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This week I’m answering some of the questions recently sent to me by you, my readers. I learn a lot from the questions I get, too, so keep them coming!

Q. If you find hot items, what is the most efficient way to grab more units?

It depends on the store, obviously. One thing you can do is see if the store is also selling the items online and order a quantity to be shipped to you. This is nice when it works because you quickly turn the inventory around to Amazon and you don’t have to drive all over creation. However, many deals will only be available in the stores or you simply don’t have the time to wait. In that case you have a couple of options: 1) pick up in store or 2) call around and reserve your units.

Theoretically, pick up in store is nice. You pre-pay, pick up your stuff and leave. What could go wrong? Plenty if you are working with Walmart. First of all, you have to go to a special desk – the Walmart.com Services, not the Walmart Services. Do not wait 20 minutes in line at the wrong place or you’ll be half-way to insane. Just sayin’. Next, the Walmart.com Services is usually in a weird place like the back of the store. They might also have the layaway services there. I mean heaven forbid all the customer services be in one place. When you go there, it could be completely deserted and you have to hunt down a worker to help you. Naturally it won’t be their job to help you so they have to call or locate someone for you.

Once you find the worker, it takes a lot longer than you can possibly imagine to find your stuff and give it to you. These folks are not warehouse workers. They often just put things in big bins and sort through them. As I learned, they also put big-ass stickers on the item with your name on it. One of the things I usually love about Walmart is no stickers so this was very annoying. Then, if you are really lucky, the worker will ring you up on the broken register. “Oh, is that register still broken? Let me ring you up over here.” Another thing I learned as I was buying my items online is that the Walmart site won’t let you order all of the units a store has and that they are wrong about which stores have units. This means you still have to shop the store.

I ended up spending over half an hour to pick up my pre-paid items in one store (I had bought in several stores so my frustration was only beginning) and I wanted to kill something. Scouting Rage. It’s like road rage but with carts.

I determined never to do this again. It was much faster and easier to simply go store-to-store and grab units. At each store I ended up grabbing the rest of their inventory so they had to check me out anyway. My 2 cents on in-store pick-up for online orders.

My 2 cents on Scouting Rage is to keep quiet and text a friend. I’m seasoned enough to know that all the comments zipping through my head would only make it worse. Smile and nod my friends, smile and nod.

Tuesday Morning is a better experience but it is imperfect also. You call this number (1-800-901-0881) and then key in your TM item number (it is printed on your receipt) for the hot item. They will tell you which stores still have units. Here’s the fine print: 1) they are not always accurate. I’ve showed up to a store that had no units despite what the computer thought and 2) you have to key in the exact zip code for the area you want to search. They won’t tell you the stores within a certain range of miles, etc. If you live in a major metropolitan area like me, that means every 10 blocks you are in a new zip code. What I learned to do was to print off the list of stores in my area within my driving range. I key in their exact zip codes. Then, when I know the stores that have units, I call them and ask them to put them aside. Save this list for future use. This saves me some driving time. Usually. I’ve showed up at a store and had them tell me they couldn’t find the item after all and I had to go search for it myself. Sometimes it is just easier to drive there and look than all this calling ahead of time – especially if I have several items on my hot list.

If the item was a clearance item to begin with, then it may be lurking in some bin at the back of the store instead of in its regular section, or in a special clearance section inside the regular section. Either way, you have to hunt around before you are really sure it isn’t there. I often will find what I’m looking for when the store clerks couldn’t.

Most stores will reserve something for you if you call, but it is a huge hassle and you will spend a long time on hold while they first ignore your call for a few minutes because they are busy and then go look for the items. You do NOT want to call a BigLots and ask them to put something aside. Drive there. It will actually take less time.

If you are really anxious about picking up this hot item in every store, send your spouse on one route while you take the other and hit as many stores as you can in one day.

Q. Do you pay someone to shop for you?

Not at this time. I might at some point in the future. It would have to be someone that I trust and that I feel confident in their scouting abilities. I really enjoy having someone to help me pack up my inventory every week. I lucked out with her because she is incredibly competent and has taught me a few things, too. I know that some of the folks in the ScannerMonkeyScanPowerand My Silent Team facebook groups do hire shoppers. Try posting your question in one of those groups.

Q. Can I use your VA (virtual assistant)?

Maybe. You need to be willing to make a long-term commitment (X hours a week or month on an ongoing basis) and it would help if you were a good project manager to begin with. There are special challenges to working with someone far away and if you are new at it, I suggest you first work with a professional VA company rather than my Shem. I love bringing her new clients because she’s awesome, but I want it to be the right fit. A professional VA company will teach you how to work with long distance workers. They’ll make it easy for you to resolve problems. Many of them have a US-based person you can call on as well as working directly with the VA.

Check out my blog post on VAs if you want to learn more.

Q. Is a repricer going to have the same problems as the scouting tools in that Amazon will not share all the data?

No. While Amazon deliberately limits the offers we see on our phones to the most competitive offers, if you find an interesting item, you can click through to the Amazon website to see all the offers. The repricing tools that I know of all have full access to the data and can reprice accurately for you if you are within a certain number of offers of the Buy Box. In other words, most repricers will download a certain number of offers and reprice within that range. If you particular product has a lot of offers and you are far away from the Buy Box, you will often get a message that the item can’t be repriced and that you need to look at it yourself to reprice….depending on your rules.

If your rules, for example, dictate that you be in the middle of the lowest five offers, then the repricer can reprice for you no problem.

I have always found rules-based repricers to be clunky and they tend to drive your prices down lower and lower. I currently use Feedvisor for my new items and I use ScanPower for my used and collectibles. I love Feedvisor and wish they repriced used and collectibles, too.

Q. Is it better to buy a lot of items cheaply and make fewer dollars per unit or a few expensive items and make more per unit?

I get this question in a lot of forms. Basically the answer is “both.” When you are first starting out and have a tight budget, then you need to buy a lot of items cheaply that you can resell for more. I still buy a lot of books, for example. I usually buy them for $1 on average and try to make about $5 or more off of each one after fees, costs, etc. My margins can often be 10X or more. I love books for that reason. I also love it when I find a great dollar store item that I can resell for $10 or more. I have one item right now that I bought for $1 and I’m reselling for $35. When I’m buying a lot of units of any product I want to make sure it has a good sales velocity. There’s no point of buying 500 bags of candy – no matter how cheap – if they only sell 1 or 2 a week, for example.

The nice thing about more expensive items is that you buy fewer units, process them quickly and make more money when they sell. Who doesn’t love that? In the beginning, most new sellers shy away from items that cost more than $10 a unit (or whatever their personal nervous trigger is) because they want to spread their risk. If that higher priced item doesn’t sell or make its margin, you feel the pain more. As a seller gets more confident and experienced, they naturally increase their risk level. Nowadays I don’t think twice about buying items up to $30-$40 a unit. I’ve paid up to $100 for the right item but the higher the price, the fewer units I’ll usually buy. I don’t want to tie up my inventory dollars for too long if they don’t sell quickly.

If you can find that product that costs a lot but sells well and makes you money regularly, then buy it! I remember Chris Green telling me a story once about one of his hottest products at the time. He was buying it regular price at Sam’s Club. It cost him about $1,000 per unit. He sold about one a week on Amazon and made $1,000 off of each one (I rounded the numbers up). He made sure he was shipping in 1-2 units a week of this product to Amazon. If you had that opportunity would you buy it? The answer for most of us is “no.” It would be too risky and most of us would want to spread our risk across multiple products.

Tuesday night I spent $1,000 buying multiple units of one product and I plan to more than double my money. That’s the difference a few years of selling makes!

Q. Do you wholesale/private label? Do you recommend it?

I have done some wholesaling in the past with not very impressive results. Generally I was fighting against a lot of lowballers who saw the same opportunity I did. This is not to say that I wouldn’t consider it in the future, but right now I don’t want to get into any deal where I have to buy large quantities in advance. Your results may vary. I know of quite a few FBA sellers who wholesale and love it.

In the cases that I’ve seen wholesaling be the most successful, they had exclusivity.

I have two companies with which I’ve recently negotiated exclusive rights and I’m in the process of getting them set up on Amazon in the Brand Registry program. I’m very excited about this approach because I’m working with the owners directly and we are partners in this sales channel. I don’t have to worry about my fellow sellers finding the same deal and undercutting me. I don’t have a large minimum I have to buy to get started, either.

In exchange for this wonderfulness, I have an obligation to these product lines that is more than what I do for any other products (besides my book and video). I will be promoting and marketing them on Amazon.com. I’ll be creating promotions and cross-promotional opportunities. I will be involved in these companies in other words. I’ve been working on getting them registered on Amazon’s Brand Registry and it is not as simple as sending in a letter. There is an online form, they want to talk to the company itself and, in one case, I also have to get their packaging certified as “frustration free.” This process could easily take me a month before I can even send in one product and I will have to pay for the special packaging myself. I’m in the middle of sourcing eco-friendly packing materials and getting bids. I also had to fix all their images to meet Amazon’s strict guidelines.

For the second company I have a truly heinous fine jewelry flat file to perfect and $500 to pay for certification and the right to sell fine jewelry on Amazon. We will have to do a professional photo shoot because some of their images are not fixable. For 25+ years I’ve launched new products and companies to the marketplace. I have skills and contacts in this area and a clear understanding of the possible costs and the very real risks. I can’t imagine how hard this process would be for someone whose work experience lies in a different area. I would never recommend this approach as something cheap and easy. It isn’t.

There have been a lot of new programs launched lately to the FBA seller marketplace about private labeling and some of the claims are concerning to me. Much of the marketing materials I see make it sound easy or that imply that if you take their class, read their book, whatever, you’ll be successful. They imply that you can get a product up and selling like hotcakes in a few weeks which is not typical. The reason I’m concerned is that marketing is an acquired skill over time. You can’t learn it from a book (unless you are already a seasoned marketer). The success of your private label product relies on your ability to brand and sell. It is more than buying a $5 logo from Fivrr and sticking it on a box. Unless you are selling a commodity and planning to compete solely on price, a brand is a company, an idea and a customer experience. Are you ready to build all that?

This is why I admire the heck out of guys like Skip McGrath who have been so successful with private labeling and exclusive deals. I know how much work it is to get set up and to maintain. I know that sourcing the product is only the beginning. Building a brand involves work to get positive reviews, advertise your product, market it on social networks and interact with the customers to a certain degree. You have to research the market to make sure there is an audience for your product. You can’t just throw a product up on Amazon and expect it to sell. That’s called gambling.

The reason retail arbitrage works so well for us as resellers is because the product brands (like Disney) have spent millions to billions of dollars marketing their brand to the marketplace. They’ve done the heavy lifting for us. People search on Amazon by those brand names. When you represent a private label and/or have an exclusive with a smaller, growing company, then you have to build that brand and community.

If you are doing well with retail and/or online arbitrage and want to try private labeling, wholesaling or an exclusive, be prepared to spend a lot of time on it. Your rewards could be substantial if you do it right, but you’ve now changed your business model. For newcomers to retail and online arbitrage I strongly suggest you get success first selling on Amazon’s platform before you start brand building.

Q. Have you been approved in all the gated categories? Which are the hardest?

I’ve not been approved in all of them. I thought I’d start with the hardest first (apparently). Apparel and fine jewelry not only require a flat file, they require you use a lot of columns in the flat file. There are many ways to make a mistake. What has frustrated me most about the process is that we make all the changes they want and then they find more things to pick on. It is a seemingly endless process of going back and forth. You only have two days to respond, even if it is Thanksgiving weekend.

Fashion jewelry is really easy, though. You only need five pictures and a quick online form. What I learned early on in this process is to go ahead and buy my pictures from iStock or a similar site at a high resolution. Then it is easy to tweak them to Amazon’s requirements. If you pull pictures off of Amazon, they will most likely not be of high enough resolution AND most of them won’t be compliant with Amazon requirements.

I suggest you find and fix the photos first and then create the flat file to match. Assuming you are creating this file just to get approved, you can make up stuff about the picture as if it were real.

The question underlying this question is usually “Should I get approved in the gated categories?” This depends on what you want to sell, obviously. It is tedious enough that I suggest first getting some success selling and then move into categories where you want to sell. Certainly being approved in a wide range of categories gives you more options, but it also takes time. If you are not already familiar with listing products on Amazon.com, you will find the flat files even more awful than I do. I sold for years without being approved in gated categories (except collectible books – I sell a lot of books) and found plenty of inventory.

Some sellers look at gated categories as a way of eliminating some of their competition by moving things into these categories that don’t belong there. This is against Amazon policy. Don’t be evil. That’s not the idea of being in a gated category. I learned from Amazon that ALL children’s costumes belong in Toys, not apparel. When I pointed out that some of their best-selling children’s costumes were in apparel, the policy was explained to me and an email was sent to someone else at Amazon to look into it.

This is probably my last post of the year. I will be back in January. If there is anything you’d like me to cover in the new year, please leave me a comment below. Happy Holidays my friends! May you all reap wonderful rewards from all your hard work and may you spend the holidays with people you love.

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