I get a lot of emails from my customers with great questions about selling on FBA. Many of them cover similar issues so I thought I’d post answers from the past couple of weeks’ email bag.
Q. I often find new-in-box items at thrift stores but the packaging might be bent, worn or otherwise damaged from all the handling or garage storage. Can I still sell it on Amazon as new?
For Amazon, if something is new, it is new. It is in perfect condition – including the box. For that reason, I’ll often list new stuff with dinged boxes as “used-like new” or “used-very good” depending on the damage and then explain in my description that the product is new-in-box, but the box is damaged. This works well for things where people don’t care too much about the box anyway like printer toner. Be aware that some categories do not allow “used” items like toys (you can sell “collectible” but not new) so if your box is not pristine, put it back down. Also, be aware that some items have expiration dates (like ink cartridges) and you can’t sell expired goods.
Q. How do you determine if a book is actually new or used-like new? Books rarely come in any sort of packaging. If I find a book that is in perfect condition and does not appear to have been read or otherwise used, what are the criteria I should use on whether to list it as new or used-like new?
Books are tricky. Unless they are shrink-wrapped in plastic, most books you will sell that are in excellent shape will be “used-like new” or “used-very good.” Even if you bought it new from a book store, many of those books have been sitting on a shelf for a while and have been handled quite a bit. The spine may not be as tight as new; there may be slight scuffs on the cover. If the book is a remainder, it will often have a small mark on the edges of the pages somewhere. That book can’t be sold as new. So unless you are really sure the book is new, you probably want to sell it as “used-like new” or “used-very good.”
Q. What type of plastic bags should I use for plush or cloth items?
I buy plastic bags from Uline.com in quantities of 500, which costs me about 12.5 cents a bag. You need to think about the biggest size of item you typically will be wrapping and buy a bag big enough for that. You can always use tape to wrap the bag around a smaller item, but it is tough when you don’t have a bag big enough. My bags are the same size as turkey-baking bags (which is what I used before I broke down and bought 500 bags from Uline). That size – 18”X24”, 2 mil thick – handles a wide range of toys, laptop cases, backpacks and the like which suits what I sell. You may be OK with cheap “jumbo” or 2-gallon bags from Big Lots (the best price I found by far for smaller quantities of bags). I even use zip-lock sandwich bags for small items. Just remember to make stickers with the suffocation warning to put on the bigger bags.
Q. I sell used comics and graphic novels and I’ve been getting complaints from my customers that the stickers I use damage the comics or are hard to peel off. What can I do?
Since many of your buyers are collectors and picky, I suggest you buy bags of the appropriate size from Uline.com or some other provider and paste your label on the bag rather than the comic. You will need to make sure the bag is tight enough to the comic that it is snug and that your label still covers the bar code completely – just on the bag rather than the comic. Uline will sell large quantities of strong plastic bags for a very good price. In this way, your collectors don’t have to pick off labels, your comics are protected in the warehouse, and your complaints should drop considerably.
Q. Whenever I am in Target, aside from the “end aisle” clearance items, which are often only a couple of dollars off retail, I don’t find bargains that I can double my money on. Can you tell me how you and Lynn shop at Target?
I get a lot of variations on this question and my answer applies to Wal-Mart as well as Target. Sometimes I am able to find stuff on clearance, but often I’m hitting a one-day sale or unadvertised special. In addition, I am often buying items for full retail that happen to sell for higher on Amazon. These might be “Target (or Wal-Mart or Toys-R-Us) Exclusives” or other items that are not offered for sale by Amazon – only the merchant and FBA sellers. Last Christmas, for example, most of the Monster High stuff was new and Amazon wasn’t selling any of it so we merchants and FBA sellers were able to command a premium. That’s not true this year. I sold lots of “Inkoos” and even entered several into the Amazon catalog myself last year. This year Amazon is selling many of them for a lower price.
So the lesson of this story is to keep scanning and shopping. Merchandise changes constantly at these stores. Target, Wal-Mart and TRU would go out of business if they weren’t selling the hottest merchandise in town, so you know their stuff is popular. You just need to find the items where there is margin. I encourage people to look beyond the toy section, too. I’ve sold from nearly every category (not clothes or jewelry, but most others). Be sure to look around if you are not having luck in one area.
Lastly, there is sometimes confusion from where I talk about “3X” in my book. People think I mean I have to makethree times my purchase price. What I meant was if I can sell an item for three times my purchase price, I look closer. That is my rule of thumb for when to look carefully and analyze and when to move on to the next item. Typically, if I buy something for $5 and sell it for $15, I’ll pocket about $5 after expenses and paying off the purchase price. In other words, I’m usually turning $1 into $2 which is pretty darn nice. Sometimes I get lucky and I’ll be able to price something for 4X and 5X and triple or quadruple my money, but those are extraordinary deals and not my every day find. Generally, I’m finding things that I can double my money on after expenses.
Rules of thumb are guidelines designed to help you focus on what’s important – not rigid laws of sales that can never be broken. If I’m buying something for $40 and think I can sell it for $100, I look at that, too, even though I can’t sell it for “3X.” Depending on the size, weight and fees, I may still be turning $1 into $2 even at a lower overall selling price.
My friend Lynn wrote a guest post on Target here: http://onlinesalesstepbystep.com/on-target/
My Dad wrote a guest post on Toys-R-Us here: http://onlinesalesstepbystep.com/toysrus/
I wrote on Big Lots here: http://onlinesalesstepbystep.com/biglots/
Q. How do you handle the sales tax issue?
Amazon collects sales tax for me and generates state-by-state reports, which makes it easier for me. I record and pay it on a quarterly basis to all the states where Amazon has a warehouse as well as my home state of Texas (which also has a warehouse). Kat Simpson wrote a book where she tells you how to sign up with each state and start reporting. You can check out my blog posting about her book here: http://onlinesalesstepbystep.com/salestaxbook/.
I wouldn’t worry about sales tax until you are actually making money. If you are buying merchandise and paying sales tax for it at point of sale, you have already paid, basically. Once you are generating more than a few hundred $$ a month, and/or you want to start buying items sales tax free, then you need to go through the tedious paperwork process of registering with each of these states. When you have a sales tax number from each state, you give it to Amazon and they start giving you reports. From there it is quite easy to know how much you need to pay. Unfortunately each state has a different process to pay. In Texas, I do everything online and it takes me about 10 minutes, four times a year. Other states can take the same or longer depending on whether or not I need to write a check or can do it online.
Q. Should I use Target credit and other cards to buy inventory?
Many people use their Target cards to get an additional 5% savings. The trick to using Target credit is to pay it off every month because the interest rate is high. Same with TRU or any other store with a credit card.
Q. Sometimes I see more than one barcode on an item. Where am I supposed to put my label on the product?
Some products have UPC and ISBN numbers. It doesn’t really matter where you put the label so long as there is no confusion with any other barcode on the package. Amazon warehouse workers have the fastest, grabbiest scanners ever made and if those scanners grab a wrong barcode, it can mess things up for your order and show up as an unknown product. Put the Amazon label over the UPC or the ISBN and then put a blank label over the other barcode and you’ll be fine.
Also, be sure you are removing all stickers from each product. Big Lots, Tuesday Morning and other stores have their own barcodes on their labels. In those cases, you just peel off their label (which usually has the price as well) and put your label over the UPC barcode.
Q. What size boxes do you buy from Uline?
I go for what is on sale – look for Uline’s special prices on boxes of different sizes. Generally I get book boxes at 18X12X12 and what I call “toy boxes” at 22X22X22 (or close to it – whatever is on sale). Last year I bought a bunch of appliances and ended up buying a specialty size to fit the boxes. I’m lucky where I live that I can drive to a Uline warehouse to pick up my boxes and save on shipping costs. My friend Lynn buys her boxes mostly from Wal-Mart. They are in the “moving” section near the tape and other moving supplies. Their prices per box are very good. There’s a lot of moving stuff printed on the box, but that’s no problem for UPS. The sizes are limited so if you need a specialty size (like me with my appliances) then you’ll need to order from Uline or a local box specialist. You can sometimes get used boxes very cheaply off of Craig’s List, too.