Tuesday, October 27, 2015

Turnover Tuesdays - Storage Fees - I Don't like Heavy Items

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

Week 1 - First attempt at reselling
Week 2 - My second straight fail
Week 3 - My iPad mini collection
Week 4 - Bed Bath and Beyond
Week 5 - An iPad Idea for Your Staples Gift Card Collection

The Item - ThinkServer TS140

Lenovo ThinkServer's were on sale for $285 on eBay two times, this is the first time and this is the second time (they were on sale again recently for the same price but the resell value was lower and it wasn't worth it anymore).

Both times there was a limit of 5 and I bought 10 total from the 2 sales.

At the time Amazon was selling them for between $350 and $360 each.

Credit Card Points 

I paid about $2,850 for the 10 servers.  That's $57 on my 2% card.

Shopping Portal

The purchase was made with Shop at Home at 2%.  I earned another $57 that way.

Loyalty Points - eBay Bucks

I earned another 2% cashback with eBay Bucks, that's another $57.

Fulfillment by Amazon Fees

I paid ~$372 in FBA fees.  I paid another ~$100 in shipping fees since they weigh over 20 lbs.  Such a pain to deal with!

That's over $47 in fees per unit!

The Haul  

I sold my first one for $363.80, the second one for $362.98.

A week passed before the next sale since the price dropped and I sold at $354.87.  Then the resellers hit the market from the second sale and I wanted to wait them out to let the price bounce back.

The problem was that it wasn't bouncing back a month later and I was losing money by not having my float and storage fees which I will get into later.  I decided to drop my price to the going rate of about $344 after a month of waiting.  I sold the remaining seven within about 2 days right at about that price.

Ultimately I earned about $3,490 from the ten units.  That's a gain of about $165 or $16.50 a unit.

Here is how the numbers work
Cash = $165
Credit Card Points = $57
Portal Points = $57
Loyalty points = $57 in eBay Bucks

When you combine the credit card cash, eBay Bucks and portal cash, I earned an additional $171.

My return on investment became about 11.5-12% or so.  Not amazing.  I could tolerate that if it were a small item like an iPad that it isn't so difficult to handle.  For an item like this in the future, I need solid, solid margins.

Storage Fees

If you hold onto items at Amazon warehouses for more than 30 days, Amazon starts charging a storage fee for that unit.  The storage fee depends on the size of the item.

The storage fees are dependent on the time of the year as well

Amazon tells you next to the listing in your FBA inventory how many cubic feet each item is.

The ThinkServer is 2.655 cubic feet (iPads are .7 cubic feet as a reference point) which means that each unit costs an additional $1.80 per unit per month to store.  When your profit margins aren't great, this can really eat into your final margins.

Keep that for 6 months at Amazon and the fees really start piling up, you'll pay an additional $11.25 per unit.