Heads up, make sure your distributors are open, and your stock needs are “ready to ship”. I don’t see AMZ being timely in returning FBA inventory given the current situation.
Even though you have been paying the increase in postage without the badge benefit of increased sales?
Well, you are getting a lot of experience managing the shipping costs while delivering on SFP.
I don’t think that it is right of Amazon to deny the badge. Will they suspend the trial metrics requirement from now until they issue new SFP badges? I wouldn’t want to see you dinged for metric hits for the virus and then lose the unissued badge that you earned.
Thanks for the great tips! There are some great six foot wire shelves that run around $100 each (from a certain wholesale retailer that’s very popular right now) that fit very well along a garage/storage room wall. I have purchased a couple sets from my holiday revenue and they are a great asset. And unlike a lot of products from said retailer, are NOT out of stock.
Edit: took out the vendor of the product in case it’s in some violation of promoting their product on Amazon forums
I wouldn’t assume that AZ will be fast on returning any pulled FBA inventory. In good times it can take 4-6 weeks. Now they don’t have enough staff, so orders (not pulled inventory) will get priority. Unless you are racking up crazy inventory fees, I’d hold off.
One thing that would be good to know is if AZ stops charging inventory after you have requested your inventory be pulled. That may change how you approach managing FBA inventory.
First you need to realize FBA sellers are a minority on amazon NOT a majority. FBA is just a fancy way to dropship. The only difference between dropshipping and FBA is when you dropship you don’t buy the merchandise while FBA sellers own everything they send in. after that its handled the exact same way. I think you will do better FBM as many buyers are hearing that the fulfillment centers may have infected workers handling their stuff.
Are the infected workers a rumor or a substantiated fact? Wouldn’t want to make anyone panic!
FBA is not like drop shipping.
In drop shipping you pay for the item after the buyers pays you the money, and you only buy exactly what is ordered
In FBA you buy your inventory with some cushion (you don’t know how well it will sell in the next x weeks), then process the inventory to be FBA ready, then ship the inventory and wait for FBA to make it available to your customers. When everything goes smoothly, you may only have to “carry” the cost of your inventory for two weeks. When it doesn’t, you may have to “carry” the cost of your inventory for 2-3 months before its even available for sale in FBA. Then you pay for inventory storage at FBA until your item sells. You must have better skills in:
- Sales Forecasting
- Inventory Processing
- Inventory Management
- Financial Management (the time between initial purchase at your vendor and purchase by the buyers is the length of your cash cycle for products that sell - the longer your cash cycle, the more you need capital and inventory financing, which adds even more costs).
- Returns Management (AZ decides if an item can be returned, not you, so your cost for returns will increase dramatically)
Net, selling in FBA requires much more sophisticated skills, a deeper pocket, plus more staff than drop shipping. I’ve done both. I am very glad that my primary supplier has decided to offer e-commerce drop shipping to its best customers!
like i said FBA and dropshipping are the same thing except you purchase the stuff first. saying you use financial management is the only difference from what i said which isn’t to hard to figure out. are you a rocket scientist? if you do FBA your a fancy dropshipper. Shame
actually they have had a few infected according to the News and they handled several hundred packages a day for how long before they were diagnposed? Now you see they had the potential to infect 20K plus easy. put into account they can’t wash hands after relieving themselves in a bottle or bucket (their accounts to labor boards) and now they have possible bodily fluids on the items they ship.
If you carry a lot of items do yourself a favor and get organized from day 1. There is absolutely nothing more frustrating than not being able to locate something that has to ship out.
Searching a 5K sq ft warehouse for something misplaced will make you nuts.
Like others have said, watch your shipping charges and adjust your templates accordingly. Pretty soon you will have UPS knocking on the door offering all kinds of incentives to gain the volume. Everything from thermal printers to subsidized technology upgrades.
I’ve done FBA for years, and SFP for a year. And FBM for a decade before that. And about 6 months of light drop shipping. I have experience.
Do you have experience in FBA?
This isn’t about being hard to figure out. It has to do with the extra thinking, the extra staff, and the extra time you need to run an FBA business. More sophisticated skills means you have to develop your skills deeper than most and track your business more conscientiously or you’ll go out of business. FBA is more complex and demanding than drop shipping.
Bad forecasting alone can leave you high and dry with inventory that never sells. Last year a completely unexpected winter storm in my area closed the post office for the two weeks prior to Valentine’s Day, so I was left with a large amount of unsold inventory going into the slow season. Since I was in FBA I had to purchase my Valentine’s Day inventory in December, when no one predicted the storm. This was the only time the post office has ever closed in the last 25 years. Really hard to predict that. The next seasonal uptick was November, 9 months later! I really had to scramble.
Why does it matter if I’m intelligent? What does that have to do with anything?
The actual FBM program is different. You can mail from home without being in their program. Just have a different SKU (I use the same SKU with a 3 digit alpha label.)
I would not ship without using Amazons shipping. There are going to be a rash of INR claims in the coming months. People are losing their jobs, kids with sticky fingers are going to be out in the streets more now that schools are closed, crime is going to rise and people are going to be desperate and I don’t think anyone has done much more to protect their packages than get a door bell camera. Its going to be bad enough to have to be fielding all these calls much less giving people refunds out of your own pocket.
Just another thing some FBA sellers that have no options when it comes to storage or shipping of the products they sell can look at into working with a third party logistics company. For example, we ship all of our products with SFP and FBM but, we also fill orders for a couple other small sellers who needed storage and they also get lower shipping from the volume. I am only putting the thought out for others to explore and something to consider.
As of Right Now USPS is NOT experiencing high ship volumes. (amazon logistics is and has increased ETA’s) just an FYI from a SFP seller who knows
Unless you are shipping hundreds of packages it’s pretty easy to take a photo of the package…
That’s the first thing that I give to a customer that wants to know where their stuff is, along with their theoretical expected delivery date , the tracking number… they have a picture of the actual package, they can Flash around , ask anybody if they’ve seen it?
I sell books, I find the most book buyers are nice, & not insane… I pack very well, you could throw my stuff like a frisbee, it is attractive, I put an extra large label on so that aging postal carrier can actually read it to deliver it… I use a lot of foam core , it weighs almost nothing… most all of my smaller books are going at the minimum Media Mail rate… which makes up for the very few heavy ones , it all averages out…
I don’t insure anything , it took USPS 3 years to lose one of my books… personally I think it has to do with the “extra large readable label for the end carrier”, most packing labels I can’t read…
This is a little bit more work, I do a custom cut & paste to generate the packing slip… & scissor off my return address, the customer’s address – it gets attached to the front of the package…
If you make it easy for somebody to do their job, they generally do it more effectively…
Since I sell a lot of odd weird esoteric freaky unusual book – fulfillment by Amazon for my books just didn’t work out… I recalled all of my inventory years ago when they changed the storage rates…
And all that previous FBA stuff slowly is selling… sold another one today, dropped it off when I did the postal run…
Just my thoughts
And also expect crime/theft to increase in the next few weeks, (ie Porch pirates) with government shutting down businesses people will be out of work, leading to unemployment lines and software systems crashing. So expect INR claims to increase.
I am still sticking with the trial for now. My sales have decreased to almost nothing and I really need the Prime badge to hopefully boost my sales. I am afraid if I stop it they will not let me back to the trial or if they do start accepting SFP suppliers I will be at the bottom of the list. Since November I have completed 1435 orders with perfect metrics, earned $45,000 and paid $5,000 in shipping. I am hoping the Amazon Gods look down on me and bless me with a Prime badge soon!
I only do FBM because FBA takes way too long to FC transfer and I’m a noob that hasn’t figured out how to set up consistent FBA shipments yet. I still get the buy box with FBM and my sales have also doubled this week. Not sure why, my products have nothing to do with wiping your ass or disinfecting your doorknob.
Very helpful, positive and informative post! Thanks for taking the time to outline a great plan to deal with this curve ball thrown at FBA sellers!