Mistakes I made selling on Amazon May – July 2014

July 18th, 2014

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):

Monsters LossYou 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!

 

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28 responses to “Mistakes I made selling on Amazon May – July 2014”

  1. Scott says:

    Ryan.

    Love the transparency as usual.

    Although there is a bit of a sting associated with the loss on the guitar it served as a reminder for you to double check your items. I bet this doesn’t happen again. Been there, done that.

    Good judgment comes from experience, and experience comes from bad judgment. Let me tell you….I have a lot of experience!

    Continued success to you!

    • Ryan Grant says:

      Thanks Scott, and I completely agree that this was a cheap price to pay to learn this lesson.

      Best Regards,
      Ryan

  2. Jane Kaiser says:

    I have been overcharged at ToysRUs thee last three out of three times I have been there. A good reason to check all receipts before leaving the store!

    • Ryan Grant says:

      Absolutely, I will not be leaving a Toys R us again without making sure everything was correct.

      Best Regards,
      Ryan

  3. Cheryl says:

    Sent my first 3 shipments. Forgot to pack three items in my second shipment that I had listed on packing list. Still waiting to see how that will play out. Learning to read profit bandit correctly as the first two items that sold for me were not at the profit I expected. But learning something new each day. Keep plugging along is my mantra:)

    • Ryan Grant says:

      Hi Cheryl,

      Thanks for sharing! I have left items out accidentally before as well and it doesn’t end up being an issue. Basically within your seller account once the shipment gets there you will be able to let amazon know that the left out items weren’t shipped.

      Best Regards,
      Ryan

  4. chad says:

    Hello Ryan,

    These posts are very informative and helpful for us beginners.

    I to have had trouble with wrong prices at toys r us. Luckily I caught most of them before leaving the store

    As far as the 10% off on Thursdays go I made them re ring my buggy full of clearance stuff because my 10% did not come off but after all if that it only gave 10% off on products that are not clearance so out of a $300 order I saved less than 2 bucks but now I know ..

    • Carl says:

      Hi Ryan,

      Good post as always. I have a similar story but mine was on a positive side about checking stuff at the register. I was buying this kids karaoke microphone on clearance at toys r us. Me and my wife noticed that some of the same microphone had full price and some had the 60% off and they were next to each other. So at the register i made sure it registered the correct price but it didn’t. I told the clerk that those microphones are on clearance and for her to double check. She said ok sir let me take out my calculator and do the match real fast. So long story short she miscalculated and charged me .45 cents per microphone which were suppose to be 4.99 each. I know was suppose to be ethical and tell her but I also was not sure if she did some kind of calculations that I’m not aware of. For me, a win is a win.

      • Ryan Grant says:

        Hi Carl,

        Sounds like you came out ahead on that one, and I can relate to not be exactly sure what went in an employee’s calculation and come out slightly ahead on it. If I notice something is blatantly wrong though, I am sure to let the cashier know.

        Best Regards,
        Ryan

    • Ryan Grant says:

      Hey Chad,

      Glad to hear you find the posts helpful. That’s a good plan to double check everything and is going to be the way I do things going forward. Too bad it only turned out to be saving $2, but at least now you know the way the discount on clearance works.

      Best Regards,
      Ryan

  5. Barbara says:

    Ryan, I appreciate reading about your mistakes. Just yesterday I decided to start writing down my own mistakes so that they don’t get repeated. Here are the first two on my list. I’m sure there will be more.

    On lower priced items, be sure to multi-pack them so that Amazon doesn’t consider them “Add-on” items. Also, check every competitor to see how they are packaging and pricing them before I decide how to do mine. I have a seasonal item that I am selling individually and didn’t realize that they are now an “Add on” item. After listing and looking a all my competitors, I doubt my items will sell before summer ends. I’m not sure what to do about that, if anything.

    My second mistake, always double check before preparing a shipment to make sure the Inventory Placement Service is turned off. I still do not understand how it got turned on for my last 2 shipments, because it wasn’t on for the first 2. I was charged a ridiculous amount of money, which Amazon did refund to me. But, they made it clear that it was a one-time only refund. So, I will not let that happen again.

    Thanks so much for sharing your mistakes. In a way, it makes me feel better about mine.

    • Ryan Grant says:

      Hi Barbara,

      Thank you for sharing these mistakes! They should help some other be able to learn from these in the future. I would try to never feel to bad from mistakes, just learn from them and move on, but nonetheless glad to hear that me sharing mine helps you feel better about any that you make.

      Best Regards,
      Ryan

  6. Grado says:

    Mistake: bought a nursery baby monitor which amazon seemed fine with me listing. After it was checked in they emailed that it could not be sold and I had to submit a removal order. So..I was out that $. It’s so great to have found this forum. Let’s coordinate a SellersUniversity similar to Frequent Traveler University for miles and points. I’ll sign up!

    • Ryan Grant says:

      Hi Grado,

      Thanks for sharing that mistake! That also sounds like a very good idea related to creating a SellerUniversity. I will look a little more into that to see if it is something I might be able to help set up.

      Best Regards,
      Ryan

  7. Bill says:

    Ryan,

    My mistake is pricing too low. My two PS2 games I had lying around the house sold quickly on Amazon but after fees and shipping (I use FBM currently) I actually lost money…not much but its tuition money…..

    Bill

    • Ryan Grant says:

      Hey Bill,

      Thanks for sharing! Looking at it as tuition money is great, it’s a relatively cheap way to learn how things work, and now it’s unlikely you will end up pricing too low again.

      Best Regards,
      Ryan

  8. karen says:

    I’ve got 71 items on Amazon (books) and I intend to sell more and more on Amazon, mainly because I’m fed up with eBay seller fees and the PO breaking things!

    Is it time I went FBA? I can’t figure out if I’d save a significant amount.

    BTW I just downloaded the Amazon scanning ap to my Android and it’s FANTASTIC!

    I think I found your site at just the right time!

    • Ryan Grant says:

      Hi Karen,

      That would be enough items to send via FBA. I would recommend trying out FBA, as I really like the system. As far as cost savings though, it’s hard to say if you would save a significant amount. Since books are able to be shipped media mail when you sell them yourself, it’s unlikely that you would save much with FBA. However, you would not have to pack and ship each order, and often you will be able to sell your books for a little more than if you were selling them yourself.

      Hope that helps!

      Best Regards,
      Ryan

  9. karen says:

    If I do sign up for FBA can I ship this existing inventory off to them?

    (Sorry forgot to ask)

    Thanks Ryan, you’re an inspiration.

  10. Grado says:

    Another mistake on a low priced item: it was 4 ounces and AZ rounds all weight UP so I had to pay as if these items were a pound each. Had 4… Had to pay for them to sell. Learning about not wasting time on low priced items. Jessicalarew.com has a free webinar tomorrow on bundling items. I signed up.

    • Ryan Grant says:

      Thanks for sharing Grado! I did see Jessica has that webinar, I am considering signing up as well.

      Best Regards,
      Ryan

  11. Dave Bommarito says:

    Great posts everybody. One of the mistakes that I have repeated is forgetting to show my sales tax license when making purchases at a store. Not all of them accept it, but it sure can make a difference. Does anybody know if TRU accepts sales tax exemptions?

  12. Clay Farren says:

    Hi Ryan.

    It seems like a lot of work to keep track of shipping expenses for each individual item. Is there an app you use that tells you how much you spend on shipping for each item, and perhaps the same app that tells you the gross profits you earned on each product sold?

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