Amazon Selling

Aqua_Aura

Since it was asked I will start the thread but I'll have to circle back and add some of the info later. Rather than me just ramble on now it is probably best to ask any questions. 

For those who may be wondering what I am talking about. I have a side business that I sell my own private label on Amazon for about the last 2 years now. We sell mostly hand tools and soon some boating related tools such as the snap install tool and the grommet install tool for things like tarps.

Aqua_Aura

I'll add this answer here as well since it came up in the other posting.

We use Alibaba but it is only used for the transactions with our supplier in China. I think ali express is for buying more direct retail type stuff but I'm not sure. As it is now with our products we are purchasing around 2000 units a month and having it shipped by sea. This is going to start increasing greatly as we have many new products starting. 

Finding a good supplier/manufacturer is going to be the hardest barrier to entry aside from having the money to begin. A bad supplier could sink you really quick. If they don't produce good products or can't keep up with your demand that can kill a product. When you run out of stock on an item it is really bad for the listing unless you were able to get ranked well and had some good advertising. 

Aqua_Aura

This is a perfect question and is exactly what someone might think however it is very much the opposite in most cases.

Very simple terms when we make a product we generally want to sell it for 3 times what we pay, so if its $5 ship into Amazon warehouse from the supplier then we want to sell it for $15 now we would only keep about $5 and the other $5 would go to Amazon for the fulfillment fee and there "commission" now of course this is a very simple example. If you do your own fulfillment this is generally only good if you want to ship out larger items that don't sell many a day but have high margins, some of our products we will sell 30 a day and a big reason they sell well is because the customer sees Fulfilled by Amazon which is a big selling point as the customer will get it quicker. If I fulfill the item I have to package up 30 units for that example then print 30 different labels and ship them and it may take awhile if the person is in Florida for instance since I am in  the NW. When my products reach Amazon they get spread to warehouses all over the US and can reach customers in 1-2 days.

Amazon list their fee schedule for FBA and their commission they take out. The wire connectors for instance cost about $5 and FBA is also about $5 so we sell for $15 however that category as we later realized is very competitive and it turned into a loss for us but we had other products that made up for it so it was not so bad. If that was my one of my first few products and I was light on money that could have sunk the whole thing. As long as you have cash available then it is much easier to spread out to many products so if you have some losers then oh well.

If you have a successful  product launch you will still be upside down in money for a period of time however you will get ahead of it and then be using your profits to launch more products. Lets say you buy 2000 units for $3 each shipped to Amazon warehouse well that is $6000 out of pocket and when they arrive in the US and you see they will sell well in a couple weeks then it is time to order more so now you spend another $6000 for a total of $12000 then a 3rd order could put you in the hole about $18000 total. I say could put you in the hole because by the third order it should start paying for itself then become self sufficient. 

You do not necessarily need to build a name on Amazon although eventually you will and it helps. Think about when you buy random things on Amazon like a tape dispenser you just search for it find a good offering both price and maybe it comes with free tape so you buy it. Not many buyers are brand loyal they just want a good deal.

LaRea

Yeah, I guess that's true:  I often don't look for a recognized brand name.  

How do you do product photos?  Some vendors have good pix and some have total crap that makes it harder to buy.  Do you create your own images?

Aqua_Aura

I meant to add that yes Amazon does charge storage fees however it is very reasonable and they charge by the cubic foot.

Also there is a place for FBM(fulfilled by merchant) if you are reselling other brands of products like if you bought large quantities of store returns. You would have to organize them and then if that brand or product allows you would list it on the current listing.

Aqua_Aura

We send our product to a photography studio that specifically takes "photos on white". Usually when you see really bad photos it is a Chinese seller or just a small brick and mortar selling a couple of their products. The Chinese seller listings are usually obvious but not always. The way they describe their product in the bullet points and use emojis is a dead giveaway. 

You can now click on the sellers name of a product and see their business address to see who you are buying from which is very helpful.

randy56

@Aqua_Aura Very fascinating how the business works. Thanks for sharing.

Aqua_Aura

There is much more than just that but it gives you an idea. It really is a very interesting path I have started down and I look forward to growing the business much more in the future. This has set a good foundation for me and my business partner to expand to all sorts of things outside of Amazon. 

YYZRC

This is fascinating. Thank you!

Dream_Inn

Definitely a very interesting topic!  Thank you so much for starting this discussion and talking about what you have learned.

Liberty44140

Aqua_Aura said:

We send our product to a photography studio that specifically takes "photos on white". Usually when you see really bad photos it is a Chinese seller or just a small brick and mortar selling a couple of their products. The Chinese seller listings are usually obvious but not always. The way they describe their product in the bullet points and use emojis is a dead giveaway. 

You can now click on the sellers name of a product and see their business address to see who you are buying from which is very helpful.

Agree that the Chinese sellers are obvious. Their store name and spelling/grammar gives it away pretty quick 

Liberty44140

AA, any advice on where to go to find the overseas suppliers? 

Aqua_Aura

I did not have to use the process below as I had a connection to a very good manufacturer/distributor already from my business partner. However we do our transactions within Alibaba so we have protections in case anything were to happen such as product didn't get delivered or it wasn't to our agreed specs. 

I say the above just as a disclaimer that I am not speaking first hand on the sourcing method most use below. 


The only way I know of to easily make a connection is through Alibaba. You would need to source the product you want mass produced to your specifications and then you can submit ROQ (request for quotation) and see what you get back. Generally your first product and order should be something small and inexpensive so this will give you a chance to see how well the supplier does with your request and how responsive they are. 


The other thing to be aware of is import laws and tariffs. You may think you have a great product then it gets to the US and you realize the tariffs are $1 per unit on your product that had a cost of $1 and that can really mess up margins. Don't do anything that is edible or could be considered hazmat. 

An example of random extra tariff fees are pencils. It's something like a writing device wrapped in wood and there is a big fee on it if it comes from China, you could source it from other countries of course. 

Liberty44140

Thanks that is helpful. There is so much on Alibaba which I guess is both good and bad. I've been researching this for over a year and looked at the services you mentioned and agree, they all seem to be selling something more than actually assisting in the set up. I wouldnt have a problem paying for assistance getting going but if its just selling a platform then there are plenty of fish in the sea. 

Are you only selling on Amazon or are you doing Ebay, other sites, and/or your own site? Part of me thinks that with the Amazon traffic there isnt much of a need to do anything more than Amazon. Sure you pay, but should make that up in volume. 

Aqua_Aura

We only do Amazon mostly for the traffic reason you give. I am looking at expanding into other areas of buying and selling store returns where you buy pallets or trucks full of whatever they may contain. My cousin does this and is looking to expand on their own so with their knowledge base and mine we should do pretty well, we just need the time and space to deal with that new venture.

Covid-19,US holidays,and February was Chinese New Year so all that really backed things up as far as our stock but we are managing and keeping as much as we can ready to sell. Going out of stock on an item can prove very costly in lost profit which is why you really should have some good cash on hand to start and operate so you can keep the supply chain going. 


We are currently very busy with Amazon at the moment so we are mainly concentrating on that since that's the money maker now and it needs our full attention. Yesterday we spent 4 hours unloading some 1200 boxes for a total weight of about 16k lbs into my shop and now I have to get it all labeled and shipped out UPS. 


THANKFULLY MY WIFE DIDN'T WORK THAT DAY AND WAS ABLE TO HELP ME!!!

Aqua_Aura

Amazon has been putting limits on how much they will take which have been below our sales needs so we have used my house as an in between storage to keep the supply chain going. Adds a little cost but much better than running out of stock. 

Liberty44140

I am sure that is well worth it though to build the business. Are Amazon's limits based on sales and if you dont sell enough in a certain amount of time you get charged? Will you get to a point where you will leave warehouse space instead of your house?

YYZRC

I am exhausted from just looking at those boxes @Aqua_Aura !!

TonyG13

Does Amazon tell you which AMZN warehouse to ship it to and how many units, or does it all go to one master AMZN warehouse, then they redistribute from there around the country?

Aqua_Aura

I see your questions and I will get back to you. Yes I am exhausted from handling all these boxes. 🥵

Ian

Care to share your business name to look at your products @Aqua_Aura?

Aqua_Aura

icoultha said:

Care to share your business name to look at your products @Aqua_Aura?

https://www.amazon.com/s?me=AE9OV415QXCFC&marketplaceID=ATVPDKIKX0DER

Ian

Aqua_Aura said:

icoultha said:

Care to share your business name to look at your products @Aqua_Aura?

https://www.amazon.com/s?me=AE9OV415QXCFC&marketplaceID=ATVPDKIKX0DER

Thanks. Keen to look at the snap tool when you get them.

Aqua_Aura

shawnmjr said:

Looking at the amount of boxes there I could see that being very time consuming for you especially working a full time job

This is going further than just a side hustle as I am looking to replace my full time job. On that note luckily for me my full time job is full time pay with working about 2 days per week or less. This is still possible to do with a 40 hour a week full time job and not touching any products with plenty of money to be made. 

Aqua_Aura

Liberty44140 said:

I am sure that is well worth it though to build the business. Are Amazon's limits based on sales and if you dont sell enough in a certain amount of time you get charged? Will you get to a point where you will leave warehouse space instead of your house?

They base it off of sales for what they allow to be sent in however it was not like this till the summer of last year and probably will go back to removing the limits. You do get charged storage fees of .75 cents per cubic foot and in the holiday months it jumps to somewhere in the 2.50 range per square foot. 

I am certainly moving toward the direction of having my own warehouse space so that we are not confined to any limits Amazon may impose and it will also be available for any other sales we decide to do. 

Aqua_Aura

TonyG13 said:

Does Amazon tell you which AMZN warehouse to ship it to and how many units, or does it all go to one master AMZN warehouse, then they redistribute from there around the country?

I create a replenish inventory order in Amazon and print UPS labels which have any number of random warehouses on them then from there it gets moved all over the country to all the warehouses by Amazon trucks. Normally it is shipped from China straight to Amazon by LTL (less than truckload) from my house it is actually cheaper and more reliable to use UPS as LTL is very limited and expensive now. UPS for Amazon inventory replenishment is far less expensive than just shipping a box to someone, this is because the UPS trucks are running specific Amazon routed straight to the warehouses.