13. Raise your Average Selling Price (ASP) to reduce your fees and increase profit margins – Two of the fees you encounter in FBA are the Order handling fee ($1.00) and the Pick and Pack fee ($1.02). That totals $2.02. Now if you are selling an item for $12.99, those two fees combined take 15.5% of your margin. But sell an item for $27.95 and those two fees are only 7.2% of your margin.
Here is another example. These are three products I am selling in Amazon FBA and their fees:
Fees as a % of Margin
Silk wrap bracelet
Salt & Pepper Mill Set
So as you can see, the higher you go up in price the lower your fees as a percentage of your sale. So as you source inventory, look for products with a higher average selling price.
My goal is $35.00. I have not hit that yet but am working towards it. Currently I am just over $29 ASP. The reason is I have several fashion jewelry products that sell for just under $20, but I keep them because they are insanely profitable. My cost on those items is between $3.50 and $6.00, so even with the high fees, I am still making good money.
12.Reduce Storage fees with Just in Time (JIT) Inventory Management
Just In Time refers to getting your inventory to Amazon just before it runs out. This way you minimize the time items are in storage and therefore racking u storage fees. Also this means you have less cash tied up in inventory at any one time.
Amazon offers a feature called Replenishment Alerts. You can set an alert for fast selling products. You can set the alert at the number of units or weeks of cover. I know how long it takes me to order most of my products, get them delivered to me and then to Amazon so I tend to use “Weeks of cover” for my ordering threshold. When the item reaches the specified limit, Amazon sends you an email. Here is what you see when you set replenishment alerts:
Again here are some short tips so I am combining them in one post:
10. Use Larger Images and Follow Amazon Image Guidelines – Amazon now requires images to be at least 1006 pixels on a side in certain categories and encourages it in all categories. The reason is that the large size allows for buyers to use the zoom feature. Amazon also has other rules for their main image including that the product be shown on a plain white background. Log into Seller Central and Click here to see the entire listing of Amazon image guidelines.
11. Solicit Product Reviews – If someone leaves a feedback that mentions they liked the product, I always send them an email thanking them for the feedback and leaving them a link where they can leave a product review for the product. According to Amazon, positive product reviews can increase sales on those items by over 12%.
These two tips are pretty short and sweet so I put them in the same post:
8. Describe product accurately – this may seem like a no brainer, but believe me if there is even the slightest difference between the product you are delivering and what you describe in your listing, customers will notice. This will lead to returns and negative feedback.
9. Ask for Feedback – Amazon buyers seldom leave feedback unless you ask them. I currently use Feedback Five. This is a third party service that automatically sends out an email to each customer telling that if there is anything whatsoever wrong with the transaction to let us know and give us a chance to fix it. The emails are sent out automatically and contain a link for them to just click on and leave feedback. After 5 years on Amazon my feedback was still under 50. After just two years of using Feedback Five, my feedback is now over 750. And those emails have helped me prevent several negative feedback situations when customers contacted me first before leaving feedback.
7.Don’t trust UPC codes when listing items – When you have an item for sale, you enter the UPC code into the Amazon page where it says Add a Product. But it is your responsibility to make sure the item you are selling is the exact same item as listed on Amazon. What happens is that manufacturer’s update their products with new features and don’t always change the UPC code. This happened to me a couple of years ago. I bought some home security camera systems from a liquidation outlet. Unbeknownst to me, the reason the manufacturer sold to the liquidator was they had improved the item by adding a recordable disk drive but they did not change the UPS code. So I listed my item and when it sold I got everyone of them returned along with a couple of bad feedbacks.
It is your responsibility to make sure that what you are selling on Amazon is exactly like the product in the listing. Not only look at the photographs closely but read the full description and the specs to make sure what you are selling is the 100% identical product.
Both of these tips are fairly short so I decided to post them both on the same day.
5. Answer Customer Communications quickly – When you get a question from a customer, Amazon wants you to answer it within 24 hours and if you do not that is a demerit against your account. You can see customer questions in your Seller Central just to the left of the page and you can set up your account so customer questions are forwarded to your email so you can answer them even if you are not currently working on Amazon. With smart phones you can even answer them from your phone.
6. If you are merchant fulfilling ship all orders within 1 business day and always enter the tracking information – Amazon requires you to state the handling time for all products and to meet that expectation. Not doing so can lead to losing featured seller status and if your numbers are really bad you can lose your account.
4. Win the Buy Box to Increase Your Sales – Whenever a buyer does a search, several results come up. When the buyer clicks on one of the results, the page that comes up is the buy box. According to Amazon over 78% of all sales are made through the buy box, so winning the buy box is crucial to your success.
There are three ways to win the buy box every time:
Be the lowest price including shipping. If a seller’s account is in good standing and they are the lowest price including shipping, their product will go in the buy box ahead of other sellers. Note however, if a seller is in FBA, then Amazon assumes their shipping cost to be zero. The reason for this is that Amazon Prime members get free 2-Day shipping on all products and all other Amazon buyers get free standard shipping on any item or shipment that totals over $35.Here is an example: I am selling a set of chef’s knives for $129 + $9.90 shipping. So the total with shipping is $138.90. If an FBA seller has those same set of knives, he can price them at $137.90 – $8.90 over my selling price but, $1 under my total price and he will win the buy box because Amazon assumes his shipping cost is zero.
Sell an item than no one else has. If you find a unique item and list it on Amazon, since you are the only seller, you will have the buy box every time.
Use Amazon’s bundling Policy to Create Unique Items. If someone is selling the same item as you are on Amazon, think of creative ways to create a unique product bundle. For example, one of the products I sell is Hazelnut oil.
By creating a bundle of three cans, I created a unique item and win the buy box every time (until someone copies me which sometimes happens).
You can also combine products to create a unique item. This is a set of 4 kitchen knives I bundled together with a knife sharpener.
You can combine almost anything to create unique product bundles. The one rule however, is if you create a bundle that includes a media item such as a book or a DVD, you cannot list it in the media category and you cannot combine media products with other media products.
3. Follow The Rules – just like eBay, Amazon has lots of rules and regulations, but unlike eBay, they are fairly stable. Amazon does not change their rules and policies as often as eBay so once you learn them they are easy to understand and follow. Once you log into Seller Central you can access this page that has the overall Amazon policy agreement – https://www.amazon.com/gp/help/customer/display.html?nodeId=1161302
To find specific policies on selling, log into Seller Central and click on the help button. Then type Amazon policy into the search bar. When the page comes up look in the left hand column and you will see a detailed list of the various policies related to all of your Amazon activities.
Amazon also has a great resources page for FBA sellers. Log into Seller Central first and use this link to access the resources:
2. Sell with FBA – FBA stands for Fulfillment By Amazon. This is a program whereby you send all of your merchandise into Amazon and when it sells, Amazon ships it for you. Amazon also handles the customer service, communications and returns and refunds. Since we moved from merchant fulfilled to FBA our sales have more than tripled. It is true that fees in FBA are higher then merchant fulfilled, but your merchandise will sell so much faster that you will still make greater profits. And some of those fees are offset by the cost of boxes and shipping materials which Amazon supplies as part of the fee.
In addition consider the huge time saving of not having to individually wrap and ship 20 to 30 packages a day. This allows you more time to do high-value tasks such as product research and sourcing.
I just finished an article called Twenty Tips for Selling on Amazon.com. Since not everyone visits my articles page, I decided to blog one tip a day for the next 20 days.
Amazon is the world’s largest online retail selling site. When most people buy something on Amazon they think they are buying from Amazon. But, third party sellers sell over 33% of all items sold on Amazon.
I started my online selling career on eBay in 1999. In 2006 I became a seller on Amazon. Our Amazon business never really took off until 2010 when I joined the Amazon FBA program (I will explain this below). Now our Amazon business dwarfs our eBay business. We are selling approximately 6 to 7 items on Amazon for each one sold on eBay.
It is very easy to register on Amazon. Scroll to the bottom of the Amazon home page and you will see a list of Amazon services. One of them says Sell on Amazon. Click on that link and follow the prompts and you will be set to start selling within about 5 minutes.
Lets start with Tip #1
1. Register as a professional seller – There are three big reasons to do this
As an individual seller Amazon charges you 15% Selling commission plus 99¢ per sale. The fee to become a professional seller is $39.95 per month, but as a pro seller you are only charged 15% –and not the extra 99¢. So if you sell 40 items per month or more, you will actually save money on fees.
As a professional seller you are allowed to create listings for products that are not currently being sold on Amazon. You can also create product bundles which we will show you how to do later as they are a great way to increase your profits.
Amazon has several categories that are restricted and you must apply to sell in these (Clothing, shoes, jewelry and Auto Accessories are just a few). You must be a pro seller to apply to sell in these categories.
Today’s post is a guest post by Jennifer Dunn of SellerEngine Software
5 Shapes of Amazon Sales Rank by SellerEngine Software
Amazon sellers care about Sales Rank. An item with a killer Sales Rank can be a huge moneymaker for your business. But they can also be a total bust.
Why? Because Sales Rank is more than just a single number. An item’s Sales Rank at any given moment isn’t indicative of an item’s potential future performance.
Instead you need to look at an item’s historical sales rank and see what trends emerge. Only then can you start making smart buying decisions.
We’ve identified 5 shapes of Amazon Sales Rank that will help you choose great inventory.
The Seasonal is an item that’s only popular during a given time of year or on a predictable cycle. After a period of high sales, it quickly drops to the bottom of the pile, only to come back again in the future.
Recognizing seasonal items is easy if you have their history. Look for deep valleys and high peaks on a regular cycle.
If you’re buying a Seasonal item, you want to make your purchase before the boom begins, not as it’s ending.
The Steady is an item that consistent stream of sales that you can count on. You likely won’t be the only seller on a Steady item. However, if you can get a good deal, you’ll grab a chunk of that market for yourself.
Remember that 20% of the market for an item that sells 100 units per day is better than 100% of the market for an item that only sells once a week.
When looking at historical Sales Rank, Steady items have very few deep valleys and few high peaks. Instead their sales rank stays relatively flat over time.
These 2 shapes are just part of the Sales Rank Puzzle. We’ve identified 3 more trends that you can look for when you’re looking at an item’s historical Sales Rank, as well as tips and tricks for finding this data.
Learn how to build a professional Amazon business working from home. The Complete Amazon Marketing System is a two-volume printed training course that shows you how to get started selling on Amazon and then how to build it into a long term business.
Today’s post is a guest post by Jennifer Dunn from Outright. The end of the year will be here soon and you will have to start thinking about taxes. If this is your first year selling or if you have been selling and never did taxes for your eBay business, this is a great article for you to read.
There’s a lot that’s “sexy” about owning your own eBay store. Some get into it because they hate answering to a boss. Others start online selling because they want to supplement their income and love the wheeling and dealing aspects of reselling.
If there’s one aspect of owning your own store that’s never inspired someone to make the jump, it’s doing your own taxes. Can you imagine jumping into a new venture hoping to make more work for yourself than necessary?
Unfortunately, when it comes to taxes, you are making your life a little more difficult by starting your own store. If this is your first year in the online selling business, you may not know what to expect. Here are a few pointers to keep in mind as you navigate the tax landscape for the first time.
All eBay Stores are Businesses
Yes, all of them, including yours. This is a huge misconception many have about their eBay store or any online store if they see it as a “side venture” or “hobby.” You can consider it a hobby all you want; you can even tell your friends and family it’s just a fun little hobby you have.
The IRS doesn’t care what you think – to them, you own a business, and you owe money to them for it. If you make over $400 in income in a year – no matter where that income comes from – you are required to let the IRS know. The sooner you realize this the better, as you can treat it as seriously as you should. With a professional mentality you’re more likely to do everything right the first time, and get as much out of your taxes as you possibly can.
If you’re disorganized, it’s time to fix that. You’re not the first disorganized person to open a business and you certainly won’t be the last; but if you let your disorganization get out of hand, your business is sunk. You have to keep every piece of paperwork (physical or not) and you have to know where everything is.
Why? Because it all comes back up at some point. All those receipts you saved from your eBay conference visit can go towards deductions on your April taxes. All those sales you made in your home state last month require that you file sales tax. If you can’t find any of this paperwork, you’re going to be in for a giant headache and a world of hurt with fees.
Things Change, but Don’t Fret
New tax forms pop up from time to time, and rules will change out of the blue. It will drive you crazy, especially after you get a routine going. You’ll think the world is ending and nothing will be the same ever again.
Don’t fret! Two things are sure: you’ll adapt to the changes because things aren’t as bad as they seem, and you can always fix a goof. Earlier this year online sellers were fretting over the 1099K and it turned out to be totally harmless. And if you goof, you can always send in a corrected copy of your tax return after you realize the mistake, often without penalty. However, try to do it right the first time to avoid any headaches or ulcers.
Taxes are All Around You
Seriously, it’s time to get on a routine. Not only do you have April taxes to deal with (which are more complicated than ever now) you also have sales tax and quarterly estimated taxes to deal with. If you don’t get on top of these at some point they’re going to constantly hang over your head, driving you nuts. However, if you get on a routine (ask a tax professional if you need one) everything should be fine.
I got two notices from Amazon that are quite helpful. Just in case you missed them, I am pasting them below:
Key Dates to Remember for FBA Holiday Selling
To stay in stock during the holiday selling season, your inbound shipments must be received well in advance of the key holiday selling dates. Mark your calendar with these important holiday selling and receiving dates:
To be in-stock on Cyber Monday, the Monday following Thanksgiving (December 2, 2013), we recommend shipping replenishments so they can be received by November 26, 2013.
To be in-stock on December 17, 2013, the expected last order date for FREE Super Saver Shipping and Standard Shipping, we recommend shipping replenishments so they can be received by December 10, 2013.
To be in-stock on December 21, 2013, the expected last order date for Two-Day Shipping, we recommend shipping replenishments so they can be received by December 12, 2013.
To be in-stock for all last-minute shoppers who use One-Day and Local Express Shipping, we recommend shipping replenishments so they can be received by December 16, 2013.
Get the majority of your Less-than-Truckload (LTL) shipments into Amazon fulfillment centers by early November and send replenishment shipments as needed throughout the holiday selling season. Closely monitor your inventory or set up Replenishment Alerts in your Seller Central account.
With the focus on the holidays, don’t forget to replenish your stock for any expected sales bump in the new year. January is a busy time for returns and exchanges, as well as for shoppers who have gift cards to redeem.
Amazon Launches New Amazon Preferred Product Prep and Shipping Supplies Store
Sourcing your Amazon Preferred Product Prep and Shipping Supplies is now easier than ever thanks to a brand new storefront on Amazon.com.
You can now get Amazon-Preferred poly bags, boxes, stretch wrap, bubble wrap, and more directly from Amazon. Using our global shipping expertise, we’ll bring these business-critical supplies directly to your business’s doorstep.
Take some time to explore the new Amazon Preferred Product Prep and Shipping Supplies store to see how Amazon can help with your shipping supply needs.
I compared Amazon prices for shipping supplies with my other sources, and while some were more expensive, others were less and I found several product I often buy that I could get for less money plus – since I am an Amazon Prime Member I get free two-day shipping. The cost of shipping packaging and shipping supplies can be quite high, so even if I pay a little more for a box, labels or some tape my delivered cost is often much lower.
Aside from offering a platform where businesses can market and sell their goods, Amazon continues to think of services that would help its sellers. The helpful functionalities and tools offered by Amazon are part of the marketplace’s goal to provide seamless shopping and selling experience for all.
One of these services is called “Brand Neutral,” which permits eligible Multi-Channel Fulfilment shipment packages to come in unbranded boxes. With this service, sellers have the added opportunity to promote and market their respective brands or business names. Merchants are provided with packaging slips, which they can opt to brand by putting their store name and other information, such as customer service contact details.
For this particular service, Amazon charges an additional fee of $1.00 per shipment, which is added to pre-order fulfillment fees. Only FBA inventory in fulfillment centers are eligible for this service –and not all fulfillment centers support this, so it can be a bit hit and miss.
Also the $1.00 fee means this is only practical for items selling for in excess of $30 to $40, as the fee would eat into the margin too much on cheaper items.
I am often asked by sellers like myself who also sell on eBay and use Amazon to fulfill their orders if customers are confused when they receive an item in an Amazon box. So far I have sold over 300 items on eBay that were fulfilled by Amazon and have had no complaints and one a couple of folks who questioned it. But if you are worried about this, then this service may be for you.
If you want to use this service, simply go to Multi-Channel Fulfillment Settings on your Fulfillment by Amazon Settings page, enable the packaging slips branding and then enter the information that you want to appear on the slip in the “Packing Slip – Text” box. You can also disable both of these services anytime.
With an approximately 85 million unique monthly visitors worldwide, Amazon continues to be one of the most dominant players in the e-commerce industry. And with its growing suite of seller tools, Amazon isn’t stopping from expanding. Amazon continues to be one of the most seller-friendly platforms available to independent third party sellers.
5 Sure Ways to Increase Your Brick-and-Mortar Business’ Revenue Online
With the increasing number of people using the Internet to browse and purchase products, more and more brick-and-mortar business owners are now investing in growing their presence on the World Wide Web. However, establishing a name for your business cannot be done overnight and a single marketing strategy is not enough to promote it.
Online visibility allows your business to build your brand and tap into a wider audience, make your information easily available, and be accessible to your customers and prospective clientele 24/7. If you are one of the business owners who wants to take advantage of these benefits, then here are five ways to increase revenue through online visibility:
The banner should include the store’s name and a short description of what your website about. It should also be eye-catching and creative. Use graphics if necessary and apply the basic rules of dark text over a light background and vice versa, so that the information will be readable.
The menu bar should consist of the basics like “About Us”, “Products”, “Store Locator”, and “Contact Us”. Photos of the products should be uploaded to give your visitors a preview of what you can offer.
Also, the address of your business store should be indicated because the primary purpose of setting up a website is to drive prospective online clientele to visit your store. A map is optional but highly recommended especially if your store’s location is not downtown. The business’ email and phone numbers should also be included in the “Contact Us” section to answer all queries and/or receive suggestions.
2. Sell some of your products online
The website you’re going to put up is basically an online store catering to those who can’t personally visit your physical store. Whether they are people who are too busy to drop by to check your items out or simply like to shop online to avoid the hassle, online stores are the virtual way to your customers’ hearts.
Businesses like beauty salons that sell specialty shampoos can opt to make use of a webstore instead of having customers line up inside their salon just to buy shampoo. Web stores can be a tool for letting your patrons know that you have more to offer.
Aside from your website, engaging in social media is also one of the best ways to create visibility online. More people are spending time on the Internet, and most of them log in their social media accounts first before anything else.
While websites contain everything you need to know about the store, social media accounts make netizens feel that they are talking to an actual person behind the website. Updates can be done using these accounts. The administrator can post photos of new items and/or services on Facebook.Customers can also join “live Tweeting” using a hashtag related to your business to gain interest from potential clients.
4. Let other people wear or use your items
Now that you’ve set up your social media accounts, it’s time to make use of word-of-mouth strategy and create buzz within your niche. While it’s better for your items to be seen on a famous personality because the reach is wider, ordinary people can still influence their family and friends to purchase your products.
Take this for example: When people like the vintage dress you’re selling worn by their friend on her profile picture or a quirky mug featured on his “Sunday Breakfast” post in Instagram, they will likely ask where your customer bought it. The customer would then refer your store.
You can ask your customers to wear or use your items and mention your business on their social accounts. Testimonials from satisfied customers are still one of the sure ways of building good reputation to potential buyers. People tend to believe someone they trust rather than advertisements that only show the selling point of an item.
At the end of the day, make sure that the quality of your products is always top-notch, as you have your reputation to build and take care of. If this is always guaranteed, your current buyers will share your products on their social media even without your asking.
5. Contribute to related websites and write advertorials
You can also write advertorials for websites that allow contributors or for blogs related to your product. With this type of content, your product or website can be clearly indicated, unlike in guest posts wherein promotional links are generally frowned upon.
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