The Difference Between Success & Failure When Selling On Amazon
Selling on Amazon FBA is an amazing opportunity, a chance to make money online and potentially change your life.
It changed mine and my family's - we're now full time online living our dream life in Mallorca.
However, I'm sure you already know that there are no guarantees of success, that to make a long term success of it requires overcoming some challenges.
There are three potential barriers to success that all Amazon sellers face:
- Knowledge & ability
- Cash flow
Knowledge and ability can be developed over time, although I would say that you do need to have an in built drive and determination to make it work,
There's not a lot I can do about your cash flow today, although if you maximise points 1 and 3, your cash flow will improve.
Today we're going to focus or barrier 3 - Time. At the end of this blog post I'll provide some links to outsourcing solutions that you can utilise.
The Time Problem:
Do you have another full time or part time job?
Are you a student who has other work to do?
Do you have childcare as a priority?
For many of us when we first start selling on Amazon, we are trying to balance the development and growth of our FBA business with other priorities. That means we often can't devote as much time as we'd like to Amazon.
It took me about 1 year to go from full time job + Amazon to 100% Amazon. It was tough, but I could have accelerated that progress if I had been more effective in one particular area. Given the subject matter of this blog post, I'm sure you've already guessed what it was.
There is a quote towards the top of this page: "Time is more valuable than money. You can get more money but you cannot get more time"
But the thing is - you can get more time. Or at least you can create more time for yourself by stopping doing things that do not add value. Of course, these things still need doing, so the obvious solution is to get other people to do them for you.
Utilise someone else's expertise or cheaper labour costs and you can focus on actually moving forward with your Amazon FBA business.
Step by Step:
Make a list of your Amazon FBA processes - online arbitrage, retail arbitrage, creating Amazon shipments, accounting, Amazon admin, reconciling stock, repricing etc.
Document these processes, either in a flowchart style (use a free online resource like LucidChart) or just write down the steps involved - example below.
Make your processes as efficient as possible (i.e. elminate wasteful steps).
Then estimate the time taken to complete each step. I've created an example below which shows a basic online arbitrage process, from receiving ordered goods to shipping to Amazon.
Based on the estimated timings each time you receive an order it's going to take you 1 hour 50 minutes to get it ready to be sent to Amazon. If you do this a few times each week you can see how quickly that time adds up.
The final step is to identify which of your processes take the most time, and out of those, which ones you can outsource.
What Parts Of Your Amazon Business To Outsource First
Removing store labels from boxes is not the best use of your time. Neither are any of the other steps involved in receiving and preparing your online arbitrage orders. A prep centre does one thing, and therefore in theory they should be more efficient at it than you.
They will check that the stock you've ordered from an online store is correct, that it isn't damaged, and will do all the prep required for a shipment - labelling, boxing up, arranging the UPS collection etc.
Many prep centres will also handle returns as well as multi channel fulfilment (e.g. eBay).
I'll provide links to some prep centres at the end of this post
Costs: Typically a prep centre will charge a per item fee and a shipment fee (plus cost of boxes to ship to Amazon). Some prep centres also charge a monthly subscription fee.
Does this sound familiar? Pretend your accounts don't exist for 11 months of the year then frantically try and pull everything together before a deadline?
Even for those of you who are diligent, spending hours every month recording all of your incoming and outgoing transactions, or preparing you accounts for a tax submission can be both stressful and time consuming.
It's not something I enjoy, it's not something I'm particularly good at, and I'm more than happy to outsource this to an expert who can do it quickly and more important correctly.
Costs: Approx. £130 / $150 per month & upwards
Product Sourcing #1 - Sourcing Lists
Here we get on to the more interesting aspects of outsourcing - where we can actually make money (depending on who we outsource to of course)
I sell primarily in the UK and EU marketplaces, but when I used to sell in the US 80% of my inventory came from product sourcing lists. I used to buy one off lists rather than a subscription service, and shopped around until I found list providers who were consistent.
Points regarding sourcing lists:
- Don't expect to buy everything off each list. Some days you may purchase nothing, the next day you may go for 50% of them. Play the long game and choose your products carefully
- Don't go for a list that has too many subscribers. I've seen services that "limit" their lists to 50 sellers. In my opinion that's way too many. Listings will get swamped with races to the bottom
- Work out how much you need to sell to break even with the cost of the list services - then everything after that is pure profit
- Use the lists as a starting point - if there is a product that is profitable because it's on sale, are there other products at the source store that you can find
I'll provide links to some sourcing lists at the end of this post
Costs: From £97/$127 - £200 / $250 per month for subscription services
From £9.99 / $15 for one off lists
Product Sourcing #2 - Virtual Assistants
We were able to grow our Amazon business significantly when we outsourced our product sourcing to VA's. OK, let me clarify that - the first few VA's we hired were a disaster - not necessarily their fault, I didn't really know what I was doing either. But once we got the system cracked regarding recruitment, training and managing them things really took off.
I'll provide links to a Virtual Assistant Training Program at the end of this post
Costs: Start at $2.50 per hour for their trial period (1 week) then $3.00 per hour (if hiring from the Philippines)
US - It's a while since I've sourced in the US so I can't directly recommend a prep centre, but I am aware of both Prime Zero Prep and IndyPrep who have both been around a while. Also, FBA Inspection has been recommended to me by a member of my Facebook group
Product Sourcing List Service
Product Sourcing Virtual Assistant
Virutal Online Arbitrage is a full training program that includes training for you on how to recruit and manage your Virtual Assistant as well full training for your newly recruited VA on using sourcing software (Tactical Arbitrage & FBA Wizard) and / or manual sourcing.