Amazon FBA Rookie Mistakes - Learn from my experiences

Amazon FBA Rookie Mistakes – Learn from my experiences

Selling using the fulfillment by amazon (FBA) program can take a while to get the hang of.  I find that experience is generally the best teacher, so I wanted to share a couple of “rookie mistakes” that I made in the past couple of weeks that can hopefully save you some money in the future.

The first mistake that I made happened when I changed a listing from merchant fulfilled to FBA, but did not update the price.  In a merchant fulfilled listing you have your list price and then receive a shipping credit, and in FBA you just have a list price and shipping is free to the buyer.  If you convert a merchant fulfilled listing to a FBA listing the merchant fulfilled list price is what carries over as the FBA price.  In my case this ended with a transaction payout looking like this (click the image to enlarge): loss on baseballI had the item listed merchant fulfilled for $1.80 plus $4.99 for shipping, and when converted to FBA it was listed for $1.80 with free shipping.  As a result, I ended up paying $0.93 to have this item shipped to the buyer! In addition, I had to pay for the item ($0.99) and inbound shipping (about $0.25) so in total I lost about $2.20 on this transaction plus my time.

You may be thinking, why would I have even bought this item in the first place? And that is a very good question.  I would have been looking at a profit of about $2 even if this item was priced correctly, so it should have been left on the shelf.  I have a habit of not being able to leave items on the shelves that are at a very low price that I have purchased for personal use in the past for a higher price.  This obviously does not make the item good for resale by default, and this case is a perfect example.  I am focusing on leaving this type of item on the shelf going forward.

The main takeaway from this experience: reprice your items when converting from merchant fulfilled to FBA.

One other experience that I will share where I learned something is from an item I purchased on clearance from Kmart.  Take a look at this picture and see if anything looks off: 20131111_150753

Anything look off? How about if I show a picture with the tags removed? 20131112_160908

It says on the package that “We Change Color!”  Well, it turns out that they turned invisible.  What I mean by that is that I purchased an EMPTY box! This one only cost me $1.40 as there was 30% off clearance toys on this day at Kmart.

You may find that when you are in a store scanning items you are just looking at barcodes and then the information that shows up on your phone without paying too much attention to what you are actually buying.  This just serves as a quick reminder to make sure that there is something in the box you are buying.

These are just 2 learning experiences that I have had in the past few weeks.  I really laughed them both off as they were very small dollar amounts, but they were valuable learning experiences.  I am glad these items happened on such small dollar transactions.  To see some transactions that went right checkout this previous post.

I will not be posting over the Thanksgiving weekend.  I will be doing some Black Friday shopping however, anyone else? My next post will be my November income report with all my results and that should be ready to go on December 3rd, so stay tuned!

Hope everyone has a Happy Thanksgiving and is able to enjoy some time off with family and friends!

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