Amazon: The Arbitrage Game Changer

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Change is coming to Amazon (again). Maybe not today. Maybe not tomorrow. The word on the “street” (or should that be banks of the river?) though is that sometime soon the change is coming.

What change you ask? Well, a couple of weeks ago it kind of started slipping out that Amazon is no longer going to accept receipts of purchases for proof of anything. The emphasis here is on anything because this is not new. Amazon has slowly, but surely been refusing receipts from purchases made at retailers, even refusing to accept receipts for places like Coach and Nike.

Although most sellers have been seeing the “writing on the wall” for quite some time now, the surprise came a couple of weeks ago when the rumors started swirling that the new policy would happen sooner than later and most likely, in October. This would mean that sellers who have already been feeding the Amazon FBA beast in an effort to get ready for the holidays would most likely be up the creek, or rather, river — without a paddle.

Still, it’s important to realize that on the official side of things, Amazon states that they have no immediate plans to change how they are accepting receipts. It’s hard to speculate on when it will happen, but sellers are hopeful that the company will at least wait until after the holiday season before putting it into place.

Why the big change? Really, it’s all about keeping the customer happy. Although you go out and buy items new from retail places to resell, Amazon sees them as actually being used. They have realized that a good deal of the complaints the company receives from buyers are actually coming from arbitrage sellers. Unfortunately, quite a few sellers send in items that are dirty, missing pieces, or have other problems. Since the buyer is expecting new, as promised, they are returning the items and making complaints.

Where this will all ultimately lead remains to be seen, but it’s a fair bet that if arbitrage shuts down at Amazon, sellers will shift back over to eBay to sell these kind of items. Buyers will then have to follow as well, since the marketplace will become the place for discontinued and new items that can only be found in retail stores.

Will a new receipt policy affect your Amazon FBA business? Leave a comment below.

How to improve your Amazon business

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As an online seller, you know how important it is to keep your business growing. You also know that no matter how well you are doing in your Amazon business, there’s always way you can improve.

Below are some tips that can help.

Know your numbers

You might find it tedious to keep up with the statistics of your Amazon sales, but it is a good way to tell how well you are actually doing. As an example, Amazon wants all buyer emails answered within 24 hours. If it takes longer, then it counts against you and can affect your contact metrics.

While this may not seem like something for concern, your overall metrics are actually quite important. Not only can Amazon actually cancel your account if your numbers get too bad, but it can also prevent you from winning the buy box when you are selling a product that is also sold by other sellers. Although price is typically the biggest determining factor for winning the buy box, you can still lose the opportunity even with the lowest price if your metrics are poor.

Keep replenishing your inventory

There’s a saying among eBay sellers that goes, “you can’t sell it if you don’t have it listed.” Well, the same applies to selling on Amazon. If you have a great selling item, it is important to make sure that you keep replenishing your inventory anytime the item starts to get low. Otherwise, when you run of out of the item Amazon will remove the listing from your results and in turn, your sales rank for that item will drop.

Get rid of your old inventory

Hanging on to old inventory hurts you in two ways. First, you have money tied up in an item that just isn’t selling. Secondly, if you are selling through Amazon FBA, you are continuing to pay storage fees, which are actually eating into your profits. Reducing the price on the item or simply getting rid of it actually ends up saving you money even if it initially feels like you are taking a loss.

Watch your pricing

Some sellers take a “set it and forget it” approach when it comes to pricing their items. Unfortunately, this can lead to one of two things. Either your items are priced too high compared to other sellers and your items won’t sell, or if the item suddenly becomes popular you might end up leaving money on the table by having your item priced too low. While it might be difficult to stay on top of every listing, try to make it part of your routine to view and adjust your prices on a regular basis. This not only can help you win against the competition, but it forces you to stay mindful of your inventory and you’ll know what you have that is moving or just sitting there.

What to do when you get an Amazon Return notification – part two

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Last week, we covered three of the essential steps you should take when you get one of those dreaded “Amazon Return” notification emails from Amazon. This week, let’s look at some additional things you should do when (and if!) the item has been returned to the warehouse.

Find out why the item was returned

Although looking at the report to find out why the item has been returned may or may not provide a good explanation (sometimes it is unknown or the buyer simply changed their mind), it does at least give you a starting point as to whether the item is resalable or not. To see this report, you will need to go to Seller Central and then look under Reports, select Fulfillment, and then click on Customer Concessions and finally on Returns. In some cases, you may find that the item just simply isn’t showing up on the report. When this is the case, you will have to open a ticket (fun, fun) and ask Amazon why the buyer returned the item.

Decide if you want to have the item returned to you

Once the item has made its way back to the warehouse, an Amazon warehouse work inspects the item to determine whether it can be put back out on the shelf to sell again. If they see that the item has been opened, they will automatically mark it as “Customer Damaged” and it can not be put back out for resell. It also can’t be put out for resell if it was returned due to it being defective. If the warehouse worker determines it hasn’t been opened and it is not defective, they will then typically add it back in with your inventory.

It is at this point that you need to decide whether to trust the warehouse worker or ask that the item be returned to you so that you can inspect it for yourself. Although it will cost you a small amount of money to have the item returned and then turn around and ship it back, this can keep you from getting negative feedback from another future buyer if they buy the item and there actually was something wrong with it. In some cases, the worker may have not noticed that there was a tear in the box or the shrink wrap was cut. If you decide that you won’t have the item sent back, double-check why it was returned and then make a note that it was returned in case there is a problem further down the line.

Determine if the item is defective

If the item is open and described as defective on the report, you will, of course, want to have it shipped back to you just to see what the problem is. As you may know, however, some buyers will say an item is defective because they want to get out of the shipping costs to return the item. When this happens, you can open a ticket with Seller Central and tell Amazon that the item was not defective. Make sure to include photos of the item in good condition as you will want to show proof that the buyer has simply said it was defective to get out of the return shipping costs.

When this is the case, Amazon will reimburse you for the cost, but only if the item has been opened. If the item has not been opened and is in good condition, they won’t give you a reimbursement since they know that you can ship it back to them and just sell it again.

What has your experience with Amazon Returns been? Leave a comment below.

Amazon cracking down sellers using fake product reviews

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Although Amazon has been going after reviewers for posting fake reviews about products for quite a while now, the online marketplace took a bigger step this week when it filed lawsuits to sue three sellers who allegedly used “sock puppet” accounts to create fake reviews about the products they sell.

Amazon had previously attempted to stop the buying and selling of reviews on their website, but according to TechCrunch, this is the first time that Amazon has actually went after the sellers themselves. They state that that the sellers used fake accounts to leave positive reviews on their own products. The fake reviews allegedly spanned about 30 to 45 percent of the sellers’ total review history.

Rather than sue the three sellers through the court system, however, Amazon has instead opted to file the three cases with the American Arbitration Association. The lawsuit accuses the three third-party Amazon sellers of creating and/or paying for false reviews that were made-up about their products. Known as sock puppeting, the accounts were created with the false names of made-up people for the intention of providing positive and often glowing reviews of various types of products sold by the sellers.

Up until now, Amazon had chosen to only go after the people who allegedly sold and provided the fake reviews for sellers, but recently Amazon decided to start going after the sellers themselves who actually paid for the reviews. Amazon states that they feel the only way to eliminate the problem is to eliminate any incentive for sellers to participate in review fraud by shutting shut down the system that provides it.

While Amazon maintains that it is only a small minority of their third-party sellers that are participating in fraudulent reviews, an independent investigation conducted last year by Geekwire showed that there were over 1,000 people sued last year for offering positive reviews via the website Fiverr.com.

4 Untruths You’ve Probably Heard About Amazon

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A lot of wannabe sellers want to take the plunge and start selling on Amazon, but find they are intimidated by some of the things they’ve heard about the mega marketplace. In fact, there are a lot of misconceptions that get bantered around the Internet on an almost daily basis. Here are four untruths you’ve probably heard that may be holding you back.

It’s hard to sell on Amazon

Hang around on some of the Amazon sellers boards or Facebook pages and you’ve no doubt heard sellers talking about getting massive orders ready to send in to “feed the Amazon beast.” They talk about how stuffed animals have to be in plastic bags and boxes have to have labels on them and…and…well, it can seem quite overwhelming.

Although it might seem like it would be easier selling and shipping your own items out to buyers, the truth is that for many sellers Fulfillment by Amazon makes their life a whole lot easier. In fact, really all you do is ship your items to an Amazon warehouse and Amazon does the rest.

You can’t successfully sell on Amazon these days

A couple of years ago, it wasn’t uncommon to hear about sellers moving over to Amazon from eBay and suddenly go from making almost nothing to making five figures a month. While it’s no longer a sure thing (and really – despite what you’ve heard, it never was), there are still a lot of sellers making some serious money on Amazon. Do your research, study the market and you could still be one of the success stories.

The marketplace is just too crowded

When you consider that there are over two million sellers on Amazon, it’s no wonder that so many people find it daunting to give it a try. After all, that’s a lot of competition to go up against. When you step back and consider that Amazon typically gets around 175 million visitors a month, however, you should realize that you still have a fairly good chance to carve out a spot for yourself.

You can set it and forget it

Maybe once upon a time you could list a popular item, add a price, a few simple details and a photo, then just wait for it to fly off the shelf on it’s own, but that’s certainly not the case anymore. Today, you need to use every optimization tool at your disposal to ensure that your item will rank as high as it can.

This means, good item descriptions, good photos and a competitive price. Even after you have your item listed, you still need to keep an eye on what the competitors are doing and adjust your pricing as needed. You don’t want to be the highest with your prices, but you don’t want to end up losing profits by being the lowest either.

What untruth have you heard about Amazon? Leave a comment below.

Amazon to implement holiday storage fees for end of 2016

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If you’ve been following the Amazon warehouse saga, you know that the company is concerned about storage space, since their warehouses started filling up with unsaleable items that take up a lot of space. Although the company has made some changes that limit the amount of certain items that can be shipped to the facilities, it’s apparently not been quite enough to deter some sellers from their shipping patterns.

To counteract this around the holiday season this year, Amazon has decided to hit sellers right in the pocketbook. They plan to raise the fees for sellers using the Fulfillment By Amazon (FBA) service, but the higher fees will only start and stay in effect for the last three months of this year.

Amazon states that this change is to urge sellers to think before they send and instead, use the Amazon warehouse wisely. Basically, they want to make sure that items that are sent in for the holidays will actually sell. Interestingly, while the storage fees are going up, the fees will go down for what they call their Weight Handling Fees, or rather, outbound fees.

Adding to a bit of the confusion, they will actually lower storage fees for October to lower than they are now, but then the fees become higher for November and December. Here’s a copy of the email that Amazon sent out to its sellers. You can also read more about it and see the proposed fees by going here.

Hello from Fulfillment by Amazon,

In 2015, FBA volumes, growth rates, and inventory levels were very high. As a result, our U.S. fulfillment centers were very full in November and December. This fullness was driven in part by FBA inventory that did not sell until well into 2016.

To avoid potential capacity constraints during the 2016 holiday season, we are accelerating the expansion of our fulfillment capacity. Additionally, we are changing our FBA fee structure to encourage all sellers to send in and store products in November and December that are likely to sell by the end of 2016. To give you time to plan for these changes, they will begin to take effect on October 1, 2016.

We are introducing the following updates to our fees:

–  Adjustment to Monthly Inventory Storage Fees: Effective October 1, 2016, the monthly fee for inventory storage will change for Standard-Size and Oversize units. October storage fees will decrease, and the fees for November and December storage will increase. This change will first be reflected in November 2016 charges for storage that occurs in October 2016. See details (or scroll to the Monthly Inventory Storage Fees information below).

–  Reduction of Weight Handling Fees in November and December: To minimize the impact of the increased storage fees in November and December on your business, effective November 1, 2016, we will reduce our Weight Handling Fees for all items shipped in November and December. See details (or scroll to Fulfillment Fee information below). With the reduction in Weight Handling Fees, sellers who reduce the storage space they use in November and December have the opportunity to pay lower total FBA fees. Sellers who hold unproductive inventory through November and December may see an increase in total fees. See examples of how total fees may be reduced.

–  Box content information required for shipments to Amazon: To ensure that shipments to Amazon are received quickly and accurately, effective November 1, 2016, you must provide box content information for each box sent to a fulfillment center. Shipments containing more than 55% of FBA units already provide box content information. In September 2016, we will provide additional tools to make it easier to provide box content information on all shipments. If your shipping processes do not support providing this information, we will apply a fee of $0.15 per unit in November and December. The fee will be $0.10 per unit for January through October. If you provide box content information, you will not be charged this fee.

Should this concern sellers?

Well, yes and no. Basically, you will have to pay higher storage fees, but when the item sells it will cost you less in “fulfilled” fees.

If you want to keep costs down, you will really need to take a long hard look at what you plan to keep in inventory this holiday season. You will also want to adjust your prices accordingly to cover the cost of your items sitting in Amazon’s warehouse on a shelf, so that you can recoup the extra amount of the fee. While I wouldn’t panic or completely change my strategy, I would keep it in mind as you begin getting your holiday inventory together and perhaps may even consider listing some of it elsewhere if you believe that the storage costs could present a problem for your unsaleable items.

What do you think of the fee change? Leave a comment below.

Amazon: The Online Marketplace that Would Be King

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In recent years, while eBay has struggled to find its new identity, Amazon has quietly surged ahead with its plans, toppling all the competition in its path while slowly but surely becoming “king of the world” in the online marketplace (insert image of Jack standing on the bow of the Titanic). As you might imagine,their success has drawn sellers in droves to the e-commerce giant, but in some cases perhaps maybe it’s been a bit like a moth to the flame.

As an example, Amazon FBA recently began sending out notices to sellers that certain items were no longer being accepted by the company due to overcrowding in the warehouse. This meant that some sellers suddenly had inventory they had purchased, but could no longer sell.

Meanwhile, in another move of dominance and what seems to have been under most seller’s radars, is that while they have been busy feeding the Amazon FBA beast, the marketplace behemoth has been sitting quietly taking notes and making plans. You see, you may not know it, but Amazon has its own private label and its known as “AmazonBasics.”

While AmazonBasics was initially created to focus on selling commodity items, such as batteries online, the private label has been quietly growing to a point where there are now over 900 products being sold under the label. Interestingly, 284 of these private label items were added within the past year. According to KeyBanc analysts, this number may actually be even greater with AmazonBasic potentially offering even as many as 1800 products.

This information may not be enough to send up warning bells, but take heed, Amazon has no problem switching from working as a distribution partner to being a direct competitor whenever there is an opportunity for them to make a profit. As an example, they have even entered the fashion business by offering clothing items like women’s cashmere sweaters under the marketing label known as Lark & Ro.

Although its doubtful that sellers will turn away from Amazon even if the company they sell through is suddenly their direct competition, it is something sellers should be aware of since moths that are drawn to flames often are the ones that end up burned.

What do you think about Amazon having a private label? Leave a comment below.

How to Handle the Latest Amazon Changes

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There appears to be something in the air over at Amazon. A couple of weeks ago, Amazon began restricting sellers from sending in certain ASINs that were part of their inventory. Word soon started spreading that sellers were receiving the following message when they tried to send in a shipment:

“You are already at the maximum inventory allowed for this product, due to capacity or other restrictions. This product must be removed from this shipment.”

Flash forward to this week and the nervous buzz has started up again after Amazon sent out a promotion to sellers on Thursday, stating that from March 31, 2016, until April 30, 2016, Amazon would waive fees for removal orders sent in by sellers for returns or the disposal of their slow moving or low selling inventory. As an added incentive, Amazon stated that if sellers have already paid a Long-Term Storage fee back in February, they could receive a 66-percent reimbursement of the fee that was paid per cubic foot for those items.

While this is creating some alarm for sellers, particularly those who have been receiving those dreaded messages, it’s really important for sellers to remember one thing – don’t panic!

Keep in mind, that this is not the first time Amazon introduced a change that had sellers worried. Remember when they closed the categories for Grocery, Beauty, and Health & Personal Care unless you got approved? Or what about when they decided that because of all the counterfeit claims only approved sellers could sell Frozen related toys and items?

As you can see, this isn’t the first big change by Amazon and it won’t be the last. While it may seem a bit discouraging, try to look at the changes as a chance to learn and adapt instead. Just as many sellers had to rethink there strategy when eBay started making a lot of their changes, Amazon sellers are now going to have to do the same. The best way to handle things is ultimately to stop fixating on what can’t be changed and start looking for ways to do things differently. It will not only make you a better seller, it will help you to keep moving forward.

How are you coping with the Amazon changes? Leave a comment below.

Amazon places inventory restrictions on sellers

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They say that all good things must come to an end. In the case of Amazon, it appears that for some sellers it’s the end of using Amazon as a long-term storage warehouse, even if as a seller you don’t mind paying all those long-term storage fees.

Although the news of Amazon refusing to allow some sellers to ship certain Amazon Standard Identification Numbers (ASINs) to the warehouse seemed to have only started going viral among the Amazon community last week, it appears that the practice of refusing to allow shipment for some items has actually been in place since at least February. That’s when some sellers initially began complaining on the forums that they were receiving an error message about shipments they were trying to send in.

This past week, however, even more sellers began receiving this specific message while attempting to process their FBA shipments:

You are already at the maximum inventory allowed for this product, due to capacity or other restrictions. This product must be removed from this shipment.

When discussing the error message with Amazon Seller Support, sellers were apparently told that Amazon was restricting certain ASINs that the company feels don’t have a high enough volume or sales ranking to warrant taking up storage room in one of their warehouses.

Unfortunately, the thing that is upsetting so many sellers is that Amazon chose to give no warning at all to sellers that the refusals were about to occur. They also aren’t currently providing any guidelines to sellers, so when it comes to sourcing item, sellers have no way to know whether what they want to send in will even have any chance of being accepted. At the moment, sellers are stating there’s no obvious clues as to what criteria they are using to form the rejections. As an example, even items that have high rankings and fast sales are sometimes getting rejected for shipment for no apparent reason.

Obviously, Amazon has to do something. They encouraged sellers to send in their items through Fulfillment by Amazon and sellers did by the masses. The problem is, even with stringent storage fees many sellers are choosing to leave items in the warehouses for long periods of time. This means that there’s no room left for any new items and basically Amazon needs the space.

Have you had an ASIN shipment restricted by Amazon? Leave a comment below.

Selling 101: What You Should Know About BOLOs – Part Two

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As you may recall, last week we talked about what you needed to know about BOLOs (Be On the Lookout Out for) items and what you should do if you locate one. This week, we are going to take things one step further and discuss whether or not you should share a BOLO when you find one.

 
Although the decision ultimately is up to you, there are some things you should consider.

 
First, is the item you have found actually a BOLO? In some cases, you may find that although the item you have found is listed for a high dollar amount, it may not actually be a good item to buy or share with others (if that is what you plan to do). If you’re listing on Amazon, you want to check for both the item’s rank and its ROI (return on investment) and make sure that both of these are good. If you are checking eBay, you want to look at completed and sold items, not just that there are a ton of item listings.

 
Second, you need to know if the item really is hard to find or if it is simply a popular item that has a good resell value. If it can be found at every Walgreen or Target, you may be able to buy it at a good price and resell or flip it for a good price, but it’s only a matter of time before other people discover it and start doing the same thing.

 

At that point, the market will most likely become over-saturated and no one is going to make anything. Even worse, if buyers discover they can pick one up at almost any store, you’re liable to be stuck with a bunch of the items that you may not be able to return.

 

If you discover that the item really is a BOLO and that it is hard to find, the next thing you must decide is whether or not you want to let other people know about it. As mentioned above, this is a personal decision for everyone. Some people feel that sharing is a way of giving back and believe in helping others the same way they were once helped, while other people feel that you need to protect your source and that business is business.

 

While it’s one thing to decide to share your own BOLO, before you share an item that you have found that someone else revealed in a group (particularly a private group), you need to determine how it will not only affect you, but the other person that initially provided you with the BOLO. Think about how you would feel if it was reversed.

Finally, if it is your own BOLO, decide whether it will really matter to you if the sellers you give the BOLO to refer it to others. If you share with a small group, then one of them decides to share, you will need to determine how you will handle it. If it’s going to be a big deal to you, then it may be best to just keep it to yourself.

 

Do you believe in sharing BOLOs with other sellers? Have you ever had a bad experience doing this? Leave a comment below.