May 2016 Guest Financial Results Post From Selling on Amazon – Dana

June 17th, 2016

Today’s post will be the second month in an ongoing series of guest financial results posts.  If you missed the first one, you can find it here.

Take it away Dana:

Hello again!  I was on vacation last week so a bit late in gathering my May Amazon results.  May was a crazy month for me – and unfortunately I wasn’t able to spend a whole lot of time on my business.  While May ended ‘ok’ – I fell short of my sales goal.  But met the other 3 goals I had for May.

I think I can honestly say I probably spent less than 20 hours in May working on my Amazon business.  Most of my time was spent packing moving boxes and getting our house ready to be sold.  You might recall in my last post I mentioned I had quit working my full time job in April and for the past 2 months we’ve been living on just my husband’s salary.  We purchased a summer home in Colorado last summer and with only one salary now – there was no way we could afford two homes.  So about 6 months ago we decided to sell our house in Arkansas and move to our condo in Colorado – at least for awhile.  The past several months have been dedicated to preparing to downsize from a 3200 sq foot house to a 900 sq ft condo.  My living room has been full of boxes to go to storage, boxes to go to Colorado and FBA boxes.  Many days the piles overflowed into one another.  It’s a miracle my kitchen dishes didn’t get sent away with the UPS guy.

But on Memorial weekend, we packed as much as we could fit into our truck and a uhaul and moved from Arkansas to Steamboat Springs, Colorado.  My initial plan had been to do some RA as we drove out west – but honestly we had no room in the truck for any thing else.

Then 4 days after arriving – we left for a week vacation in Costa Rica.  The vacation has already been planned before we decided to move and before I impulsively quit my job.  And while timing could have been a bit better – I was definitely ready for some relaxation.  I’m now home, and ‘most’ of the moving boxes are unpacked and I’m all recharged and ready to hit this Amazon thing full blast.  Especially after seeing the slow start we’ve had for June.

So how did May go?  Let’s recap the goals I outlined in last month’s post.

My May Goals:

– Gross Sales of $8,000
– Start using a prep center
– Get ungated in Grocery
– MOVE – which honestly will be taking the majority of our time.

Goal 1: Gross Sales of $8000

Given the distraction of moving we fell a bit short of our Gross Sales goal of $8000.  We had total sales of just over $6500; with about $200 of those coming from eBay. I experimented a tad bit with JoeLister early in the month and cross listed some items on eBay. For those unfamiliar with JoeLister – it automates the process of selling on eBay and using Amazon as your fulfillment center.   I did sell a few items but haven’t really investigated all the fees to know if I was really profitable on those items.  I’m really new to eBay – and don’t have a good grasp on all the fees, etc around selling on that platform yet.  But the experiment did prove a) items sell there and b) the ease of using JoeLister can’t really be beat.  The software pretty much does everything.  It was nice to see when something sold knowing I didn’t have to worry with the shipping – or anything – really.  It’s an area I’m definitely going to pursue more.

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I also think sales were a bit low because the last shipment I sent in May – nearly all of it showed incomplete for some reason.  With the move and everything I just didn’t have time to figure out what happened.  So most of my newest inventory didn’t go live until this week when I had time to sit down and fix it all.  I have no idea what happened – but it wasn’t too hard to fix.

Here you can see the last half of the month really slowed down:

image002Next up the income statement and some more financial details (click any image to get a better look):
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Replacement Image
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The services that are used that show up in the subscription fees section are OAXray, InventoryLab, TaxJar, BQool, and JoeLister.  

Goal 2: Start using a Prep Center

So part of my moving plan was to address the gap of having a place to send OA shipments while we were moving.  I figured with shipping lead times I needed to stop OA purchases about 3 weeks out – which obviously wasn’t ideal for ensuring I had inventory.  So I started investigating using a prep center so we could keep shipments moving along.  Honestly – after putting together my very first FBA box back in Jan – I always knew this would be one of the first things I outsourced. I can design multi-million dollar software applications but I can’t pack a box to save my life!  I’ve definitely gotten better – but I’d much rather be doing something else.

I went with a prep center that is located in a tax free state – mainly because the finances made more sense to me.  Their pricing structure is a flat rate and includes all shipping materials and boxes.  And one additional perk that was important to me – they keep the hard copies of all invoices received with shipments – should I ever need them.  I’m hoping in the future they will move to a cloud based storage system so I can have access to them whenever – but for now I’m happy knowing they have the hard copies and can scan/email me if I ever need it.

To be honest – I had a bit of a bumpy road out of the gate with them.  After signing up – I received some outdated instructions.  Once I inquired – somehow they lost my account and couldn’t find where I had signed up – although they were receiving and tracking my inventory.  But we eventually got it all straightened out – although it delayed my shipment to Amazon about a week.  Not a big deal really – just a reminder when you introduce a new process – always expect little bumps in the road.  Things happen.  I expect to be using them a lot more in the coming months.

Goal 3: Get ungated in Grocery

Ok – so this was a biggy.  I’ve been trying since March to get ungated.  I think I submitted probably 4 times.  I decided to submit one last item before hitting the road just for kicks.  I nearly fell over when I got the email. I’m happy to share details of what I did for anyone interested.  But the big issue for me was (and this just came to me one night after being denied 4 times) I realized that when I setup my FBA account I set it up under my personal name as a sole proprietor.  I have an LLC and EIN number but the way Amazon does things – they wouldn’t accept my EIN – so I just used my name and SSN.  The invoices I was sending in had my LLC name on them, as did my sales tax permit.  It finally made sense why they kept saying my sales permit was invalid.  I sent an email explaining this and a copy showing that I was the owner of the LLC and they approved me about 30 min later.  Next, on to Health and Beauty.

I literally read the email 5 times to make sure I was understanding correctly.

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Goal 4: MOVE

Words can’t describe how happy I am for this to be done.  Now – if only our house back in Arkansas will sell – things will really start looking up!

Looking toward June

So despite everything going on, I’m pleased with May.  However I’m bracing for a really bad June.  Having the business on auto-pilot in May meant very little sourcing was done and June sales are already showing that.  Some of our inventory that was stuck for several weeks – now have lower prices which will eat into our margins.  And I’ve discovered (which I knew) Steamboat Springs isn’t exactly the hot bed for RA activities.  I’m about an hour away from the nearest town of any significant size and 3 hrs away from Denver.  I’m already planning a RA marathon trip next week – so we’ll see. So our new strategy will be doubling down on OA and getting some traction with wholesale.  But first – I’ve got to unpack some more boxes and get my FBA workspace set up.  There is very little room in a 900sq ft condo to pack and ship boxes.

My goals for June:

– $4000 Gross Sales (yeah – it’s gonna be a bad month)
– Make first wholesale test buy
– Start streamlining more of my processes in preparation for outsourcing some additional activities (buying, reporting, accounting, etc)

Ryan’s last words: Thank you Dana for putting this post together and sharing all of these details!

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12 responses to “May 2016 Guest Financial Results Post From Selling on Amazon – Dana”

  1. Joshua Wynn says:

    That’s great that you were ungated in grocery!!! I’ve been denied over and over and over since December. Where have you been getting your invoices? I wonder if the business name is my issue too. My store name is different than my actual business name. My invoices and my reseller cert have my actual business name on them. You would think Amazon understands most sellers don’t use their actual business name as store name, but maybe that’s giving them too much credit.

    • Dana says:

      I used Abedelivers for invoices. The invoices had my LLC name. But when I looked at my Amazon account – I noticed under Legal Entity it had my personal name Dana Grummer. No where on my Amazon account does it have my LLC – which is different than my store name. You might try sending them a copy of your LLC and pointing out it shows you as the Registered Agent. That’s all I did and told them I was going to submit a case to have my legal entity in Amazon changed. But I haven’t done that yet. Good luck! Don’t give up.

  2. Jana says:

    Thanks for addressing the issues of store name vs business name. I’m in the middle of the Inc. process and don’t have business name yet on amazon, resale license, so ordered for ungating under my name (which matches amazon account name (but not username). Confused how to navigate this stuff while in a name change process. Glad t know you sent them in proof you are one in the same and they got it

  3. Dana Grummer says:

    @Jashua – I tried to reply via my phone but it wouldn’t go – so I’m gonna try again. Sorry if this a duplicate. I used AbDelivers for invoices. Just 3 different items of 10+ quantity I think. I purchased items I knew I would use (I have lots of sweet and low now, but the chocolate is gone). My invoices had my LLC name. But when I checked my Amz Account under the Legal Entity – it just listed my personal name. No where on my Amazon acct is my LLC – which is when the light bulb went off for me. My store name is neither my name nor my LLC – but once I pointed out that my LLC had me listed as the Registered Agent and told them I planned to open a case to have my Amz account changed to my LLC – I was approved within 30 min. So you might try that. Just don’t give up yet!

    @Jana – It sounds like you’re on the right track. I just kept reading to make sure the invoices were in your business name – I didn’t stop to think that my Amz Account wasn’t. I did have to point it out to them that me, the Registered Agent for the LLC was the same person listed as the owner of the Amz Account. Another note – I sent my initial request about 3am – but actually waited 2-3 days before I sent a response back to them. The times before I was just automatically denied. So I think it still matters who you get. It was also a Holiday Weekend – so that might have had something to do with it – you knows 🙂

  4. dan says:

    I enjoy these articles, although for personal reasons, I am hesitant to sell on amazon. I see a few things. 1) Amazon has strongly stated that they don’t allow retail arbitrage including this in the selling agreements. Are you not concerned that they will suspend your selling one day? 2) While I can see the outsourcing of some things, I see the danger of outsourcing the sourcing of goods. Good employees aren’t stupid, I have see this many times where the hired help becomes the people you compete against. Aren’t you worried that some of your good sourcing people will figure out the numbers and go out on their own?
    Finally with the Fullfillment centers filling up, and the investors eventually being impatient are you worried that one day Amazon will crimp the hose on you either by rationing what you can sell FBA or jacking up the fees.

    • Kristian says:

      Hi Dan, very good points! I think you are correct as far as being afraid of Retail Arbitrage being a potential reason for shut down. As a matter of fact, that should be only a stepping stone for anyone interested in long term success on Amazon. Usually they close their eyes for as long as they can while making their profits on you, however, the first time you start having issues – negative feedback, shipping on time, high cancellation rate, or simple complaint from your competition and your account will go down. Anyone wanting a long term success need to use the retail arbitrage only as a stepping stone to figuring out how Amazon works and sourcing a product that they can private label and sell.

      Your second point is also correct, I’ve seen many instances of that happening, as a matter of fact that’s pretty much how I got involved in online selling – an employee of another business owner told me their whole business strategy and sold me on the idea. I shy away from having employees, which is very unusual for me and one of the hardest thing I had to deal with in this business, as I am used to having 50-100 employees on most businesses I previously owned.

    • Dana says:

      I can understand your concern Dan.  And while I agree to an extent I don’t share your opinion on all of these points. 

      First – I do agree that RA is not a long-term approach, at least for me.  I’m using it as a stepping stone to learn what and how to sell on Amazon’s platform.  There are lots of things that need to be considered when you sell RA items and ensuring you are eligible to sell them is
      just one of them.  Amazon’s policy states “As a Seller, you may list any item on the Site unless it is a prohibited item as defined in the procedures and guidelines….” 
      Now that’s not to say you have the right to sell any item from any manufacture and you must indicate the proper condition. For example, I’m not going to sell anything with a manufactures warranty as new.  There are many other pieces to consider as well – but I haven’t seen anything that states RA as a whole is against the selling agreement.  Maybe I missed it (which is very possible).  But in any case – RA is not my long term strategy. 
      It’s way too much work for me – lol. My long term plan is to focus on wholesale and private label – but I’m
      not there yet. 

      Am I concerned with Amazon suspending my account one day? Not really.  Any successful business should always have multiple channels and always be aware that one channel could go away.  I worked for a
      Fortune 500 company previously and we were suppliers for some of the largest retailers in the world.  While our Walmart channel was very profitable – we in no way relied solely on that channel for our profitability.  I had an entire staff working to continually look for additional sales channels.  You can never be too comfortable with one channel. 

      For your second concern – I do not (or not yet) outsource sourcing of goods. But it is something I would like to do. You have to remember that not everyone wants to sell on Amazon.  Occasionally my mother will do some sourcing for me. She has no interest in selling on Amazon or anywhere else for that
      matter.  She just likes to shop and she loves hunting for a good deal.  FBA takes a great deal of time and there are some people who either don’t have the time or desire to prep, ship or manage their own business.  It doesn’t make them ‘bad’ employees – in fact it probably makes them a better employee because that’s all they want to do.  And there is nothing wrong with that.  I get that most entrepreneurs can’t understand that someone wouldn’t take what they’ve learned from you and then compete against you. But that’s because they are entrepreneurs.  Not everyone is and not everyone has the same desire. It doesn’t make them bad employees or stupid.  I’m also not worried about competition.  Buying and selling of goods has been around forever – and so has competition.  Focus on providing value and not on what everyone else is doing.  And if they want
      to compete with me and they are successful – good or them.  It probably changed their life for the
      better.  I’ve recently shown my father-in-law how to sell on Amazon and he will most likely be competing
      against me.  But my FIL is on disability and this opportunity will allow my Mother-in-law to retire this year.  I’m paying it forward and trying to bless someone else.  For me life isn’t about how much money you make – it’s about being a blessing to others. So – no – I’m not worried that when I find someone they will compete against me. 

      And on your final point about Amazon rationing what I can sell or increasing fees; this might happen.  But
      again, Amazon should not be anyone’s only income source.  I’m fully aware they could pull the plug at
      any moment.  But at the current moment they are not and I’m taking advantage of their willingness to allow small 3rd party sellers like myself to participate and sell on their platform.  Making money is about seizing the opportunity where it is – and at the moment – this is where it’s at :).

  5. Kristian says:

    Hi Dana, thank you so much for the information you provided, very interesting! Could you elaborate if you don’t mind regarding the use of prep centers? Which one did you try and how did it work? Do you still have to create the FBA shipments yourself and simply provide them the labels and Etc?

    • Dana says:

      I’m using Prime Zero Prep at the moment. I chose them because they are in a tax free state and that help offset some of the prep fees. As I mentioned in my post – the start was a bit rocky and it took almost 2 weeks to get my first shipment out. I then was out of pocket moving and just got my 2nd shipment out this week. It went very smoothly. When I make a purchase I update a spreadsheet for them to let them know it’s on it’s way. Once they recieve it, they confirm the qty. Once I have what I feel is a good amount of inventory to send in – I create the shipment plan. I still use IL and create a batch then send it to Amz. I then just email my prep center that the shipment plan is ready and they go in and print the lables, complete the shipmentnish it out and ship it. They do all the prep and labelingSo far, I’m very happy with it. I’ll be branching out into larger wholesale orders and doing some bundling as well – so I’ll update you on how that goes.

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  8. Robert says:

    Hi Dana,

    Thanks for sharing your monthly reports. I want to ask you, is there any OA course that you recommend?.

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