Pulling the trigger on Amazon FBA

[million$$$smile]

So I was talking to Snowbank at B&P and I was sharing with him about a private brand of tools that we had developed a couple of years ago. Sales have been growing and my partner and I had been thinking about not just wholesaling, but to try retailing to broaden our market and to create brand awareness.

He looked at me and said what I had been mulling over for quite sometime. "You ought to try Amazon fullfillment."
So, we've set our little company up for FBA, and hope to ship an assortment of 18 products that we produce this week.

I currently sell products on Amazon, that were downloaded from our websites but we have had to ship everything ourselves. This has become a full time task for two employees and I decided if we are going to scale this, we have to try FBA. It was the nudge from Billy that really made me want to not put it off any longer.

Billy, (Snowbank) thanks for the nudge.

I think I'll periodically post a thread and let ya'll know how its going.
Perhaps it will help others to decide if it is worth it or not.

Randall

 

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[1step]

I look forward to following your progress, I think you will find your number of sales increase with FBA. For your larger products it may be different but for the smaller products I have sold the FBA fees are only slightly more than what it costs me to fulfill the product myself (not counting costs of time)

Look forward to more posts

 

[nextgen]

I have been thinking about using FBA as well however, i'm not sure if I should use it considering my items sell at 9.99 not sure if it would be worth sending there. I'll keep my eye on this thread to see how you make out.

 

[LightHouse]

Awesome move Randall. With fba not only do you get on the free shipping and prime radar, but if you focus on getting reviews for your products, you can really rack well in their eco system.

 

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[1step]

nextgen

amazon fees are 15%. The FBA costs will be $2.00 plus a weight based additional cost, which is around $.50 per pound. So you will lose at least $3.50 off each order. Plus the costs it takes you to get the product to amazon, if your product has any weight to it this may not be a good choice for you

 

[Vigilante]

Use Amazon preferred partner UPS to ship products TO Amazon, and schedule it through Amazon within Seller Central. Their rates for shipping in to Amazon using Amazon's UPS rates are ridiculously low.

 

[nextgen]

I mean i would still be making $5 per item sold. the weigh 1.2 ounces so its not heavy at all. Are you guys seeing a upswing in sales due to amazon prime?

 

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[Eskil]

Subscribing to this.. My goal is to shift to FBA too once I have ran my first tests with the supplement.

 

[1step]

Sales certainly go up using FBA. You will rank higher in the search. What are your costs to fulfill the orders? Around $2.00?

As Vig said above shipping to amazon especially for your product will be very very cheap.

EDIT: It also costs $40.00 per month to be able to sell on amazon so this could be an added expense if you are not currently selling on amazon

 

[Jake]

I've been looking into it. it alleviates some of the issues I have with selling physical products from my current locale.

Does anyone know if a business exists that preps and forwards packages to FBA?

Lets say my manufacturer will not send direct to FBA (I'm waiting on an answer) Are there any mail forwarders out there that handle special requests or specialize in this? If not it may be an opportunity for someone.

 

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[CEBenz]

I've been looking into it. it alleviates some of the issues I have with selling physical products from my current locale.

Does anyone know if a business exists that preps and forwards packages to FBA?

Lets say my manufacturer will not send direct to FBA (I'm waiting on an answer) Are there any mail forwarders out there that handle special requests or specialize in this? If not it may be an opportunity for someone.

Dan at Tropical MBA may be able to help there. Not for sure you, but you might ask him.

 

[Jake]

Dan at Tropical MBA may be able to help there. Not for sure you, but you might ask him.

He mentioned to me in his a thread that he could assist with fulfillment. Thanks for the reminder.

I believe it's on the other side of the country compared to the company I'm looking to source from but it could be an option.

 

[CEBenz]

He mentioned to me in his a thread that he could assist with fulfillment. Thanks for the reminder.

I believe it's on the other side of the country compared to the company I'm looking to source from but it could be an option.

You could also check with a local fulfillment house. Explain to them what you need to do and ask if they could help you. All they really need to do is forward the freight.

 

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[Eskil]

Sales certainly go up using FBA. You will rank higher in the search. What are your costs to fulfill the orders? Around $2.00?

As Vig said above shipping to amazon especially for your product will be very very cheap.

EDIT: It also costs $40.00 per month to be able to sell on amazon so this could be an added expense if you are not currently selling on amazon

Can you also set up inventory monitoring inside FBA so that, say you want to be notified when there are less than xxx units left in stock - so that you can stay up on ordering more from production ahead of time? If you know you're selling through 50 units a day, and have 1000 units (20 days worth) left - but at the same time you know that your manufacturer will take 14 days to produce & deliver a new shipment - you would want to get notified in time.

 

[Jake]

I'm still getting up to speed on FBA but it's not exactly sending it from 1 address to another. Products need to be labeled(product and boxes), broken down into quantities designated by amazon, and possibly sent to multiple fulfillment centers (from what I gather).

I'm hoping the supplier will do this for me but I'm looking for temporary backup solutions while I wait for an answer. My patience is pretty low over the weekends . Working 7 days a week doesn't help.

 

[1step]

Can you also set up inventory monitoring inside FBA so that, say you want to be notified when there are less than xxx units left in stock - so that you can stay up on ordering more from production ahead of time? If you know you're selling through 50 units a day, and have 1000 units (20 days worth) left - but at the same time you know that your manufacturer will take 14 days to produce & deliver a new shipment - you would want to get notified in time.

I am unsure. It would make sense that this would be built in but I havent seen this. There is a feature that will tell you how long until your stock runs out and it will tell you when you are low on inventory.

 

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[Jake]

"Replenishment Alerts enable you to manage your inventory in Amazon's fulfillment centers without needing to constantly monitor each listing. You can set the alert quantity for individual items or groups of items. When the listing's fulfillable quantity reaches your setting, we notify you by sending you a Replenishment Alert e-mail."

Amazon.com Help: Replenishment Alerts

 

[nzerinto]

Sales certainly go up using FBA. You will rank higher in the search.

Is there solid evidence of this....particularly the bit about ranking higher in search? Because that's very interesting, considering....

 

[1step]

"Replenishment Alerts enable you to manage your inventory in Amazon's fulfillment centers without needing to constantly monitor each listing. You can set the alert quantity for individual items or groups of items. When the listing's fulfillable quantity reaches your setting, we notify you by sending you a Replenishment Alert e-mail."

Awesome, thanks

Is there solid evidence of this....particularly the bit about ranking higher in search? Because that's very interesting, considering....

I wouldn't consider it "solid evidence." I read a few places that this is the case and it happened with my product but it could be another factor that caused it to happen. Amazon likes control, once they have the product in hand they know the orders will get filled in a timely manner and they know the product is available so it would make sense that they would give these products preference.

 

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[Eskil]

"Replenishment Alerts enable you to manage your inventory in Amazon's fulfillment centers without needing to constantly monitor each listing. You can set the alert quantity for individual items or groups of items. When the listing's fulfillable quantity reaches your setting, we notify you by sending you a Replenishment Alert e-mail."

Amazon.com Help: Replenishment Alerts

 

[nzerinto]

I wouldn't consider it "solid evidence." I read a few places that this is the case and it happened with my product but it could be another factor that caused it to happen. Amazon likes control, once they have the product in hand they know the orders will get filled in a timely manner and they know the product is available so it would make sense that they would give these products preference.

Very cool, thanks for the response.

 

[million$$$smile]

That's what awesome about this forum. Everyone helping everyone.
We are ordering a different brand of one of the products that is sold on Amazon due to the fact that the item is very "pointed," not sharp, but we just want to make sure there isn't an issue for them shipping it for us... I've read that sharp object need additional packing from supplier...

Randall

 

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[MJ DeMarco]

I use FBA for TMF as well as standard listings -- I make $1 more on an FBA product (priced at 14.77) than selling one direct (priced at 10.69) so there isn't much a difference.

I only do FBA because Amazon refuses to lower the price of my book as they sell it at full retail. This allows Amazon Prime readers to get the book w/o shipping costs and for a discount.

One thing I noticed ... ever since moving to FBA, Amazon has NOT lowered the price on my book since. Before FBA, Amazon would juggle the price from 22.95 to 15.73. (I make the same profit margin on the main listing, regardless at which price they list it.) This is concerning because my sales ranks drop when the main listing sits at 22.95. When they discount the price, my sales rankings jump. Since FBA, my book has not been discounted in months.

How it works...

1) Yes, use the Amazon partner supplied carrier UPS -- cheaper than USPS and more reliable.
2) Send more inventory than just one -- if I send FBA 18 books, the $10 cost to deliver is spread out over those 18 units.
3) If I create an FBA order for, say, 32 books, Amazon will split the order into 3 units and have me send to 3 different FBA warehouses. Each book needs to be labeled for FBA, covering the books' original UPC.

a) Phoenix
b) Pennsylvania
c) Indianapolis

As for my feelings on FBA, I'm hung.

I'm not happy about my book being sold on Amazon for full retail as it hurts my sales ranking. My use of FBA might have caused this to occur since the price at which I sell @ is less than what Amazon would sell at directly. It's probably been about 6 months since Amazon discounted my book which coincides with my participation in Amazon FBA.

 

[andviv]

Randall, please let me know what products you will be selling there. I buy from Amazon regularly and when I need a tool will look at yours first. Of course will provide feedback once I do so.

 

[Eskil]

That's interesting, MJ. I didn't know being on FBA meant sacrificing some control over pricing like that.

 

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[CEBenz]

MJ,

Who decides what retail is on your book?

 

[biophase]

I use FBA for TMF as well as standard listings -- I make $1 more on an FBA product (priced at 14.77) than selling one direct (priced at 10.69) so there isn't much a difference.

I only do FBA because Amazon refuses to lower the price of my book as they sell it at full retail. This allows Amazon Prime readers to get the book w/o shipping costs and for a discount.

One thing I noticed ... ever since moving to FBA, Amazon has NOT lowered the price on my book since. Before FBA, Amazon would juggle the price from 22.95 to 15.73. (I make the same profit margin on the main listing, regardless at which price they list it.) This is concerning because my sales ranks drop when the main listing sits at 22.95. When they discount the price, my sales rankings jump. Since FBA, my book has not been discounted in months.

How it works...

1) Yes, use the Amazon partner supplied carrier UPS -- cheaper than USPS and more reliable.
2) Send more inventory than just one -- if I send FBA 18 books, the $10 cost to deliver is spread out over those 18 units.
3) If I create an FBA order for, say, 32 books, Amazon will split the order into 3 units and have me send to 3 different FBA warehouses. Each book needs to be labeled for FBA, covering the books' original UPC.

a) Phoenix
b) Pennsylvania
c) Indianapolis

As for my feelings on FBA, I'm hung.

I'm not happy about my book being sold on Amazon for full retail as it hurts my sales ranking. My use of FBA might have caused this to occur since the price at which I sell @ is less than what Amazon would sell at directly. It's probably been about 6 months since Amazon discounted my book which coincides with my participation in Amazon FBA.

MJ,

There are a few ways around your issues. First is that your book (or product) should be listed as a commingled product. Then your book will have a universal UPC code. This eliminates the need for labeling as they become stickerless. Unfortunately, you cannot switch a product from one to the other. You can start another TMF product but would lose all the reviews. So make sure you get it right with your next book.

You can set up a massive shipment say for 1000 books. When Amazon breaks it into 3 shipments to 3 places, just ship to Phoenix and cancel the other 2 shipments. Then you have 300 books going to Phoenix. I don't know if you can do this forever because I think Amazon will catch on soon.

Maybe it's just with books, but I get to set my own pricing on everything.

 

[biophase]

That's what awesome about this forum. Everyone helping everyone.
We are ordering a different brand of one of the products that is sold on Amazon due to the fact that the item is very "pointed," not sharp, but we just want to make sure there isn't an issue for them shipping it for us... I've read that sharp object need additional packing from supplier...

Randall

Make sure you go stickerless option with a UPC code when setting up your product listing.

 

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[Jake]

Make sure you go stickerless option with a UPC code when setting up your product listing.

Great to hear. I've been wondering about that.

So is the only reason to choose stickered is if you have a product without a UPC, correct? Besides that, stickerless is the way to go as long as I purchase a UPC and put it on my product? Do you still need a SKU?

 

[snowbank]

Awesome Randall! Great to hear.