I just got back from eBay On Location (EOL) 2012 in Philadelphia, PA where I had an absolute blast! I had never been to an eBay event even though we sold heavily on eBay for many years. In recent years, our focus has been on Amazon, but I’m taking a closer look at how eBay should be incorporated, not only into my online sales strategy, but how all sellers should appreciate some of the unique opportunities that eBay presents.
Some of this fresh look was inspired by the keynote presentation at EOL by Gary Vaynerchuk. I was fortunate to get to meet Gary after his presentation.
Gary wrote a book called The Thank You Economy (available on Amazon and be sure to watch the video) that lays out not only how easy it can be to be personal and engage with your customers, but also just how vital this practice is quickly becoming. Gary talked about how little things like hand written thank you notes in packages and following up with customers to personally thank them for their business are so easy to do, but so rarely done, that that companies that make the extra effort will be the ones earning their customers’ business for years to come.
Is it just because customers are starting to expect an additional, personal level of service? Not entirely; it also has to do with the effect of social media and the new-found power of the customers’ voice. An exceptional customer service experience can reach incredibly far through sites like Facebook or Twitter, and the same thing can be said for negative experiences.
In my opinion, one reason that many companies don’t fully adapt a social media strategy is that it can be difficult, if not impossible, to accurately gauge the return on investment (ROI) of their efforts. If a company is too big, it can be difficult to get budgets and time approved for a social media strategy that’s effective, and effective is, of course, a relative term when the exact ROI for the social media is often unknown. When it comes down to budget and time allocation, if you can’t measure it, they probably aren’t doing it.
The light bulb went off! While I was so busy thinking of all the ways that you could make money on Amazon, I lost sight of the big picture. Sure, I still believe that Amazon is easily the easiest place to sell online and make some real money both quickly and easily with the ability to scale, but at the end of the day, every customer that buys your products is just another Amazon customer. Amazon is happy with this arrangement, and many sellers are, too, as they watch the deposits in their bank accounts, but where is the long term plan?
Like I mentioned above, when you sell on Amazon, that customer belongs to Amazon. Whether you ship yourself or use FBA, you are not allowed to market to that customer by email, phone, or even direct mail. This means no company link in your email signature, no packing slip in your outbound shipments, and nothing related to you personally can be packaged with your FBA inventory. If Amazon finds out that you are doing this, your selling privileges will be in jeopardy.
Here is a link to Prohibited Seller Activities and Actions on Amazon.com.
So what was I talking about? Considering eBay’s place in your overall online selling strategy! The way I see it, eBay is one of the best places where you can gain exposure, engage with your customers, and use social media to provide that personal touch. Will each and every customer engage back with you? Unlikely, but social media is making this type of engagement easy to do and the companies that engage properly will be building a brand equity over time that will be difficult to catch without some long term planning by their competitors.
This is currently one of the BIGGEST differences between Amazon and eBay. With Amazon, you are getting sales, but when you run out of stuff to sell, no one will notice that you are gone. With eBay, you can build a brand and engage with your customers along the way. You can find out what they are interested in and you can find some common ground. Sellers should be using eBay strategically to gain incremental sales and take advantage of every opportunity to do things that your competition isn’t doing. Engage with your customers in meaningful ways but don’t summarize this information as an invitation to clobber your customers with marketing. They can even send them links to their Amazon store. Gary V calls this the jab, jab, jab, jab, jab, right hook.
This isn’t something that can be built overnight and it isn’t something that can be build disingenuously. My advice is to start now and BUILD your business in meaningful ways that your competition is likely overlooking.
What else did we do at eBay On Location? Naturally, we got our hands on an eight foot eBay sign and took it to the Hard Rock Cafe, The Liberty Bell, and Independence Hall!
The sign now has it’s own Facebook Page: http://www.facebook.com/EBayOnLocationSign
http://www.amazon.com/gp/help/customer/display.html/?nodeId=200684570
On February 15 and August 15 of every year FBA conducts an inventory cleanup, at which time inventory Units that have been in our fulfillment centers for 365 days or longer will be assessed an upfront, semi-annual Long-Term Storage Fee of $22.50 per cubic foot.
To provide additional flexibility to maintain your unique selection, one Unit of each applicable product ASIN will be exempted from the semi-annual Long-Term Storage Fee if none of your Units of that ASIN have been in our fulfillment centers for less than 365 days. Please note, FBA accounts for inventory on a first-in-first-out (FIFO) basis.
| Inventory cleanup dates | Affected inventory | Long-Term Storage Fee (per cubic foot) |
| August 15 February 15 |
Units in fulfillment centers 365 days or longer |
$22.50 |
Units in our fulfillment centers for 365 days or longer are charged the Long-Term Storage Fee semi-annually on August 15 and February 15.
One Unit of each applicable product ASIN will be exempted from the annual Long-Term Storage Fee if none of your Units of that ASIN have been in our fulfillment centers for less than 365 days.
In advance of each Inventory Cleanup, we will notify you of any Units in your FBA inventory that will have been in our fulfillment centers for 365 days or longer as of that date.
Use the Recommended Removal report and the Inventory Health report to identify your inventory that is likely to be included in the Long-Term Storage program during the next inventory cleanup event. Products will appear in the Recommended Removals Report six weeks prior to the cleanup date.
Below is the blog post that I did about the August 15th, 2011 cleanup date. I hope it helps you evaluate your inventory and make the necessary adjustments.
REPOST from August 10, 2011:
Have you received an email like this?
Dear Seller,
The FBA Long-Term Storage Fee will take effect on August 15, 2011, less than one week away. Be sure to submit your removal request before midnight PDT on this date to avoid incurring Long-Term Storage Fees.
I received it TWICE; once on my books & media account, and again for my ‘everything else’ account where I sell toys, tools, and, well, everything else.
What is the Long Term Storage Fee?
The Long Term Storage Fee is $45/cubic foot that is charged on items stored in FBA warehouses for more than one year. This does not mean that every item that you send to FBA has to sell within 12 months. There is an exemption for single units of an ASIN. This means that Amazon still wants your Long Tail items (items that sell, they simply don’t sell very often), they just don’t want three copies of a book that sells once every three years. This would be nine years supply of inventory and it is not how Amazon envisioned the FBA program.
| Item | Dimensions | 1 unit | 2nd unit | 10 units |
| Book | 8? X 6? X 1? | $0.00 | $1.10 | $9.90 |
| Toy | 11? X 8? X 2? | $0.00 | $4.58 | $41.22 |
Believe me, Amazon does NOT want to charge you the Long Term Storage Fee. This is not a profit center for them. They want FBA warehouses humming with inventory coming in and orders going out. This is what they are good at. They do not want to be in the storage business.
Want to know my numbers? I’ll show you:
Books & Media:
As of August 8, 2011, you have 2,060 Units of inventory that will have been in our fulfillment centers for 365 days or more on August 15th for which you will be charged $2,384,unless you submit a request to remove them (or they sell) before that date.
Everything Else:
As of August 8, 2011, you have 181 Units of inventory that will have been in our fulfillment centers for 365 days or more on August 15th for which you will be charged $4,071,unless you submit a request to remove them (or they sell) before that date.
I’m pretty sure that most sellers are not looking at such high numbers. When I started with books, I’ll admit I was a dummy. I thought I was a genius and happily bought ex-library books on tape sets that were listed for $70+ on Amazon. Too bad I didn’t know the difference between ‘listed for’ and ‘selling for’ (I’m better now, thanks). Learned a few things about Sales Rank is the past three years as well 
From Amazon:
Return and Disposal of FBA Inventory – Fees
Through August 15, 2011 the per-unit fee to have inventory over 270 days old returned to you is $0.20 per-Unit including shipping ($0.40 including shipping for Oversize Units), or you can have Amazon dispose of the inventory Units for no charge.
After August 15, 2011, the per-unit fee to have inventory returned to you is $0.50 per-Unit including shipping ($0.60 including shipping for Oversize Units), or you can have Amazon dispose of the inventory for $0.15 per-Unit ($0.30 for Oversize Units).
I have some oversize items on my Everything Else account that is pushing the Long Term Storage Fees way up. I sent Amazon all of my oversize items because the monthly fees were so low. Amazon admits that they did not expect this behavior when they implemented the FBA program and defined the fee structure. This behavior (myself included) is in part what prompted the Long Term Storage Fees. This post has two parts; first, how to analyze and remove/dispose of your older inventory to avoid the Long Term Storage Fees, and second, what these rules are for and how to optimally send inventory to Amazon’s FBA warehouses.
Analyzing Your Aging Inventory
Log into your Amazon Seller Account: https://sellercentral.amazon.com/gp/homepage.html (seller account required)
Look under Reports, then click on Fulfillment.
Under Inventory, you’ll see two reports. One called Inventory Health, and the other called Recommended Removal.
Request both of these reports to be downloaded. Save, and open in Excel. Familiarize yourself with these reports; they are very helpful. Right now you want to look at the columns that relate to Inventory Age (270-365 days & 365+ days) as this will show you the items on which Amazon will charge you the Long Term Storage Fee.
Creating a Removal Order
FBA Manual 6.4 Create Removal Orders
Amazon has actually made this process fairly easy. Here’s how I did it on my accounts:
Go to your Seller Account, Reports, Fulfillment, choose Recommended Removal, View Online, click on Generate Report.
You’ll now see the first 150 items from your Recommended Removal Report. These are all items that will be charged the Long Term Removal Fee or that have single quantities of inventory that have been in stock for 365+ days. Click on Begin Removal Process.
Most of these items you will want to remove or destroy. The ones to double check are the ones that have a Fulfillable Quantity of one and Available Quantity of one (even if at FBA for 365+ days). These may be Long Tail items that you want to keep in inventory. Remember, single inventory units per ASIN are exempt from the Long Term Storage Fee. I copied and pasted the ASIN into Amazon to check the prices and Sales Rank for these items to decide if I wanted to keep them at FBA or remove/destroy. If you want to keep them, check the box in the Delete column to remove the item from the removal order. Once you have reviewed the items, click the Continue button at the bottom of the screen and complete the process. If you have more than 150 items to review, repeat the process for the additional items.
You have to have your removal order PLACED by AUGUST 15, 2011 to avoid the Long Term Storage Fees. Don’t wait until the last minute.
Note: you may be able to get a tax deduction by shipping a Removal Order to a thrift store or non-profit for an amount great than $0.20/unit. Correction: Business inventory cannot be donated for a tax write off like this. You can go through the steps to convert business inventory to personal use and then make a donation, but I doubt that it is worth the trouble in this case. (Thanks Karin!)
Creating a Disposal Order
Follow the same steps as above for creating a Removal Order, but instead of clicking Ship To Address and entering an address, you’ll click on Destroy. Trust me, when Amazon says they will destroy the items, they will be destroyed.
What’s Really Going On?
As mentioned above, Amazon does NOT want to charge you the Long Term Storage Fee. If they did, they would not make so many reports available to you and make it easy to identify and dispose of this type of inventory. They even reduced the removal and disposal fees to help sellers adjust to this new rule. It’s only $0.20 to get Amazon to pick, pack, and SHIP an item back to you. I don’t know about you, but i can’t even buy a box for twenty cents, let alone pack and and ship it somewhere. And if your inventory is scrap or junk, Amazon will toss it for you FOR FREE.
This fee is designed to encourage FBA sellers to manage their FBA inventory better and to not simply use FBA warehouses as a cheap storage unit for all of their inventory. The FBA storage fees were so low that many sellers (myself included) simply sent Amazon everything because it was so cheap to store it at FBA that it made sense.
Who remembers fourth quarter last year (2010) when Amazon halted inbound FBA shipments because FBA warehouses were full? I sure do. This fee will prevent this from happening again. Amazon wanted nothing but to receive inbound shipments and get stuff listed and sold, but too many sellers filled up the warehouses with slow moving inventory. The new Long Term Storage Fee will discourage this practice and keep FBA warehouses able to receive products without any delays.
Summary:
Think of it this way: only send Amazon a maximum of ONE YEAR SUPPLY of any product and you will never be charged the Long Term Storage Fee. Single quantity items are excluded to you can still send in Long Tail items without worry. Periodically check the Inventory Health Report and the Recommended Removal Report. Most FBA sellers who sell books and media items with quantity of one will be largely unaffected by this new fee. If you need any help having your inventory returned to you or disposed of, please contact Amazon’s Seller Support team using the Contact Us link in your Seller Account.
A few weeks ago (May 14, 2012 to be exact), I attended the Seacoast eBay and eCommerce Meetup Group organized by Bobbi Miller.
http://www.meetup.com/Seacoast-Ebay-Seller-Group/
The special guest speaker was Jason Smith from Thrifting With The Boys (TWTB).
http://www.thrifting-with-the-boys.com/
Jason runs TWTB with Bryan Goodman who used to live in the area and regularly attend Bobbi’s Meetups. This was more than just a Meetup where you have dinner and listen to a guest speaker for an hour; this was ‘meet at the store and do some real, live sourcing with someone who knows what they are doing’. People met at a Savers (thrift store) and brought things over that they thought would be good buys. Jason would then give them feedback about each item. This was the golden information that really helped people. He’d explain WHY an item would be good to sell or WHY an item would not be good to sell. And just because it would sell, if the price was too high at the store (seriously, some shirts were like $8), then it would kill the margin and profit, even if the item would sell quickly online. This REAL feedback on specific items is what really helped the attendees LEARN and gave them great insight that would help them grow their businesses.
Anyway, I’m generally known as an Amazon and FBA guy, and here we are hitting thrift stores and pawing our way through racks of t-shirts and scouring shelves of coffee cups. I’m used to retail shelves, new merchandise, and UPCs, but I’m hooked!
I now had just enough information about what would sell to be dangerous and I’m going to a different thrift store every day. Around here, we have a bunch of Savers, a few Salvation Armys, and one Goodwill. I found great stuff at every one and I even started going to garage sales.
Now I’ve done eBay before. I’ve packed 100+ boxes a day, day after day. I’ve been a Platinum Powerseller, but I left eBay a few years ago for the allure and simplicity of Amazon and FBA.
My primary eBay accounts can be seen here:
#1: www.locomodem.com
Sales: $1,453,843.86
Transactions: 25507
#2: recon_tools
Sales: $270,151.39
Transactions: 5528
Finding stuff to sell wasn’t hard, but if I’m going to go back and give eBay another chance, I need to be able to somehow match the efficiency of Amazon with one-of-a-kind items that are best suited for eBay. After all, now I’m back to taking pictures, choosing categories, and writing descriptions. It was not that long ago that this meant getting out your camera, taking the pictures, uploading them to your computer, and then editing, resizing, and cropping as needed. This step alone would seem to be a deal breaker, but here’s where technology has really stepped up in eBay favor.
With one of a kind items, there is really no way around taking pictures and entering item specifics; you just need a dead-simple way doing it.
So, hearing about my renewed interest in eBay and my desire for efficiency, Kat Simpson of www.thatkat.com says that I should talk to Cindy Johnston Sorley of www.bubbacandance.com. Cindy raved over eBay’s new iPhone and iPad apps and about how fast she could list items, even one-of-a-kind items that required pictures and specific, detailed descriptions. Her enthusiasm was contagious, but I was admittedly skeptical. That night, I downloaded the eBay app to my iPad and gave it a whirl.
The solution is pretty elegant. There is an app for iPhone and iPod Touch (referred to as the Gold App) and a dedicated iPad app (referred to as the Blue App). Now you have the camera and computer all in one and you can list without even having a computer! I know some of you may be laughing at me for being late to this party, and that’s OK, I can handle it but the point that I would make to eBay is this: sellers like me left eBay for many reasons, one of which was not being efficient enough to scale properly (something that Amazon and FBA did wonderfully). Now eBay has apps that let sellers list one-of-a-kind items with efficiency and hardly anyone knows about it? eBay should be screaming from the rooftops about their new apps!
So I stayed up pretty late that night but I was determined to list some items. After all, I now had a basement full of Savers bags full of shirts, coffee cups, and other assorted things and if I wanted to continue the treasure hunts, I knew I’d have to start selling. I hadn’t sold and shipped an item myself in over two years. The last things I had sold on eBay were just listings that I fulfilled with my Amazon FBA inventory. I go with the easy stuff and list some coffee cups. I set them up on the kitchen table because I don’t have a proper photo studio setup yet. I intended to do some shirts, but I need to find a place to take good photos without kids toys in the background. I used the Blue App on my iPad and it was just as easy as Cindy said it was. You really can list an item, start to finish, with title, category, pictures, and description in under two minutes. And the pictures thing is pretty fancy. It’s not just ‘take a picture’ and use it as is; you can pinch and zoom so that you get a great shot of any little detail that you want to highlight.
When I finally went to bed, I had listed six items and it took me about an hour. I could list the same items in a lot less time if I did them again now that I am more familiar with how the app works. I also had to update everything on the account before listings would go active since I had not sold in so long.
So, a few days later, I practically jump as my phone makes a sound that I had never heard it make before: CHA-CHING! It was the eBay app alerting me to a sale! Pretty cool, eBay, pretty cool.
What did I sell? Two Dunkin Donuts coffee cups for $29.95. http://www.ebay.com/itm/290726826387
I paid $1 each at a garage sale just down the street. Maybe I could have sold them for more, but I’m happy with the sale. eBay, it feels good to be back.
So am I still an Amazon and FBA guy? I know I’m seen that way, but that was not my plan. I’m an ARBITRAGE guy, and let’s coin a new word here: OMNITRAGE. OMNI- prefix meaning everywhere; all. TRAGE- from arbitrage. It’s all about identifying inefficient markets and capitalizing on them. I got my start exploiting the market inefficiencies between Home Depot and eBay. It was easy, I learned the markets and the products, and we made great money doing so. Just because we moved to Amazon and FBA doesn’t mean that my interests have changed; they’re still the exact same! Identify products in inefficient markets and get them to the market where they are best suited. It doesn’t matter where you buy it or where you sell it. It could be retail to Amazon or thrift store to eBay, it’s all the same ‘hunt’ and the hunt is what I enjoy.
So never stop learning! If you’re on your way out scouting for toys at retail, consider stopping by that thrift store on your way there. If you’re searching for Hawaiian shirts and Starbucks mugs at thrift stores, consider learning to scan books, media, and games (you’re already at the store, aren’t you?).
And on your way home, don’t be afraid to stop by that garage sale either
What’s next? Finding innovative ways to scale this even further. Stay tuned.
