jmssparkman

[jmssparkman]

Peak efficiency. It is what ensures the profitability and sustainability of any business venture. Building a successful business requires more than decisive action; it also entails close scrutiny of business systems in place, as well as the careful analysis of numeric data indicative of the performance of the utilized business model. These system checks and number crunching create a foundation for effective policy setting and decision making for your business.

Conducting routine systems checks and crunching numbers can be beneficial for FBA sellers no matter what point they are at in their enterprise. For those starting out, an in depth look at the state of their business can help them pinpoint and set up the necessary systems and processes that can not only increase profitability but also sustain it. Established sellers, on the other hand, can determine how to effectively modify their systems and work processes to plug cash flow leaks that reduce their bottom line after a thorough inspection of their existing business models.

If you are looking to improve the efficiency of your operations in the quickest time possible, ask yourself the following questions and take a closer look at these aspects of your FBA business:

How Much Should I Earn Every Month? -Your Monthly Gross Sales and Profit Goals

The ability of your business to survive or thrive depends on the sales and profits it can generate. For your business to continuously grow and meet its developmental targets, you must know what level of profit is needed to sustain it.

The first thing you have to know is the point where you break-even. To determine your required minimum monthly gross sales amount, there are several figures that you have to look at and take note of. First, is your total monthly business expenses. These include your direct and indirect costs, FBA fees and your miscellaneous expenses. Second is the Average ROI of your inventory investments, and last is your Inventory Turnover rate.

Although there are online calculators that can give you a rough estimate of what your monthly gross sales goal should be, it is ideal to acquire the services of a bookkeeper or accountant for sound business advice. Run your numbers by a financial services professional, know your current break-even point, and set realistic sales and profit targets in tune with your current and future business goals.

Am I Moving My Products at a Profitable Rate? – The Strength of Your Inventory

The success of your FBA business depends largely on the strength of your inventory. When you make the correct sourcing decisions, you move your products much faster, achieve a better turnover rate, incur less costs and bank your profit more quickly.

The Inventory Health report you can download from Amazon can give you critical insight on the strengths and weaknesses of your sourcing game. The report allows you to see your fastest selling items, the ones that don’t move as quickly, and inventory that has gone stale. To access this report, go to Seller Central and hover over “Reports”. Then, click “Fulfillment”. On the left side of the page that opens, click “Show More” in the section with the heading “Inventory”. Click on “Inventory Health”, and you will have the option of downloading this report or viewing it online.

The information from this report allows you to see how your inventory investments have been performing, and brings to light things that severely impact your bottom line:

-Additional expenses (storage fees) incurred from slow-moving inventory – From January to September, Amazon charges you the amount of $0.64 per cubic foot your inventory takes up in its fulfillment centers monthly. This rate increases to $2.35 from October to December (Rates presented are for standard sized inventory, and this may vary depending on size tier of product/s).

Therefore, when looking at profit margins for inventory aged 90 days and over, these storage fees must be taken into consideration. Moreover, inventory aged 120 days and over are subject to Amazon’s long term storage fees. For these items, your margin must be able to cover this additional expense after paying FBA fees.

-Flaws in Your Sourcing Game – items in your stale inventory are good indicators of flaws in your sourcing methods. Careful analysis of these items in your inventory can reveal the weaknesses of your sourcing methods, e.g. neglecting to check sales rank and price history, entering highly-saturated market segments, failing to expand categories to sell in, ignoring seasonal trends, etc…Whatever the flaws in your sourcing method are, analyzing the common denominators of underperforming items in your inventory is a good way to correct them in the quickest time possible.

How Do I Move Underperforming Items in My Inventory? Troubleshooting Stale Inventory

While it is tempting to just liquidate stale inventory and move forward, utilizing the often overlooked Detail Page Sales and Traffic by Child Item report can help you identify problems with the listings of the slow-moving items in your inventory.

Found under Business Reports, this assessment tool from Amazon helps you remedy listing problems of slow moving inventory in two ways:

1. The Buy Box Percentage column of this report will tell you the best pricing adjustments you can make for your slow moving items. If you have stale items that never seem to get the buy box, find out who your main competitors are and what price ranges they are working with. Moreover, work on your overall competitiveness to be able to continuously vie for the buy box and employ a highly reactive repricing strategy. On the other hand, if your slow moving items are featured in the buy box often but still have low sales, you and your competitors are probably selling at prices much higher than prices at markets outside of Amazon. Check other marketplaces and adjust your prices appropriately.

2. The Unit Session Percentage column of this report gives you an idea of how much traffic a listing gets. The figure that appears in this column is obtained by dividing the number of units sold by the number of views for a specific time period and expressing the quotient as a percentage.

If the product page of your item has a good number of views but low sales figures, it often means that there are elements in the product page which are either attracting the wrong people or driving buyers away. Check the product page for errors in the title, image, product description , bullet points and keywords and fix them right away. In some cases, customers simply choose to not purchase the item from you. Review your prices and compare your seller rating and feedback with your competitors. On the other hand, if your item has a low number of page views, one thing that you can do is lower your price significantly until its sales rank improves.

These are just some of the numbers, data and reports that you can utilize to improve the efficiency of your FBA business. If you have other tips and suggestions, share and discuss them in the comments!

If you wish to learn more about the various facets, intricacies and complexities of Amazon FBA and make your business more profitable, subscribe to our email list!

 The post Run a Tighter Ship: How to Improve the Efficiency of Your FBA Business appeared first on FBA Library.

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[jmssparkman]

There is a new collaborative program between Amazon and Kohl’s that may be making your life easier.  Starting in October, around 82 Kohl’s locations in the Chicago and Los Angeles areas will be accepting your Amazon.com returns, unpackaged and all. If it goes well, people all over the United States may be able to stroll into a Kohl’s and take advantage of the opportunity.

To read more about the program, check out: http://ift.tt/2hjK5Pg

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[jmssparkman]

Have you ever encountered a product with duplicate ASINS?

Remember that it is not a good practice to list a product under these circumstances. Duplicate ASINS cause problems in sales, confuse shoppers, harm reviews and reduce the visibility of the item in organic searches.

To have this issue fixed, you must file a case with Amazon.

First, log in to your seller account,  click the “Help” option and select “Contact Us’ at the bottom of the page.

After this step, select “Selling on Amazon” and click “Products and Inventory”.

Then, select “Product Page Issue”. The prompt question “What kind of issue are you having?” will then appear.

Select “Merge Duplicate or Split Product Pages”.

In the suggested target field ASIN, key in the ASIN you want to retain (more likely than not you’ll want to keep the one with the better rank).

In the “Duplicate ASIN(s) requested to be merged to target ASIN” field, input the duplicate ASIN. In the field that asks you to provide a reason, just say “Duplicate ASINS for one product” or something to that effect.

That’s it…Amazon will usually get the merge the products within 24-36 hours.

The post Have you ever encountered a product with duplicate ASINS? Here’s How to Fix It… appeared first on FBA Library.

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[jmssparkman]

Even the most conscientious of FBA sellers gets negative customer feedback from time to time. Nowadays, customer reviews are proving more important to the buying decision making process than personal recommendations or manufacturer guarantees. While negative reviews can be quite alarming, we must accept that they are simply part of a customer-oriented business like FBA.

Aside from exerting the effort to provide exemplary customer service, FBA sellers like us must know how to proactively manage negative customer feedback. A sound strategy in dealing with negative customer feedback can help protect your reputation as an #Amazon seller and of course, your revenue stream.

Check out these 3 tips to combat negative customer feedback:

1.) The most simple solution to this pesky problem is to reach out to the disgruntled customer. Going the extra mile can do a lot to resolve an issues as well change a customer’s personal opinion. In the business of sales, customer service is paramount! Get in touch with the customer, express your willingness to remedy the situation, and inform them of the steps you will take to make it right. While Amazon’s terms of service states you may not directly ask for negative feedback to be removed or star-rating changed, you CAN suggest the customer update their review hoping you have improved on their experience.

2.) Addressing a negative review publicly can show other customers that you have taken notice and future transactions will proceed smoothly. Doing this let’s it be known that no matter the situation, you are available and willing to work out the issue at hand. When commenting publicly, make sure to mention that you have taken the necessary steps to remedy the situation.

3.) As unpleasant as it may be to acknowledge a blemish on your account, integrating negative customer feedback into your business development process can serve as learning points that can help you manage and run your business. Keep in mind that the best way to minimize negative customer feedback is by raising the level of the service that you provide.

Be proactive, take action, and make your customers (even the unhappy ones) rave about how awesome your company handles itself.

 The post TAKING THE BAD WITH THE GOOD: How to Proactively Manage Negative Customer Feedback appeared first on FBA Library.

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[jmssparkman]

Without a doubt, Amazon’s FBA program offers a lot of benefits and value to its subscribers. Multitudes of us are taking advantage of this great selling platform and are earning handsome ROIs from our inventory investments, and the number is growing exponentially each day

That being said, although Amazon FBA presents a straightforward opportunity for profit, it does come with its complexities. For instance, one aspect of FBA that many sellers find perplexing is the payment of various fees to Amazon for utilizing its fulfillment channel.

Often times I paint these fees with one giant brush and group them into the part of my mind that says “There is nothing I can do about these, it’s just a cost of doing business” Recently I sat up late one night thinking about how there may be a way to cut these fees, if even by a little bit, and shake some more profit out of the Amazon FBA Tree.

The first thing I needed to know was what fee’s I was actually paying.

The reality is Amazon has always been upfront with the fees they charge, I just usually ignore them. For those of you that do also, here is how they categorize these expenses:

Referral Fee

This is the commission Amazon earns from letting you use its sales platform. The rate Amazon charges for its referral fee is 15% of the item price. The category of the product may cause the rate to vary.  

Variable Closing Fee

The amount varies per item, and will depend on what the category the item belongs to, where it was shipped, and what the mode of shipment was. Only media products such as books, game consoles, DVDs, music CDs, software and the likes are subject to these fees.

Amazon Fulfillment fee

This is the total sum of three FBA transaction fees: FBA Order Handling fee, FBA Pick and Pack fee and FBA Weight Handling fee. The product size tier your item belongs to will determine the cost of the order handling fee and the pick and pack fee while your item’s weight will set the cost for the weight handling fee.

So now that I knew what I what I was paying for, I dove in the deep end and brainstormed and researched as many ways I could think of to lower the FBA fees.

And here is what I dug up:

1. Beat the Amazon Add-On Program – FBA sellers haven’t been too crazy with Amazon’s Add-On Program. To those who aren’t familiar, in the Add-On program, Amazon may choose to feature your lightweight, low -priced product as an “add-on” that must be purchased with another item since it is “costly” to ship on its own. When one of your items is branded as an add-on, two problems are created: First, it is now doubly hard to sell your item, and second, the FBA fees go up.

The best way to beat this Amazon feature is to add a new multipack option to the add-on item’s product page listing. The working logic here is that a customer may be more amenable to spending more on a multipack of a product that he or she needs/wants  than buying something that he or she does not particularly care for.

2. Identify Your Target Market and Plot Your Own Shipping Plans – although it seems more convenient to just let Amazon handle your shipping plans, you may incur unwanted additional shipping related fees if you do so.

When handling your shipping plans, Amazon conducts market testing in order to determine the most profitable location for your product. That sounds great and all, but what you probably don’t know is that as it moves your product around different fulfilment centers in the country, you end up shouldering the shipping costs. This can take a huge chunk off of your ROI from your inventory investment. If you want to know which of your products Amazon is moving around, head to your inventory manager in your seller account and check the availability of your products. Items marked as “reserved” are the ones generating additional shipping costs.

While this additional expense is acceptable when you are starting out, remember that in the long run, you’ll be better off knowing where to ship your products and developing your own shipping plans. You will definitely save on shipment fees and increase your ROI.

3. Get Rid of Stale Inventory to Avoid Paying Long Term Storage Fees – stale inventory hurts your potential for profit in two ways: first, it represents capital that can’t be reinvested in faster moving products and second, stale inventory that has been idle on fulfillment center shelves for six (6) months are subject to Amazon’s long term storage fees.

Amazon issues long-term storage fees bi-annually (every February 15th and August 15th), and charges a rather steep rate of $11.25 per cubic foot your affected inventory consumes. Failure to remove affected inventory within a year of being charged will get you charged double the rate at $22.50. Paying these fees is a serious drain on your capital and definitely hurts your bottom line. Therefore, it is a must to conduct routine inventory age checks and dispose of aged inventory as often as you can.

4. Take Item Size and Weight Into Consideration when Setting Profit Margins – One of the prerequisites for FBA success is understanding how the size and weight of your item affects the FBA fees that you have to assume. Naturally, the bigger and heavier the product, the higher the Amazon Fulfillment fee gets and vice versa. Therefore, if you plan on selling larger products on FBA, make sure that you set profit margins that can sufficiently cover the costlier fulfillment fees Amazon will charge. This is the reason why, as a rule of thumb, I stay away from bulky and heavy items, as these will necessitate more effort on Amazon’s part to fulfill, which in turn will lead to a spike in fulfillment fees.

5. Do not Overlook “Opportunity Costs” – to make things clear, Amazon will not charge you any fees for not being able to replenish your inventory in a timely fashion. However, keep in mind that your failure to do so subjects you to “opportunity costs” when you lose your sales momentum due to stockouts. Keep in mind that loss of opportunity also hurts your bottom line. Therefore, it is your responsibility as a seller to actively monitor your inventory and restock when needed. When replenishing your inventory, always take into consideration the lead time, which is the wait period for your items to become active and available for sale on Amazon. Doing so will make your restocking process much more efficient.

 The post Fortify Your Bottom Line: Pay Lower FBA Fees appeared first on FBA Library.

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[jmssparkman]

Did you know that you can use a customized Merchant Stock Keeping Unit (MSKU) as an item analysis tool?

To those who don’t know what an MSKU is, it is a character string of letters and numbers that is associated with an item that a seller adds to an #Amazon listing. When you list a product via a web app like #Inventorylab, you can let the app auto generate one for your item or you can create your own unique MSKU.

Now before you balk at the idea of adding another process to your workflow, hear me out.

Creating your own MSKUs can make you more efficient in managing your FBA business.

When you create your own MSKUs, you can cram a wealth of information in a character string of your own design which you can access at a glance.

Have a look at an MSKU we created to maximize analysis during other steps in the backend of our business:

B00CCBQ4RI-AP1117-EB-1954-KI-N-AB123

So what does this MSKU tell me?

It tells me:

ASIN of my product (B00CCBQ4RI),

Purchase date (April 11, 2017),

Place of purchase (Eastbay),

Cost per item ($19.54),

Prep company (Kingston in New Hampshire),

Condition of the item (New)

Who made the purchase (AB123 is a buyer code)

Having instantaneous access to this type of information about each product in your inventory has a lot of advantages. It saves a lot of time and makes repricing and product analysis much, much easier. This MSKU is usually listed on the Inventory Lab and Appeagle Pages. So when I am taking a look at various reports, all of the product information is right there on the same screen I’m already at, and don’t have to go digging through Google Drive files to find what I am looking for.

The great thing about this practice is that you can customize your MSKUs according to the specific product information you would like the string of characters to reflect.

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