Selling through Amazon FBA

[Ed Mack]

Because they use Eco-Friendly plastic. They're saving the planet, don't be ungrateful.

Yes.  That's what I'm trying to tell people.  Good ole' Zhang only uses the best materials in his knockof........I mean replicas.

[Achilles]

did they reimburse at your list price?

The horror scenario for me if they lose something that was going to be shipped to customer, killing your metrics...

 

In my experience when items are lost/damaged at the warehouse, they usually credit me enough back where I more or less break even. I don't profit the way I was planning, but I haven't lost any significant money. It can be annoying. They lost an entire BOX of 20+ large toy lightsabers last holiday season that would have given me a solid profit, and I ended up more or less breaking even on them after reimbursement. But the overall money involved is proportionally small, so I just chalk it up as one of those things. It also happens so incredibly rarely I don't think of it as anything nefarious going on. 

[No More Monkeys]

In my experience when items are lost/damaged at the warehouse, they usually credit me enough back where I more or less break even. I don't profit the way I was planning, but I haven't lost any significant money. It can be annoying. They lost an entire BOX of 20+ large toy lightsabers last holiday season that would have given me a solid profit, and I ended up more or less breaking even on them after reimbursement. But the overall money involved is proportionally small, so I just chalk it up as one of those things. It also happens so incredibly rarely I don't think of it as anything nefarious going on.

We should probably move this to separate thread, but I was always curious what happens if sell something via FBA, and Amazon has one of those bright moments when they decide to ship sets in poly bags. Box gets beat up, customer complains and leaves negative feedback, and there is either return or concession (probably by Amazon?). Have you had any experience with such scenario?

[Bold-Arrow]

We should probably move this to separate thread, but I was always curious what happens if sell something via FBA, and Amazon has one of those bright moments when they decide to ship sets in poly bags. Box gets beat up, customer complains and leaves negative feedback, and there is either return or concession (probably by Amazon?). Have you had any experience with such scenario?

Regarding feedback : most of the time amazon will take responsibility for damaged, lost, late items . If you look at fba sellers you will notice most have negative or neutral feedback crossed off with a note that amazon fulfilled the order and they take responsibility.

Regarding concession: they will take it from your account and u will get reimbursed within 45 days

Returns : lots of scenarios and this my que to move these posts

[Ed Mack]

Feedback means little on Amazon to me.  I never leave it and rarely look at it because they guarantee everything.

[No More Monkeys]

Feedback means little on Amazon to me.  I never leave it and rarely look at it because they guarantee everything.

If you have an option to order from two sellers, one with 90% and the other with 99%, with comparable number of feedbacks, and you either need your item on time (say, someone's birthday), or there is a risk that price will move too far up while you are dealing with returns or seller not shipping at all, it stands to reason that your are reducing your risk by ordering from the guy with 99%. Double that during Christmas gift season

Edited September 5, 2014 by No More Monkeys

[Ed Mack]

If you have an option to order from two sellers, one with 90% and the other with 99%, with comparable number of feedbacks, and you either need your item on time (say, someone's birthday), or there is a risk that price will move too far up while you are dealing with returns or seller not shipping at all, it stands to reason that your are reducing your risk by ordering from the guy with 99%. Double that during Christmas gift season

Sure, but many 3rd party sellers don't have 99% feedback.  Most are in the low to mid 90s in my experience and many sellers have some sort of negative feedback, even the top guys/gals.

[smittypop2]

A lot of the guys with lower percentages on Amazon are dropshipppers. They get negatives left and right for failure to deliver on time, shipping the wrong product or just being sold out by the time they actually sell it. I really loathe these sellers because they ruin most products. I still don't understand why Amazon allows these guys to continue selling like this when they have so many problems. I can't fathom being allowed to sell on there with the amount of bad feedback and AtoZs they must get on a daily basis.

[smittypop2]

Also, with regards to FBA and the pitfalls of it.

 

A)I have had 100s upon 100s of items "lost" by the Amazon pickers and it usually harms me monetarily. I actually had a 70some item shipment lost about 5 minutes after they checked it in last week and get really screwed as a result. For example: I sent in X item for a seller price of $350. The item was previously selling for $150-$200, but no one had any left for less than $330 and they were not FBA. They "lost" mine shortly after checking them in and I got $118 per item in reimbursement. I did lose money on these and there is not one thing you can do about it. That is one of the things that really sucks.

 

B)The other problem is that you can only store the inventory there (they charge you a monthly fee depending on how much inventory you are storing) for a year to a year and a half and then they either charge you an exorbitant long term storage fee or else a smaller fee to send all these items back to you. I usually opt to have them sent back and usually 20-30% of the items are completely destroyed and not fit for resale. You can fight with them and try to get reimbursed, but they don't like to do it and don't like you to repeatedly attempt it. The main problem is that you can not believe how badly the warehouse workers treat this inventory in general. I would be appalled if I ordered any of these items and got them in the condition that they returned them to me.

 

Anyways, I hope this sheds some light on the FBA process and helps some people that are thinking about utilizing it. I would ship 100% of my items myself if I had the time to do it on a daily basis. I have not even went into the process of FBA returns (which happen for any reason at any time) and the crap they send back to you that a customer broke/destroyed/stole pieces out of and refuse to reimburse you. Good luck to all!  

[allen9917]

I never gave FBA a serious thought but now I do. It seems the fees are similar overall. Yes they charge the storage and handling fees, but the shipping to buyers are free, and amazon prime with free 2-day shipping will bring more exposure. If I ship 5 sets to 5 different buyers, the total postage is much higher than shipping 5 sets in a package to amazon. Plus the saving on storage at home and fewer trips to USPS/UPS/Fedex.  I don't know I'll let them handle all the exclusives but it seems a very good way to sell small to mid-range sets.

 

So, any one already using them, and if not, why not? Appreciate sharing any thoughts and experience.

[stephen_rockefeller]

Just my opinion but I would never ever send them expensive retired sets. I know good and well they aren't going to pack and ship as well as I do. Inexpensive sets that are still available I might use FBA though.

[mykingdomforabrick]

I FBA quite heavily.

Any questions I'd be glad to answer and help.

 

There are positives and negatives just as any other marketplace.

For me the benefit of not dealing with customers directly and of managing my own shipping schedule is a good fit.

That outweighs the higher cost and risk of customer returns.

 

In the customer theft/returns department I've had success so far with amazon reimbursing me for any damage caused by themselves or customers (stolen items, figs, etc).

 

Also keep in mind that amazon has more credit card #'s on file then anyone.. buyers ready to click the one-click button and buy.

FBA sellers get a premium for the items due to prime shipping and worldwide reach.

 

So far I'm happy.  I do still ebay a bit as well but FBA gets the majority of my time and investment.

[redcell]

I don't use FBA because of the higher fees.  You should check your math on the shipping costs that you set out above.  Every time that I have run the numbers, it is more expensive for me to use FBA when all of the associated fees are factored in.  If I had a bottomless well of inventory, FBA might make more sense if it increased the rate of sale, but, otherwise, I make more doing it myself.

[allen9917]

Thanks for your responses. I would not let them handle the exclusives, but for smaller sets under $100, it makes things more straighforward, and may be even saving some costs as seller will not pay shipping to buyers. I do see FBA will bring more returns as buyer can return for full refund even they opened a brand new item, and that could be a headache.

[Achilles]

I think the main thing to consider is volume. If you sell a lot of items, FBA is well worth it. It's far cheaper to send several items to Amazon than it is to individually pack and ship it. I routinely ship boxes of 20 items to an FBA warehouse for less than the cost of mailing one single package myself. Similarly, you don't have to deal with returns/customer service. And this doesn't factor in the time difference. 

 

Without FBA I wouldn't be in the business at all. 

 

The only real downside as far as I am concerned is with Amazon your competitions prices are always very obvious and visible, whereas with Ebay you sometimes get lucky with timing and can get more than you expect for an item depending on the market at the time the sale ends.

Edited October 6, 2014 by Achilles

[river41]

Thanks for your responses. I would not let them handle the exclusives, but for smaller sets under $100, it makes things more straighforward, and may be even saving some costs as seller will not pay shipping to buyers. I do see FBA will bring more returns as buyer can return for full refund even they opened a brand new item, and that could be a headache.

of course you pay for them to ship it to a buyer.They charge a shipping fee based on the weight of the item besides the  handling fee based on the size. you are seriously mistaken if you think they don't charge you to ship it of course they do.

[allen9917]

of course you pay for them to ship it to a buyer.They charge a shipping fee based on the weight of the item besides the  handling fee based on the size. you are seriously mistaken if you think they don't charge you to ship it of course they do.

I see there is a weight handling fee, but it is quite small. I used 75013 as an example in their demo. To ship it myself I need to pay an average of $8 for USPS priority, but the FBA fulfillment cost is $3.46. Not bad.

[legos4me]

if you add the shipping you pay to ship it to them and paying them to ship it out for you you are paying twice to ship the same item.Add the cost of storage which can be quite high and all the extra returns you get it should be a money loser. The primary benefit should be convenience and of course to get convenience you have to pay and in this case you are paying amazon to ship it for you. The question is -for me is it worth x amount of dollars to pay someone to ship my products.

[Bold-Arrow]

several FBA threads are now merged into this one

[Bold-Arrow]

back on topic, FBA is great if you are selling in large quantities and/or you have storage issues. It works well for me as I dont have the time to pack 20 items every day ,and I rarely have to deal with CS issues (again time restriction).

 

I would never sell a large retired item (SSD for ex) via fba EVER!!!! the risk is too great plus eBay prices don't lag that far behind especially when you factor in fees

[exciter1]

I guess I have a question.  How does Amazon handle the storage fees?  Is there a pricing structure and does it increase by the total weight, # of items, type of items, etc?  If you have significant inventory, but don't want to sell for 2-3 more years, I'm guessing you just don't blindly send everything to an Amazon Warehouse to have it stored for you?

[smittypop2]

Just had an FBA mandated SSD return last week. The item is now in my inventory as defective. I just requested it be sent back to me and will probably be missing parts. I will have to call Amazon and fight with them to get a refund when I get it back. That is absolutely the worst part about FBA and it really makes me angry that they accept returns when items have clearly been ruined/broken/destroyed by the customer and also when the customer can pretty much steal whatever portion of the toy they want. The only thing to stop that is a Amazon limit of 50 returns per account before they actually ban you. That obviously never discourages anyone and the 2 month return window is the worst. Selling volatile items via FBA in Nov/December can really come back to bite you. Some of the unscrupulous/savvy persons will buy the item in January at retail and drop it right back on your account. Anyways, it is great for people with time constraints, but I wouldn't advise it for anyone with a heart condition .

[smittypop2]

You can not store an item there for over a year or year and a half depending on when you send it in during the cycle. They purge your FBA inventory that is more than 1 of each unit and charge you to send it back to you or charge you a very exorbitant long term storage fee for each item (ex $5/per unit for a Milano Space Ship type lego box). These fees are levied every 6 months in addition to your regular storage fees that are charged monthly. The purged units that arrive are usally beat to crap and some of them are in non-sellable condition. It is a true wonder that they can treat inventory this awfully and not have more complaints. I wouldn't accept 90% of the stuff they sent to me if it were an option.

[Bold-Arrow]

I guess I have a question. How does Amazon handle the storage fees? Is there a pricing structure and does it increase by the total weight, # of items, type of items, etc? If you have significant inventory, but don't want to sell for 2-3 more years, I'm guessing you just don't blindly send everything to an Amazon Warehouse to have it stored for you?

There is a structure for storage fees and it goes by cubic feet and type of item ( oversized vs regular) and the period of item they are holding the item for you. After 10 months the fees will shoot up so it is not to be treated as a long term storage unit .

[legos4me]

actually you are somewhat incorrect and somewhat correct. They charge you a monthly storage fee based on how much cubic feet of storage you take up.There is no difference between regular and oversized except that one takes up more cubic feet then the other. The difference between regular and oversized is in the handling fees that they charge you when they ship your item. A oversized item (every medium to large lego set is oversized even a 9462 is oversized )The storage fee is significantly significantly higher in the fourth quarter. The long term storage fee ( think about 22 dollars for a helms deep) is only after 12 months not 10.

  Also for every return they charge you a return processing fee (about 5 dollars except on a very low value item) plus they charge you to ship it back to you. Even if you ask they to destroy it they charge you a disposal fee.

  Smitty I used to send high value items but I got burned twice with pieces missing. I really tried hard to get reimbursed from amazon because they never should have excepted a return when the customer stole part of my item. It did not work for me and I tried multiple times with different customer service agents.If you somehow get them to reimburse you please let me know the trick.(through pm )

  As for what smitty said about being careful in nov I second that through bitter experience. When Microsoft came out with the Kinect in nov.it was going for a 100 dollar profit(after factoring in all fees etc.). I sold 11 of them through fba. The return period on fba items is through the end of January. 8 of the 11 people returned it in January. Only 2 of the 8 returned the one that was sold them. (Every Kinect had a unique serial number and I recorded mine before sending to fba -there was no commingling on kinects every one had a individual sticker). Every retail store except amazon attached the serial number to your receipt so I got stuck with 6 kinects as they didn't match my receipts. I had to sell them at a loss because they were available everywhere in january. After factoring my initial cost to ship to amazon and the cost to ship to the customer plus amazons return fees adding the charge to ship back to me plus selling at a slight loss to undercut retail(then paying commission and shipping charges on top of the slight loss) my 1100 dollar initial profit turned into a 500 dollar loss all because I used fba and lost control of the return process.  there can be extremely large drawbacks if you aren't careful.