Tuesday, April 26, 2016

Turnover Tuesdays - I Just Destroyed Some Inventory and I Liked It

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.

Here is a story of two items in my inventory which I ended up destroying and I'll explain why.

Item #1- Large Tinsel Santa Hat Red Fence Yard Wall Door Christmas Decor 

Interestingly, I never sent this item in.  As you can see in the picture, it was added to my inventory when I never sent it to Amazon.

This thing is large, like 52.7 Cubit Feet in Volume large.

For reference, an iPad is about .04 to .05 cubit feet in volume so this is slightly more than 1,000 times larger in volume.  The thing is ginormous.  How that item gets mistaken as part of my shipment is beyond me but that's not the point.

The item sells for about $250 and I tried to lower the price just to get rid of it so that I wasn't paying storage fees (I told Amazon that it wasn't mine but they kept it in my inventory).  At one point I was down to about $90.  Then I realized that I was going to end up paying almost $150 in fees to sell the item.  Not exactly worth it.  If you look, you'll notice that all the sellers are fulfillment by merchant, not Amazon.  This is not an item that is ideal to be sending to a fulfillment center.

I was sick of paying storage fees (this took a few months of not selling at higher prices) and I didn't want it anywhere near my apartment so instead of having the item sent back to me, I put in a destruction order.  It took two orders for them to finally do it but it is now out of my inventory.

I opened a case with Amazon explaining that I never sent the item in and it was mistakenly put in my inventory and I would like to be reimbursed for storage and destruction fees and I was reimbursed in a few days.

It made a lot more sense to have the item destroyed, rather than continue to pay storage fees and wait until quarter 4 or have the item returned to me.  I would have a lot of explaining to do to my wife.

Item #2 - Swingline Tot Mini Stapler

I bought these for $0.50 from Staples Clearance.  It was a great price, I scanned them and saw they were going for close to $5 on Amazon.  After fees I was expecting about $1.25 per item but if you paid $0.50 that's 150% ROI.  I bought them, got my Staples Rewards and used discounted gift cards (I probably paid about $0.40-$0.45).  They weigh almost nothing and I threw them in with other heavier items so inbound shipping was essentially nothing.

At first I was able to sell them for about $4.92 each which got me my 150% ROI.  Over about 1 week I sold 6 of them (I bought 18 of them which is all they had.)

After that, Amazon came in stock (oh, I hate them!) and dropped the price to $3.99.

I'm sure you can guess from the chart when I scanned the item and sold a few (Orange line is Amazon's price).  Pretty unfortunate timing for me.

At first I just kept my price high waiting for Amazon to go out of stock.  That just didn't happen over months.  I didn't mind paying storage for a few months since the size was so small but I didn't want to pay long term storage fees for no reason if it just wasn't going to sell until next November.  Even $0.25 cents of storage fees is a big deal when you are hoping for $0.75 of profit, especially when you don't know if Amazon will ever go out of stock.

If I lower my price to $3.99 to match Amazon it would take me a long time to sell and the fees are $4.02.  Meaning I am paying Amazon a few cents to sell, still paying storage fees for those that don't sell and risking a return which would can have a fee as high as $5 or so, which is a catastrophic fee for such a cheap item.

I didn't want to recall the item since it would have cost me $0.50 per item to send it back.  Instead I opted to have the items destroyed for $0.15 each.  It is less of a hassle and very cheap.

Alternatives to Destroying

1) I could have had the items sent back to me and return it to staples.  I don't think it is worth the hassle for $.15 an item.  I bought them for $.50 so I would have gotten $0.50 back.  However I would have paid an extra $0.35 in removal fees instead of destruction fees.  Not worth it in my book.  Others would disagree.

2)  I could have had the item removed and tried to sell via fulfillment by merchant or via eBay.  Also not worth it for the little bit of money

3)  Amazon was offering free removals.  I could have had the item removed and chucked them myself or given as gifts (Here's a beautiful mini stapler for Chanukah!).  The truth is that I should have done this but I didn't think of it, anyways this is a solution that only would have worked in April.  The principle of removal vs. destroying stays true.

Anyone else ever had an item destroyed on purpose?  Share you story in the comments.