offer cannot be combined with any other coupon offers.
Amazon Buys Whole Foods - Unless you were trekking through Tibet last week, you heard the news that Amazon bought Whole Foods for almost $14 Billion in Cash. Not only did Amazon's stock price rise on the news, the stock prices of major grocery chains fell -some of them by double digits.
What does this mean for sellers? Probably not much, at least in the near term. A few years from now, however, could see a whole new Dynamic when it comes to selling food online. For this to work, Amazon will need to keep growing their Prime base because food buyers don’t like waiting a week or more and paying for shipping.
About the only short term affect I can see is that Amazon will have access to dozens of niche gourmet food items which some sellers may compete with. That is because, Whole Foods has always been a leader when it comes to trying new products, especially those from small start-up companies. If you sell those products, then you will have a new competitor - Amazon.
There is one thing that may happen that affects the grocery business in general, more than it will affect sellers. Amazon has always been a leader in lowering prices by raising efficiencies. If Amazon does this with Whole Foods (and I am pretty sure they will), it will help lower food prices in the industry which would help consumers overall.
Another thing we may see more of is Amazon expanding their same day delivery to more cities where Whole Foods has stores and warehouses. Part of Amazon’s strategy seems to be turning some Whole Foods stores into distribution centers.
New Security System coming for Amazon Sellers. I warned you about this in the last issue. Now the drop dead date (June 30) is fast approaching to set up 2-step verification. Right now inside of Seller Central, hackers may be taking your money.
Two Step Verification will be mandatory by the end of June to log into Seller Central . Click here for more information by Cynthia Stein including a warning NOT to change your bank account (it could get your account suspended).
There are a couple of problems sellers who are already using it have. One issue is the codes taking too long. A couple of sellers have complained that it can take several minutes until you get your codes.
And, here is an issue from a reader - Edie C., Los Lunas, NM who Amazon reports it's a "system wide" problem. (I wonder how many other "system wide" problems Amazon will have with this rollout.
Skip, I really appreciated your article in the newsletter about Amazon Two-Step Verification. I activated it on my account 3 weeks ago, and ever since I have been unable to sign in on any computer other than the one on which I initially activated (since I told that computer to remember me). It does not send me codes, and I receive an onscreen error message saying that there is a technical error that Amazon is working on. I have spent several hours on the phone with Seller Support since then, and am told that this is a system wide problem, with many sellers affected. Today was the first time I was told they expect the issue to be fixed by the end of the week.
If you read my book, How to Make Money with The Amazon Affiliate Program, then you know all about A-Stores. Amazon A-Stores are small tailor-made web stores that you can embed in your website or blog. I mention in the book that they do not perform well and are pretty much a waste of time. Well, it looks like Amazon agrees with me as they just told their affiliates that A-Stores will go away at the end of this month
There is another Fraud issue going around. I have written about this before -but it bears repeating:
If you ever get a phone call from eBay or Amazon out of the blue that is not related to an ongoing case you opened - be very careful. Scammers are getting phone numbers of eBay and Amazon sellers. They are calling, pretending to be from the company and will ask you for your email address, last 4 numbers of your credit card, or last four of your SS number.
They will do this under the guise of wanting to make sure it is you they are speaking to. Do not give them any information over the phone. Instead ask them to answer your support case via your registered email. This happened to me once and I asked them for the number of the support case they were calling about. Not only did they not know, they hung up on me without even saying "goodbye" once they realized I was suspicious.
Amazon stock price just topped $1000 last week for the first time and a few other noteworthy news items about Amazon:
New Amazon FBA Listing Requirements. Actually the hazmat requirements mentioned in this letter from Amazon have been around for a while. But, mostly Amazon is formalizing them.
One issue that has plagued sellers for years is obvious non-Hazmat products such as leather wallets, jewelry items, non-aerosol food products like smoked salmon and beef jerky, being flagged as Hazmat -and it taking weeks to get that corrected.
Here is the announcement:
Starting June 2017, when you select Fulfillment by Amazon (FBA) for your listing, you will be required to provide additional information about the product.
To ensure the safety of our customers and compliance with all applicable regulations, you will need to provide additional information on any products that are batteries, contain or are sold with batteries, or may be considered dangerous goods (also called hazardous materials or Hazmat).
Dangerous goods are present in many consumer product categories, including personal care (e.g., flammable fragrances), grocery (e.g., aerosol cooking sprays), home goods (e.g., corrosive bathroom cleaners), and products with batteries. To learn more about dangerous goods, please refer to the Dangerous goods identification guide (Amazon Seller Central login required).
You will need to provide this information when converting your new or existing listings to FBA and can do so using one of the following methods:
If you do not provide the requested information, you will not be able to create or convert your product listing(s) to FBA.
At this time, listings that are already converted to FBA will not be impacted by this change.
Amazon is putting on their own conference in New York City on Wednesday, June 28, 2017, called Boost with FBA at Pier 94 (A large open space used for Art and Antiques shows, large meetings and trade shows) which is close to Lincoln Center, the Theater District, Times Square, and Central Park.
The cost is $199 per person (but, I have heard through the grapevine that certain large sellers are getting free invites). In addition to the seminars, you'll have an opportunity to schedule a one-on-one session with an Amazon expert to talk about your specific business challenges, questions, needs, and more. You can reserve your session during the registration process. There are limited slots available and it's first-come, first-served.
Here is the link for more information and to register. Don't wait - this will sell out quickly.
I have been playing around with a new eBay Tool, Product Genie . Product Genie is an eBay research tool that lets you see the most recent sold items, top selling brands and fastest selling items on eBay. Learn the top selling items on eBay and be a step ahead of your competitors. In all honesty, I don't have a lot of experience with it yet, but early results look quite promising, so I suggest you give it a try.
Need product reviews? Amazon has launched an early reviewer program designed to help sellers get those first few reviews for new products. As you can imagine, the program has a lot of caveats and restrictions -nevertheless it a welcome addition to how sellers can get reviews on new products. Go here for information . You may have to be logged into Seller Central to access that link. (Most Amazon seller links require you to be logged into Seller Central first).
Amazon change to approval process for Health & Personal Care products
If you want to begin selling products in the Health and Personal Care product category -you only need to apply for approval to sell in these six sub-categories:
Dietary Supplements, OTC Medication, Medical Supplies, Baby Food and Formula, Contraceptives, and Feminine Hygiene.
If you are already selling in these categories, you do not need to take further action. If you want to sell a Health and Personal Care product that falls outside of the six categories listed above, then you do not need to apply for approval.
FBA Sellers Note - Amazon has long had a policy that FBA sellers could not send liquid products into Amazon in a glass container that exceeded 4-ounces. That policy has now changed. Here is the new policy:
FBA will now accept liquids in glass containers up to 34 ounces. As per our prep requirements for liquids, liquids in glass containers between 4 ounces and 34 ounces must meet the following guidelines:
Have a double-sealed screw cap (such as a shrink wrapped cap)
Be in a corrugated box
Be able to pass a 3-foot drop test
FBA cannot accept liquids in glass containers that do not meet the requirements above or exceed 34 ounces.
OK - Let's get started with this issue's articles
ASD puts on two wholesale trade shows per year in March and August. This summer's show is July 30 - August 2, 2017 / Las Vegas Convention Center. I was invited to speak this year and was planning to do it, but my Navy son has leave at that time and will be home for a visit.
This year's show is a little different in that they are teaming up with Las Vegas Market for a total of 5600 wholesale vendors. You can register here. After you register, take a look at some of their hotel deals.
Lets get started with this month’s articles:
Inventory consists of all the products you purchase to sell on eBay. Unless you engage in drop shipping, or selling on consignment for others, your inventory represents your largest investment and potentially your largest financial risk.
You incur risk by purchasing inventory that:
Business owners call this nonperforming inventory. I have often stressed how crucial it is to research a product before you purchase it, so you can determine if it will sell on eBay or Amazon (or both).
Jungle Scout is an excellent service to research products. Their service is Amazon centric, but I find I can use the results on eBay as well
Product research is your best defense against being stuck with nonperforming inventory-but even excellent research is not foolproof. You can still end up with products that sell well at first and then fall in price as others begin selling them. Whether you sell on eBay or Amazon, or both, let's examine how to manage your inventory so that you reduce costs and increase your monthly profits.
Dealing with Nonperforming Inventory
Purchasing large amounts of inventory at one time has its risks and rewards. Although you can get better prices by purchasing in large quantities, you need to consider how long it will take you to move the inventory. This brings us to the question of going wide (buying lots of different products), or Going Deep (buying large quantities of just a few top selling products).
eBay and Amazon buyers pay close attention to an item's supply. When buyers see many identical items listed, they are reluctant to pay top dollar. Although the opposite is also true. For example, hot toys with limited supply at Christmas time can often sell for a multiple of the full retail price.
They know that if they miss an item in one auction, they can just bid on another one. If you put too many of the same or similar items on eBay within a short period, you will drive down prices by increasing the supply. When you do this, you end up competing with yourself. eBay does limit the number of identical results from the same seller that buyers will see on the search results page, but they only exclude items that have identical bidding activity and price.
So if you have an item with a current high bid of $15.98 and another identical item ending a few days later that is at $10.50, both will show up in the search results. Which do you think new buyers will be bidding on?
Despite your best research, you might end up with a product that's just not selling at a price that's profitable. When this happens, the best thing you can do is sell it quickly for whatever you can get. When you are sitting on inventory that is not selling, you are tying up money you could be spending on inventory that will sell. The name for this situation is opportunity cost.
Retail store owners understand the cost of nonperforming inventory and the value of inventory that makes them money. That is why every retail store has a sale table.
If an item is not selling well, store owners mark the price down to move it out quickly and free up money and shelf space for inventory that will perform better. As an Amazon or eBay seller, it is imperative that you do the same thing if you want to make a profit. When inventory isn't moving, you need to create a virtual sale table.
There are two strategies for getting rid of inventory quickly. One is simply to launch the items online at a lower price. The problem with this approach is that listing a large number of similar items at one time could drive the price even lower than what you were hoping to get. A better way is to list the items on eBay in Wholesale Lots.
Almost every eBay category has a subcategory called Wholesale Lots. This is where people sell items in bulk. For example, if you purchased a large lot of cell phone batteries from a supplier and were only able to sell a few of them before the price started dropping, you could take your remaining batteries and either break them up into small lots or sell them as one large lot.
Small lots will usually realize a higher per-item price than large ones; there are many small eBay sellers who cannot afford to purchase a gross of 144 batteries, but who would be willing to buy 12 or 24 at a time.
Another option is to use a fixed price multiple-quantity listings on eBay. Fixed price listings are much cheaper to list and can run for 30 days. Unlike eBay Store inventory, fixed price listings come up in the main eBay searches so you get more visibility. If you list a quantity over 10 (say 50) of an item in a fixed price multiple quantity listing, the "quantity" that shows on the description page will just say more than 10 available. If it's lower than ten, it will show the specific number that are unsold. If you list at a low price, you should be able to catch the impulse buyers and shift your inventory quickly.
Turn Your Inventory Over Often
Inventory turn refers to how often you replace your inventory in a given period. Keeping your inventory turning at a brisk pace is essential to making large amounts of money on Amazon or eBay. Consider the following example:
You find a source for overstock designer blue jeans, and buy a pallet load of one hundred pairs for $7 a pair. When you check the prices on eBay, you see that similar jeans are selling for between $18 and $29 a pair. The normal response is to list the jeans at the higher price. So you start launching auctions for the jeans at $29 a pair and find that you can sell about ten pairs a week. You are making a gross margin of $22 a pair before eBay and PayPal fees. Because you are selling ten pairs a week, you are realizing $220 a week. At this rate, it will take you ten weeks to sell all the jeans.
Now, let's say you lower the price of the jeans to $22 a pair, and you begin selling twenty-five pairs a week, as opposed to ten. Your gross margin on each pair is now only $18, but you are realizing $450 a week because of increased volume. Plus, you will sell all the jeans in four weeks instead of ten. Your margin for the four-week period is $1,800. You can now turn around and invest that $1,800 in more inventory, which you can sell again in another four-week period at the same price.
Compare the two scenarios: In the first one, you make $2,200 over a ten-week period at the higher price of $29. However, in the second scenario, you make $4,500 over the same ten-week period by selling the jeans at the lower price and reinvesting the profits. This is an example of using a lower pricing strategy to increase your inventory turn rate.
Controlling Your Inventory
You can't control the flow of your inventory if you don't understand it. That's why it's important to keep good records. When you are just starting out, set up a simple Excel spreadsheet where you list your inventory. Create separate columns to list the item, the quantity you purchased, the quantity on hand, the date you acquired it, the cost per item, and the average selling price. (Every time you sell an item you should update the quantity on hand.) Keep a record of each sale in a ledger, so that you can determine the total final selling price for the entire lot.
There are third-party tools to help you do this, but when you are new, or small, I recommend doing it yourself.
As someone who is an avid cook and a pretty good amateur Chef, I often watch the Food Channels and Cooking shows on Cable TV. It turns out that the home buying and home-improvement shows are on a nearby channel and my wife really enjoys watching those. I often end up watching some of the shows she likes with her.
A few evenings ago, we were watching a show called Beachfront Bargain Hunt - Renovation. In this show, a couple searches for a low cost fixer-upper in popular beach towns where most of the properties are pretty expensive. The idea is they buy the property and fix it up (complete with décor) and move in.
The home décor is the key here. In the past, this show, and several similar shows had a deal with Wayfair.com. Wayfair is an online shopping site that sells decorator furniture and accessories. As part of the sponsorship, the couple would sit down and shop for furniture and accessories at Wayfair.com on an iPad while the camera looked over their shoulder.
Imagine my surprise when we were watching this show and the couple were shopping on eBay on the iPad. Also, we noticed at the commercial break that eBay was one of the main sponsors of the show.
Sponsored placement is just one of the things going on with eBay. They are also launching a major TV campaign based on the positioning that eBay is more "colorful" than Amazon's beige boxes. In another move to compete with Amazon, the new eBay ads will also push the fact that over 80% of the products sold on eBay are new.
eBay's new ad campaign launched on Sunday during the NBA Finals. eBay's ads will imply that Amazon (without actually naming them) is very dull and lacks the "color" of eBay.
eBay's VP of global brands, Karl Isaac, told Ad Age Magazine that the new ads "are focused on buyers celebrating a sense of self-expression, but it's because of our sellers, we can offer the best choice."
I have been grousing for years about eBay needing to get back into the type of prime time TV advertising they used to do while Meg Whitman was heading up eBay. So, I am pleased that eBay is launching a new campaign -I am just not sure about the message and the marketplace positioning.
You can view one of the new ads here.
eBay says the new ad campaign will come in two parts. Part I is the new series of positioning ads with the theme "Forget Beige boxes - go colorful." Part II will consist of more specific ads designed to get you to visit the site and start shopping.
As someone who spent several years in the advertising business I have two comments:
If you are going to run a profitable and professional eBay and/or Amazon business, it's important to to package and ship your goods professionally.
No one likes to receive their treasures in a cereal box stuffed with old newspapers.
This does not mean that you have to always use "new" supplies. Recycled boxes and packaging materials are fine as long as they are in good condition.
There are three costs involved in shipping:
Let's look at each one.
Time is money. The time you spend wrapping packages, could be better spent creating listings, searching for new products, answering customer emails and so on. The single best way to save time is to have a permanent area for shipping. Invest in tape guns, paper rolls and a flat shipping service. If you have to clear the dining room table every time you want to wrap a package, that's a major waste of time.
We used to have teenagers to help with the business (they are all grown up now). It was a much better use of my time to pay my son a few bucks and hour to wrap packages (and once he was driving, to take them to UPS or the post office).
Besides, anything you pay them can be a business expenses for tax purposes. Instead of giving your kids an allowance for doing chores, pay them as casual labor and you can deduct what you pay them as a business expense. (If the total amount is less than $600 a year, then your child does not have to file taxes on the income).
If you don't have kids to help you do this, give some thought to hiring a local teenager -or even better, a retired person who wants to earn some extra money.
Always package your merchandise carefully to avoid damage in shipping. Your eBay or Amazon customer does not care if UPS or the post office damaged it -they will blame you anyway and expect you to make it good.
Here is an example. My wife and I shop a lot on eBay and Amazon. A few weeks ago, I received a package from an eBay PowerSeller containing an antique flow blue plate I had purchased from his eBay Store (My wife collects Flow Blue).
The plate was loose in the box. The seller had wrapped it with bubble pak, but hadn't taped the bubble pak together or used void filler to keep the plate in place. During shipping it had worked loose in the box. Fortunately, it wasn't broken. Even experienced sellers who know better, often take short cuts that can result in a disappointed buyer and in some cases, negative feedback.
Shipping boxes and supplies
Shipping supplies consist of boxes, newsprint or tissue, Styrofoam peanuts, bubble pak and tape.
Note: Many buyers hate Styrofoam peanuts (I know I do). Here's a trick to use them anyway for void filling. Just pack them into zip bags and put those in the voids instead of loose peanuts.
Why pay top dollar for shipping supplies, when you can often get them for free? Here is a source of free shipping supplies, boxes and packing materials:
If you ship USPS Priority Mail, the U.S.P.S. website offers free shipping supplies delivered (also free) direct to your home or office. Many eBay sellers use Priority Mail for shipping items under three pounds (See below for why).
The USPS will send you free boxes, envelopes, tape and labels direct to your home by priority mail. You can print out labels on USPS.GOV and do Delivery Confirmation at the same time. (This is a saving of 35 cents over doing it in person at the post office).
If you are a very occasional seller, there isn't much you can do to lower your shipping charges. If, however, you are a high volume Amazon or eBay seller, you can negotiate rates with UPS, FedEx and FedEx Ground (formerly RPS).
Call the companies and ask what their quantity points are to get a discount. If you work for a company that uses UPS or FedEx, they have programs whereby employees can piggyback on their company's discounts. Here is how that works.
You open up an account with your own credit card. UPS or FedEx ties your shipping rate to your employer's rate. Ask you employer to ask his/her shipping company sales rep if they offer such a program. It is good for you and the employer, because employee usage can raise the company's overall quantity. And, this will help your employer to get lower rates.
Note, that both UPS and FedEx charge a premium for residential delivery. Because of this, USPS Priority mail (especially in flat-rate boxes) can be cheaper on shipments under 5 pounds. So, always compare the two before shipping.
There you have it -several ways to save on shipping.
If you are selling on eBay or Amazon (or even other sites like Etsy), then the listing title may be the single most important factor in your success. Why? There are two main reasons:
There are several things that make a title successful. Looking at the bullets above, it is obvious that your selection of words that people type in (keywords) are very important because it will help your listing be found.
Let me digress for a moment to discuss the title practice and policies for eBay and Amazon
Amazon has a few title rules
So let's look at some of the things that make a good title. In my opinion, the first thing is keyword selection. Keywords are the words and terms people type into the eBay and Amazon search box when they are looking for a product. If it's a long phrase, it is called a long tail keyword. Here is an example
If a buyer wanted to buy a specific type of camera, they would be unlikely to type just one word, camera. Instead they would type something like digital underwater camera. The second one is an example of a long tail keyword, which in fact makes up almost 80% of all the keywords typed in eBay or Amazon search engine.
How and where to find keywords
There are several tools on the market -most have a cost, but a few are free.
My favorite is Merchantwords . Their normal fee is a bit pricy, but we have negotiated a super deal for my readers. Merchantwords is optimized for Amazon, but I find the keywords they uncover work pretty well on eBay also.
There is also a free tool right on eBay. When you do an advanced search on eBay, one of the filters you can specify is sold listings. Look at the sold listings for the product you are selling and see which keywords other sellers used to get the sale.
I haven't used it, but according to a few of my readers, Scientific Seller is the best free keyword tool on the market.
All of these tools work the same way. You type in the product name, or a keyword you already know, hit search, and the system shows you a list of keywords. Here is an example from Merchantwords. This search is for the term underwater camera.
Here are some of my tips for titles:
Don't go crazy with keywords. You want to include them, but your title should still make sense and grab people's attention. Here is an example of an overly keyword-rich title. The product here is a chef's knife
Pampered Chef Knife for kitchen, Camp Magic chefs knife, Swiss Army chefs knife, chef knives
That title has lots of searchable keywords, but I expect when it came up on the results list on eBay or Amazon, it would not get many clicks. Here is a better one:
Fibrox Handle Professional 8 Inch Chef's Knife, Picked Number 1 By Cooks Magazine
That title has several searchable keyword & keyword phrases including, 8 Inch Chef's Knife, Professional Chef's Knife, Fibrox Handle Chef's Knife and Cooks Magazine .
The main thing to remember about titles is stop and think about what you are doing
Thermoserve sells a complete line of Melamine picnic tableware and insulated cups. They also carry sports team licensed goods..
InSattivia sells a large line of both men's and woman's fashions and accessories
Jeanne Simmons Accessories Inc. provides quality hats for men, women, children and accessories to the wholesale market.
Julie Waterman offers a large line of unique fashion jewelry
The McStevens Co. sells a large line of licensed food and cocoa products.
Traditional Turkish Towels sells a wide variety of towels, scarves and other accessories made in the traditional manner.
Bangkok Crisps sells a line of tasty vegan and gluten free snacks made in Thailand
GiftCraft sells a very nice line of gifts for the home and/or personal use.
Blade and Bloom sells a large line of 199% natural skin health and beauty products
American Retail Supply sells a complete line of gift bags and boxes for those of you who want to create specialized bundles
Design Imports carries a complete line of kitchen fabrics, hand towels, aprons and market shopping bags
Dale Tiffany, Inc. is the world's largest developer of Tiffany, crystal, art glass lighting and accessory products.
Cape Cod Metal Polishing Cloths are moist polishing cloths that clean, polish, and protect all metals: silver, pewter, gold, brass, copper, etc.
Grow & Make sells a complete line of kits that show you how to make cheese, hot sauces, candles and many other things.
Coloring Books USA are publishers of coloring books that combine a coloring book, story book and a souvenir item all in one.
Just Add A Kid -sells a clever line of T-shirts, onesies, bibs, and socks. You can be sure to find one to match any child's personality.
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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