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.

Increase in Sellers

There are a lot more sellers than there used to be.  If you ask older sellers about selling, they will tell you that they see much more competition than there used to be and anecdotally I see a lot more sellers as well.  

According to the numbers, Amazon increased the number of third party sellers by more than 50% in both 2014 and 2015 and that trend seems to be continuing.

That being said, I have already surpassed my selling numbers from last year by about 33% without the help of iPads for most of the year.   I haven't bought an iPad in months (did he really say that!).

That's partially unfair since I only started in April last year so there is more months this year but it's also sales numbers which is less important than actual profits.  I have also increased my overall profit numbers by about 30% despite $8k of returns in January, over $700 in Long Term Storage Fees from inventory from last year, lots of fire sales from old inventory.  The types of things I sell are far different from last year and hopefully are setting me up for a much better than 2017 than 2016.

The point is that there is plenty of money to be made if you sell smartly.  

That being said, when quarter 4 comes around I go back to my roots and start selling everything in sight.  I'm a sucker.

This can get you into trouble.

Check out the Keepa for Speak Out.  It costs about $20.  It was going for $100+ a few months back.  Everyone and their mother saw that.  So when Hasbro finally made enough of them the number of sellers increased from a low of about 11 to now close to 800.  800 sellers!  Going to be tough to make money on that one for the new sellers.


Amazon increases the time to return from 30 days until January 15th.  If you sell overpriced stuff you will see a lot of returns.  That may not be a problem but it will happen.  You can either sell it slightly overpriced and hope it doesn't get returned or hope your profit from the others makes it worthwhile still.  Last year I was running to a lot of stores in January and February to return items back to where I bought them from.

One thing to keep in mind, keep your receipts.  You can get banned from returns if you return too many without receipts (happened to me at Target) since they are worried about return fraud.

Price Paid Makes All the Difference

If the price increases on Amazon you can bet people will notice and buy the same item you have.  The big difference will be that you bought it when it was 20% off and they paid retail and can sell for much lower and still make a good profit, otherwise you may watch the price go down and feel like you can't sell because you'd be barely breakeven or lose money.

Label Yourself and Know your Fulfillment Centers

Processing times are going to get really bad. I've heard horror stories from last year of people sending boxes in and they don't get received until after Q4.  That is just horrible.  

Some fulfillment centers are forwarding centers like AVP1 and ABE8.  They are going to send 100% of the inventory elsewhere which means you will be backordered.  You don't want to be backordered during the heart of the season.

One think you can do is label items yourself, it will decrease processing times.

Pretty much everything standard size I send goes to a forwarding facility and takes a while to be in stock.  Oversized items are available within 1-2 days after I send them in.  My decision on when to send items in is very different for oversized and standard sized items for this reason.

The 4th Quarter Hasn't Really Started for Sellers

I've been buying things for months in anticipation of Q4 but the selling season hasn't really started yet for almost everything.  Once Black Friday hits, sales velocity starts ramping up.  Last year I had about 1/3 of all my sales in December.  Just crazy.

When Q4 items sell now, I get upset.  I usually increase the price (there are exceptions).

When I send items in now I don't price it at the buy box, I usually increase the price by 20-30% from that since it will likely get there in December.

It doesn't always work and you might get stuck with items so it's risky but that's my approach.

It's OK Not to Sell This Year, if it's Small

This past week I've been selling a few SKUs that I've held since Q4 of last year.  I sold one video game that I paid $14 for it.  It went down to about $20 last year.  I just sold them for about $30 this week.  

I also sold a toy that I bought for $3 last year.  It was at $10 but went down to $5 during the end of Q4.  I just sold them for $12.75 this past week.

The common denominator is that they were very small.  I paid close to $.01 per unit in monthly storage, effectively nothing and well worth it.  I also paid Long Term Storage fees which was close to about $0.10 a unit.

This requires you to float the money for a year.  That's annoying and really bad if you don't have enough float to continue purchasing other items but it's not the end of the world if cash flow isn't the reason your business isn't growing faster.

If it's larger, its gots to go.

Look Out for Clearance After Q4

Keep in mind that whatever doesn't sell goes on clearance.  Check that out after Q4.  It's one of the best times to go shopping.  Just don't get fooled by sales velocities you were just seeing.  Things come to a screeching hault during Returnuary.

Week 64 - The Buy Box
Week 65 - Amazon Restrictions and the Future of Selling on Amazon
Week 66 - Fun with Inventory Reimbursements
Week 67 - Q4 Storage Fees
Week 68 - Start Your Own Listings
Week 69 - A Long Tail Sale and Calculating Storage Fees
Week 70  - Prices Always Come Back Except When They Don't
Week 71 - Past Performance is No Guarantee of Future Results
Week 72 - Automation Beyond Amazon