Selling Lego on Amazon.com

[gregpj]

I'm curious. There are a ton of people here talking about Q4 selling but LEGO is now a restricted brand and you need to be an authorized distributor to sell (I was required to get a written letter from The LEGO Group stating that I was allowed to sell on Amazon). Do people on here just not realize the brand is restricted now... or what am I missing?

People were grandfathered in if they sold before.

[jeff_14]

13 minutes ago, Serejai said:

I'm curious. There are a ton of people here talking about Q4 selling but LEGO is now a restricted brand and you need to be an authorized distributor to sell (I was required to get a written letter from The LEGO Group stating that I was allowed to sell on Amazon). Do people on here just not realize the brand is restricted now... or what am I missing?

Most of us discussing this have been grandfathered in and are allowed to sell without having to be authorized based on past sales. 

[Serejai]

5 minutes ago, gregpj said:

 

People were grandfathered in if they sold before.

 

Yeah... I started to think that might be the case. Checked on my second selling account that I use for personal things and I was already approved, even though I've only ever sold three LEGO sets on there a few years ago. So basically Amazon conned me into giving them $1,000 for no reason on my business account by sending me an email telling me I had to be approved, even though I really didn't. I love how they treat their sellers.

[dougts]

Amazon conned you?  because they didn't know you had a second selling account and should have automatically linked the two together?  You didn't do your homework, and you sent them the $1000.  You weren't conned.

[Bold-Arrow]

13 minutes ago, Serejai said:

Yeah... I started to think that might be the case. Checked on my second selling account that I use for personal things and I was already approved, even though I've only ever sold three LEGO sets on there a few years ago. So basically Amazon conned me into giving them $1,000 for no reason on my business account by sending me an email telling me I had to be approved, even though I really didn't. I love how they treat their sellers.

If you have 2 seller account u need to get an approval from Amazon before u get shut done and have more that 1k to worry about . If you already do they u can ignore this post however the two businesses can't be selling the same type of goods . 

[Serejai]

Thanks for the concern! I have approval for all of my accounts; I actually have three

[Miami Bomb Squad]

ok, let me get this correct, amazon charges for storage space every quarter/month.
cause i see many fba sellers and their items are still there after many months.  
ie..i don't see any profit to be made selling fba, unless you just give it away being the lowest.  
can someone give me an example of the storage fees?   let say you have 20 sets of something, how much would they charge per month or qtr?

[Serejai]

3 minutes ago, Miami Bomb Squad said:

ok, let me get this correct, amazon charges for storage space every quarter/month.
cause i see many fba sellers and their items are still there after many months.  
ie..i don't see any profit to be made selling fba, unless you just give it away being the lowest.  
can someone give me an example of the storage fees?   let say you have 20 sets of something, how much would they charge per month or qtr?

Okay first off, I rarely ever have anything last more than two weeks in the warehouse. I'll use the LEGO Tumbler as an example. Currently it's at $325, which is well above MSRP. If you were to send a Tumbler in right now and listed it for that price it would sell within a day. That's also a fairly low-volume set. The new LEGO AT-ST is currently going for $50, and if you sent one of those it would sell literally within minutes of being checked in at the warehouse. If you have something FBA that takes more than a month to sell you're doing it wrong. You should never be hit with storage fees on LEGO products. That being said, they are minimal and you won't even notice but it varies based on size and weight.

Secondly, FBA is more profitable than FBM by a noticeable amount. FBA prices are higher than FBM prices and the margins are larger. The volume is a hundred times higher for FBA listings, too. I used to list all of my products FBM and FBA until I realized that FBA was making up 95% of my sales AND my margins were higher. The only time I bother with FBM now is when I have time-sensitive items that need to sell immediately (ie before a product restocks somewhere, or grocery item expires, etc).

[Bold-Arrow]

20 minutes ago, Miami Bomb Squad said:

ok, let me get this correct, amazon charges for storage space every quarter/month.
cause i see many fba sellers and their items are still there after many months.  
ie..i don't see any profit to be made selling fba, unless you just give it away being the lowest.  
can someone give me an example of the storage fees?   let say you have 20 sets of something, how much would they charge per month or qtr?

If people weren't making money there wouldn't be anything at fba  

[asharerin]

29 minutes ago, Miami Bomb Squad said:

ok, let me get this correct, amazon charges for storage space every quarter/month.
cause i see many fba sellers and their items are still there after many months.  
ie..i don't see any profit to be made selling fba, unless you just give it away being the lowest.  
can someone give me an example of the storage fees?   let say you have 20 sets of something, how much would they charge per month or qtr?

Storage fees are based on volume at $0.43 per cubic foot for larger sets like the Tumbler. So taking the Tumbler as an example monthly storage fee on one set will be 50 cents Jan thru Oct, In Nov/Dec they bump up the rate on a Tumbler to $1.34 per month. As you can see the regular storage fees are minimal and wouldn't impact many peoples decision to have to move an item quickly.

The killer are the long term storage fees. After 6 months that Tumbler will be assessed a $13.05 fee and if it sits there for 12 months then it gets hit with a $26.10 fee. Personally I have no issue letting inventory sit for up to 6 months but I will remove/sell inventory to avoid the long term fee. They used to allow you to have one of each item sitting in the warehouse with no long term fee but next Feb every item will now get the long term storage fee.

If you can turn inventory in 6 months the storage fees are so low I would not worry about them at all.

[Jackson]

You all should probably "first rule of Fight Club" it...unless you enjoy competition and saturation and making less money.

[landphieran]

Unless you are constantly doing large large volumes it's also much more economical to ship in items by bulk (200+ sets) and like asharerin mentioned the fees are trivial.

With the crazy price fluctuations in toys during the holidays I often send all of my products in at one time with the plan for my inventory to last through February.

[asharerin]

Also alot of sellers won't even care about the long term fees. As long as the entire operation is net profitable overall then those fees are just another tax deduction. Depending on your business model it may not be worth your time removing and then resending the inventory.

7 minutes ago, Jackson said:

You all should probably "first rule of Fight Club" it...unless you enjoy competition and saturation and making less money.

That ship has sailed. Anyone new can't sell lego and those who are just doing FBM will most likely stay in their comfort zone. Those few who do try FBA will have done so on their own anyway. Now that the gate is up I keep Fight Club for the buying side of things.

[Jackson]

Storage fees are significant and often cause my units to drop below my break-even point.  Sometimes, a couple of sellers who have thousands of units combined will pop into a listing with a super-low price, and the price won't recover for a year.  Meanwhile, my junk is sitting there accumulating storage fees.

[Jackson]

9 minutes ago, asharerin said:

Also alot of sellers won't even care about the long term fees. As long as the entire operation is net profitable overall then those fees are just another tax deduction. Depending on your business model it may not be worth your time removing and then resending the inventory.

That ship has sailed. Anyone new can't sell lego and those who are just doing FBM will most likely stay in their comfort zone. Those few who do try FBA will have done so on their own anyway. Now that the gate is up I keep Fight Club for the buying side of things.

Probably, but Amazon can change the game at any time.  Amazon might see a drop in profit and be all like, "We don't need those pesky gates anymore."

[Serejai]

1 minute ago, Jackson said:

Storage fees are significant and often cause my units to drop below my break-even point.  Sometimes, a couple of sellers who have thousands of units combined will pop into a listing with a super-low price, and the price won't recover for a year.  Meanwhile, my junk is sitting there accumulating storage fees.

You are doing something horribly wrong if storage fees are cancelling out your profit. Even a Tumbler sitting for an entire year would be $30 in fees. Smaller LEGO sets that fall in the $40-60 price range costs less than $4 to sit in the warehouse for an entire year. If you're not making more than $4 on a $50 set over the course of a year...

To give an example, I have sold 1,287 LEGO sets so far this year. My total storage fees for the entire year, for ALL of my products, is only $13.87 to date. Are you sending items in as soon as you buy them and letting Amazon store them for a few years as the price goes up? I really can't think of any reason why any LEGO set you have would even sit in the warehouse for a month, let alone a year, unless you were just trying to get an unreasonable price for it... in which case just keep it at home and send it in when the price is where you want it to be. Either that or you're paying too much for the sets you buy if undercutting is an issue for you.

[asharerin]

6 minutes ago, Jackson said:

Probably, but Amazon can change the game at any time.  Amazon might see a drop in profit and be all like, "We don't need those pesky gates anymore."

Not a chance IMO. The gates are forever and there will be more going forward. Amazon is about long term dominance, not short term profits. 

 

[fossilrock]

4 hours ago, asharerin said:

Not a chance IMO. The gates are forever and there will be more going forward. Amazon is about long term dominance, not short term profits. 

 

You dont know that. Unless you work for amazon's upper echelon, let's not relay speculation as facts.

[Miami Bomb Squad]

Thanks for all the input, starting to clear things up about the storage fees.
Some of you make it sound so hard to believe.  
Take For example, Helms Deep,  I find it hard to believe a buyer would pay $248 (lowest price on FBA) over $206.50 (lowest on FBM).
Thats a $41.50 difference. WHY?
I have 18 of these and if i put them up on FBA, it would sell faster & more$ than FBM at a higher price?  come on.

[zskid00]

Funny you say that because I did sell a Helm's Deep at that price via FBA today. Granted it was there for about 9-10 days before somebody bought it so I'm sure the sales rate is low. It is only early October though.

[Serejai]

14 minutes ago, Miami Bomb Squad said:

Thanks for all the input, starting to clear things up about the storage fees.
Some of you make it sound so hard to believe.  
Take For example, Helms Deep,  I find it hard to believe a buyer would pay $248 (lowest price on FBA) over $206.50 (lowest on FBM).
Thats a $41.50 difference. WHY?
I have 18 of these and if i put them up on FBA, it would sell faster & more$ than FBM at a higher price?  come on.

You're asking why people pay more for FBA? That $41 difference gets you two day shipping, hassle-free no questions asked returns, a higher quality product (FBA has a lot stricter guidelines for product condition), the sellers are held accountable (FBM sellers get away with a LOT of stuff that FBA sellers would be immediately banned for) so there's more peace of mind, and in general it's just a better buying experience all around.

That's like asking why people pay more for things on Amazon than on eBay, or why people shop at Toys R Us instead of Target, etc. People pay for better service and convenience. FBA is seen as a lot more professional than FBM.

[Bold-Arrow]

^ I'm starting to like u . Lol

[Jackson]

17 minutes ago, Serejai said:

You're asking why people pay more for FBA? That $41 difference gets you two day shipping, hassle-free no questions asked returns, a higher quality product (FBA has a lot stricter guidelines for product condition), the sellers are held accountable (FBM sellers get away with a LOT of stuff that FBA sellers would be immediately banned for) so there's more peace of mind, and in general it's just a better buying experience all around.

That's like asking why people pay more for things on Amazon than on eBay, or why people shop at Toys R Us instead of Target, etc. People pay for better service and convenience. FBA is seen as a lot more professional than FBM.

You have a big ol' boner for FBA.  We get it.  No need to convince anyone.

[fossilrock]

I agree with Miami Bomb Squad.  I sell FBM, and I am not convinced that items sell at the higher costs at a much higher frequencey, especially on items that are retired and a few years out of the major retail outlets.  Sure, there might be a few impatient suckers out there, but when you are selling anything over a lb and using amazon's shipping, priority mail will get it to most customers in this country in 2 to 3 days pretty much matching prime.  And all this jazz about getting a better product through FBA is a bunch of crapola.  FBA is packaged by mostly minimum wage employees so you are putting your trust onto people that don't give a crap.  Amazon used to provide a quality service when shipping items, now it's just a mass consumerist machine.  If you are an FBM seller with quality feedback, and quality reviews, and you ship and package it way better than amazon, you will do fine.  

Finally, my last few experiences buying from amazon have become disappointing. Buying collectibles from amazon if you want something to arrive in new and perfect condition is no longer a given.  Plus, amazon FBA is a waste of energy resources. Shipping a box to a warehouse, so they can then ship it somewhere else just seems like a waste.  I'll just use the middle man as a simple user interface between customer and seller..  

Edited October 5, 2016 by fossilrock

[exciter1]