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If this is your first Christmas selling on Amazon, you are probably pretty excited right now. Enjoy the lull during the storm my friends.  The holiday selling season is not over yet!  Naturally sales will be slow today and tomorrow, but you have more sales coming (hooray!) and more work. This is my last post until the week of January 7th so I thought I’d cover a few steps…my version of the 12 Days of Christmas if you like. Sing along if you’re feeling cheerful…On the first day after Christmas, selling on Amazon gave to me…

1.       A refund of the pear tree…

I hope you’ve not spent all that exciting money in your Amazon honeypot because now the returns really begin in earnest. If you’ve not been through it before, the few weeks after Christmas can be a real bummer of refund after refund. Don’t take it personally and don’t worry too much about it. It is expected. You should also still see good sales for the next few weeks as people turn in stuff they don’t want and – hopefully – buy more stuff from you. You want to make sure you have these returned items sent back to you so you can determine if they are still sellable. If they’ve been opened, you may still be able to re-sell them on Amazon (books and other media, appliances and a few other categories) but under a different condition from “new.” Alternatively, you may be able to sell the items on CraigsList or eBay.  Check your unsellable merchandise under “Reports,” “Customer Concessions” (on the far left-hand side of the screen) and “Returns.” It generally costs about 50 cents to have an item returned (some items are higher). If something is listed as defective, or there’s not enough profit margin to make it worth the cost of returning, then have it destroyed rather than returned. That’s cheaper for you (15 cents on most items). I have my account set up to automatically return unsellable items to me once a month so I don’t have to rely on my memory. Usually I’m only talking about 2-3 items a month. At this time of year, I will pay closer attention to keep my return costs down.

 2.       Two bad reviews…

Be sure to keep an eye on your bad seller marks. I got two last week where the customers were ticked because they didn’t get their items on time. I had Amazon remove those quickly (it was their fault). A bad mark or two can have a huge impact on a seller’s satisfaction rating – especially when you are new. From your SellerCentral dashboard, be sure to check your “Customer Feedback” on the far left-hand side regularly. If the customer has a beef with you, be sure to respond quickly, politely and compassionately. That is the best way to get them to remove bad feedback.  See my blog post on this topic for more details. If it is Amazon’s fault, the way to do it is go to “Help” at the top right-hand corner of every page. Click on “Contact Seller Support” on the right-hand-side. Click on “Orders” and then “Customer Feedback Problems.” Fill out the form and send your email. Amazon will respond within hours. Please note there are only four legitimate reasons they will remove feedback – obscene language, personally identifiable information in the review, the entire feedback is a product review or – as in my case – the issue is regarding fulfillment.

 3.       Three polybags…

You may have noticed more and more of your inventory is getting called out as requiring polybags and you are getting dinged for not using polybags. If you are confident the item was polybagged, be sure to let Amazon know and have them check it out for you.  Email is fine for this.  Click on “Contact Seller Support” as above, and choose “Fulfillment by Amazon” and “Other Fulfillment by Amazon Issues.” You also need to go to your Shipping Queue and “Acknowledge” the problem with your inventory. Only in that way will it be released to be sold on Amazon.com. The reasons you need to inform Amazon of their mistake are 1) they’ll charge you a fee to bag the item, 2) they’ll keep the item from being sold and 3) you don’t want to get a reputation as a seller who doesn’t follow the rules. Right now they are not taking away seller privileges for bagging mistakes, but you can bet they will be going after repeat offenders in the future. And, in case you are wondering, YES…they are making a lot of mistakes right now. You are not alone. Some warehouses are worse than others.

 4.       Four buyer emails…

As much as you’d like to “check out” for a while from your business and party with your family and friends, you need to check in to your Amazon email at least once a day. It won’t take long. If you don’t respond to customer inquiries within 24 hours, Amazon gets very frowny. Become a repeat offender and they’ll threaten to expel you from the site. I find that I get more customer inquiries (often return related – I have a form letter that I cut and paste in) around this time of the year. Have your form responses ready.

 5.       Five major sales….

You’ve been shopping for months…and it’s not over yet! Some of the best sales of the year are on the horizon.  After Christmas you’ll find holiday stuff on deep discount, naturally, toys, and thousands of other gift items. Toys sell all year round, not just Christmas.  Don’t forget, Valentine’s Day is right around the corner. If you see some good gifts for sweethearts or that you think will sell well next year during the holidays, buy them! Also, think about items that traditionally go on sale in January – household goods, TVs and TV accessories, pool supplies and much more.

 6.       Six big assessments…

Around New Year’s or early in the New Year is a good time to reflect back on your inventory from last year. I suggest six ways to examine your sales:

  • Return on investment – which items gave you the best ROI? Which ones did you have to discount down to cost in order to sell? Write down your biggest winners and losers of the year and learn from them!
  • Return on time – some inventory takes more time to find and process than others. Which items in your inventory gave you the best return on your time spent? The worst?
  • Speed of sales – some items sold like crazy, others may have sold one a month or less. Which ones were your winners? Your losers? What can you repeat for next year?
  • Kill your darlings – admit it, we all fall in love with certain items in our inventory. That adorable Barbie, that awesome appliance deal…but if you are not getting the return you need in the time you need…kill it. Sell it off and don’t buy any more.
  • Personal preference – we are drawn to things we know and like from toys to tools, books to baby. Make this a strength for you and not a weakness.  Look at your inventory and see what categories were your biggest sellers and why. The “Customer Experience Performance Newsletter” you get every month from Amazon is helpful for this. This is where you should probably spend your time and grow roots in that category. If you plan to branch out to new areas, that’s fine, but you’ll probably do better in areas where you have some interest and expertise – where you can hone you knowledge. I rarely sell tools. I haven’t gotten excited about them yet – which is OK. Be sure you have a strategy in place and look at your inventory in terms of your personal preference.
  • Areas of weakness – now is a good time to evaluate areas where you feel lacking. When I read Jessica Larrew’s book Liquidation Gold earlier this year, I realized that I was lacking in the area of repeatable sales. I had too many onesy-twosies in my inventory. I wanted to find hot items I could sell in volume. Her book really helped me look at 2014 and what I wanted to do differently this year in terms of inventory acquisition.

 7.       Seven days repricing…

The days after Christmas all the way through the first week in January are still brisk on Amazon.com. People have gift cards and returns to spend. Keep your eye on your prices and decide which ones to change and which ones to wait. I suggest spending time every day repricing. Sometimes a few cents or a dollar make all the difference in your sales. I sort my inventory in SellerCentral by “All Inventory View,” “Active” (left-hand side of screen), and then I click on the top of the list for “Your Price” until I get the highest priced to the lowest.  After I do some repricing on my most valuable items, I then sort my inventory by “Active” and “Available.” This gives me a list of my inventory from the most items to the least (keep clicking on “Available” until your list shows the most units to the least). I often use ScanPower’s “Webscout” that comes free with its listing program. I can copy and paste the ASIN for my item into Webscout and see how many units the other sellers have. That helps me with my repricing.

 8.       Eight fee hikes…

Not to Grinch on your holiday cheer, but Amazon will be hiking its FBA fees February 18, 2014. Since this may impact your profit margins on your items, try to sell as many items as possible before February. I’m not saying you should take losses – you shouldn’t if can help it.  However, it may be worth looking at the new fees for some of your tighter margin items and deciding what makes the most sense in terms or waiting other sellers out or cutting your price to sell before the new fees go into place. In looking at the new fees, the biggest changes are for larger items – up to $4.70 more on “special oversize.” Most smaller items are only a few cents more. I will write more about the new fees closer to time, but for the short-term, look at your items that are currently oversized (small oversize, medium oversize, large oversize, special oversize) and decide if you want to reprice to try and sell before Feb 18 or not.  Not sure which items are oversized? In SellerCentral go to “Inventory Amazon Fulfills.” You may get an error message that the data is more than 24 hours old. Don’t worry about that.  You can refresh the page in a minute or so and it will be accurate. Click on “Unit volume (cubic feet)” until you see the highest volume down to the lowest. This is a quick way to look at your biggest items. I currently don’t have any items that are bigger than “medium oversize” so the new fees will have a minor impact on my margins (less than $1 higher than now).

 9.       Nine profits lowered…

If you’ve been successful selling this year then you have a terrible problem – gasp! – profits. The IRS expects corporations to pay taxes on their profits. Many LLPs, C-corps and S-Corp owners try to mitigate their profits by taking advantage of sales at the end of the year (the stores are no dummies, they know all about this) and buying new equipment and supplies for their businesses. Need a new printer? Did you promise yourself a Scanfob after Christmas sales? Now is the time! Make sure that you pay before the end of the day on 12/31. While sole proprietors can write off these expenses, too, this strategy is particularly helpful for corporations because they onlypay taxes on profits. They get to write off things like salaries, bonuses, life insurance (key man policies), retirement programs and more that sole proprietors can’t. This is also why Christmas bonuses are given at the end of the year.  Be good to yourself and reduce your profits by taking your maximum tax deductions before the end of the year.

 10.   Ten debts to repay…

Did you use credit cards, loans or other debt for your business this year? It may make sense from a tax strategy to pay them back before 12/31. Debt can be a significant expense for a business and while you can write off your interest…you are paying interest! I look at interest payments as being like taxes – you might as well throw your money down the toilet. Sometimes it is necessary to incur debt to grow and Uncle Sam is very frowny on people who don’t pay – but it doesn’t mean I like it or feel that my money is well spent. Whether or not to pay off debt before year end is a question for your CPA (you also get to write off CPA fees – money well spent). In my case, I run my business on cash and I don’t carry long-term debt. Most sellers use credit cards. The smart ones pay off the debt quickly so as to avoid getting ensnared in debt.

 11.   Eleven taxmen coming…

Speaking of taxes…Uncle Sam is coming for you sooner than you think. While you may not want to deal with it until January, there are several reports you should be sure to print off for your CPA. One of them MUST be printed off on 12/31 or on 1/1 (early).  It only takes a minute to pull the report and it will answer your CPA’s question “how much inventory did you have up at Amazon at the end of the year?” Go to “Reports” in Seller Central and select “Fulfillment.” There is a whole page of possible reports here you can download. Be sure to choose “specific dates” so you can get the whole years’ worth of inventory activity:

  •  Received Inventory – tells you exactly what you sent to Amazon during the past year
  •  Amazon Fulfilled Inventory – Snapshot of exactly what is in the warehouse that day. Tells your CPA what inventory will roll over into 2014, basically. This can only be run on December 31 (or January 1 if you wish. That’s close enough for the IRS) as it is a real-time report, NOT historical. Amazon does not have a historical report that shows you what inventory you had in the warehouse when, so whether you pull the other reports or not, be sure to pull this one.
  •  Monthly Inventory History – This report can be run for the whole year and will show you what you sold each month.
  •  All Statements – You’ll find this one under Reports, Payments rather than Inventory. You can print off your statements for your CPA of all your payments for the year. There’s a summary view and then you can drill down into the detail. This report shows you Amazon’s fees, your gross, your net, basically.

Now you can go celebrate New Year’s with the warm glow of righteousness that comes when you do something you hate to do, but that you know is good for you.

12.   Twelve months a planning…

The week between Christmas and New Year’s or the first week in January are both a great time to plan ahead for 2014. If you’ve conducted the inventory review in number six above, it will help you answer important questions like where you should focus your attention in 2014, what kind of inventory to buy, the mix of inventory that will serve you best, how much of your income to invest in new inventory, how to grow your business and much, much more. There may be new things you want to learn about selling on Amazon or scouting this year – where can you find the information you need? In your planning, don’t forget the reasons you got into this business in the first place.  What are the heart-centered things that will make this worthwhile for you?  My friend Lynn is planning to remodel her bathroom with her holiday profits, I’m saving up for our fabulous family vacations, my friend Robert wants to buy a beach house in California – what inspires you and makes you want to work this year? What will be your yardstick for business success? A dollar figure is basically meaningless – no matter how big – but what the money can buy you is very meaningful. Dreaming of paying off your debts, taking a special trip or home improvements? Write it down! Let your goal inspire you when you feel tired, frustrated or bored.

Here’s to a prosperous New Year!

Cheers,

Cynthia