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jasontayonline Blog

Chapter 9: Amazon FBA Journey from Jan 2014 to Jan 2015

9/3/2015

41 Comments

 

Comparing Amazon Sales From Jan 2014 and Jan 2015 - Results and Lessons Learnt

Picture
Jan 2014 Sales: $962.56 compared to Jan 2015 Sales: $21,771.47
This Jan 2014 to Jan 2015 comparison shows what can be achieved in 1 year. The number that I find personally most encouraging is the 2,162% increase in Ordered Product Sales. Notice that the number of orders and units sold only increased by about 1,200% (12X) but sales dollar amount increased by 21.6X. The reason? Selling at higher prices through 3 main strategies.

Higher Selling Prices
Strategy no. 1 is to look for products that sell at higher price points on Amazon, which is always helpful to reduce the percentage of fees paid to Amazon, resulting in higher profits. Having a higher selling price also allows me to move away from looking for products with the often mooted 3x selling rule that sometime confuses people. The 3x guide is not a rule it's a guideline for new sellers (just asthe theory of evolution is just a theory not fact). If you are not sure about how to count your costs, I strongly recommend you get familiar with using Amazon's free FBA Revenue Calculator which I used to calculate all my profit numbers below and for everything before I decide to sell it or not.

I know a couple of very successful sellers who will only sell something if they can make a minimum of $10  profit per sale.  For them the $10 threshold helps them focus on maximizing their productivity so they don't spend their time packing items to make a dollar or two. Personally, I like to sell anything that I can make at least $6 on after all Amazon and third-party prep fees. Since I don't pack anything myself, I don't mind the lower dollar amount margins. I will even go down to $3 in net profit for some products that sell well (low bestseller rank aka sales rank within the top 3% of a parent category), have very low competition and can be easily re-stocked, for example from a wholesale supplier. When checking prices on Amazon, I zoom in on products that have a price of $15 or more. I especially look out for prices that are  $19or more and love anything that is $35 or higher.

Multipacks
Strategy no. 2 is multipacking. A multipack is putting 2 or more of the same item together such as 4 tubes of Colgate toothpaste. I like multipacks for several reasons. First, it raises the selling price (see strategy 1 above) resulting in higher profit compared to selling singles. For example, I sell a grocery item that is currently selling for $10 .48 each on Amazon. My cost is $2.98 each. If I sell it as a single at that price, my net profit is $2.18 per sale. However I also created a 2 pack and a 4 pack which I price at $19.99 and $37.50. The 2 pack nets a profit of $6.68 which works out to $3.34 per unit vs $2.18 - that's over 53% more profit per unit. For the 4 pack, my net profit per sale is $15.56 which is  $3.89 profit per unit - that's 16.5% more per unit than the 2 pack and over 178% more profit per unit compared to selling single units. You'll be surprised how many people will buy in large quantities - it's one of the reason McDonald's does so well by training counter staff to suggest up-sizing a meal to every customer. Secondly, there tends to be lower competition on multipacks. I guesstimate that a large proportion of Amazon sellers are sourcing from retail arbitrage, which means they are scanning UPC codes in stores. By creating you own multipacks with a new UPC codes, you immediately become invisible to the mobs of scanners because your multipacks will not show up on their scanners since the UPC codes are different! The proof is in the pudding and many of my multipacks still have zero competition after being listed for months, some for a year! The third reason I like multipacks is I can order in larger volumes from my wholesale suppliers. This helps me meet minimum orders to get free shipping or volume discounts with some of them. I think it also helps them to like me since I am now a buyer with bigger orders. For example if I sold 1/day of a single, I would order 30 units a months. However if I sell 1/day of the single, 2 pack and 4 pack, that's 7 units a day or a monthly reorder of 210 units vs just 30.

Bundles
Strategy 3 is creating bundles. It's similar to multipacking (you also get the benefits of higher selling prices and profits as well as even lower competition) except a bundle consists of 2 or more different but complementary products. For example a shower curtain with a bath mat and/or towels. Or salt & pepper shakers bundled with salt and pepper. Or a water bottle with a cleaning brush. The possibilities are endless!

The key to creating bundles with a higher chance of success is to include at least 1 product that is popular or a hot seller which buyers are searching for. Then you just add something (s) in a package that makes sense for that customer so that when they see it they think, "yes, it makes sense for me to get those items together" or " that would make a great ready-to-use set/kit or a gift".  A quick way to get ideas for bundles is to look at the Frequently Bought Together section as Amazon tracks what every customer buys in order to suggest related products to increase sales. Just this week I've created a new bundle from 4 products from 2 different suppliers. 1 product I sell 3-6 units/day at $15.99 with a cost of $3.90 and the other is the number 1 bestseller in it's subcategory

A good bundle can be amazing and is effectively like a private label product except better- you can leverage on a product's or brand's existing popularity and by bundling it with something from a different supplier or even a simple 1 sheet how to use guide you insert together, you have effectively made it like a private label listing.  Effective bundles can be amazing. One of my bundles was ranked under 800 in grocery this week and I did not have to do any SEO, PPC advertising, giveaway offers for reviews or any other marketing that comes with typical new private labels!

These 3 strategies are simple to employ. If you take action, you will see results.

If you need help with how to create bundles check out the Proven Bundling Course which is also a module included in the Proven Amazon Course. You can find out more about the course contents in my Proven Amazon Course Review.
41 Comments
Jack Mc Laughlin
26/3/2015 10:09:10 pm

Just read your piece on Skip's page. I am currently selling Oxygenics water saving shower heads on E-Bay but selling slowly. Would they be an ideal product foe Amazon.

Reply
Jason Tay link
6/4/2015 11:52:51 am

Hi Jack. Wow! Where do I start to answer a question like that? First I don't have an ideal product. I have over 600 different products I've listed for sale on Amazon. Everything from cereals to shoes to shampoo to kitchenware, etc. My only criteria are it can sell, is profitable and doesn't go against my ethics.

I'm assuming it will be sold via FBA which is how I sell everything cos more than half of Amazon orders are by Prime members for Prime eligible products. I did a search for Oxygenics water saving shower heads which returned 75 results.

Next observation is most of the listings have only 1-3 sellers. This is great as there are very few competing sellers. However it can sometimes be a red flag that only authorized sellers are allowed to sell this brand on Amazon which you can ascertain by asking Amazon Seller Support or the manufacturer.

Now let's use one of them as an example. The "ETL 26781 White Body Spa Oxygenics Shower with 60" Hose" is selling at $33.23 via FBA (meaning fulfillment By Amazon aka Prime eligible to a buyer). The rank at the point of writing this is 1007 in Automotive (estimated sales of 6 units/day according to www.fbatoolkit.com). So the question is can you source it at a cost price that will still make you an acceptable profit after deducting all Amazon fees and other costs? Next thing is are you approved to sell in the Automotive category on Amazon. If not, you must register a professional seller account (not the free individual account) so you can apply for approval in Automotive which is a restricted category. Only pro sellers are allowed to apply for restricted category approval. Or maybe this is not an automotive product in which case you can contact seller support and request for it to be moved to another category that is more appropriate.

Anyway based on the above info, you would then make an informed decision about whether that fits your definition of an "ideal" product to sell on Amazon.

Reply
Jason Tay link
27/3/2015 02:07:41 am

Hi Jack. Wow! Where do I start to answer a question like that? First I don't have an ideal product. I have over 600 different products I've listed for sale on Amazon. Everything from cereals to shoes to shampoo to kitchenware, etc. My only criteria are it can sell, is profitable and doesn't go against my ethics.

I'm assuming it will be sold via FBA which is how I sell everything cos more than half of Amazon orders are by Prime members for Prime eligible products. I did a search for Oxygenics water saving shower heads which returned 75 results.

Next observation is most of the listings have only 1-3 sellers. This is great as there are very few competing sellers. However it can sometimes be a red flag that only authorized sellers are allowed to sell this brand on Amazon which you can ascertain by asking Amazon Seller Support or the manufacturer.

Now let's use one of them as an example. The "ETL 26781 White Body Spa Oxygenics Shower with 60" Hose" is selling at $33.23 via FBA (meaning fulfillment By Amazon aka Prime eligible to a buyer). The rank at the point of writing this is 1007 in Automotive (estimated sales of 6 units/day according to www.fbatoolkit.com). So the question is can you source it at a cost price that will still make you an acceptable profit after deducting all Amazon fees and other costs? Next thing is are you approved to sell in the Automotive category on Amazon. If not, you must register a professional seller account (not the free individual account) so you can apply for approval in Automotive which is a restricted category. Only pro sellers are allowed to apply for restricted category approval. Or maybe this is not an automotive product in which case you can contact seller support and request for it to be moved to another category that is more appropriate.

Anyway based on the above info, you would then make an informed decision about whether that fits your definition of an "ideal" product to sell on Amazon.

Reply
Shawn Searcy
28/3/2015 04:18:02 am

Jason,
Great job on Posting, I am now in my second year of FB sales, have grown 200% from last year but not 21K :) (yet) I have been looking for better priced products and I need to focus more on Bundles. Whether in Grocery, Pet or Home I need better priced products especially to save on Fees.

Reply
Jason Tay link
28/3/2015 06:59:34 am

Hi Shawn. 200% is still progress :)
Hope you'll find some of the tips on this site helpful. One thought I always have is to do things that are scalable. All the best!

Reply
Rebecca
28/3/2015 05:25:36 am

Great post. I have a question. If you are doing bundles and not shipping the items yourself how do you get the pictures of the bundles.

I am getting ready to use a shipping service and I am also starting to do a lot of bundles and just realized that I will need pictures of the bundle to make the new listing but I want to send everything to the shipping service.

Reply
Jason Tay link
28/3/2015 07:02:56 am

Hi Rebecca. I've been asked that question morenthan once this week, no doubt as a result of this post. The answer is I don't take product pictures. All I do is save images of the individual products then paste them into the free Paint program on my PC and save as a jpeg. Hope that helps!

Reply
Kristie
6/4/2015 02:37:57 am

Jason, when you say you take the individual photos and paste them into Paint and save as a jpeg, do you mean, for example, if you create a bundle of 4 items, you take a pic of each item, put it into Paint and then generate one pic of all 4 items? Just double checking. Thank u!

JP
7/4/2015 03:10:56 am

Great article Jason. Being in Singapore, what's the rough breakdown of what you source locally vs OA in the US? Being in Asia as well, I am finding the shipping costs to be driving down my profits and I am looking to concentrate more on OA in the US. What is your take on this?

Reply
Jason Tay link
29/4/2015 06:02:31 pm

Hi JP. For sales on Amazon.com I source nothing locally. I started with 1 private label order of $80 for 10 units, 2 wholesale orders at the end of 2013 and all sourced in the US. From Feb 2014 to June 2014 is when I really scaled up by doing OA in the US (see the bottom of this blog post at http://www.jasontayonline.com/blog/chapter-2-gearing-up-for-adventure-in-the-amazon). The only time I have ever sourced anything from Singapore for sale on Amazon.com is when I carried some items in a suitcase to CES2 in Dallas.

Reply
JP
10/5/2015 10:22:15 am

Thanks Jason, that is very helpful. I'm having a look at the sources you mentioned right now. Was there any particular training you used for learning private label?

JP
10/5/2015 10:42:09 am

Please ignore the previous questions...I found this post which I think answers it!

http://www.jasontayonline.com/bretts-buying-network.html

Reply
Ct
12/3/2016 12:29:56 pm

hi Jason.. thank you so much for such an informatic blog. I am from Singapore as well and so happy i found your blog as i am just starting out. Enjoyed your articles and looking forward to learn more. By the way, do you know of any meetup of FBA Entrepreneurs in SG for networking. Thank you lots

Reply
Jason Tay
12/3/2016 02:31:51 pm

Hi CT, you can join our FB group made up of sellers from Singapore and various countries. Any meetups are usually areanges there. https://www.facebook.com/groups/MySilentTeamSG/

Reply
Chris
20/3/2016 09:12:39 am

Great insights, Jason! Im from Singapore and I would v much like to carve out an ecommerce business from scratch. I have read up on Amazon FBA and I see that we have to get printer labels and packing materials for the packaging. Is it possible to leave the packaging, label printing and shipping all to Amazon?

Reply
Jason Tay
20/3/2016 09:24:28 am

Hi Chris! Yes you can have Amazon label products with the Amazon product label for $0.20 each. But you would still have to package everything to send to them first and make sure each item has a clearly visible UPC barcode that Amazon's warehouse staff can scan to identify them so they can affix the correct product label.

As for shipping are you referring to inbound shipping (shipping to Amazon) or shipping each individual order to each customer? With FBA the point is to leverage on Amazon warehousing and shipping tho handle the latter, but you still have to package everything and ship to Amazon first (which could be to 1 or multiple of the 70 or more fulfilment centers they have in the US or other countries with FBA such as UK, Germany, Japan, etc if you are planning on selling in those countries).

The whole UPC or Amazon barcode aka product label requirement and shipping are points of confusion for many people and I've asked similar questions countless times. I probably should dedicate an entire post to clear this up and that would be a useful resource to point people to.

Reply
JP
22/3/2016 10:22:36 pm

Hi Jason - great to see the activity here! Do you have any suggestions how we can obtain an insurance policy for selling online in Amazon?

Any reference where you got your policy, or suggestions would be appreciated!

Reply
Jason Tay link
29/3/2016 09:57:16 pm

Hi JP, you should contact the corporate insurance department of any insurer and enquire about product liability insurance. Most agents that service individuals handle only personal policies.

Reply
Liam link
6/6/2016 05:58:22 pm

Wow, thanks for the insightful guide Jason! :)

Recently I found their official FB page: https://www.facebook.com/AGSSEA

Apparently they have weekly webinar that also talks about FBA for free!

Reply
Jason Tay link
22/6/2016 09:34:56 am

You're welcome Liam!

Reply
PP
20/6/2016 08:50:43 am

Hi Jason
Was wondering how did you send your packages to Amazon fba since you are in singapore? Did you use singpost?

Reply
Jason Tay link
22/6/2016 09:33:19 am

Hi PP,

I actually don't ship anything from Singapore to the US. Most of my inventory for Amazon.com is sourced from USA suppliers with some from India and China.

I do ship some inventory from Singapore to Amazon UK (about only 5% of what I sell compared to the US) and use DHL for that. I do not recommend usinf SingPost/Speedpost as they do not provide a DDP (delivered duty paid) service. This means duty is by default charged to the recipient (Amazon) who will not pay your duty and have the shipment returned to sender. This has happened to me with SingPost SpeedPost and tripled my shipping fee since it cost about $250 to send, $250 return fee, then $250 to send again by DHL!

Conclusion - if shipping a few boxes from Singapore, I recommend using DHL, UPS, FedEx, TNT, etc. Also register for a corporate account as the rates can be about 60-70% less than the consumer rate.

Reply
PP
22/6/2016 03:36:03 pm

Thanks for replying
Was also wondering what type of items do you sell on Amazon and how do you find good items to sell on Amazon.

Jenny
12/7/2016 05:42:20 pm

Hi Jason, your website is very helpful. Thank you so much. I'd like to know when you say that you source most of your products from US and send them directly to Amazon warehouse for the FBA. But I saw some youtube videos where you need to print the shipping label before you can send it to Amazon. Do US vendor do it for you on your behalf?

Reply
Jason Tay link
19/7/2016 01:24:27 pm

Hi Jenny,
I send all my inventory to a US prep service. You can find out more about prepping (labeling, wrapping, etc) by going to the menu at the top and selecting AMAZON FBA GUIDE>AMAZON FBA PREP COMPANIES.

You can also get 2 free lists of FBA prep companies by filling in your name and email address on form at the right sidebar of this site.

Reply
Chris
13/7/2016 06:16:39 pm

Hi Jason, I am about to do my first PL product.. Its a stainless steel flask and as I see there are already several similar ones existing on Amazon, I have requested my manufacturer to make a shoulder sling for each bottles... May I ask, is this consider a bundle? Can I just sent them in as one product with one code? Thanx

Reply
Jason Tay link
19/7/2016 01:29:53 pm

Hi Chris,
It doesn't matter whether it is considered a bundle or not. Either way if sold together as a set, it would still be considered 1 listing. In other words 1 SKU, 1 product, 1 ASIN with 1 UPC.

The far more important question to ask is what is going to make your flask sell? Considering the competition, what are the search terms (keywords) for which it would be able to get on to page 1 of Amazon's search results? Since over 70% of buyers purchase only from page 1 of their search results.

Reply
Jack
6/9/2016 06:41:24 am

Hi Jason
Im from Singapore and I really want to sell some of my unwanted stuff such as books and many more on Amazon. I created my amazon account already and did my shipping listing. But when it comes to shipping, I contacted UPS if they could send my box to amazon. However, the shipping cost is so expensive and its over 200sgd just to send few boxes to amazon. Is there any way to cheaper shipping cost so there's profit?

Reply
Tim
9/10/2016 07:54:34 pm

Hi Jason,
Thank you for sharing your experience here.
I am keen to know if there are any meet ups in Singapore or Malaysia?

Reply
Jason Tay link
27/10/2016 08:22:26 am

Hi Tim, we don't have any regular meetups. However you just missed our most recent meetup one week before your comment. The best place to interact and find out about any meetups is on my Facebook Group https://www.facebook.com/groups/MySilentTeamSG/

Reply
Heather
24/10/2016 10:50:26 am

Hi Jason, thanks for your informative post! I've been reading about international shipping with FBA and some online forums say that

1) You first have to manually change the settings under Settings > FBA > Export Settings to ensure products ship internationally;
2) Amazon has to approve items meant for international shipping; and
3) Many items end up not being approved for export.

From your personal experience in dealing with FBA, was it easy to arrange for international shipping? I am planning on using WooCommerce with FBA, and then utilising FBA to ship internationally (US, UK, Germany, China, Singapore etc).

Thanks!

Reply
Jason Tay link
27/10/2016 08:32:43 am

Hi Heather, while it is easy to turn on FBA Export settings, I have not personally used Amazon's Fulfilment Order service to fulfil international orders. I do use FBA to fulfil orders from my other websites, but only within the US. For non-US orders I ship them from Singapore.

And while it is easy to enable FBA Export settings, like you mentioned, not every product is eligible for export and I think different products might be eligible or ineligible for different countries so there are multiple possible scenarios. For example I have a client's product that is eligible for export but not eligible to send to Canada due to some Canadian-USA trade regulation.

As with many things, I would test if I wanted to find out for sure. This requires having your product in stock with Amazon FBA, enabling Export settings and then creating fulfilment orders to various countries to see which ones work (you can just create fulfilment orders to see if they can done, without confirming it).

Reply
Heather
27/10/2016 09:04:38 am

Thanks Jason for the sharing.

We have decided to use an order fulfilment warehouse in China to ship our products directly from China instead of storing them in FBA warehouses in US. For a small business like ours, FBA does slap on some other fees that are not clearly written on their website and their international shipping is pretty costly. FBA does work best if items are light and higher-priced (above the free shipping threshold of $49) and for domestic shipping. Thanks for your articles too, they have helped quite a bit!

Frank link
3/6/2018 07:52:00 pm

Hi Jason,

I'm using an amazon.com account & i would love to sell to SG Amazon market. Hence, I have turned on FBA export settings, but my shipment plan only shows US & not SG even though I have specified SG under settings > shipping template.

Please kindly advise, thanks Jason!

Jason Tay link
4/6/2018 12:19:41 am

Hi Frank,
I think there are several different issues here.

1. 3rd party seller cannot sell on Amazon.com.sg. Amazon has several retail models and Amazon Singapore is direct retail only (meaning Amazon themselves are the ONLY seller). Amazon US, Europe (UK, Germany, France, Italy, Spain), Japan, India, Australia are marketplaces (meaning 3rd party sellers can sell on the platform).

2. Amazon.com is for the US site and FBA (fulfilment by Amazon) means a 3rd party seller is using Amazon's fulfilment service to store and deliver to customers. Enabling FBA exports means to give Amazon USA permission to ship inventory you store in Amazon USA fulfilment centers to buyers outside the US. This does jot mean you are selling on another Amazon site for another country such as Singapore. It means if someone from outside the US, such as Singapore, goes to Amazon.com and buys your item, it is eligible to be shipped from an amazon warehouse in the USA and exported to the buyer's country.

Hope that clarifies your issues.

Linda
1/5/2017 12:36:35 am

Hi,
Thank you for this post. However, I'm totally new to Amazon FBA. I am thinking of selling on Amazon FBA but do not really know how to figure out the shipping to Amazon warehouses from Singapore.

May I have a little help on this? Appreciate any help that I can get!

Reply
Jerry Ling
17/7/2017 10:33:11 pm

Hi im thinking of selling on Amazon fba, may I know how to go about shipping to UK or US for example .And my supplies coming from china and other asian country .Thanks in advance.

Reply
Ryza bayquin link
18/8/2020 01:20:52 pm

Thank you for sharing this article, Have a great and informative blog content. Keep sharing.

Reply
Elena C link
23/12/2020 11:07:37 am

Great post thanks

Reply
Lhynzie link
27/8/2021 06:34:42 pm

Very informative. Thanks for posting.

Reply
Roy Goldstein link
1/10/2021 04:49:08 pm

very helpful and inspiring at the same time. keep sharing such amazing content with us.

Reply



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  • About
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