Thursday, December 29, 2016

Amazon Donated My Inventory Without Asking.... -

We've talked on many occasions about the importance of monitoring your inventory on a regular basis as Amazon has the tendency to "misplace" a lot of inventory without telling you or reimbursing you.  It's one of Amazon's fonder characteristics.

When you looking at inventory reports, transfers of all sorts have corresponding letters that tell you what has happened during the transferring (relabeling, damaged, lost, etc.)

My current service Glasshouse Inventory noticed letter G on one of the reports which was a new one for them and the inventory was missing after the transfer corresponding to G.  They asked Amazon for clarification on what the "G" was for.

Well this is a new one for me:




So it seems that Amazon donated my inventory to charity. That's really sweet of them but not something you usually do with other people's stuff.  Granted they admitted it was a mistake but I wonder if they were going to take a tax deduction for it too!



What was the ASIN for it?  B00X3B16YW 

A green Apple Watch, the gift that keeps on giving.  The person who got it from charity probably returned it back to Amazon without the watch in the box so I can sell it again as new and get a another return...

Tuesday, December 27, 2016

Turnover Tuesdays - How it is Going Outside of Amazon

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.

The previous posts in the series can be found at the bottom of this post.


Selling on eBay with JoeLister - Meh


As I mentioned in week 77, I am trying to move beyond Amazon into eBay and Walmart.  eBay has had very blah results with JoeLister.  Since September 23rd  I have sold about 30 units total through JoeLister.   That's not very good.  Really not very good.  During that same time I sold more than 6,700 units with Amazon.  Granted I have far more listings with Amazon (I only paid for 100 listings with Joe Lister) but even on those 100 listings I had far, far more with Amazon.  I don't know yet if I will drop JoeLister but it is not an integral part of my Get Rick Quick Schemes.  Right now I'm using them to try and sell items that have Long Term Storage Fees associated with them in February.  Each sale provided outsized returns.



Selling on Walmart - Bumps and Bruises


Thursday, December 22, 2016

Check Quantities Even with Purchase Limitations

One of the more important pieces of information when pricing items is to know how many units are cheaper than you and how long you can expect it to take to reach your price.  I will price something very differently if the person below me has 1,000 units vs. 15 units.


One easy way to figure out how many people have (without special software) is to add the item into your account and try to place 999.  It will default to the number the seller has. If they have more than 999 it won't go higher.  Parenthetically, I leave it in my shopping cart and see how many the person has the next time I got into my cart so I don't have to keep doing it.

Some people (including Amazon) like to put purchase limitations.  If you are only allowed to buy 3 or 27 (27 is very common for Amazon) when you put in 999, it will go down to 27 because of the quantity limits.  The problem is that the person could have 28 or 999+ and you wouldn't know so here is a little trick to figure it out.  It can take a while but can be useful information.


If you look closely when you change the quantity in your shopping cart you will either see one error message or two error messages.




You can see that when I add 28 it just say that you tried to purchase more than the quantity allowed.  However when you try to add 999, you will get a second error message  that the quantity you tried to purchase is greater than the quantity available so you know that it is somewhere between 28 and 999.  




You can play around with the numbers to get a better idea (or keep playing until you get an exact number but exact numbers probably aren't as important as general idea).  Again, this can take a while so I don't know how useful it will be but someone might use it.

Tuesday, December 20, 2016

Turnover Tuesdays - Using Q4 for An Accelerated Shake Up

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.

The previous posts in the series can be found at the bottom of this post.


Inventory Shakeup



I've mentioned a few times recently that I'm in the process of trying to change over my inventory.  Instead of being mostly electronics, I'm moving over into Groceries, Beauty, Health and personal care, some toys after Q4 (plenty during Q4), some kitchen stuff, office supplies and the like.

I'm interested in high profit and few returns instead of a high volume of sales.






Free UPS Pickup for 10 Years (Maybe)!

HT: DansDeals


Free UPS Smart Pickups for 10 years!

Sign up for this before it dies.  I love my UPS Pickup!  Works on existing accounts as well just make sure you override existing promos if you have them on your account.


Do it now!

Keep in mind that Terms and Conditions say one year so this may not be honored for 10 years.  Can't hurt to try.



Thursday, December 15, 2016

Important Changes to FBA Fee Structure

There was a lot of news out of Amazon FBA including some new ingredient listing requirements for Health and Personal care but the one that will affect everyone is the new general fee structure for everything.

You can find the announcement with all the details here.

The key trends are that storage fees are going up, October is the new November, Amazon wants you to pay for Fulfillment Center processing and fulfillment fees are changing (mostly cheaper) but not totally.


Here are the specific changes:


Consolidation of Fulfillment Fees



  • Consolidation of Fulfillment Fees: Effective February 22nd 2017, the Order Handling, Pick & Pack, and Weight Handling fees will be consolidated into a single, per-unit Fulfillment Fee. See details (or scroll to Fulfillment Fee schedules below).



The gist is that it used to be that orders of multiple units incurred smaller fees per unit than orders of single units.  For example, if one iPad incurred a $10 fee, 2 iPads incurred a $19 (or usually less).  Part of that was the $1 per order fee which remained at $1 no matter how many units were ordered  but part of it were the rest of the fees.  This made a major difference on items that people tended to order multiple of since you can reliably earn more per unit than the calculator said.  That's a thing of the past.




It's important to note that while fulfillment fees for smaller items are going down, fulfillment fees for large and oversized items are increasing.  Profit margins will change for items you have been selling so it's important to reassess every item to make sure it's still worth it to sell.




Inventory Placement Service Changes


  • Change to Seller Shipment Requirements: Effective July 19, 2017, Amazon will increase how often you are asked to send items to multiple destinations when creating your shipping plan. For each shipping plan, you may choose to follow Amazon’s guidance or use the Inventory Placement Service, which gives you the option to ship to fewer destinations. A per-item service fee applies when you use the Inventory Placement Service; the fee depends on the number of destinations you choose. See details (or scroll to Inventory Placement Service Fee schedules below).

We've talked about Inventory Placement Service before.  IPS is Amazon's way of getting you to pay for fulfillment center processing.  Basically, you pay a per unit and a weight based fee to have your items sent to one fulfillment center.  This saves money on shipping and is more convenient to ship but the fees can be massive.  Also, once they get to the one center, Amazon is going to move some of them around to where it needs to go so sometimes you don't go from backordered to live any faster.  It's just more expensive.




The new fees are actually lower and give you the option of choosing 1, 2 or 3 centers to send to.  Overall, I think it is better to have more options. If you can avoid the fees and keep everything going to one Fulfillment Center, even better 😉



October is the New November Fees

  • Alignment of Q4 Inventory Storage Fees:  Effective October 1, 2017, the monthly fee for inventory storage in October will be increased for Standard-Size and Oversize units to be consistent with the storage fees for November and December. See details (or scroll to Monthly Inventory Storage Fee schedule below).
  • Alignment of Q4 Fulfillment Fees:  Effective October 1, 2017, we will reduce the Fulfillment Fee for all items shipped in October. October fulfillment fees will be consistent with fulfillment fees in November and December. See details (or scroll to Fulfillment Fee schedules below). With the reduction in fulfillment fees, sellers that reduce the storage space they use in October have the opportunity to pay lower total FBA fees in October.


I've dubbed this October is the new November.  The same increase we saw this year for November and December storage fees will now include October.   You can also see that storage fees from January through September are increasing from $0.54 per cubic feet to $0.64 per cubic foot, an increase of almost 20%.






Media and Zero-Fee Fulfillment Changes


  • Higher Fees for Media products: Effective February 22, 2017, the Fulfillment Fees for Media items will be increased to match the Fulfillment Fees for Non-Media items.
  • Elimination of Zero-Fee Fulfillment: Effective February 22, 2017, the Zero-Fee Fulfillment discount for standard-sized items that sell for $300 or more will be discontinued. Fees based on the product size tier will apply.



This change probably doesn't affect too many people.  I'm not sure but the Zero-Fee Fulfillment change may make iPads more expensive to sell.




Takeaways


- Storage is going up by 18.5% for 9 months, more than 400% for 1 month (October) and staying the same for 2 months (November and December).  This may be because their fulfillment centers are too full even with building more or they think the market can bear the increased fees which I think is true in general.  People will adapt and also pay more storage fees.


This will likely mean that I will focus on smaller items (lower fulfillment fees, storage fees increases are less significant on smaller items).  It might also mean sellers might start price increases more quickly ("Race to the Bottom") which is usually bad but can be good if it clears out sellers more quickly.  Think Kohl's.  Many sellers may start to think about renting a storage unit to ship more items into Amazon as they sell instead of sending all at once.

I have just started selling with Walmart with a much smaller volume than Amazon.  One of the disadvantages/advantages of Amazon is that there is no FBW (fulfillment by Walmart), which means you need to fulfill all orders yourself which I'm learning is quite expensive if you aren't selling the right sized items (for a different post).  You need to have your inventory with you since you are merchant fulfilling so I have already started the process of storing more inventory with rented space.  One of the luxuries this affords me is "free storage."  I'll already renting the space for Walmart, if I can decrease my storage fees (especially long term storage fees), I can use those savings to offset some of my rent and the breakeven number for Walmart is even lower.

For example, let's say rent is $500 a month and I can save $150 a month in FBA storage fees by storing at my rented space, if I can make $350 a month via Walmart (after all fees), I can breakeven on the new rent. If I can make more than $350 a month (sounds reasonable though the numbers are rounder for illustration purposes), it's now worth it to rent the space.




- October is the new November.  This one is tough for me.  I paid massive storage fees in this past November to make sure I was in stock in late November and early December.  My October storage fee was the highest all year since I was starting to build up my inventory but November storage fees were more than 4x my October fees.  Having to pay that increased fee an extra month next year would be really tough.  Big hit on the margins.  I will have to flood FBA with inventory even later next year than usual since they did a pretty good job in late November getting things in stock from the Fulfillment Centers, I was pleasantly surprised.  No Q4 stuff before late November next year.


- Consolidation of Fulfillment Fees.  I'm cool with this, nice to have some carrots instead of only sticks.  Might make me focus on smaller items, which I've been doing anyways but won't change too much for me.


- Inventory Storage Placement Fees - whatever, I'm not paying them.  I'll figure out a way around the issue.


Conclusion

Overall, I think the news is bad if only for the significant increase in storage but it will probably allow me to better focus on a smaller number of SKUs and make sure everything is selling and build up my Walmart inventory at the same time.  These were both part of my goals for 2017 anyways but my inventory turnover will probably speed up a bit.



How do you see the changes affecting you?  Will change what you sell and/or how much you buy at once?

Tuesday, December 13, 2016

Turnover Tuesdays - Reimbursements

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.

The previous posts in the series can be found at the bottom of this post.


Reimbursements, Yay!



I love reimbursement emails.  Makes my day when they are large.

It's not unreasonable to say that being on top of reimbursements and your inventory is the most important aspect of selling on Amazon after actually selling.


There are lots of reasons that you get reimbursements when you sell with Amazon, some more obvious than others.  They include Amazon not checking your inventory in (you sent in 6 and they received 5), lost and damaged inventory, returns initiated but never make it back to Amazon, returns after the return window has closed, returns that have been badly damaged.  All these can be reasons for a full or partial reimbursement.


I cannot underestimate the importance of reimbursements.  In 2016 alone, I have almost $500k in sales and over $42,000 in reimbursements.  I have almost as much in reimbursements as with refunds. I would have difficulty having any profit without reimbursements.




The actual numbers come out to 8.6% of my gross sales sales!  That's just straight crazy.  My rate of lost items seems to be greater than average but it is considered industry average to have shrinkage of about 1%-5% of inventory.  That same 1% of shrinkage can have a difference of about 5-10% on your margins.

Thankfully, as Amazon loses or damages your items they record everything in reports.  You can run your inventory adjustment and inventory reconciliation reports.  You can and should read them.  There is a wealth of information about what's happening to your inventory after it gets sent to Amazon.


Sometimes, about 40% of the time according to one person I spoke to who runs a company specializing in Amazon reimbursements, Amazon auto reimburses you.  Amazon acknowledges that they lost or damaged your item.  This should be auto reimbursed 100% of the time.  I'm pretty sure Amazon has software capable of doing that.  The reality is that if you aren't asking for reimbursements you won't be getting about 60% of the reimbursements owed to you.  That's your money, not Amazon's!  You can't let Amazon take that away.  Can anyone say class action lawsuit?


Inventory Shrinkage - Silent but Deadly


Tuesday, December 6, 2016

Turnover Tuesdays - Returns, Returns, Returns!

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.

The previous posts in the series can be found at the bottom of this post.


Returns, Uch!




Just the word returns gets me upset.  Oh, and those emails!  They can ruin your day.  I hate returns, it's just money out of my pocket.  Returns had a major impact on me in 2015, especially during the holiday season and immediately thereafter.  Last year I had over $8,000 in returns in December and then again in January.  Salt was just getting poured further and further into the wounds.

I was mostly ok with that since I was still making money despite the returns.  I had over $100k in sales last December so my business could survive those returns.  Still, that's a ton of returns and it would be nice to cut that down for this year.  I also want customers to be able to return item - just not mine ;) - so that they are more confident making purchases.

Friday, December 2, 2016

I'm Walmart Unbanned!

Yesterday, I mentioned that I had been banned from a few important stores this year including Target, Kohl's and Walmart.


I was both accused of stealing other Blogger's lucrative methods (in jest, obviously), while others were amazed that such a thing could happen at Walmart.  I, myself, was amazed and I said yesterday that I didn't even know it was possible


Thankfully Wes stepped in and helped me get unbanned.  He suggested I call up and ask to speak to the US call reps and see what the deal is.

The problem as you recall was that Walmart wouldn't allow me to even get to the order review.  I wasn't able to choose a credit card.

I called and spoke to a US rep.  She started going through my account and asked me to take off the credit card I was trying to use and add it again.  Then she looked at my credit cards on the account and said "Whoa, that's a lot of credit cards."   I guess about 20 cards on one account isn't so normal? I had taken part in an American Express Offers for you a while back and had added a lot of new credit cards to my account.  I also had multiple discover cards connected for different years of Discover doubling.

Either way, she said that having too many credit cards can be a flag for fraud and suggested I remove some.  I removed all the cards except one and magically I could check out again!

So am I now unbanned from Walmart.  Although technically I was never banned.  Hmm, I think you are still winning Vinh.

Thursday, December 1, 2016

And The Ban Hammer Continues...

Lately, it seems that I've morphed into #shutdownsalldayeveryday.  

One of the risks of reselling are bans.  Resellers tend to take advantage of stacking promotions, portals and free shipping that are readily available for anyone but aren't used to the same extent as crazy people like us.

When you are trying to grow your business, it can be tempting to continue to increase your purchase size to meet the demand of customers.  I was tempted and it didn't end well for me.


2015 Bans



Last year I was banned by Best Buy (I spent over $30,000 there in 2015), Toys R Us (I was only banned from getting their rewards,but I can still order), Bon-Ton (very quick ban trigger).  Maybe others I'm forgetting about.



2016 Bans



The past few months have been very fruitful for bans.

It started with Kohl's.  That wasn't fun but not so bad.  I did a bit of reselling from there but everyone else does too so competition comes in and crushes the price on most items.  Now, they autocancel my orders.  Kohl's let one order go through recently but then the next two were flagged again.  Oh well.

Then came Walmart, which is impressive.  I didn't actually know that was possible.  I can't even enter credit card information.


Next was the dagger to the heart.  Target.  Autocancel orders immediately.  Not only was that one of my favorite stores to resell from, but my wife shops there too :(  That was not a fun conversation with her.


So, for your reselling business sake and, more importantly, for your spouses sake, don't get yourself banned.  It's just not worth it.

Slow and stead wins the race.  If only I listened to my own advice.


Thankfully I still have Staples (for now).  The one good thing is that this gives me even more incentive to work harder finding manufacturers and distributors .  I will miss the portals though.

Wednesday, November 30, 2016

Turnover Tuesdays - Pricing for the 4th Quarter Madness

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.

The previous posts in the series can be found at the bottom of this post.


Pricing During Q4 Busy Season




I'm going to officially declare that we have reached the Q4 busy season.  While things will probably still heat up a bit more in December, from talking to others and my own sales figures, overall sales are way up from even the beginning of last week.

As I mentioned a few weeks ago, I'm even selling items that haven't come close to hitting my price in almost a year.

Friday, November 25, 2016

Support Your Favorite Bloggers on Black Friday

Any day is a good day to support your favorite Bloggers but it's always good to have a reminder on a big shopping day.

The best way to support is by using Amazon links for categories that shopping portals aren't already paying out on those categories so that you don't lose out on any money yourself.

This is my Amazon link


In addition, take the opportunity to sign up for shopping portals that you will be using today as they usually give out a one time sign up bonus.


Here are the ones available for me


Top Cashback - I earn $10 and random promotions where you can earn $10
Ebates _ You earn $10.  I earn $5 for each referral and there is a bonus for referring more.
Mr. Rebates - I earn a percentage of your portal earnings (you do not lose any of your earnings)
Be Frugal - $10 for each of us
Splender - I earn $10, readers will earn $5 for signing up and spending $50.  Sorry :( I don't make the rules
Simply Best Coupons - I earn 5% of your earnings (you do not lose any of your earnings)
Extra Bux - We both earn $5
Giving Assistant - $5 for both of us
Sunshine Rewards - we both earn $2
Upromise - $20 for each of us.  I need to invite you via email.  Send me an email orensmoneysaver@gmail.com if you are interested.




Thanks for helping out.  In addition, to the monetary bonus, the thank you is very much appreciated when someone values your work.

Tuesday, November 22, 2016

Turnover Tuesdays - Update on My Miles vs. Cashback Opportunity Costs

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.

The previous posts in the series can be found at the bottom of this post.


Miles vs. Cashback



Back in Week 47 I discussed the opportunity costs of earning miles rather than cashback.  I highly recommend reading that post as I don't want to rehash my arguments back and forth in favor of against miles or cashback.


In that post I showed that I estimated a possible increase in my account by $17,500 for 2016 based on what I had already earned and possible projections.  This is a picture of one of my accounts in Fidelity at that time.




Friday, November 18, 2016

Beware of Tax Implications of Transferring Points for Free Merchandise for Resale

Frequent Miler had a nice post yesterday talking about the possibility of transferring Membership Rewards points to Plenti to take advantage of the 50% transfer bonus for free merchandise.

Personally, I think Plenti is an underrated currency for resellers as it gives you access to free merchandise at Macy's.  If you are making the purchases anyways that earn points, you might as well sign up and use them.

In addition, like many loyalty points (Shop Your Way Rewards, Staples Rewards, etc.), when you use Plenti the purchase is tax free for the portion paid for with Plenti.  If you use Plenti for the entire purchase you won't pay any sales tax.  That can be a big deal.


While I don't disagree with Frequent Miler about getting free merchandise with your points (with his caveats), I don't think it's a very good idea to transfer the points to Plenti in order to resell the merchandise in most situations.


It is generally assumed that credit card points/miles are not taxable income (speak to your accountant).  If you transfer the points to Plenti and don't pay for the merchandise and then sell it, your COGS will be $0 and you will now need to pay taxes on all the revenue generated at whatever your tax bracket is.


If you have no other way of redeeming the points for a good value or you need the cash quickly you can do it but be aware of the tax implications and how they will erode the value of your points.

Tuesday, November 15, 2016

Turnover Tuesdays - Some Quick Holiday Tips

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.

The previous posts in the series can be found at the bottom of this post.


Holiday Season

The holidays are a magical time full of beautifully expensive Unicorns where everything at Target and Walmart seems like a great deal (until everyone else finds it - which they will).  Shopping portals often increase their payouts and have spending bonuses (currently being offered by quite a few of the mileage portals).  

If you ever were thinking about signing up for a credit card with a large spending minimum for the bonus, now is the time.  

I've only been through one holiday season but I learned a lot from that experience, hopefully I can give over some of the useful information.

Thursday, November 10, 2016

Using Inventory Lab to Check Which Shipment Contained Your Item

We've all experienced it.  You sent 6 iPads in but when you look at your FBA inventory you only see 4 there.  What happened to those other 2?

Well, one problem is that many, many things could have happened.  It could have never been received, it could have been lost once received, it could have been damaged in the warehouse, it could have been sent for relabeling and lost into the Amazon ether (yes, that happens a lot more than you think).


Amazon has some pretty good reports you can run on lost and damaged items.  It's all there though it's quite time consuming to go through.



Finding which shipment you sent it in can be a challenge.  If you are like me you have pages and pages of shipments.  It's impossible to check each one if you are missing one particular SKU.  Once it's checked in you can check the received inventory report based off any SKU but if it was never received probably you may be out of luck.


For a long time as part of my inventory tracking spreadsheet I would have a column for FBA shipments.  It was a way to easily go back to that shipment and check what happened.  It was annoying but worth it until I found out I didn't need it all.



Inventory Lab Tracks Shipments for You



Personally, I am a huge fan of Inventory Lab.  It would be almost impossible for me to accurately account for COGS, sales and fees at the volume I'm doing without some sort of software and Inventory Lab does a great job at that.  When you play around with it you start to realize that it also pays for itself.

The one thing that I'm starting to realize I don't like about Inventory Lab is that it doesn't support eBay or Walmart sales (as far as I know) but this post isn't about Inventory Lab.  You can read more about it here.



One nice thing about Inventory Lab is that I've always received helpful customer service.  I wanted to see if they tracked this data so I didn't have to.  You are creating shipments with them so maybe they have it available for you.


I sent them an email (support@inventorylab.com) and they sent back:





Here are the Circles and Arrows of what that means

On the dashboard you can pick "closed batches".  These are the shipments that have already been sent off to Seller Central




At the next screen you can input any ASIN and you will see all the shipments that included that shipment




Under "Name" you can see the name of those shipments.

You can copy the name of any shipment and go over to seller central and find that shipment.








Using the name function isn't as easy as the FBA ID is but if I don't have to track that info myself, I am pretty happy.

Wednesday, November 9, 2016

Turnover Tuesdays - Automation Beyond Amazon - JoeLister and GeekSeller

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.

The previous posts in the series can be found at the bottom of this post.


The Elections

I sat down to write this post late tonight when the news was starting to come in that Donald Trump would likely become the next president of the US.  This isn't a political blog but I knew that I had little to no chance that anyone is reading so I figured it was time to give away some secrets!

Did I have you even for a second?  No?  Oh well.

Here comes a nice post that you won't read anyways.  I hope everyone had a fun election party.  I decided to pack boxes to keep my mind off the circus that is our election process (no party affiliation coming out there - I think both parties would agree to that).


Tuesday, November 1, 2016

Turnover Tuesdays - Past Performance is not a Guarantee of Future Results

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.

The previous posts in the series can be found at the bottom of this post.


Using Data from Keepa to Your Advantage


The Keepa extension is probably the most important (and free!) extension available to Amazon sellers.  I use it to evaluate every single deal.  Rank is almost meaningless to me at this point.  Rank is a snapshot currently but sales significantly affect the rank.  If you used rank to evaluate purchases on Prime Day and Amazon put it on sale, every item would have been #1 rank in its category so rank can be very misleading.  You need to evaluate rank over time.  You need to see the number of sellers over time.


There is a ton to be gleaned from Keepa, some of it obvious and some of it not so obvious but it is absolutely essential.

One thing you can use Keepa for is to check out prices last year during busy seasons previously.  This can be a guide for you of what items have huge demand.  As I will show, this does not necessarily correlate to a big payout.

Sunday, October 16, 2016

No Turnover Tuesdays for the Next Two Weeks

Tonight starts the holiday of Sukkot.  I will be off the grid on Monday and Tuesday of this week and Monday and Tuesday of next week.  That means no Turnover Tuesdays this week or next week.  We will come back with a vengeance in 2 weeks.

Enjoy the break!

Tuesday, October 11, 2016

Turnover Tuesdays - Prices Always Come Back, Except When They Don't

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.

The previous posts in the series can be found at the bottom of this post.


Race to the Bottom


A Race to the Bottom is when one seller undercuts the price followed by more and more sellers undercutting.  Prices plummet in a hurry as sellers are racing to lower the price.

When an item goes on sale from one of the big retailers, there is almost invariably a race to the bottom.

My favorite saying is that you either need to be first or last to sell anything.  First because the prices are still high or last when prices finally recover.  Obviously, first is far preferable but not always possible if you can't get your inventory in fast enough or you bought too many to sell before the race to the bottom begins.  So I often find myself waiting for the price recovery to sell (unless I get impatient).  That is usually a good strategy.

Friday, October 7, 2016

My Last Miles Redemption is an Example Why I Prefer to Earn Cash, not Miles

Earlier this week, I pointed out that I was able to use Delta SkyMiles to book a trip from NYC to TLV for only 70,000 points round-trip per person.


If you have followed my blog for a while you may know that I highly prefer to earn cashback over points with my credit cards.  You won't see me whip out my Starwoods credit card for everyday purchases (I actually don't even have a Starwoods - I know, the pain!).


I will use my latest redemption as a real life example.


Let's assume I would have booked the same flight with cash as I would have for miles.  It's not true since I would have booked a more convenient direct flight since it was basically the same price as one with a stopover but let's gloss over that for a moment (even though that's one of my reasons for disliking miles).

Had I not had miles to burn I would have used cash which would have cost about $900.


My flight cost me 70,000 miles + fees.  Let's do some math.



Sunday, October 2, 2016

Don't Discount Delta and their SkyPesos and The Value of Transferable Point Currencies

Tonight is the beginning of the Jewish New Year which continues until late Tuesday night.  For that reason, there will be no Turnover Tuesdays post this week.  Happy New Year everyone!  



For today's post, most people probably won't learn anything new but it was something interesting that happened to me so I thought I'd share and maybe somebody can learn something from it.


I was booking a flight to TLV from the NYC airports this past week.  I had always been told that the best way to book miles from NYC to TLV was with United. Since I'm Jewish I assumed advice from Jewish friends on the best way to get to Israel must be true.

I knew about using Avios to do it very cheaply but it was complicated, the availability was very poor, it took a while to piece together everything and I always had domestic short haul flights as a way to use Avios.  I would always check but it usually meant an hour to piece it together only to find out it didn't work for my trip.


When I first got into miles it cost 80,000 miles roundtrip from NYC to TLV in saver level awards.  Since then the price has gone up to 85,000 miles.  I have been known to measure miles in terms of how many trips to Israel it will get me.  For example, if I was ordering $2,000 worth of iPads from Staples and they were offering 5x United miles on the portal (that actually used to happen last year), that was 2/17th of a roundtrip ticket to Israel for just purchase.


Either way, last year at some point someone pointed out to me that  United miles aren't even the best way to fly United to Israel.  If you use Singapore KrisFlyer miles to fly on Star Alliance, it actually only costs 75,000 miles.  

This was a revelation to me.  It meant that collecting United miles was no longer even close to collecting Ultimate Rewards points.  This should be true anyways since Ultimate Rewards can be used for cash and many other partners and booking flights as cash directly at 1.25x-1.5x but if you know you are going to use all your UR points on United anyways, so then collecting United miles was pretty much the same as collecting URs since the URs were heading into United.

Now, that's not so clear anymore.  URs can be transferred to Singapore instead.  Not only that, Thank you Points and Membership Rewards can be transferred to Singapore too.  Those can't be transferred to United.  It opens up a world of consolidating points.

There are important factors to know before doing this including timing your points transfers, how to book, etc.  All not for now, but the point is that the once obvious choice for me wasn't so obvious anymore.




Delta to the Rescue?

Tuesday, September 27, 2016

Turnover Tuesdays - A Long Tail Sale and Calculating Storage Fees

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.

The previous posts in the series can be found at the bottom of this post.


Long Tail Sales


Long tail sales are when you are selling an item that doesn't have much demand and you don't expect sales to happen quickly.  Your turnover is much slower but that doesn't mean your profit has to be any worse.


We would all like to sell fast selling items but those can attract a lot of competition so profits often eventually erode.  So instead of (or in addition to) selling 20 a month of one item you can sell 20 a month between 200 SKUs with the same sales numbers and possibly higher profit numbers


The downside, especially on Amazon where they are storing the item for you, is that you are going to pay storage fees.  That's definitely true but that isn't always a significant factor.


Tuesday, September 20, 2016

Turnover Tuesdays - Start Your Own Listings

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.

The previous posts in the series can be found at the bottom of this post.


Keepa Charts


I know for myself that I sometimes get hyperfocused looking at Keepa charts to check out sales history and prices.  How many have sold in a week?  In a month?  At what price?

These are very important questions and it often influences how many of any particular item I will buy for my first purchase.

You can really learn a ton just by studying charts and your knowledge on what to look for on the charts will change over time as well as you read more charts



Tuesday, September 13, 2016

Turnover Tuesday- Getting Around (or Happily Paying) Quarter 4 Storage Fees

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.

The previous posts in the series can be found at the bottom of this post.


Quarter 4 Storage Fees


This year, Amazon has decided to implement a significant increase in storage fees during quarter 4.  I've talked about this before but now that Q4 is coming upon us rapidly (less than 30 days until the official start but we all know that the magic doesn't start in October) it is time to really get into the details of some strategies to help minimize storage fees.





Standard size storage fees are approximately 4x the regular monthly fee and oversized storage fees are a little less than 3x the normal monthly storage fee.

Ostensibly, the increased storage fees (and decreased fulfillment fees) are to encourage you to sell  inventory earlier in the season so Amazon's fulfillment centers aren't as overwhelmed or stuffed and prices remain lower for customers.  That being said, I think that will partially happen.  I'm not sure a ton of people will sell earlier but I do anticipate many sellers waiting longer to send inventory in to avoid/minimize the storage fees.  In the end I predict Amazon to make a ton of extra money due to the storage fees and to end up with some very unhappy sellers.  I'll explain that later.

Tuesday, September 6, 2016

Turnover Tuesdays - Check Your Refunds To See If You Had Inventory Reimbursements

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.

The previous posts in the series can be found at the bottom of this post.


Inventory Tracking



Without a doubt, the toughest part of selling on Amazon is keeping track of inventory.  As you build your inventory it becomes almost impossible to track everything without either great software or spreadsheets.  I've yet to find the great software but those who are coming to the Tagging Miles Reselling DO may find out about a company I use for inventory tracking (not from me) which I'll reveal publicly after the DO.

Unless your spreadsheets are great, you won't even realize that you are missing so many items.  Believe you me, the number of items that get lost, damaged and/or poof into the Amazon ether without reimbursement is frankly astounding.    The more I find out, the more I realize how easy it is to be selling very profitably and yet you have no idea that you could missing hundreds, thousands or even tens of thousands of dollars of inventory that you didn't even know about.  It sounds impossible to be missing in so much stuff but you can get caught up in buying and sending in more and more items that you aren't paying enough attention to what's already there.  If you send in 57 of one item and you sold 53 of them and four are lost, without a spreadsheet there is no way you'd catch that, especially if it takes a few months to sell.  Even with a spreadsheet you may not catch that as you get larger and larger.

Remember, this is your money and your inventory, if you aren't doing what's necessary to protect it properly you may think you are profitable but you may actually not be.  It's really annoying to pay attention to it but if you aren't paying attention you'll be losing money you don't even know about.  So either pay attention or pay someone else to pay attention. If you think it's not worth it, just try it.  Where do you think all those inventory reimbursements are coming from?  Your stuff.  You will be astounded at what you find once you start looking.  I know I was.  More on that in a couple weeks.


Tuesday, August 30, 2016

Turnover Tuesdays - Amazon Restrictions and the Future State of Amazon Selling

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.

The previous posts in the series can be found at the bottom of this post.



Since I am a prophet, I decided to share my incite into the future direction of selling on Amazon.  Obviously I'm kidding, I wouldn't give away trade secrets like that.

On a more serious note, there have been some major (Minor? More on that later) changes for certain brands that a few people have noticed.  These brand restrictions may be the start of a serious negative trend for sellers that can vastly affect our bottom lines.


The Amazon Balancing Act - Sellers vs. Buyers


Tuesday, August 23, 2016

Turnover Tuesdays - The Buy Box

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.

The previous posts in the series can be found at the bottom of this post.





The Buy Box


What is the Buy Box?  The Buy Box is the main page for any particular item on Amazon that features only one seller with the current price.


Here is a picture:





The Buy Box is Really Important


The Amazon Buy Box is probably the single most important factor in making sales on Amazon.  You will commonly see on various websites that 82% of sales on Amazon go directly through the Buy Box.  I couldn't find extremely reputable sources that give out this research but the percentage is definitely high, but knowing the factors that go into whether you may may "win" the Buy Box can really affect your sales and increase your profit on those sales.


Wednesday, August 17, 2016

Turnover Tuesdays - The Classic Deal Curve

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.

The previous posts in the series can be found at the bottom of the post.





The Product - ZTE SPRO2





On March 30th, I bought 5 ZTE SPRO2s on eBay for $349.99.  They were going for about $450 at the time on Amazon.  That would have been about $415 after fees, which is $60-$65 after shipping.

Soon after buying from eBay the familiar Amazon race to the bottom started.  It wasn't too bad here, but prices bottomed out at about $380.  While not amazing, that would still be breakeven and if I had to settle for something like that to avoid long terms storage fess I would but that was only a couple of weeks later.

In this case, it wasn't an extremely popular deal and it was limited to 5 per customer on eBay so the number of sellers never went insane but it definitely increased.  You can see the Keepa chart below.  The top is the price and the bottom is the number of sellers.




It isn't quite as stark as the following Keepa chart on a different product I'm selling which came from a daily deals site.  I'll bet you can figure out what I think about those now.  It hasn't recovered yet but you can already see from the chart that the recovery has begun, though you wouldn't know it from the prices. Keepa charts can be an amazing pricing tool for that reason.


'

Already by June prices started to recover a bit so it took about 2 months for recovery.  I sold the first one for $499 which is actually even higher than the prices were before I purchased.  I saw the number of sellers continue to decrease and I took a chance and it worked.  


After I sold 2, I raised my price more.  I went to $539.99 and 3 days later it sold again.  That's incredible!  I still had 2 more left and I actually raised my price again.  Unfortunately prices didn't come with me, prices actually went down.  Eventually I sold the last 2 for $536.95.  I had one return that was in sellable condition and resold it again for $536.95.  

The return cost me $5 total since it was resold for the same price I only lost the return fee.  Had one of the earlier ones been returned I would have actually came out ahead since the price went up but I am not upset by this.  There are actually no more FBA sellers so I could have sold all of them for more but you never know what will happen when you go too high.


You can see from Inventory Lab that I earned between $109 and $140 per sale which is 30-40% return on investment.





The reason I did so well and I was able to raise my price even though I hadn't sold yet is because I had my eye on the charts.  Remember that prices lag behind the number of sellers.  There is often a lot of sellers around the lowest price so even though the number of sellers decreases until that glut of sellers is gone you won't see an increase in price.  If you are paying attention to the seller charts you can have a significant advantage over your competition.


Wednesday, August 10, 2016

Turnover Tuesdays - Access to Capital During Quarter 4

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.



Tuesday, August 2, 2016

Turnover Tuesdays - Retirement Accounts

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.

Being a small business owner provides a lot of extra taxes in this country (like self employment tax) but the tax code also provides some pretty good incentives to avoid some of those taxes while planning for your retirement at the same time.

This post is not about business expense tax deductions.  There are a lot of those for small business owners as well and maybe I'll have a post on that in the future.  This post is specifically an introduction into some of the retirement accounts available in this country that can lower your tax burden.

As I always write, I am not an accountant, in fact I paid an accountant this year to do my taxes (business expense!).  I have rudimentary knowledge in accounting and retirement accounts but hopefully this is enough to start a conversation and get those who are interested on the path towards responsible retirement planning and tax avoidance.  Please speak to your tax adviser about what works best for you.

Just remember, it's not a crime to lower tax obligations.  You should avoid taxes when possible.  If you misrepresent your income to avoid taxes or claim tax deductions you aren't eligible for, that is a crime of tax fraud/tax evasion.  I can't stress this enough, you must always pay every penny of the tax you owe.  Our goal is to legitimately owe less.


Capital Constraints


Retirement accounts often have penalties if you withdraw the funds before they are eligible.  If you are funding retirement accounts, that money is staying there unless there are extenuating circumstances.  Selling on Amazon requires a lot of capital.  Don't put away money in quarter 1 that you will need for quarter 4.  You aren't saving that way.  If capital constraints are a problem, don't put away quite as much.  Saving for retirement hurts but withdrawing savings from retirements hurts even more.





The IRS has a list of all the possible retirement accounts and their details here.  I won't go through all of them since some don't apply to most people but they are good to know about.  If you are closer to retirement, you may be able to make "catch-up" contributions beyond the limits stated, depending on your age and the plan.




Basic Retirement Accounts


These retirement accounts are available to anyone who has income, not just business owners.



IRA



An IRA is an Individual Retirement Account (IRA).  You can open an IRA with any number of institutions and you should not be paying on fees to have your IRA administered.  Any money put into an IRA is free from income tax the year you contribute.  For example, if you make $100,000 a year and you contribute $5,000 towards an IRA, you now only pay income tax on $95,000 of income instead of $100,000 of income.  If your marginal tax rate is 30%, you will have saved $1,500 in taxes this year since you would have paid $1,500 of taxes on that $5,000 of income.

When you withdraw the money from the IRA you are now obligated to pay taxes on that income.  For example, if you decide to withdraw that $5,000 when you are 70 years old and retired and your marginal tax rate is now 10%, you will have to pay $500 of taxes on the withdrawal.



Limits - You can only contribute $5,500 a year under current limits

Keep in mind that the growth of the money is tax deferred but they are taxable.  If that $5,000 became $50,000 over 30 years, you will have to pay income tax on the entire $50,000 upon withdrawal like any regular capital gains.

Withdrawal Limitations - You can start to withdraw at age 59 and a 1/2 and if you withdraw early you will pay a 10% penalty aside from the income taxes you have to pay.

Income Limitations - None

Basics of an IRA

Roth IRA


Roth IRAs are trickier.  Roth IRAs work almost in the opposite way as regular IRAs.  Instead of lowering your current tax obligation, when you contribute to a Roth you owe the same amount of taxes during that year.  Your current taxable income doesn't change.  The advantage of the Roth is that any gains you incur are not taxable.

For example, if you contribute $5,000 and it turns into $50,000, you still only paid the tax on the original $5,000, not the $45,000 you earned over time.  In addition, if you are currently in a much lower tax bracket than you plan to be in during withdrawal, you can pay taxes at your current rate and avoid paying taxes on the principal and the gains at the higher rate as with a traditional IRA


Limits - $5,500 a year under current limits

Withdrawal Limitations - You can begin to withdraw without penalties if the money has been in the account for at least five years and you are 59 and a half or meet certain criteria.  It's more complicated so consult your tax adviser if you need to withdraw early

Income limitations - not everyone is eligible.  If you are single, you can contribute if you earn $132,000 or less and if you are married filing jointly you can contribute if you earn $194,000 or less.

Basics of a Roth IRA


Keep in mind that you cannot contribute to both an IRA and a Roth IRA maximally.  The limit of $5,500 applies to both IRAs combined.


Backdoor Roth IRA


The tax free growth of an IRA can be a benefit and many people might prefer to pay taxes on the income in exchange for the tax free growth.  The problem comes when your income no longer allows you to contribute to a Roth IRA.  What do you do then?

There are a couple of solutions I know of and one involves a 401(k) Roth but if you don't want a 401(k), there is another more "simple" solution.  It's called a "Backdoor Roth".  Under certain circumstances you can contribute to a traditional IRA which has no income limitations and convert that contribution into a Roth IRA contribution.  This is a complicated subject and can have other tax implications including paying taxes on the "income" withdrawn from the traditional IRA so, again, talk to your tax adviser before considering this option.


SEP IRA


A Simplified Employee Pension (SEP) IRA is the first account that is geared towards employers.

A SEP IRA is similar to a traditional IRA in that the contributions lower your taxable income.  You are only eligible for a SEP IRA if you have self employment income.

The big advantage with a SEP IRA is that you can contribute up to 25% of your wages from the business's income, up to a maximum of $53,000.  There is no annual reporting to the IRS.

The big disadvantage is that you must contribute to your employees SEP IRA equally if you have employees (under specific guidelines).  If you contribute 20% of your salary, you need to contribute 20% of your employee's income toward their SEP IRA.  If you are the only employee and you plan to keep it that way, a SEP IRA can meet most people's retirement needs.   I set mine up in 5 minutes from Fidelity with no fees and they are available at most brokerages without fees.

You are limited in your investment vehicles including the inability to invest in real estate or life insurance and you cannot take a loan from the SEP IRA like you can from the 401(k).

Withdrawal Limitations - Same as traditional IRAs.  Penalties if withdrawn before 59 and a half.

Income Limitation - No income limitations.  The only limitations are the amount that you can contribute which is a maximum of 25% or $53,000 (whichever is lower) for 2015.



Basics of a SEP IRA


You can contribute to both a traditional or Roth IRA and a SEP IRA since this is considered an employer sponsored plan and the regular IRAs are employee sponsored



401(k)


A 401(k) plan is a bit more complicated, especially if you have employees.  Often times there is a plan administrator with annual fees and fees to have the plan drawn up.   Employees can contribute up to $18,000 a year and there may or may not be some sort of employer match on those funds.  Employers can contribute up to $53,000 a year, of which $18,000 are employee deferrals and decrease their taxable income but not their self employment taxes (Social security, Medicare and Medicaid).  The other $35,000 do not have self employment taxes.  The funds and their growth are tax deferred until withdrawal, similar to a traditional IRA.

Withdrawal Limitations - funds cannot be withdrawn before 59 and a half without penalty.

Income Limitations - None, just a maximum contribution of $18,000 for employees and $53,000 for employers.

Basics of a 401(k)


As opposed to a SEP IRA, you can buy life insurance and invest in real estate (under certain conditions) with 401(k) contributions.

Another big advantage of a 401(k) is that you can borrow money from the 401(k) without paying a penalty.  That money must be paid back to the 401(k) with interest.  The interest is not significant since you own the 401(k) you are paying yourself but it still needs to go into the plan for retirement.  This can be a good way to increase your short term available capital (think Q4).  This is usually limited to a maximum of 50% or $50,000.


401(k) Roth


A 401(k) Roth is similar to a Roth IRA in that you contribute with after-tax dollars so it doesn't lower your current tax burden.  Instead the money grows tax free and the gains can be withdrawn tax free.  The contribution limits are the same as a 401(k):  $18,000 for employees, $53,000 for employers.  You cannot contribute to both a 401(k) and a 401(k) Roth to the maximum contribution levels.  You can do a maximum of $18,000/$53,000 between the two accounts.


Withdrawal Limitations - Similar to a Roth IRA, you cannot withdraw the money penalty free before the money has been there for 5 years unless you are 59 in a half or met certain criteria.

Income limitations - There are no income limitations.  This is a big difference between an IRA Roth and a 401(k) Roth.


This chart is from the IRS website




HSA


A Health Spending Account (HSA) is an account that you can use to pay qualified medical expenses with pretax dollars.  Any money contributed to your HSA lowers your taxable income like a traditional IRA.  If you use the money on qualified medical expenses you are not taxed upon withdrawal like a Roth IRA.  You are also not taxed on the income as it grows like a traditional IRA.

As opposed to an FSA, the money contributed is not lost year to year if it isn't spent.  Everyone knows that friend buying $3,000 worth of glasses and Band-Aids at the end of the year ;)


In addition, if you make it to retirement without using the money for healthcare spending, you can withdraw the money like a traditional IRA. If you use the money for medical expenses in retirement you don't pay taxes on the growth.  If you withdraw for non medical related expenses, you will pay taxes on the growth upon withdrawal like a regular IRA.

This is actually one of the potentially best accounts in terms of taxes.  The White Coat Investor actually calls it a Stealth IRA.


A big drawback is that you need to have a high deductible health plan (HDHP) to qualify.


HSA contribution limits (from Wikipedia)



Defined Benefit Plan


A defined benefit plan is mostly designed for those who are 50 and older and would like to contribute very large sums every year until retirement (think $200,000+ annually)

This is when actuarial calculations come into play and is very complicated.  Beyond the scope of this post.



In general, all of the accounts are relatively cheap and can be done on your own or with minimal help including a single employee 401(k).

If you have W2 employees besides yourself or you want a Defined Benefit Plan, that probably should not be done on your own.

If you are interested in a referral for a tax lawyer who administers these accounts, please email me at orensmoneysaver @ gmail.com and I can forward over the information (I earn no commission on the referral).

I hope that this can provide some basis with which to talk to your accountant or tax adviser but please, please don't make tax decisions based on this.  That wouldn't be smart.  That being said, there are lots of ways to lower tax burden and you should maximize decreasing your taxes when possible.



Any important retirement accounts I'm missing that you are contributing to?  Let me know in the comments.