It’s been a little over 2 months since my last mistakes post so it’s time to share some more instances where things haven’t gone as planned when selling online. The goal with the mistakes posts are to show some of the less glamorous parts of selling online that aren’t often discussed. Hopefully you will be able to learn something from this post, as well as see that you can make mistakes and still have solid financial results.
The first mistake for today relates to something new that I am trying for sourcing inventory. I have a fried who is buying inventory with my money, listing the products, and shipping them to FBA in return for a percentage of profits. One of the parts of the process I am not having him do is price the items. The plan is to have him price items at an artificially high price, usually $99, and then I will reprice the item while it is in transit to the amazon warehouse. There was one item where things didn’t go exactly as planned, take a look (click to enlarge):
You might be thinking that this was not a mistake on my end, but really it was. The arrangement with my friend started less than a month ago so it is quite important that I reprice all of the items while they are in transit to the amazon warehouses. This will catch any possible listing errors, and will allow the items to be priced competitively as soon as it is available for sale. The item was a Monster’s University Guitar, and HERE is a link to the product page if you want a better look. So in total I paid $5.76 for this item to be shipped to the customer, and I also paid about $8.50 for the item so in total it was a loss of just over $15. This really is small price to pay to learn this lesson, as it could have happened on a much more valuable item. In addition, it will get me to reprice items while they are in transit and not allow them to be checked in first before repricing. This should help items to sell faster, as if they sit around for a day or 2 at amazon warehouses at an artificially high price they aren’t going to sell anyway.
The next part of this mistakes post will be sharing the total number of items that I lost money on between May 1st and July 15th. In total during this time period there were 31 items that I sold at a loss. The losses ranged from $0.05 to $7.32 per item, and added up to a grand total of $62.65. This does not factor in the inbound shipping costs, packaging costs, etc, so the actual amount lost on these 31 items would be a bit more. In addition to the aforementioned items, there were another 37 items that I sold where my profit was less than $1 before factoring in inbound shipping and packaging costs. So the bulk of these 37 items also likely resulted in a small financial loss. The bulk of these items where the price went down after I purchased them and I felt they were unlikely to recover. I made the decision to get whatever cash out of them that I could so that I can reinvest, as opposed to holding out for too long hoping the price will recover.
In addition to these losses, there were 11 items from the grocery or health and beauty categories that expired during the past 2.5 months. The total cost of these items were $58.79, so the cost of those items, plus the inbound shipping was a loss as well.
Losing money on some of the items that I sell is inevitable, but I evaluate each one to see what went wrong so that I can avoid a similar situation in the future. It’s important to remember that these losses don’t only have financial implications, as there was also a good amount of time invested in finding these items and shipping them into amazon.
Another mistake that I have made a few times over the past couple of months has been not having items ring up correctly at the register and paying the incorrect price. Off the top of my head I can think of 2 specific instances that happened at Toys R Us. One relates to an item being displayed as on clearance, but came up at full price at the register. The price that showed up at the register was $39.99 and the price was supposed to be $7.99. This was a pretty significant gap and something that I am definitely going to get corrected. There was another instance at a Toys R Us recently where I did not receive a discount I was supposed to. On Thursdays individuals with Toys R Us credit cards receive an additional 10% off their purchase. Well, I finished checking out, checked my receipt in the car and noticed that I did not receive the 10% off. I finished checking out about 10 minutes before the store closed, so by the time I noticed the store was just about to close so I didn’t address it on the spot. I have not resolved either of these mistakes that happened at Toys R Us yet, but my plan is to go in and get both fixed in one shot. I don’t anticipate any trouble getting these issues fixed, but it’s a nuisance to have to spend the time to take care of them. Make sure to pay attention while checking out, and check your receipts before you leave the store!
One quick announcement to make before I wrap this post up, I was just a guest on the Side Hustle Nation Podcast earlier this week, you can listen HERE if you are interested.
That’s all that I have for today, if you have any mistakes that you are willing to share that we could all learn from, please put it in the comments below!