FBA Step By Step Start Your Online Home Based Business with Amazon.com

I was listening on the radio to a TED Talk the other day by Matt Killingsworth who studies happiness.  He built an iPhone app Track Your Happiness that lets people report their feelings in real time.  Among the results from over 15,000 people in 80 countries, he learned that the more our mind wanders the less happy we are. We’re often happiest when we’re absorbed in the moment.  His conclusion was that a wandering mind is an unhappy mind.

Even when we are thinking about pleasant things in our mind wandering, we tend to be less happy than when we are just focused on what we are doing at the moment. If we are focusing our minds on other things – even happy things – we will 1) not be enjoying what we are doing at the moment and 2) be unhappy in the near future. He also learned in his research that we tend to mind wander about 30% of the time on average.  So what does that mean for the intrepid Amazon FBA seller?

This means that to be happy in our work, we need to avoid distractions and be happy with what we are doing right now.  Sounds a bit like Zen, right? Be. Here. Now. But this isn’t just philosophy.  This is advice in urgent need of practice.  Happiness has a direct impact on our success in the business – particularly in the early days when we are still creating our systems and processes for the business. The past few weeks I’ve gotten an increase in unhappy calls and emails from FBA sellers. Here’s a summary of what I heard:

• Amazon is changing the rules
• I’m afraid of losing my selling privileges
• I’m afraid of making a mistake
• I’m not good enough/smart enough/motivated enough to do this business
• Other sellers are doing better than me
• I want to make $X and I’m not
• I can’t make money with Amazon’s new fees
• I don’t know where to find inventory
• I’m afraid

What was interesting to me was how many of these folks mentioned that they had read something on Facebook or heard something on a podcast or visited a blog/group that triggered these feelings. That is the power of mind wandering.  With all the connectivity provided by social media and email, one bad story can blow through our community like a tornado. And then what happens? We see panic selling, poor buying decisions as people feel they just have to buy something and get it up there, “races to the bottom” to sell something, poor business practices and people dropping out because the business makes them feel badly about themselves and their futures. When we focus on our fears, we find a lot to fear. Positive affirmations and fake optimism don’t work either. Our brains are pretty smart, after all. How to get back on track, then?

1.        Find the bright spots
2.        Avoid distractions
3.        Make a plan
4.        Take it one step at a time
5.        Prioritize
6.        Be disciplined
7.        Let go

Find the Bright Spots – It is easy to get distracted by the negative and let it overwhelm the positive.  Chip and Dan Heath, authors of Switch (one of the best books I’ve ever read) talk about bright spots and how focusing on the one or two things that are going right can often provide the answer to what is going wrong. Rather than say “I have 20 things going wrong,” they will have you ask yourself “why are these two things going right and what can I learn from them?” You then build from your own success. Are you unhappy with your business right now?  Stop reading this blog right now and think of at least three things that are going right in your business – no matter how small or seemingly insignificant. Now ask yourself “Why are these things working? How can I learn from these experiences and take them into the rest of my business? How I can I build on my strengths?”

You can download the first chapter of Switch from the link above if you want to know more or from Amazon if you have a Kindle.  This concept of bright spots is related to the concept of our “Magical Magnifying Minds” as presented in the original AA Big Book. Magical magnifying minds simply states that things we focus on become bigger. In the story, a resentful alcoholic who blamed his wife for his problems changed his life and their marriage by focusing his magnifying mind on all the things about her that he liked or at least didn’t dislike. Not only did he notice for himself the things she did for him, but he began to genuinely appreciate her and thank her.  His sincere gratitude in turn led to her opening back up to him and recognizing all his good qualities and why she married him in the first place.  They both became much happier and fell in love again. What started out as a difficult task turned into an easy joy for him.

You don’t need to be an alcoholic to make this technique work for you. My husband and I have been married for 20 years and I have re-focused my mind when I find myself resentful and blaming. The change in our relationship was so dramatic the first time that I felt like a complete ass. It finally sank in, ahem, that I was the problem and not my sweetie. My mind was choosing to focus in on the negatives instead of the positives and I was making myself unhappy. When I focused on his good qualities, he changed! Hee hee. In reality we both changed for the better.

That is true for many things in life. It is often us that’s the problem not the other person or thing in the case of Amazon.  They will change the rules.  How we perceive these changes is the difference between happiness and unhappiness in our businesses. When a new rule or fee change upsets you, make a list of what you do like about your Amazon business. Make those attributes bigger with focus. Look for the bright spots so you can build a solution to your latest problem. This will affect not only your happiness, but also your success in the business.  This is why happiness in our work matters.

Avoid Distractions – Our wandering minds love Facebook, Pinterest, groups, videos, podcasts…you get the idea. It is fun to make friends and learn things. The dark side, however, is that tornado of bad feeling that can blow through the community when someone complains a lot or tells a scary story. The other issue is there is a lot of conflicting advice about Amazon’s FBA program.  One person will tell you to do things one way another person will have another suggestion.  You can drive yourself crazy trying to follow everyone’s advice. There is always this little gnawing of doubt that says “maybe I should be listening to so-and-so.” If you find yourself growing anxious from what you read or hear on the blogs and groups, I suggest you cut back on your social media time. Put your blinders on and focus on what needs to be done in your business.  It doesn’t matter what someone else is doing or how they are measuring success. What matters are your business and the work in front of you.

Make a Plan – One of the best ways to avoid distractions and keep your head down is to have a plan.  Confused by all the gurus out there? Pick one and stick to them for a while.  Tell yourself, “I’m going to follow this person for one month and not look at the rest.”  After a month, evaluate your experience.  Was their advice helpful to your business?  I suggest one or two at a time because the point is that you don’t want to deal with conflicting and confusing advice here.  You want to make your business better, more efficient, more profitable, etc.  You have questions and want to learn. Some of your questions are Amazon oriented some are business oriented like where to find good inventory, etc. Keep your eye on your prize and ignore the other stuff.  When I started I went to Amazon with a lot of my questions.  I read their help section, I called them all the time about their side of the business. They were a reliable source of information.

Next, prepare a weekly plan for yourself.  In my case, I started out with approximately 10 hours a week to work my business.  I had to decide what to do in that time that would make me money so I focused in the beginning with getting inventory up there. I planned my scouting trips.  Consistent shipments – even if they were small – made up the bulk of my plan. Because I had limited dollars, I did a lot of books, thrift stores, estate sales, etc. and saved up money to buy more toys and retail arbitrage for Q4. As my business grew, I was able to buy more new stuff year round but books and used items like collectible toys and games still make up a large part of my inventory.  Because I take a lot of my money out of the business each month, I often have to fall back on books and used items. I don’t have credit cards and run my business on cash.  Other sellers are able to keep more of their dollars in their businesses and/or they have credit and thus buy more new items and build up their inventories differently than me. So my plan is different from many other sellers including my Dad and my friends who are in the business.

Take it One Step at a Time – Admittedly step-by-step is my thing, but that’s because it works. It is easy to get overwhelmed. There is so much to learn and know about Amazon. It took me months to feel comfortable in SellerCentral and Amazon is constantly adding new things.  Rather than trying to learn it all at once and being frustrated, I suggest you learn things as you need them and for the other things, put them in your plan. Every time you find a new issue that concerns you – from negative feedback to sales tax, put a time to review the issue in your plan and then let it go until you reach that time. Maybe you allow one hour a week to explore/learn about new issues. I suggest no more than two new issues per month if that many.  For example, I tell a lot of people not to worry about sales tax right away.  If you are buying inventory in your state, you are paying sales tax at the point of sale.  Make some money first. Learn the business. Then tackle sales tax in your state.  After you’ve done the paperwork on that and are comfortable filing with your state (usually a few months to learn everything), then look at other states. Don’t feel like you have to do it all at once.  Remember, you are small in the beginning and only one person.  Treat yourself and your time with respect and compassion.  It will all get done over time.

Prioritize – Sometimes my to-do list can grow into 20 or 30 items which is overwhelming and discouraging. A helpful approach that I learned years ago from Leo Babauta of Zen Habits was to focus in on one thing at a time. He suggested that I have three habits/tasks that I’m working on at any given time. There can be lots of steps to these tasks, BUT I’m only focusing on three at a time. Some goals will take months to accomplish, some only a few hours.  I set aside time every morning where I work on these goals.  That way, no matter what comes up later in the day to distract me, I will have accomplished tasks that are truly meaningful to me and that move me forward to a larger goal. This is how I’ve written and revised my book, created a video and found time to write this blog.

In terms of your Amazon business, I suggest you prioritize your issues this way:

1. Affects my ability to sell on Amazon (compliance with Amazon’s rules)
2. Impacts my sales on Amazon (increases productivity and/or profitability)
3. Administration (measurement, reporting, filing, taxes, etc.)
4. Business (learn more about how to be a better business owner, fill in the gaps in your education. Don’t understand P&L? Set a time to learn it)

Whatever goals you have for yourself on your business to-do list, see which category they fall under and then designate an order in which you will tackle them.  Don’t add a new item to your list of three things until you’ve completed a current goal. You want to only have three items at a time on your “must do” list and work on them every single work day until they are done. You don’t have to work all day on these three items.  There will be other items you must accomplish in your life and business, but your happiness and your productivity will increase significantly if you are making progress every day on your most important goals.

One tool that some people find helpful is Evernote.  It allows you to clip anything you find from your computer, smartphone, tablet and the web and to organize and save it for later use.  See a story about an issue that interests you?  Clip it and promise to look at it later during your “issues” time. You can easily pull together all your research on a topic together in one place even if you are researching on different devices and platforms. In this way you don’t feel like you have to deal with it right now when you might perhaps be better served by processing your inventory or repricing. Does it seem overwhelming right now to even think about new software like Evernote?  Then don’t. Put it on your list for a later time. Focus instead on your three priorities for today.

Be Disciplined – This is a commitment to yourself that you will follow your plan and you will deal with concerning issues over time.  You will focus on the bright spots and you will avoid distractions.  Sometimes it seems that the hardest commitments are the ones we make to ourselves. Your happiness matters and all of these techniques will help you focus and be happier in the moment. This happiness will make you more successful which will make you happier in the long run as well. It is a virtuous cycle. If you get off track, promise yourself you’ll get back up.  Successful business owners are not gurus of positive thinking who never have a bad day, they are real people who know how to bounce back and keep going. They have a commitment to themselves to not stay in a bad place.

Let Go – If you have your plan in place, let everything else go.  Focus on what is important today and right now – not in the future. Your wandering mind will attach itself to all kinds of worries if you let it.  Since it seems our minds are programmed to wander, the best thing you can do is to be aware of when you are wandering and gently bring your mind back to the present moment.  No judgment, no anxiety.  Be kind to yourself.  “Oh! I see that I’m worrying over XYZ issue. I want to focus on getting this order out instead. I can come back to XYZ later.” One of the interesting side effects of the Track Your Happiness app was that people became happier while using it. Why? Because the program would interrupt their thought patterns and it would make them aware of what they were doing and how they were feeling in the present moment. They were suddenly more aware of the small everyday things that were good in their lives.  Their minds were focused on happiness and they found it. They could re-focus in a moment without trying to force themselves into happiness or fake a feeling.

Your best resource in this business is yourself:  Your mind, your resilience, your creativity, your patience, your persistence, your willingness to learn, your confidence in yourself, your ability to focus…and your happiness.  These characteristics all feed into each other.  You get to decide whether or not they create a negative cycle or a positive one. That’s the power of your magical magnifying mind.

It is time for Amazon’s annual FBA fee hike! Hooray. Not.  I’ve updated this annual blog post and spreadsheet with the new information that takes effect on February 18, 2014.

Get a doughnut, a cocktail, or whatever you need to get through this. It is number-crunchy stuff but extremely important – the difference between success and failure as a seller (no pressure).

While scouting tools will figure out Amazon’s fees for you on the fly, you need to know in your head your other out-of-pocket and overhead costs so you can make wise inventory choices. You need to know when you are in the store if something might be oversized or not and what that may mean to your profit margin. Sometimes a few cents can make a difference.

Amazon’s new fees go into effect in about a week and the spreadsheet further down shows some previous sales of mine with the new fees incorporated. If you have my book, the numbers in there are outdated, but you can use it as a foundation to create your own spreadsheet. Your expenses will likely be different from mine.

For those of you using ScanPower Mobile & List, your on-screen data will automatically reflect the new fees starting on February 18^th.  I’m assuming this is also true for the other tool providers. This analysis is to help you create your own spreadsheet to help determine profit based on your business expenses. It will also help you create your own “Rules of Acquisition” when scouting (yes that was a Ferengi reference).

Here is a link to my new FBA Library that includes a bigger PDF of the spreadsheet below in case the numbers are hard to read. You will need to register to access the spreadsheet (plus other Step-by-Steps and popular blog posts). It is free.

What’s New?

Monthly storage fees will increase as well as Pick & Pack and Weight Handling Fees across the board. If you use Amazon’s Inventory Placement Service, those fees are going up. Those who sell apparel will have some new fees in May. Other fees like multi-channel fulfillment, long-term storage and zero-fee fulfillment are not affected.

Overall, most of the fees are only a few cents higher. It looks like they used a repricer to get these weird numbers. Just like last year, the fees increase steeply as the size and weight of your inventory item increases. Amazon is incentivizing its sellers to ship smaller items, basically.

If you sell apparel, a new fee will go into effect in May. Amazon has not posted the fees yet. If you sell apparel, be sure to go to “Help” in Seller Central and read more about this particular fee.

Size Matters

Not sure if your item is standard or oversized? Here is the current tier of sizes. Each has its own fees (see below for chart):

• Small Standard-Size (up to 15” X 12” X ¾” and no more than 14 oz.)
• Large Standard-Size (up to 18” X 14” X 8”, up to 20lbs)
• Small Oversize (up to 60” X 30”, up to 70 lbs)
• Medium Oversize (up to 108”X 22” [130” combined sides], up to 150 lbs)
• Large Oversize (108” X 57” [165” combined sides] to 150 lbs)
• Special Oversize (over 108”, over 150lbs, i.e. big screen TVs)

Please note that the weight handling fee is based on the outbound weight. That means your product, plus the box and packing materials.  The “combined sides” is the total of the length plus width of your item or the two biggest sides.

Fee Changes – Pick & Pack and Order Handling

I’ll pull this all together in the spreadsheet further down. Here are the new fees. These are IN ADDITION to the $39.95 a month you pay to Amazon to be a Pro Seller. “Media” includes books, CDs, DVDs, video games and VHS.  “Non-media” is everything else, basically.

Pick and Pack	$1.02 for all Small Standard-Size and Large Standard-Size Media and Non-Media.$4.03 for Small Oversize.$5.07 for Medium Oversize.   $8.12 for Large Oversize.   $10.25 for Special Oversize (like TVs).
Order Handling	$1.00 for Small and Large Standard-Size Non-Media only
Weight Handling Small Standard-Size Large Standard-Size           Small Oversize     Medium Oversize     Large Oversize     Special Oversize	$0.46 per pound for Small Standard-Size$0.55 for Media and Non-Media up to 1 lb. $0.82 for Media up to 2 lbs $1.34 for Non-Media up to 2 lbs $0.82 + $0.41/lb. Media over 2 lbs $1.34 +$0.39/lb. Non-Media over 2 lbs   $1.34 up to 2 lbs $1.34 + $0.39/lb. above 2 lbs   $1.91 up to 2 lbs $1.91 + $0.39 above 2 lbs   $61.62 up to 90lbs $61.62 + $0.80/lb. above 90 lbs   $124.08 up to 90lbs $124.08 + $0.92/lb. above 90 lbs
Outbound Shipping Weight Calculation
Dimensional Weight*	Following industry practices, for all Units with a volume greater than 5,184 cu. in. (based on length x width x height), we will use the Dimensional Weight if the Dimensional Weight is greater than the Unit Weight. The Dimensional Weight is the volume of the Unit divided by 166.
Packaging Weight	The Packaging Weight (box and packing materials) will be 2 oz. for Standard-Size Media, 4 oz. for Standard-Size Non-Media and 1 lb. for Oversize products.
Rounding	The weight value of the Unit (either Dimensional Weight or Unit Weight) plus the Packaging Weight will be rounded up to the nearest whole pound.

*You can find dimensional measurements for every item you have in inventory inside your SellerCentral under “Inventory Amazon Fulfills.” The measurements are on the far right of the screen. Something has to be pretty darn big to have a volume greater than 5,184 cu. Inches.

Where you will see the biggest increases are for large items like Ping-Pong tables and large-screen TVs. If you’d like to see more examples on Amazon.com, log in to Seller Central, go to “Help” and then search for “Fulfillment by Amazon Fee Changes.” Amazon gives examples of the fee changes for different sized items at the bottom of that page.

Fee Changes – Inventory Placement

If you wanted to reduce the number of inbound shipments (and warehouses) where you sent inventory, you used to be able to pay Amazon a flat per-unit fee. If your item is under 1 lb. or less (Standard-Size) or under 5 lbs (oversize), your fee remains the same. Once again, the bigger your item, the more you pay. Please note for this service that the fee applies to everything in your box even though you may only be adding one or two additional items.

Standard-Size	$.30 for 1 lb. or less$.40 for 1-2 lbs$.40 + $.10/lb. above 2 lbs
Oversize	$1.30 for under 5 lbs$1.30 + $.20/lb. over 5 lbs

Fee Changes – Monthly Storage Fees

Your monthly storage fees are based on the total cubic feet of your inventory and the month of the year.  Fees have only gone up a few cents per cubic feet:

January-September     $.48 per cubic foot

October-December     $.64 per cubic foot

A recent storage fee for me was just over $90 – about 200 cubic feet at $.45 cents.  Under the new fees it would be $96 a month.

This is Amazon’s way of encouraging fast sales rather than long-tail sales.

Making Your “Rules of Acquisition” Based on These Fees

For the accountants and other financial folk I will state for the record that this chart does not represent all of my expenses accurately.  I own another business that covers a lot of my overhead like my space, office equipment, computers, cell phones, printers, office supplies, etc. This is why it is important to create your own chart.  You will likely have other expenses that need to be included in order to create your Rules.

The actual sales price is the price at which I SOLD my book. Amazon’s fees include its commission, the order handling fee of $1, the new pick & pack and weight-based fees. Plus there is a variable closing fee for media of $1.35.

In the next section, I’ve included my other costs. Besides the out-of-pocket cost, I figured out what my average listing fee is per item based on the $39.99 cost from Amazon, Scan Power and other related programs, and then the actual number of items I sell per month. This fluctuates, but 20 cents is a good average for me after comparing several months’ worth.

I base my shipping estimate to the warehouse on a typical cost of 50 cents per pound that I get when I use Amazon’s UPS account. Again, this varies somewhat depending on which warehouse and how many total pounds of items I have in my shipment. More weight=less cost per pound. I send a lot of books which are generally closer to 25 cents a pound.

For our purposes, I assumed that it would take around 8 weeks for these items to sell and that I would pay one month’s storage fee. Of course, that varies too, but I do try to turn my inventory quickly. Lastly, the “Miscellaneous Expenses” cover things like tape and boxes, labels for my Dymo, costs for things like ScanPower List & Mobile, etc. I pulled together a year’s worth of expenses and then broke it out by the number of items I sold in a year to get this figure. Your number could be MUCH different than mine. Be sure to do this calculation thoroughly and don’t leave out any expenses.

In my case, for example, overhead like my cell phone, utilities, tax preparation costs, etc., are paid for out of my main business.  My “day job” as it were. In your case, these may be new costs for you and you need to figure it into your overall profit and loss.

If you are just starting out, take the cost of the supplies you used in your first month and divide by the number of items you sent in to Amazon. So it might be one quarter of a roll of tape, 8 boxes, 300 labels, that kind of thing.

In the case of my CD, I decided to lower the cost and break even rather than pay the 50 cents to have it shipped back to me or disposed of by Amazon. It was sitting out there in storage and the value had changed significantly since I bought it.

With the coffeemaker, I sold it for less than my original list price, too. Luckily I had enough margin that I could lower my price and still more than double my money. Ideally, I like to double my money after fees and expenses – like the diaper disposal sack – or better. You can see from my chart why I find books and media so appealing.

Notice on the very bottom that I included my 2013 totals for the same products.  This is to show you the difference the new fees make.

Aside from the CD which was just a mistake, these new fees wouldn’t be enough to discourage me from buying these items again. This is because I had really good margins built in.

If I bought the Cuisinart based solely on the number I saw on ScanPower ($71.13), I might be upset later if I hadn’t accounted for the extra packing and shipping weight on my end in my mental calculations.  This is a particular concern with appliances, food and beauty where the items can be really heavy.

My Rules of Acquisition

So now that I have a handle on my costs, I’ve set some Rules of Acquisition for myself. I talk more in my book about my rules of thumb. With the new fees, I’m not interested in paperback books unless I can sell them for at least $7. When I get to a book sale, I look at the price sheet and I subtract that cost from the “net” prices that ScanPower gives me.

Would I sell a book for $5.99? Possibly. My rule is a starting point. I would also look at other factors like ranking, whether or not there are a lot of FBA sellers, if Amazon is selling the book, and so on.

As you can see, my Rules of Acquisition go hand-in-hand with my Rules of Pricing. I have to be able to price high enough to cover a little bit of loss or discount down the road.

You will create rules of your own as you go along. My friend Lynn, for example, refuses to buy anything oversize (i.e. over 18 inches), not only because of the extra fees, but because it is a hassle for her. She knows that her shipping and supplies go up with oversized items as well as weight fees and the oversize fees. I will buy big. I have a supply of boxes in bigger sizes for my toys, bedding, appliances, collectible games & puzzles, etc.

I’ve recently embraced food and beauty. I avoid baby items that are most likely to be recalled like strollers, cribs, etc. That’s just me. Some folks I know are only selling toys or only selling books and media. There is no right or wrong to this – just personal preference and comfort level. The most important thing to do in this business is to act and to start scanning everything in your chosen categories.

Send in inventory and make some money!  Amazon will continue to raise its prices every year which means you will continue to do what retailers do around the world which is…pass along the costs to the consumer.

I know I promised you another exciting “Dark Days of January” post about fees and reports, but I just couldn’t think that hard this week.  My brain is elsewhere.  Luckily, I found this great video from Amazon.com on how they receive our packages at the warehouse. It covers all the things that can go wrong with your inventory and how you can minimize the chances of your inventory getting pulled to the side for problem solving. This apparently is one of the ways inventory can get lost or damaged.

It is mind-boggling to see the warehouse in action. I couldn’t help but notice how beat up some of those boxes were that were being checked in at the warehouse. This is why I primarily use new boxes from Uline.com rather than used boxes from book sales, stores, etc. I have had very few boxes or items arrive damaged at the warehouse.

Amazon Warehouse Video

In addition, a year or so ago I had a guest post from an Amazon warehouse worker who offered great advice on how to pack your inventory correctly for the warehouse. If you have inventory questions that aren’t addressed by the blog or the video, please leave me a comment below!

If you have old items at the warehouse, you got an email from Amazon this week with an estimate of how much you are going to owe (gasp! My heart!).

Every six months Amazon clears the dead weight out of its warehouses by assessing its FBA sellers long-term storage fees. They politely call it “aged inventory.”  Anything that has been in the warehouse for a year at the cut-off date could cost you a lot more than your typical monthly storage fee. Oh, and yes, this is in addition to normal fees.  The long-term fees are meant to be expensive enough to prompt us to take action.  So, if you’ve been selling for more than a year…consider yourself goosed.

The best way to avoid these fees, of course, is to sell your old stuff.  The assessment date is February 15 so you have a few weeks to sell.

In today’s post I’ll cover how to find out if you owe long-term storage fees and how to have items returned or destroyed.

First, look at your potential long-term storage fees.  You can find the report in SellerCentral under “Reports” and “Fulfillment.”  You want “Recommended Removal” at the bottom of the page on the left-hand side.  You do NOT want Long-term storage fee charges” under “Payments.”  This is a historical report of the last time you were assessed, NOT your upcoming potential charges.  Ok, click on “Recommended Removal.”

You can look at your report on screen or you can click on the tab and download a file you can open in Excel or another spreadsheet program. You also have the option to pull up data by individual SKU or ASIN. On-screen you can’t sort the data so I’ll download as well as look onscreen. The report shows you your original MSKU and details about the product. The reason I say “original MSKU” is that I’ve been selling some of these items for years.  The scrapbooking books at the warehouse are not three years old, for example. I keep sending in more as I find them.  You also see that Amazon recommends that I remove 1 Paint Idea book even though I have two up there.  This is because we are allowed to have one unit at the warehouse without extra charges. The point of the fees is to avoid warehousing huge quantities of items for long periods of time.  So, 1 item is OK. Two or more will cost you.

The exception to this rule is if the one item up there has been up there for a year without selling a unit. In other words, if I have a slow selling book up there, it can gather dust for nearly two years before Amazon will charge me long-term storage fees. After that, they’ll charge me.  If the item is very valuable and the monthly storage charges are low, then it is worth sending it in to Amazon.

You will also notice that I have an unsellable item where it says “No Listing.” I have to look into this immediately. I can’t sell what isn’t being listed. If I can get it to be listed again, I won’t be charged since it is only one unit. Here’s what I do with the report:

1. Download and sort by number of recommended removal quantity from highest to lowest
2. Reprice all items where it makes sense.  Try to sell by 2/15
3. Determine which items I want to keep at the warehouse (and pay the fees)
4. On 2/14 arrange to remove or dispose of all other items left on this report – kill my darlings
5. Learn from my mistakes

Books make up most of my ancient inventory and they are generally pretty small.  The fee is based on total cubic feet of excess inventory.  They will charge you $22.50 per cubic foot. Now many items like books, dog toys, etc., are much smaller than a cubic foot. This is why they charge you by the total cubic feet of excess inventory rather than a per-unit charge. Last August, I paid just under $65 which means my total excess inventory was just under 3 cubic feet – not bad.

On 2/14, I download the report again. Hopefully it is smaller because I’ve sold off some inventory.  At this point I need to decide what to do with each item – stay, destroy or return to me. My decision is affected by:

1. How much the item is selling for on Amazon
2. Whether or not I think I can sell the remaining units in the next 6 months…and for how much
3. The cost to destroy it vs. the current price on Amazon
4. The cost to ship it back to me and then back to Amazon at a later date vs. the long-term storage fees
5. Whether or not I think I can sell it through another channel like eBay

My first question is “how much will this cost me to keep?”  There’s an easy way to figure that out. Go to “Manage FBA Inventory” under the “Inventory” tab.

I’ve pulled up one of my items from the recommended removal report here.  As you can see, the unit volume is .072. If I multiply .072 times $22.75, I get $1.62 per item or $179.82 if I keep all 111 units…which I won’t. These darn dog toys were a huge mistake. I’m going to have to sell them below cost. I bought a lot of them wholesale and apparently so did a lot of other people.  I had them sent directly to Amazon rather than to me. It was convenient, but now I have a lot of them up there costing me money. If I had bought them retail, I would have sent in maybe 30 to see how they sold and waited to replenish.  These are actually popular toys – they are just selling at ridiculous prices.

Ok, enough hand-wringing. Good-bye my darlings!  From this screen I can create a removal order if I want to which is handy for one or two items. However, since I have a lot of items to look at, it is easier for me if I go back to the original “Recommended Removal” screen.  From there I can remove/dispose a large number of items efficiently.

From the main screen of the “Recommended Removal Report” (see previous picture), click on the “Begin Removal Process” button. You will need to go through your inventory twice – once to dispose, once to return items.  On the first screen, choose whether you want your items returned to you or disposed of.

I’ve decided to start with items to be returned to me.  I will go through the report now and click “Delete” for all the items I do NOT want sent to me. In other words, only the ones I want sent to me will be unmarked.  As I go down the list, I can decide how many I want sent to me.  The report shows me how many they recommend I have returned.  In gray underneath this number is the actual number that is in the warehouse. In this way, I can have fewer or more units sent back to me. I will repeat the process for “disposal.”  This time when I go through the report, I will “delete” items I do NOT want destroyed.

Since this is all about money, I will often have to decide if I want to have something returned or simply destroyed (and good riddance).  For standard-sized items Amazon will charge me 50 cents per unit to return an item.  If the item is oversized (one side is longer than 18 inches, basically), the cost is 60 cents per unit. If I choose to destroy the item, it will cost me 15 cents for a standard-sized item and 30 cents for oversized.

For small items, the return fees may be about the same as the long-term storage fees. In that case, I’d most likely leave the item up there. Looking at the dog toy mistake again, the storage fee is $1.65 per item.  To have that item returned to me and then mailed back at some future date would be $1 in costs to me.  I would save 65 cents per item which is $65 for 100 units – real money.

For books that are now being sold by lots of sellers for less than $4 on Amazon, I will just have them destroyed. I don’t have to think about it. Items that I can sell for more than $10, I’ll usually have sent back to me.  Because lots of sellers have rules like this for themselves, Amazon created a cool new service called “Automated Long-Term Storage Removal” where you can arrange for Amazon to automatically either return or destroy inventory that is subject to the fees. You can set a price limit per product to determine whether your inventory is destroyed or sent back.  They’ll send you an email ahead of time telling you how they plan to take care of your inventory. At that point you can make adjustments if you want to. You have to go and create your settings before each assessment date – it won’t be a “set it and forget it” kind of thing. Still, it could save you time.

To set this up, you need to go to “Settings” inside SellerCentral. It is on the far upper right-hand side of the page.  Under “Settings,” choose “Fulfillment by Amazon.”  You will find, among other things, a way to automate the removal of your unfulfillable inventory as well.  Scroll down to the bottom.  You will see “Automated Long-Term Storage Removals Settings.”  Click “Edit.”

The default for this report is “Disabled.”  As you can see, I’ve selected the option to set price limits.  All I need to do now is fill in my email address, determine my limits, put in my address and hit “Update.”  It is pretty straight forward.

Unless you have a lot of old inventory, it will probably take longer to read this blog post than to actually take care of your long-term storage fees. Amazon makes it pretty easy once you find the right report. If you reprice now, you may be able to sell most of your aged inventory before the deadline.

Taxes, reporting, filing and planning…they don’t call these the dark days of January for nothing. Isn’t this fun? Next week we’ll cover Amazon’s annual FBA fee hike. I know you are as excited as I am.

Ok, just kidding on that one. Hopefully the returns haven’t been too bad for you.  Now that we’re into January, it is time to think about 2014 plans, taxes and more taxes.  In other words…the party’s over and it is time to get a broom and trashcan and start cleaning up. Regardless of when I file my federal taxes, I always pull all my information together early in the year so I know if I need to save up to pay taxes.  Just like your personal taxes, you can extend filing your taxes if it makes sense to do so.

As I prepare all my reports and finalize my 2013 bookkeeping for my CPA, I thought I would share a little sunshiny moment that I had recently.

Long-time readers of mine know that I use ScanPower for my listing and scanning.  One of the features they offer is the ability to capture my cost while I’m pricing.  All this year I’ve done that. As I was listing I had my receipts in front of me and I recorded the amount I paid. This has helped me in repricing later. In 2013 I asked the guys there to allow me access to the data in other ways (I’m sure I wasn’t the only one!).  In particular, my CPA asks me every year to provide the value of the inventory I have up at Amazon.com.  What I was hoping ScanPower would provide was a report I could download on 12/31 with my actual costs added in. Then all I would need to do is go back to some of the older inventory (pre-2013) and add their costs, add it up and be done.  Considering that I have several thousand books in my inventory, this is no small task.

Well, it is a much smaller task now!  I’m happy to say that the new Unity offers access to all my data including what I paid.  It is not obvious how to use it (yet) so I created a 14-page Step-by-Step for my readers who use ScanPower on how to find and use that data.  I am currently using Scribd to store my Step-by-Steps and it may require you to register in order to download it. It is free. Please note that while all the images do not show up on Scribd (I can’t figure out why), if you download the PDF file to your computer, it is just fine. I’m assuming this is a Scribd issue.

If you were fortunate enough to sell more than $20,000 on Amazon.com in 2013 and/0r have more than 200 transactions on Amazon.com, be aware that Amazon will be reporting your gross sales to Uncle Sam. This 1099-K form will be available to you on January 31st and Amazon will send you an email. If you don’t see it, you can check your own SellerCentral. Go to “Reports” and “Tax Document Library” to see your 1099-K form when it is available. You will file this form with your federal taxes for your business (or you personally if you are a sole proprietor). You can also download your sales tax reports here. Please be aware that even if your sales are lower and Amazon is not reporting you to Uncle Sam, you are still obligated to report your sales.  No free rides from the IRS.

Sales for most people drop in January, it is normal to feel bummed about this – but it doesn’t mean we stop selling.  If you are following Steve’s Retail Flipping strategy, then you should be busily buying for maximum returns later in the year. I’m currently selling cookbooks, exercise books, exercise VHS (yep, VHS) and other self-help books. My textbook sales are up. Valentine’s Day is right around the corner. Next will be Easter, graduations, Mother’s Day, Father’s Day, new babies, birthdays, weddings, backyard BBQs….there is a reason for people to buy stuff all year round and we need to lay our plans now to take advantage of these occasions.

Early in the year is also a good time to reflect on the overall profit and loss of my business.  How did I do compared to previous years? What were my successes? My failures? Where do I want to focus my attention this year? How can I efficiently increase my sales? I’m still time pressed and I’m still taking out a fair amount of my profits for my family so my growth is slower than I would like.  This year I’m planning to put a greater percentage of my checks into inventory in the hopes that a year from now I’ll have doubled my monthly income (on average) in about the same amount of time.  If my plans are successful, I’ll share in a future blog post. If they fail…I’ll share that, too.

In these quiet, cold days of January, let the warmth of your dreams keep you inspired and may 2014 be the best year ever!

Cheers!

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 7^th 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. Earlier this year I reviewed Steve Lindhorst’s book Retail Flipping where he talked about how to shop all year for maximum flipping advantage. He has a calendar that describes what items you should buy when. I look at that calendar every month as I plan ahead.

 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 only pay 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

Amazon’s Hazardous Materials (“HazMat”) policy is very confusing.  Items that people have sold before using FBA are suddenly forbidden. Items that are clearly not HazMat are put in HazMat for review.  It can be very annoying and expensive for a seller – particularly if an item you sent in is now considered HazMat.  A new seller I know had that happen to her recently. She had sent in some items that were suddenly – after being listed for some time – considered HazMat and Amazon destroyed them. That’s right. She couldn’t even have them returned to her, they were just trashed.  And these weren’t cheapie $8 Spiderman toys (like in my case last year), either. I felt so bad for her and it led to this blog post.

There are several things going on at Amazon.com in regards to HazMat and they relate specifically to Amazon.com’s insurance company that protects them from warehouse loss of all kinds including losing our stuff in the warehouse, damaging our stuff and shipping our expensive items, and then catastrophic stuff like fire, etc.:

1. New items – As new items are added to the Amazon catalog, they are automatically put in a queue for HazMat review. This process normally takes a week and then the item usually clears. After a week you can request your item be expedited if it hasn’t cleared yet.
2. Old items – This is the most frustrating.  Amazon also has to go through items that are already on the catalog and make sure they are in compliance. There are tens of millions of listings on Amazon and it is taking time. This is why something you’ve been selling successfully may suddenly be HazMat. In this case, as with my friend, you are s-c-r-e-w-e-d. It sucks.
3. Changes in products/regulations – I’ve had this happen several times where a toy was discovered to have a hazardous paint on it or not in compliance with some rule or regulation. It may be recalled by the manufacturer. In this situation, Amazon will give you a choice of having the item returned or disposed of. In the case of my collectible game, it was the die and I had replaced the missing die anyway, but it didn’t matter. I had to remove the game.
4. Manufacturer complaints – The original manufacturer of the item complained and got Amazon to remove all third-party sellers from the catalog. This happened to me with some Disney party plates. Not the matching napkins, just the plates. It was weird. I had them returned and did the walk of shame at Target to get my money back. While your item will be immediately de-listed, you can have it returned.

OK, so now the other most frequently asked question about HazMat – isn’t there a list somewhere that I can check?  The answer is YES and NO. There is a list of items that are generally considered HazMat (see below). But not item by item. HazMat products are regularly listed on the Amazon.com catalog. Why? Because merchant sellers are welcome to sell these items!  If a product has been previously designated HazMat, you will be notified when you try to ship the product in.

Hazardous materials (Hazmat) and dangerous Units

The following products cannot be processed by Fulfillment by Amazon:

• Products that are regulated as a hazardous material by the U.S. Department of Transportation (DOT). This includes, but is not limited to, explosives, compressed gases or aerosols, flammable liquids or solids, oxidizers, poisons and corrosive materials. Please refer to the Hazardous Materials Identification Guide for additional information on Amazon policy regarding Hazardous Materials.
  • Lithium ion and lithium metal batteries, or products containing those batteries either within or with the main product can be processed by FBA as long as the required information is provided. See Lithium Battery Requirements for required information.
• Vehicle batteries
• Products regulated by the U.S. Drug Enforcement Agency (DEA), such as controlled substances and listed chemicals and their derivatives as designated by the DEA.
• Any device, drug, dietary supplement or similar substance that requires a prescription or a medical professional’s supervision or direction for their use.
• Products prohibited by the Food and Drug Administration (FDA).
• A plant that is not permitted for sale in all U.S. jurisdictions or is not double packaged to discourage infestation by pests.
• A product that is subject to a product recall.
• Any product that cannot be lawfully sold and distributed in all US jurisdictions, including: radar detectors, foie gras, baby crib bumpers, airsoft guns, and throwing knives.
• A live animal of any kind, including insects.
• Cigars, cigarettes, dipping tobacco, E-cigarettes, or other tobacco products.
• Alcoholic beverages.
• Guns (excluding cap guns), gun parts, gun kits (excluding model gun kits for model guns that are not capable of firing any ammunition), mace, and black powder and other types of ammunition (excluding bb bullets, caps, and air gun balls).

Potential Problems by Category

This list from Amazon is “potential problems,” not “forbidden.” Not all of these are automatically HazMat. I’m selling body wash on Amazon right now, for example.  I also sell remote control toys and other items that have batteries in them.  Some batteries are OK others are not. You just need to make sure you have permission from Amazon before you send it in. For many products, they will tell you when you try to list it that it is HazMat. For example, I tried to send in a baby bedding set and could not figure out why it was considered HazMat! I called in and was told that crib bumpers are forbidden. Ah!

If you see Amazon and/or FBA sellers selling an item, it is probably OK since they have to store it in the same warehouse.  Except….when it isn’t.

For example, you are not allowed to sell Kindles – not because they are HazMat (despite what they say below!!!) but because Amazon doesn’t want the competition or potential customer service problems with Kindles sold by a third-party. After all, Kindles are stored in an Amazon warehouse.

Product Category	Example Products	Potential for Hazmat
Automotive & Powersports	Car batteries Shocks and struts Stereos Emergency car kits	May contain lead-acid or non-spillable batteries, compressed air or gas, or explosives
Baby Products (excluding apparel)	Creams Oils Sunscreen	May contain alcohol in different forms
Beauty	Hairspray Nail polish Hair dyes Mousse Mascara Gels Body spray Perfume Cologne Aftershave Shaving creams or gels	May contain aerosols, alcohol, or flammable liquids or solids in different forms
Camera & Photo	Digital cameras Replacement camera batteries	May contain lithium-ion or lithium-metal batteries
Cell Phones & Accessories	All cell phones Replacement cell phone batteries	May contain lithium-ion or lithium-metal batteries
Consumer Electronics	Laptops Computer parts	May contain lithium-ion or lithium-metal batteries
Grocery & Gourmet Food	Cocktail bitters Oils Extracts	May contain alcohol or flammable liquids or solids in different forms
Health & Personal Care	Body wash Soaps Dietary supplements	May contain aerosols, alcohol, or flammable liquids in different forms
Home & Garden	Room or linen sprays Essential oils Diffusers Kitchen or bathroom cleaners Lawn care products Hand sanitizers Insecticides	May contain aerosols, alcohol, flammable liquids or solids, or corrosive materials in different forms
Industrial & Scientific	Chemistry sets Lab chemicals or equipment Other potentially hazardous liquids, powders, or solids	May contain lead-acid or non-spillable batteries, lithium-ion or lithium-metal batteries, alcohol in different forms, or flammable or non-flammable gases
Kindle Accessories	Kindles Reading lights	May contain lithium-ion or lithium-metal batteries
Office Products	Dry-erase or drawing markers Ink cartridges Glues Calculators Printers	May contain lithium-ion or lithium-metal batteries, or alcohol or flammable or solids liquids in different forms
Personal Computers	Laptop computers Wireless mice or keyboards Computer parts Accessories	May contain lithium-ion or lithium-metal batteries
Sports & Outdoors	Matches Fuel gel tabs First aid kits Hand sanitizers Alcohol wipes Insect repellent Lighters Flares	May contain lithium-ion or lithium-metal batteries, alcohol in different forms, or flammable or non-flammable gases
Tools & Home Improvement	Nailers Staplers Power tools containing compressed-air cartridges Cordless drills or screwdrivers Paint Spray paint	May contain lead-acid or non-spillable batteries, aerosols, or flammable or non-flammable gases
Toys & Games	Remote-controlled toys Craft kits Glues Electronic learning devices	May contain lithium-ion or lithium-metal batteries, flammable liquids or solids in different forms
Watches	Most watches	Many watches contain lithium-ion or lithium-metal batteries

FBA prohibited products

Certain products may be eligible for sale on the Amazon platform, but cannot be sold through the Fulfillment by Amazon program. The following products cannot be sold through Fulfillment by Amazon:

• Vehicle Tires
• Gift cards, gift certificates and other stored value instruments.
• Products with unauthorized marketing materials (e.g., pamphlets, price-tags, or other non-Amazon stickers). Amazon will not accept pre-priced labels or products.
• Products that are greater than 144 inches by 96 inches by 96 inches or weigh more than 150 pounds.
• Products that require prep and have not been prepped according to the requirements in the FBA Packaging and Prep Requirements section.
• Damaged or defective Units.
  • Note: Used condition products may have damage as long as the product is labeled with the appropriate condition.
• Products with labels that were not properly registered with Amazon before shipment or that do not match the product that was registered.
• Products that do not comply with any agreement between Amazon and the seller.
• Products that have been illegally replicated, reproduced, or manufactured. We reserve the rights to destroy and to deny removal requests for any inventory identified as counterfeit.
• Products that Amazon otherwise determines are unsuitable.
• Products prohibited for sale on Amazon.com.

Notice how Amazon can simply decide that something is unsuitable? It may not make sense to you, but there is nothing you can do about it. “Counterfeit” is why a lot of CD/DVD/VHS sellers are finding their products de-listed and/or destroyed. The manufacturer can call in and say that Amazon is selling counterfeit versions of its product and they have to cancel everyone since they have no way of knowing who is counterfeit and who is legit.

OK, remember my YES and NO up above?  Amazon.com does offer more specific guidelines by category. If you sell a lot in a particular category, you’ll want to review your category so you can be on the alert for potential problems.  Go to this page and scroll down.  You’ll see links to every category which have restricted products that are prohibited for sale on Amazon.com. My favorite? “Human Parts & Burial Artifacts.” Yuck. This includes wigs, by the way.

Recalled Products

Another reason your product might get into trouble is if it is recalled. This is what happened to my collectible game. It can happen at any time. In my case, Amazon informed me with an email, delisted my product and gave me the option to have the game sent back to me or destroyed.  Amazon relies on several federal recall websites for its information and you can too if you have any concerns:

• Federal Government recall website
• CPSC recall website
• NHTSA recall website
• FDA recall website
• USDA Food Safety and Inspection Service (FSIS) recall website

There are certain categories of products that are more likely to have recalls including Baby, Toy, Beauty and Food. I don’t even look at car seats, high chairs, playpens, strollers or walkers in the Baby category, for example. Too much potential recall risk. In Toys, most recalls are either HazMat (too much lead in the paint, etc.) and/or for babies or toddlers. Most 8-year-olds are not at risk of choking on a toy. I stick with big brands in these high-recall categories – they have a proven track record of safe products.

There is not much you can do about recalled products except do your best to avoid potential problems up front. If the manufacturer is recalling the product and yours is new, you can turn to the manufacturer for reimbursement. They should take care of you. In the case of my collectible game, I was out of luck. The manufacturer wasn’t producing the product any more and my die weren’t even the faulty die. They would have sent me a new set of die for free which wasn’t worth the trouble or the hit to my integrity.

One Last Warning

HazMat has additional hazards beyond losing expensive merchandise.  You can lose your right to sell on Amazon. When I sent in my Spiderman Web Shooters, I did not get a warning when I listed it and sent it in. I got a firm warning from Amazon after it arrived at the warehouse and they had destroyed all of them.  I called in freaked and upset. I was thinking “toy” but the warehouse was thinking “contents under pressure.” I got off with a warning. It was my first time and – as I pointed out to them – they did let me send it in.

I asked the cheerful lady at SellerSupport how I could avoid making this mistake again in the future and she said “call us.” It is not a perfect solution. Like I mentioned, I was thinking “toy” so I sent it in with no doubt or concern whatsoever…and didn’t think to call them for a toy.  Your best bet is to do what I had to do which is saturate my brain with potential problem products in my major categories.

If I see a licensed product without FBA sellers that could be a potential problem, I now call to make sure before I send it in.  That would have helped me with the Avenger party plates, for example. I remember being so excited that there were no FBA sellers….sigh. Now I know that to be a potential red flag.

This is a long post and I don’t want anyone to feel particularly worried or anxious. There are jillions on products to sell on Amazon that are perfectly OK. Reading up and thinking about potential problems will help keep you out of trouble in most cases. You may wish to avoid certain products altogether like baby car seats.  If you buy a problem product by mistake, it is OK to do the walk of shame and return it. We’ve all been there! That is so much better than having your stuff destroyed at the warehouse.

My long-time readers will recognize this post from last year, but I thought it worth 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 and make money.

1. 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. 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.

For ScanPower users, the repricer is being upgraded just like the listing program was recently. According to the company, it should be ready soon. In the meantime, I have a blog post about manual repricing through Amazon’s Seller Central to tide you over.

2. Restock – 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.

3. 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)

4. 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.

5. 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 (I come behind him to price before we push “ship” in ScanPower). He patiently packages my plush items in plastic. While I’m going through the Shipping Queue process, he’s stuffing in packing materials and weighing the boxes. 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. My son also helps with unloading and stickers when he’s home with varying degrees of enthusiasm (he’s 17). 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.

6. 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” 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 besides toys. This time of year sees the appliance department get bigger, for example.

Also, if you are following the Retail Flipping strategy I wrote about earlier this year, be on the lookout for for off-season deals and clearance like wedding supplies, pool equipment and post-Thanksgiving kitchen and dining deals.

7. Watch out for hazmat – 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.

8. 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.

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.

9. 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.

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.

10. 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.

11. 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.

12. 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.

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. Happy selling y’all!

Do you remember this line from Jerry McGuire?

Today’s blog post is different from most because I’m hoping you will help me and your fellow sellers.  I’ve started to create a short video/powerpoint walk-thru of ScanPower’s new Unity 2 that I hope will help newcomers and old hands alike understand the program as well as understand all that bewildering stuff Amazon requires like MSKUs and ASIN, FNSKU…it is a whole new language to learn.

I’m hoping to have it finished by early December and I would really appreciate it if those of you who use ScanPower would share with me areas where you got stuck when you first starting using Unity – things that weren’t intuitive to you, and things you wish you’d known getting started.  With your help, I will create a useful walk-thru for newcomers.

Would you mind taking five minutes today or this weekend to share your experience with me?

I’m mostly selling books, toys, food, beauty, pets and collectible books and toys.  If you are selling in another category which impacts how you use ScanPower, I’d be very interested to hear about that.

In addition, do you use the “sticky notes,” and “sticky condition” features? I don’t, so I’d really appreciate understanding the situations in which you use it.

Rather than post below, please send me an email instead: cynthia@fbastepbystep.com. It is my intention to be constructive and helpful to the community rather than provide a platform for grievances.  Feel free to send those to support@scanpower.com.   They have answered my many questions over the past couple of months as they continue to improve their product.

Lastly, I’m often asked if I work for ScanPower or if I have some kind of financial deal with them and I don’t. They are the product I use and I write about what I know.

I’ve been asked by FBA sellers to create Step-by-Steps for Listtee, InventoryLab and other listing programs and I’m flattered.  If you use another program and would like to create a guest post about it, let me know.

While I try to keep things simple and streamlined in my book and my advice to new sellers, I’m not adverse to sharing other options with the community – especially the experiences of sellers (vs. the software companies). The most important thing is that you have a program that helps you to be efficient in your business. This blog is all about helping sellers be successful.

Thanks for your help!