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Do you use FBA?

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  • Do you use FBA?

    I'm curious how many forum goers out there use FBA to sell some of their products.

    If you do, what are some of the things you love about FBA? What are some of the technical challenges you face? If you could say "If I could do this better/faster" what would that be?

    Thanks for your time.

  • #2
    I sell FBA on items unrelated to my restoration business. There's really just ONE thing that I dislike most about FBA and that's shipping to 3-5 different warehouses with each shipment. It would be so much more cost efficient and time efficient to ship ALL my items to the warehouse closest to me and let Amazon sort out the rest. What I like best? I get an email that says an item has sold. That's it. I don't have to pack, label, ship, do the customer service, nada. They handle it all. During the holidays where things will be so fast and furious (hopefully like they were last year) all I have to concentrate on is getting more inventory to the warehouses and not individual shipments, customer service, etc. I just have to shop til I drop and ship to Amazon. I've sold as an individual seller and a pro merchant and sales are 30% higher as a pro merchant (not a webstore, just a pro seller account), profit margin is higher also on FBA merchandise. Free shipping always attracts buyers and with FBA your items have free shipping (built into your purchase price, of course).


    • #3
      thanks for the reply TooBusy. can i ask a couple more questions? (hope so because here they are)

      1) when you prepare your items, about how many are you sending at any given time? Are your shipments large?

      2) how cumbersome do you find their preparation process - primarily for those items that need to be relabeled with proper fnskus

      3) if you are shipping on a larger scale, do you have any sort of integrity check in place to ensure you are picking and shipping the correct items from your inventory?

      3b) are you picking and shipping yourself or do you have staff members that do it for you?

      4) do you sell your items on multiple asin's at a time? or have you even considered doing so to circumvent competition and squeeze out more margins at the risk of less traffic vs something with a higher sales ranking?


      • #4
        We're primarily an Amazon seller now with 20,000 SKUs. We did one SKU as a FBA test earlier this summer.

        Sales went up and overall costs went down, due to Amazon shipping the item more cheaply than we could
        Cons: Prepping was kind of a pain in the butt. I was sending out about 16-20 units at a time and these are fairly hefty things. Imagine something like a walkie-talkie inside a plastic clamshell.
        The return rate for people buying over FBA was much higher
        Something like 3-4% of our units would come back to us from Amazon as unfulfillable because the tape wasn't sufficient, or because a customer returned the item without all the pieces. These were effectively junk once we got them back.

        I have discontinued doing it for now, but have been keeping an eye out for another SKU that would be good for it. Most things we sell a lot of are tiny objects that we can mail for $1.50, so the cost savings would not be as much.

        We do sell on multiple ASINs per item. Do you use anything for repricing? I have a pretty robust system scripted up to handle pricing updates.


        • #5
          Originally posted by Toobusy View Post
          It would be so much more cost efficient and time efficient to ship ALL my items to the warehouse closest to me and let Amazon sort out the rest
          They actually used to do this by the way. The great company they are, they decided this was too expensive and it would be much better to pass the logistics costs along to the merchants. All under the guise of the amazon partner carrier "discount" we get. This essentially raises their overall volume and thus increases their discounts with UPS on all of their outgoing shipping, but we foot the bill.


          • #6
            If you're doing a small number of items in a shipment, say under 20, I pay the .30 each item and ship to the same warehouse and they distribute it. Sounds like a plan until you calculate that during the pick and redistribute on their end your item becomes "unfulfillable" until it reaches it's new destination and is suddenly "fulfillable" again.

            I self fill probably half of my items, which are lower cost items that the $1 pick and $1 pack would eat too much of my profit margin to make it worth my time and effort to ship.

            My "average" shipment is 100 items or less, and I do that myself. I print the labels, attach to the items and sort according to the warehouse Amazon picks that the item will ship to. Biggest PITA? Removing price tags. I HATE that part of the whole scenario because I purchase for resale so I'm dealing with clearance warehouses and their price stickers. (Goo gone is now my best friend and a heat gun on the items where I can use it).

            I mostly buck up my inventory for the holidays where the prices among merchants rises because of the season, during the rest of the year although I keep my pro merchant status, I self fill my items. I have no assistance/employees working for me on this. My restoration business falls off during the holidays, and I can see that, hobby cars are not important and family/children are, so Amazon fills the void for me.

            I haven't found returns to be higher FBA however. I have few returns (knock on wood) but you are allowed to deduct 20-50% for returns, depending on the reason for the return. Accidental order? 20% restocking fee. Just following Amazon's policies on that


            • #7
              I wish the Amazon Order Sync would import the FBA fees. I'd like to automate the computation of fulfillment costs on each order. If I ever get a large volume, it will be a major pain in the butt to look up each order individually. Some orders are Prime, and others non-prime, so the fees are different. Also, the Sync brings in WA sales tax, which is a pass through. Wish it wouldn't bring it in at all.


              • #8
                how is everyone handling the tax implications of filing in every state that your items are located (ie Amazon warehouses) - plus you have to keep track of when Amazon moves your items to another warehouse - I could see having to file in 50 different sates and then having to know every states tax laws. I can only imagine there are millions of folks not doing their taxes correctly and in this digital world and Amazon reporting to states that folks are going to get caught up in tax legal issues.

                The tax implications are a nightmare - every state has different sate laws and you are considered a nexus when your items are sitting in an Amazon warehouse and then sold from that warehouse. So you need to file in almost every state now that Amazon has so many warehouses. Some states even require you to file paperwork even though you may not even sell into that state.

                So what is everyone doing to make sure you pay every states sales tax as a FBA sellers since you are now considered a local business (nexus) once your items go to an Amazon warehouse in that state.
                Last edited by ebeegirl; 02-13-2018, 06:21 AM.


                • #9
                  Ebeegirl, I'm pretty sure no one is, at least I've never heard of a solution to the problem. Especially since Amazon co-mingles inventory depending on your product it can be impossible to know where it really is. Our sales tax attorney warned us years ago that FBA would be an absolute nightmare once the states got around to attacking it and it could easily put some small-mid sized etailers under. State sales tax audits are 100x worse than IRS audits.


                  • #10
                    lukiegames we used to sell on Amazon as FBA but when tax laws started changing we could envision that many sellers have no idea that they are now required to report state sales tax in every state that their items are warehoused. We thought this won't be an issue since we sell food and food is not taxed in Ohio where we are based. Unfortunately some states do charge tax on food and as Amazon started really building their warehouses we started envisioning the forthcoming issues this could present since I would bet a very low number of folks actually pay state sales tax on Amazon sales.

                    I would also assume many people don't even know about a Nexus. You could keep up with your inventory as Amazon would let you know where it was located but we would have had to hire a full time tax attorney. Just a heads up to everyone that is not paying right now - the states will want your money and can you imagine going to all these states when they come knocking. So we no longer sell as a FBA seller.

                    We checked out a company called taxjar but for us it really wasn't worth the amount of paperwork we would have to do to comply.