Tuesday, May 20, 2008

My Amazon FBA 6-Month Review

November 2007 was my first full month using Amazon's FBA service, so I thought I would look at some stats and share them with all of you.
  • Total items shipped to Amazon FBA to date: 7305
  • Total items sold to date: 6462 or 88% of all items sent to FBA.
  • Total items unsold: 843 or 12% of all items sent to FBA
  • Number of un-sold items that have been warehoused longer than 4 months: 58 or 7% of all unsold items.
  • Total warehouse expense for those 58 items: $3.48
  • Gross Sales (6 months): $85,218.83
  • ASP (Avg. Sale Price) - $13.19. BTW, that ASP is higher than my ASP on eBay "back in the day".
  • No, I'm not going to tell you what my net profit is, so don't ask.
  • I spend 10 hours a week on this business and have not been to the post office or UPS once in six months. I answer 2 emails a day (related to this business) at the most.
  • I have no employees, warehouse, packaging materials or Pitney Bowes account.

This isn't Glacier Bay DVD, but I've learned my lessons from that experience and will take this business slow and steady.

Just my 12% (adjusted for eBay FVF)

19 comments:

Max said...

Very interesting stats, Randy, thanks for sharing. Even if I go conservative and assume a 20% margin, that's still a nice profit.

Poly said...

Hi Randy,

Thanks for sharing. Such a great concept by Amazon.

Excluding the savings in man hours from the handling and shipping of orders, by how much did the your handling/shipping expenses (%) increase on the average sale?

Randy Smythe said...

Poly,

Actually, my S&H expenses went down.

My cost to ship a DVD is $0.57 cents, but I only sell on Amazon so I don't pay their Basic Fulfillment rates.

FillZ Inc. said...

Any specific feedback as to what you like vs. don't like about the program? Are you just selling on Amazon with the program?

I know its come a long way from the first round of beta testers, but was curious as to your thoughts. It sounds from your post like its quite simple to use and you are happy with it.

Cheers,
Shaun

Cliff said...

Hey Randy,

Thanks for posting. I don't know how slow you're actually taking it, but it looks pretty steady.

I finally picked up the eBook advertised to the right of this column. Learned a couple of things, but $29.95 did turn out to be pretty steep for the 50 or so pages. It is well-written, concise, easy to understand though, so I would recommend it to someone who has yet to create their Seller Central Account, but has thought about it.

I'm hoping his section on negative feelings towards penny-sellers holds true--I listed a slew of VHS last night that I'm sending out to FBA on Friday, where I'm the cheapest guy...after a pair of penny-sellers duke it out for several listings. This will be an interesting case of goods to see if the lure of SuperSaver/Prime shipping can overcome the penny sale. I'm at about $5.99-$7.99 on those titles, which isn't too bad if you qualify for either shipping deal.

My numbers are miniscule by comparison to what you've posted above, but I have made some interesting sales. An OOP VHS that isn't available in DVD form went for $22.50. I've sold a couple of common VHS titles, which are in print on DVD for $6-$7. I was the cheapest guy by about $10, but I even got $59.99 on an OOP CD.

Selling about 1 item per day with under 200 currently warehoused. Continuing to add, concentrating on new and used VHS + DVD, paperback books, and CDs (though those are my own that I'm selling off just to clear room).

So far I like the program a lot--it just took a couple of weeks to get over what felt like excessive final value fees (eBay talk), but when you take the no listing fees and the minimal labor into account it's more than fair.

Randy Smythe said...

Cliff,

Thanks for the details on your experience. I remember the first few weeks for you were a little tough, but it looks like it is humming along now.

Shaun,

It is not quite ready for prime-time for large sellers, mostly because Seller Central is not quite up to snuff. I generally ship orders of 150 - 200 units twice a week so it is perfect for my biz. Once they finish the changes to Seller Central larger sellers will come on board.

Of course if you guys at Fillz get setup with them that might move this along faster.

eMail me please rksmythe at yahoo

I'm sure that

Robert said...

Thanks for the insight Randy. I'm considering trying FBA. I do similar numbers as you but for a $20 item.

I have a couple of questions. First... when you say "my cost to ship a DVD is $0.57 cents, but I only sell on Amazon so I don't pay their Basic Fulfillment rates....can you please explain that a bit for us neophytes? Does that mean that for orders which I take on my site but fulfill through Amazon it may not be wothwhile?

If you sold on your own site and not through Amazon do you think the FBA program would still be viable for you or would the cost be too great on such a small ticket item?

Secondly, about a third of my orders are from outside the U.S.. Does FBA work for Int'l sellers as well? I ship strictly with the USPS 1st Class mail Int'l.

Thanks for your great Blog Randy...

Robert

Randy Smythe said...

Robert,

Thanks for the question. If I sold that same DVD on my website or another marketplace and had it fulfilled by Amazon it would cost me $2.57 to ship. Of course on my Website I wouldn't have the 15% comission either so the total expense might be a wash.

When I shipped items myself, I typically paid $1.60 including direct labor and packaging to ship that DVD myself so Amazon Basic Fulfillment is $0.93 cents more expensive than if I shipped it myself but I also am not paying $4.500 a month in rent for my warehouse, security system and insurance etc.

On the International question, FBA does ship Internationally and I pay the same $0.57 cents to ship to the UK as I do to Utah but only for Amazon marketplace orders. I don't believe they are setup yet for International shipments through Basic Fulfillment.

I hope this helps. For me it would be worthwhile to use FBA on orders from my own website but not on another marketplace where I had to pay FVF.

Cliff said...
This comment has been removed by the author.
Cliff said...

Nice little FBA benefit -- I don't think the autopricers get it. Not meant to promote my own product (Randy, delete if not appropriate), but I came in at $11.75 on this item because I could afford too, when the cheapest existing product was at $15 and change. Look what's happened. I've got 4 sellers at my price or cheaper by a few pennies ...but I'm still $2.98 cheaper than them if you're logged into Prime. I don't know how it shows if you're not logged into Prime, but I'm also cheaper if you only qualify for SuperSaver. And these other four sellers came down from at least $3.75-$4.00 to meet me, but they're still $2.98 more expensive for a good amount of customers.

Even if they catch on and come down yet another $2.98 to beat me, I still feel advantaged towards customers such as myself, who prefer to order through Prime.

I liked that!

Randy Smythe said...

Cliff, that is odd becasue in most cases, I have found that I'm always $2.97 higher than the lowest price (even though I show-up first on the list) In your case they came down to your price but won't be able to show ahead of you until they drop another $2.98

Very cool.

Cliff said...

Now as long as I steer clear of you I should be okay :)

liz.jones said...

Hi Randy, Thanks for this blog, very interesting reading. We are Pro Merchants on Amazon at the moment, and shipping everything ourselves, but are considering moving to fulfillment by Amazon (FBA). I was wondering if you were previously shipping directly to customers and, if so, whether you had any idea of how much (%) your sales went up when you moved over to FBA.

Randy Smythe said...

Liz, I sold a few items a month on Amazon before. In a prior life I sold alot with my previous company but FBA wasn't available then.

I do think it is well worth the test.

Rob said...

has anybody had any experience with FBA not scanning all books. I have had many shipments where books were not scanned but later found after I emailed Amazon-very frustrating-I am scared to send more items. Any suggestions--am I using the wrong printer on the labels? Any label brand better?

mark said...

very detailed article, would like to know is there a limit to how many products are sent to fba? Is there a set fee on shipping to fba? Or is it just basic mailing standards?

Anonymous said...

hey guys, check out this video about amazon fba edition https://www.youtube.com/watch?v=hjXv6F2d6V0

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