Amazon FBA Rookie Mistakes – Learn from my experiences

November 27th, 2013

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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13 responses to “Amazon FBA Rookie Mistakes – Learn from my experiences”

  1. Adley says:

    Wow those really are rookie mistakes haha. I always make sure to inspect my items from the thrift store and I would notice if the box felt a little light.

    Oh well, you live and you learn. Making mistakes is a part of life.

    • Ryan Grant says:

      Haha yes indeed they are. I would have thought I would have noticed that this box felt a little light, but apparently I did not. Oh well is right, a small price to pay for some valuable lessons.

      -Ryan

  2. Linda says:

    Thanks for the post. I am so glad I have never made any mistakes. 🙂

  3. Derek says:

    Ha, that 2nd one is pretty funny! Thanks for sharing that, as a lot of people would not have wanted to admit that for their readers but it is a great reminder to also pay attention to the condition of the item if it turns out to be a positive buy.

    • Ryan Grant says:

      Ha, yes I was quite surprised when I took a look at the box and noticed it was empty. Glad I found it before sending it in to amazon though. Thanks for stopping by the blog, and my goal is to share as many experiences as possible good or bad so people get the full picture.

      -Ryan

  4. […] 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 …  […]

  5. […] help you avoid similar mistakes in the future.  If you missed my last “mistakes” post, HERE is a link.  If you have any questions or comments, please leave them below, or send me an email at […]

  6. MamaP says:

    Hi, Ryan
    1st let me say how much I’m enjoying reading your blog. I’ve just stumbled on it today, started from your first post, and am at this point. Sharing your “rookie” mistakes is great for a couple of reasons: It tells me that you’re a real person, who is really just starting out and of course the second reason is the reason that you shared them – to give others a ‘heads up’. Thank you.
    Another issue that you hit on in this post is very applicable to me and what brought me here (indirectly) today. I too, have a very difficult time leaving something in the store when I happen upon a 80% or 90% off sale. I know of a sale right now, that would allow me to load my SUV up fully with new merchandise (mostly household goods: curtains, table cloths, home decor, frames, candles,etc.)and spend less than $20 or $30 for it all. Unfortunately, I have “loaded my SUV” up so many times before, I have no place left to put this stuff.
    Selling an item here and there on eBay, Craigslist, etc. obviously isn’t cutting it.
    Unfortunately, I’m just an ol’ gal who is very good at the bargain finding, shopping, and BUYING – but have no degree, and apparently not much business sense either.
    In desperation (because I SO want to be shopping today, but have no more space), I started researching better ways for me to “get rid” of a lot of my ‘hauls’.
    FBA intimidates me, as does renting a storage unit to store my inventory (I’m on a limited, fixed income), but maybe by the time I finish reading your blog posts, I’ll feel more able to take the plunge. Thank you!
    It would be freakin’ awesome if you lived near me, and I could just do the bargain hunting and buying, and hand it off to you to handle the rest of the business. I will refrain from asking you to mentor me, as I’ve seen so many have already come before me and I’m sure at this point in your ‘experiment’ you have way more than enough to do. ;o)
    Thanks again, Ryan.

  7. Samantha says:

    Thank you for sharing this. I haven’t laughed that hard in forever! Every time I looked at that empty box it set me off again!!

  8. Chris lee says:

    Great information, but I’m having trouble
    I have found a product to sell from DHgate.com but can’t seem to get the information from Amazon to send it to there fulliment centre I need to give this to DH Help

    • Ryan Grant says:

      Hi Chris,

      You likely will need to have the product shipped to you before the Amazon warehouses, that is the way the FBA program usually works unless your supplier is taking care of the labeling / prep.

      Best Regards,
      Ryan

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