My long-time readers will recognize parts of this post from last year, but I thought it worth updating and repeating for all the new sellers. The holidays are upon us and if you are like most online sellers, you are working your butt off right now. If this is your first season selling, welcome to the madness. So what should you be doing to maximize your profits in the least amount of time? After all, I’m sure you were planning to enjoy the season sometime in there, right? Here are 12 suggestions to survive the madness, make money and find time to relax with friends and family.
Reprice – This is the most aggressive time of the year selling. Be sure you are checking your prices often to keep them competitive. I’m not talking about slashing your way to the bottom here, but simply making sure that 20 people haven’t suddenly started offering your item for $1 less. Often small adjustments in price can get your sales flowing again. Amazon’s algorithm for determining the Buy Box takes into account things like your seller metrics. If you are in good standing with Amazon, you can sell the same item for more money than a seller with poorer metrics. In addition, you will get more time in the Buy Box. Assuming you are in good standing, then you can price for the same or slightly more than the crowd currently in the Buy Box and sell your stuff. There is no need to start the race to the bottom.
For some items where I have a lot of units, I will check daily. In Amazon’s Seller Central, you can sort your inventory to look particularly at items with multiples or particularly high-priced items – whatever is most meaningful to you. Other sellers reprice their entire inventory every day during the holidays. I’m a part-timer. The important thing is to keep your eye on your stuff. Remember – you don’t need to undercut the competition to make a sale on fast-selling items. If you match them, you will all rotate through the Buy Box.
I’m currently using Feedvisor as my repricer for new items and I love it. I set my floor and ceiling prices when the items hit the warehouse and then the program takes over. Occasionally I will revisit my pricing if something isn’t selling and lower my floor, but most of the time I don’t need to do that. When someone else drops the price five cents, Feedvisor will adjust me as well…down to my floor. Every day I check in to Feedvisor to see what items didn’t have the Buy Box in the previous 24 hours and I decide then if I want to drop my floor or wait out some low-ballers. Since I look at my stats regularly, it only takes 2-3 minutes a day to review/tweak my pricing.
Invest in your winners – Some things will sell like funnel cakes at the Fair and you will be so excited. Be sure to keep some inventory dollars available throughout December to replenish the hot sellers. Pareto’s Economic Principle states that 80% of our profit comes from 20% of our inventory. This means it is important to invest in our successes and cut our losses or less successful sellers. A lot of what you sent up to Amazon early on was an educated guess and/or an experiment. Once a product has proven itself, don’t keep buying experiments, buy the sure thing. It seems obvious but a lot of sellers don’t do this in a strategic way.
There is one seller I know who is very strategic. He knows that panicked sellers will tank the price of certain strong selling toys during Christmas. He waits and buys up a ton of inventory at rock bottom prices from his competitors and then re-sells them on Amazon for his price with little to no competition. This is an item that he knows is a good seller year round. The lowball price is the anomaly and he takes advantage of other sellers’ bad pricing decisions. I don’t recommend this strategy for every hot toy (Zhu-Zhu Pets anyone? groan…) or item, but more for classics or for a product that you’ve been selling for a while at a great price and then everything went crazy bad at Christmas.
Keep shopping – The retailers will continue to slash prices and have sales right through New Year’s so take advantage of them. I sell on Amazon all year round, not just Christmas so I keep scouting even after the holidays pass. Obviously, stay within your budget. I don’t use credit so I’m forced into my budget when I want to buy! buy! buy! (See my note on “systems that compensate for your weaknesses” below)
Avoid the crowds – This is a tough time of year to be in the stores and no one is sympathetic to the fact that you and your four awkward carts are working here. Try to shop during lighter times (late night and early afternoons during the week are the best times). Some stores like Tuesday Morning and Big Lots will let you park your full carts near the checkout and keep an eye on them for you while you keep shopping. Others like Target and Wal-Mart won’t.
Get help – While I run my business pretty much on my own during the year, starting in late October/early November it is all hands on deck at my house. My husband hates to shop and doesn’t price the inventory but he is great at unloading the car, removing price stickers with Un-Du, listing items and putting on Amazon labels and weighing boxes. He patiently packages my plush items in plastic. He’s also been my driver where he picks me up at one store, fills the car, drives me to the next one and then he goes home to unload the car. This saves me a lot of time and keeps the crankiness down (on my part). My son also helps with unloading and stickers when he’s home with varying degrees of enthusiasm (he’s 18). If you are trying to do everything yourself and feeling exhausted and crabby, see if you can get help from a family member or friend. One of my girlfriends hires a babysitter to watch her kids on big days so she can work uninterrupted. This year I hired part-time help to process my inventory and it has made a world of difference! Obviously not everyone’s business can support that, so think how you might leverage what resources you do have. Don’t forget child labor. My niece and nephew are happy to help out for a few dollars an hour. They bag, de-sticker, sort, etc.
Pay Attention – Now that you are an online seller, you will never look at stores the same way again. If you are fairly new to toys, pay close attention to the brands and “families” or “lines” of toys. What is hot right now will likely be hot next year so this year is an investment in your education. When Monster High first came out, I found a bunch of them at BigLots and took a risk. They were on sale and even though I had never heard of them before, they seemed cool. MH took off like a rocket. Since that day I’ve sold a ton of MH dolls, accessories and electronics, BUT Amazon got in the game last year and is selling many items at extremely low prices. It is harder to find those special deals with great margin in MH. If there’s a great MH sale after Christmas? You better believe I’m all over it. Stores like Toys R Us, Target and Walmart also have exclusive versions of certain hot toys like MH. Those usually maintain a higher re-sale margin because Amazon can’t compete.
As my friend Lynn reminds me, shopping at Wal-Mart and Target are educations on what the savviest buyers in the business think is going to be hot. Do you see a special display in the store? They are either dumping (please get rid of this mistake for us!) or enticing (come into my store and buy lots of stuff on impulse because you got this item so cheap).
Note what new things are being highlighted for the holidays beyond toys. This time of year sees the appliance department get bigger, for example.
Watch out for hazmat and restricted items – Basically anything with the potential to explode or catch on fire is forbidden at the warehouse and the hazardous materials review process can take weeks that you don’t have. This time of year the shelves are full of cute gifts for kids and adults with nail polish (and remover), perfume, paints and other questionable liquids. Unless there are already other FBA sellers selling those items, put them down. They are not for you.
Also, there are some brands and items that are restricted. They are not explosive but the manufacturer has put the kybosh on you selling them and Amazon won’t let you send them in. In many cases, you can sell those items as merchant fulfilled and if the deal is awesome enough, you may be willing to go through that trouble. I have three items this year that I’ve sold MF. For me, it is not usually worth the trouble. I want to send everything to Amazon and let them fulfill. If you look on your scanner and there are lots of MF sellers but no FBA and no Amazon, it might be restricted. If you are using ScanPower, you can easily pull up “CamelCamelCamel” from the application and see if Amazon sold it previously. If so, it is probably not restricted.
Pull records from Amazon – on December 31 (put a reminder in your calendar RIGHT NOW!) take a snapshot of your inventory. This will help you with your CPA later when she asks “how much inventory did you have at Amazon at the end of the year?” Go to the Reports tab in Seller Central and select Fulfillment. There is a whole page of possible reports here you can download. It will take you about 10 minutes to download the ones I suggest. Be sure to set a time later to review them, you’ll find it fascinating! I suggest you create and download the following reports. 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 “Fulfillment.” You can print off your statements for your CPA of all your payments for the year if you’ve not been doing it as you went along. 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. Your CPA will want all these expenses in your books.
*If you’ve been tracking your item costs in a program like InventoryLab or ScanPower List, then you can also pull a report in those programs on December 1 or January 1 that will show you the items at the warehouse that day and what you paid for them. Import that report into a spreadsheet and it is a snap to provide your CPA with a detailed report of exactly what your items in the warehouse were worth at the end of the year. Otherwise you will need to take your Amazon spreadsheet and fill in the costs per each item (start a new column) manually from your receipts. This is how I did it for years before ScanPower allowed me to enter costs when I was processing my inventory.
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.
Plan your day, week, month – The best thing I ever learned about planning was “compensate for your weaknesses.” This means create systems that out-fox you so you don’t procrastinate or get distracted from the important activities you need to do. One system I have, for example, is UPS comes to my house at least once a week to pick up boxes. It only costs me $10 a week and now I don’t let processing inventory slide because I’m tired or grumpy. Well, hardly ever. What is even cooler is that it isn’t costing me anything to set up regular pick-ups since I signed up for the UPS Connect program which gives you the first year free. Check it out. You can link it to your existing account.
Having a part-time inventory processor also makes sure I keep the Amazon beast fed with inventory. My virtual assistant in the Philippines pays my sales taxes for me every month, corrects my images for Amazon, maintains my food expiration date spreadsheet and much, much more. She is incredibly efficient and it keeps me on my toes and moving projects forward.
Hate bookkeeping? Find a way to automate it as much as possible and then make an appointment with your CPA to review them from time to time. This will keep you from falling too far behind and force you to look at it closely a few times a year. My next appointment is in January. All those great time efficiency tips you’ve read about really work, but you have to use them. Find what works for you and compensates for your weaknesses whatever they are. I write down my daily priorities every day. It helps me to see how realistic I am about my day and to prioritize. You may enjoy clicking things off a list. Work with your strengths here. There is no “right” way, only what works for you.
Schedule fun – One of the things that can make this – or any – business a drag fast is to work all the time. I learned early in my career to schedule fun into my calendar to make sure I stayed connected with friends and family. Now, I have to confess I’m a recovering workaholic who used to work 70-weeks regularly. Perhaps this isn’t a problem for you like it was for me. But it gives me something to look forward to even if it is just a phone call with a friend. If you miss holiday parties and get-togethers because of your business, you will grow to resent the business fast which can lead to procrastination, poor performance and even unconscious sabotage. I’ve lived all these things with previous businesses. I hope you don’t have to.
For those of you in the Dallas-Fort Worth area; that means you and your sweetheart should come to our December 13 dinner and have some fun with your fellow sellers! Check out the FBA in DFW Facebook Group for details.
Take care of yourself – By this I mean make sure you eat on schedule and sleep at night. With family and work obligations going full tilt right now, it is easy to fall off a cliff health-wise and get sick. Shopping all day? Take the extra 10 minutes to pack your lunch or pick a restaurant in advance where you will eat lunch. It makes a big difference to be prepared.
Turn it off – With all the shopping at this time of year anyway, it is possible to be in business mode, scanner at the ready all the time. While normally I advocate being prepared to take advantage of surprise opportunities, be sure that you also turn it off so you can be present with friends and family and not looking longingly over at the clearance bin. There is more inventory out there than you can possibly buy. You’ve already spent your budget, right? So enjoy yourself. Be with your family.
When I say turn it off, I also mean turn off the TV, the tablet, the phone…at least for some of the time you are with your family. If you have a teenager in the house, you may need to forcibly remove the phone from his hands. Remember that being with our loved ones is the point for this season whether your household is religious or not.
Jesus Christ who is the reason for the season for many Americans reminds us that the most important gifts we will ever get belong to us already – forgiveness, redemption and salvation.
Buddhist monk Thích Nhất Hạnh reminds that our undivided attention is the most important gift we can give our loved ones – our attention can relieve suffering, resolve problems, build love and trust between people. Why is it so hard for us?
The Jewish Festival of Lights reminds us that it is good to eat fried foods and play games with our family (Hanukkah food is so awesome).
In case you’ve not figured it out yet, I learn things the hard way. None of these suggestions are theory. I hope some are useful to you. I will probably only post once more this year. I would love to hear from you about what I should write. Tell me what is on your mind, questions you have, how the big selling season is going for you…Happy selling y’all!