FBA Step By Step

Thrift stores are a great source of inventory for FBA sellers and it is an adventure every time in more ways than one…I’m writing this week about Goodwill in particular because it is a slightly different beast than the typical neighborhood thrift store.  For one thing, Goodwill is a huge organization with locations all over North America including Canada and Mexico. What does this mean to you? It means they tend to be really well organized with warehouses and the ability to distribute huge lots of goods across a large region. If this sounds a tiny bit like “BigLots,” it should.  Goodwill gets new and slightly damaged merchandise in large lots from businesses and manufacturers of all kinds and it balances out where the goods go so no one store is overwhelmed by a particular item. It may even spread a large lot across multiple regions which means that other Goodwill shoppers across the country might have the same item, not just local stores.

If you find a good seller in one Goodwill near you, it is likely that you can pick up more at another Goodwill. These are brand new items although sometimes the boxes are beat up and not good for selling. Often Amazon is no longer (or never did) selling these items because they are discontinued which is also nice for us. A huge preponderance of new Goodwill items sell between $2 and $6.

Of course, the majority of inventory at a Goodwill is used, donated items from individuals and small groups. These items are collected either at individual stores or collection sites throughout the city.  They are then sorted (lots of stuff is trashed on the spot – you’d be amazed at the garbage some people donate) and often taken to a central warehouse where the goods are balanced out a bit.  My local Goodwills, for example, are full of used textbooks right now – most of them only $2 – and I’m seeing some repeats from store to store. I’ve bought entire shopping carts full of textbooks with under 1 million rankings and I’m thrilled. I can only speculate where they got them because normally you’d only see a few textbooks at a Goodwill and yet the past couple of weeks have been staggering. 

By the way, the reason you only see a few textbooks at most Goodwills is because many of them are now selling their more valuable books on…Amazon!  Because each region is under different management, you see a lot of “Goodwills” selling online. Their competency in selling is highly variable and they don’t usually have the manpower to plow through all the books they get, but textbooks usually get some scrutiny. They are easy to pick out of a pile for one thing.

Which brings me to the question, what can you buy at a Goodwill to sell on FBA? Unlike eBay, there are many categories on Amazon where you can ONLY sell new items like “baby” and “toys,” so be sure you know what can be sold used. Plus, FBA sellers are restricted from certain categories or need special permission (like “collectible books,” or “clothing” for example). If you aren’t sure, look it up in the “help” section of Seller Central. Amazon is very clear.

One thing you can’t really anticipate is the “who is forbidding us to sell now?” question. Some manufacturers have clout with Amazon and restrict third-party sellers of their goods. I bought some new party plates at Target with “Cars 2” on them which I found out after a couple of weeks of selling them that I could no longer sell them. Ironically, the matching napkins were no problem and I sold all of those. The plates came back to me and I’m selling them through another channel. Amazon doesn’t publish a list or anything you can check so this is how most people find out that they can’t sell something that looked so great on the scanner. You can call Amazon before listing a product if you are concerned – this was the solution they offered me when I asked what we sellers could do.

If you see an item with no FBA sellers, which is clearly branded, be aware that it might end up being something you have to merchant-fulfill or sell in another category. I just bought a brand-new Disney iPhone case for $2 at Goodwill. There are merchant but no FBA sellers. I suspect it might end up going the eBay route or merchant-fulfilled, but I couldn’t resist the deal. They sell new from Disney for around $30.

So here’s how I work a Goodwill:

• Stuff up front in bins or on display shelves – This is often the new merchandise they are trying to move. I bought new sports goods and toys this weekend.
• Books – I’m looking for non-fiction for the most part.
• Collectible Games – the exception to the rule that all toys must be new is if it is a collectible meaning it is discontinued, old, rare, hard-to-find. Another clue is that Amazon is not selling it either. If they are selling it, it is definitely not collectible. Bring a small knife to open any tape and make sure all the pieces are there before you leave or that they are easy and cheap to replace like timers, clay, dice, etc. You have to sell complete games. At some Goodwills they will let you bring incomplete games back, but most of them don’t so be sure to check for pieces.
• New merchandise hidden in the kitchen/appliance area – air filters, designer napkins, vacuum cleaner bags…who knew?
• Allowable used appliances. In one of his eBooks, Jordan Malik turned me on to Sharper Image air purifiers and how people will buy them used and in a box of my own making (they are oddly shaped). With the exception of large items like this, I personally only buy products that are in their original packaging even if they clearly used. It saves me creating a box and is more appealing to potential customers to buy an “open box” item. Be sure to plug in any appliances before you leave the store and check that they are working.
• VHS tapes – new, sealed in plastic, only. Don’t bother with used from a Goodwill, most are in terrible shape and will only bring you negative feedback. Also, make sure there is really good margin on the tape. VHS sell slowly and you want to make sure your margin can afford a year or so worth of storage fees if it comes to that. You want tapes that aren’t available on DVD and are rare and hard to find.
• Computer software and games – used is fine. Make sure the discs look very clean. If you’re doubtful, don’t buy it. If you are looking at a jewel case and there is no barcode on it, the software/video game originally came in a box, probably with other stuff like a booklet. You cannot sell it without the box and original stuff.
• DVDs – you probably won’t find much of value in this section since people tend to donate their unwanted DVDs (translate=blockbusters that everyone has) so it is usually last on my list EXCEPT if it is brand new, sealed in package. Then I’ll check it out. With Roku and iTunes, fewer and fewer people are buying DVDs so keep the rank low (I suggest under 100,000 but this is not a hard and fast rule and other sellers may disagree with me).
• Stuffed animals – usually stuffed animals are piled up on top of clothing racks. I’ve occasionally found brand new toys with their original tags that show no wear whatsoever. I found two Harley Davidson branded toys this way and I suspect they were protected rather than played with which was great for me. Some toys will have matted fur or worn tags. These are not new and you can’t sell them. If they smell like cigarettes or cats, don’t sell them.  In Amazon’s world, “New is New” and not “nearly” or “mostly” new.
• Baby items – must be new. Boxes must look great, don’t pick up a slightly dinged or scratched box. Moms are very picky. It is not worth the grief. Be aware of items that are not sellable like crib bumpers and check all butt wipes and diapers to see what size package they are sold in. Most times what I find at Goodwill is not enough to sell on Amazon (like there are 12 packages in a case kind of thing). Don’t sell formula or food unless the expiration is more than 6 months out.
• High-dollar items – usually there is a locked case somewhere with higher priced items in excellent condition. These might be collectibles, new items or even auction items (i.e. you have to bid to win them). They’ll let you scan while they watch. You can find some very nice things in the case like expensive digital cameras, collectible comic books and more.

Things to know:

1. Sale items and books are not returnable in most Goodwills and thrift stores. They get so many books – they do NOT want them back. 
2. Books and other departments will go on sale fairly regularly.
3. Some Goodwills are so organized they have “clubs” with membership cards, discounts, special sales…just like any typical retailer.  Sign up, they’re worth it. I’m a member of the Goodwill group that covers West Chicago up to Central Wisconsin.  Why? Because my friend Lynn lives there and we go shopping together when I visit.
4. You will need to sign up with each Goodwill separately with your sales tax certificate unless it is one of those highly organized and technology interconnected groups (like the Chicago area). In most cases, they three-hole punch your form and put it in a notebook to check against next time. I’m not kidding. In North Texas, we’re lucky the cash registers don’t use pop-up numbers. It is ironic since we’re in the Telecom Corridor.

As a special caveat, I will warn you that part of Goodwill’s mission is to train unskilled and formerly homeless people for jobs. Often the person behind the counter is close to illiterate and finds a cash register intimidating. Things like ringing up your purchase as “non-taxable” can be a problem.  Checking out with multiple shopping carts can be a problem. Finding your sales tax certificate in the 3-ring notebook can be a problem.  Be patient and cheerful and remember this is normal and part of the mission. Checkout for me can take half an hour sometimes.

This caveat applies to a lot of non-profit thrift stores, not just Goodwill of course.  Salvation Army is also an excellent resource. I don’t know about the rest of the country, but they are not quite as organized down here as Goodwill. You have to go to the right neighborhood to find the real finds for Salvation Army whereas I find the Goodwills to be fairly consistent throughout a region. In terms of working the store, I pretty much work them all the same.

Many thrift stores have special sale days each month or special sections of the store on sale (like books). When my Mom is in town, we go shopping together to take advantage of her seniors discount. Some move inventory like crazy, some have the same old stuff every time.  Your mission is to find the stores with swift turnover and visit regularly. One thrift store I know of discounts books to 10 cents on Saturdays and their turnover is very fast. It is a dirty, crowded hole-in-the-wall but an excellent find for an FBA scout. 

If you would like to learn more about thrifting from other FBA sellers, Chris Green has videos that he records live of some of his shopping trips. Scan Power has a YouTube channel with episodes like “Thrifting with the Boys” and “Thrift Store Haul with Chris Green at the Salvation Army.” In addition, there is a regular internet radio show (with archives!) called “Thrifting for Profit – The Amazon Way” with Debra Conrad and “Thrifting-with-the-Boys” with Jason Smith that you may find interesting.

What about you? Do you scout thrift stores? What have you learned? Please share your stories in the comments below!

{ 3 comments }