Selling on Amazon FBA-2016 4th Qtr-the Good, Bad & the Ugly

Clint Eastwood Poster with the title Amazon FBA X-mas Season, The Good, The Bad and the Ugly.

For most Amazon sellers, the fourth quarter is when they expect to make most of their yearly income.   

If you are like most Amazon sellers, you can expect a significant spike in your sales during the Christmas holiday season.  In 2015, Amazon.com reported over $35.75 billion in sales during the 4th quarter sales in North America.  Amazon’s total sales for the US and Canada in 2015 was $79.27 billion.  As a result, over 45% of Amazon’s total sales occur during the fourth quarter.

Unfortunately, if you are a new Amazon FBA seller, the fourth quarter will be a real dud. 

Recently, Amazon.com announced they were going to close their FBA program to new sellers during the fourth quarter of 2016.  The reason they did this is to ensure timely shipping of FBA products to their Prime customers.

A red inked stamp reading “Access Denied"

 

If you are a new Amazon seller and you have not completed your first shipment before October 10th, 2016, you will have to wait until December 19th to ship it to one of Amazon’s fulfillment centers.  If this is your predicament, you are essentially going to miss selling using Fulfillment by Amazon during the Christmas season when most retailers make most of their yearly profits.

Amazon restricts many Amazon FBA sellers from selling toys and games during the Christmas season. 

A small boy playing with his toys in front of a Christmas tree  

In 2015, Amazon started restricting who could sell toys and games during the fourth quarter.

Under Amazon’s new guidelines for selling toys and games during the Christmas season, you will not be able to sell toys and games from November 17th until the end of the first week of January unless you fulfill the following criteria.

  • You must have processed and shipped at least 25 orders from September 1 through October 31st. The orders do not need to be specific to the Toys store.
  • Your pre-fulfillment cancel rate must be no greater than 1.75% from October 1 through October 31st.
  • Your late shipment rate must be no greater than 4% from October 1st through October 31st.
  • Your order defect rate must be no greater than 1% short term as of November 1st.

 

Expect some FBA fees to be higher and some to be lower during the fourth quarter.

Amazon’s FBA monthly storage fees are reduced 25% during the month of October and triple during November and December.

A table of Amazon’s FBA monthly inventory storage fee adjustments 

The reason why Amazon is decreasing storage fees in October is to encourage more sellers to sell their products using Fulfillment by Amazon (FBA) during the holiday season.  Amazon prefers sellers to use FBA because they have better control of shipping and customer service.  They also know their Prime members prefer buying products fulfilled by Amazon.

Amazon triples storage fees in November and December to discourage sellers from storing slow-moving items during their most busy season.   During the 4th quarter, Amazon’s warehouses are crammed to the rafters.   As a result, and they want to reserve warehouse space for popular, fast-moving items.

The following a link to Amazon that describes the changes in FBA monthly storage fees during the fourth quarter. (https://www.amazon.com/gp/help/customer/display.html?nodeId=201648210)

Amazon reduces FBA weight handling fees 10 – 25% during November and December. 

A table of Amazon’s handling fees for standard sized items during 2016

A table of Amazon’s handling fees for oversized items during 2016  

 Amazon is reducing weight handling fees to offset their increase in storage fees during November and December.  The main intention of Amazon’s reduced weight handling fees is to encourage sellers to use fulfillment by Amazon.

It is important to realize that you get a reduction in weight handling fees only when you sell an item and ship it out of one of Amazon’s fulfillment centers.

The following a link to Amazon that describes the changes in FBA weight handling fees during the fourth quarter.

Amazon adds a five cent service fee if you fail to provide box content information when you send items to their fulfillment centers during November and December.  

During the months of January to October, Amazon charges a ten cent service fee for every unit when your shipping box arrives without the proper content information.  This fee jumps to fifteen cents during the months of November and December.

Amazon will start charging this added fee starting November 1st, 2016.  The reason they are doing this is to increase the efficiency and accuracy of processing incoming shipments to their fulfillment centers.  They are charging a higher fee in November and December because their warehouses will be swamped by incoming products and their need for efficiency will be very acute.

The following is a link to get Amazon’s Box Content Shipping Requirements.

In summary, if you are selling on Amazon FBA, Amazon’s 4th quarter fee changes and selling restrictions may be good or bad for your business, depending on your circumstances. 

If you are a new seller on Amazon and have not already shipped your inventory to one of Amazon’s fulfillment centers, you will not be able to use fulfillment by until the beginning of next year.  If this is your circumstance, you can still sell on Amazon during the holiday season using the Fulfillment by Merchant (FBM) program.  Unfortunately, you will be at a significant disadvantage when you are competing with FBA sellers selling the same item that is eligible for free Prime two-day shipping.

New sellers that are locked out from selling during the 4th quarter on Amazon FBA can also choose to sell on eBay.   The following are links to articles that will give you more information about selling on eBay.

Amazon Long Term Storage Fees Could Crush Your FBA Business

A picture the inside of an Amazon fulfillment center with the title “Beware of Amazon Long Term Storage Fees.” 

If your Amazon FBA products are collecting dust in Amazon fulfillment centers, get ready to pay outrageous long term storage fees.

Twice a year, on August 15th and February 15th, Amazon clears out the FBA product deadwood from their Amazon fulfillment centers.  The way they do this is by charging outrageous long term storage fee to encourage FBA sellers to get their slow-moving products off their shelves.

On every August 15th and February 15th Amazon charges FBA sellers $11.25 per cubic foot, for any products that have been on their shelves for six to twelve months.  Long term storage fees jump to $22.50 per cubic foot for any product that is still in their fulfillment centers for more than twelve months on these so-called “Inventory Cleanup Dates.”

Amazon’s long term storage fees are in addition to your regular storage fees.

It is important to note that Amazon charges long-term storage fees on top of your existing storage fees.  Regular storage fees can range from $0.43 to $2.25 per cubic foot depending on the time of year and whether your packages are standard size or oversize.

A table of Amazon’s storage fees for standard and oversized items

Amazon exempts a single unit of inventory from their semi-annual long-term storage fee.  

I am not sure why Amazon decided to exempt one unit of inventory from their Long Term Storage fees.  I suspect they did it so they would not appear to be total heartless dogs.

What should you do if you have tons of inventory that is about to be charged long-term storage fees? 

In a nutshell, you have the following options if you are facing the prospect of paying Long-Term Storage fees:

  1. You can give away your product or put your items on sale to get them off the shelves. Even if you incur a loss, this option might be beneficial in the long term because it will spike your sales.  When you drastically increase your sales, it will cause Amazon’s algorithm to raise your product rating.  In the following video, Cody Hawk explains how he avoids long-term storage fees by becoming proactive about getting slow-moving products off Amazon’s shelves after ninety days.

YouTube Movie by Cody Hawk That Explains How to Avoid Amazon Long Term Storage Fees

 

  1. You can have Amazon send back your product and sell it on EBay or your Ecommerce store. The following table lists the fees Amazon charges for returning products or for disposing of
  2. You can have Amazon dispose your products and deduct the cost of disposal and the cost of the disposed product from your taxes.

A table of Amazon’s Removal Fees

In summary, it is vitally important that you take action to avoid paying Amazon’s long-term storage fees.

It is important to be proactive if your product is not selling well on Amazon.  Make attempts to improve the quality of your listing.  Taking steps to increase your product reviews might also improve your product’s ranking.  Another thing to consider is lowering your selling price.  If after ninety days, you still have lots of product languishing in Amazon’s product fulfillment centers, you need to start getting aggressive in lowering the amount of inventory sitting on Amazon’s shelves. If all your attempts fail, you might want to consider having Amazon send your product back and selling them on Amazon using Fulfillment by Merchant (FBM).  Your other option would be to sell your product on EBay or your Ecommerce site.  In a worse case scenario, you could try selling your items at a garage sale, flea market or on Craig’s List.

A Windows Update Deleted My Files & My Road to Data Recovery

How a Windows Update deleted my files.

A man on his knees pleading next to a Windows recovery screen

I had a really interesting experience yesterday.  Saturday night, I got the usual notification not to turn off my power when I closed down my PC.  It was updating my system.  I’ve seen these messages a thousand times and thought nothing of it.

: Configuring Windows Update, 30% Complete, Do not turn off your computer

 

The next morning, when I turned on my computer, I got the usual message that my computer was updating my system.  After the update had finished, I knew right away that something was really wrong.  Why was the background image on my desktop screen changed from a scene of Yosemite to the Windows logo?

A frustrated man looking at his laptop flanked by 2 desktop screens, one with a Windows logo, the other a scene from Yosemite

I checked my Thunderbird email system.  My inbox was empty.  After seeing that, I really started getting freaked out.  I checked my folders.  They were empty!  What the “H” was going on!  My programs were there, but none of my files!  Now I was in full-panic mode.

Thunderbird email screen opened to an empty email inbox

I don’t know if you have ever been in this situation.  If you haven’t, I can almost predict with certainty that sometime in the future you will experience this type of event.  There are lots of ways you can lose your data.   Hard drives fail all the time.  Your computer might get stolen.  Your house could burn down.  Someone might hack into your computer, encrypt your data, and try to extort money from you to get your data back.

A dark blue computer screen with a Titled Windows with a statement saying that a fatal exception has occurred

My road back to data recovery

Whatever the cause, losing the files on your computer can be a devastating experience.  Documents like a book that you’ve been writing for years, your Ph.D. thesis, your family pictures, your website’s files could disappear in a blink of an eye.  This has happened to me in the past.   When the hard drive on my computer failed, I lost over two years of work I had been working on.  Like a dummy, I was not backing up my files.  This was before we had cloud backup services like Carbonite. As a result, this hard drive failure turned into a major nightmare and set me back on my project more than six months.

This recent event in my life emphasized the importance of backing up my computer.  It also reminded me of the importance of reminding my readers to take this important step to protect their documents, pictures and movies stored on their computer.

The word BACKUP in blue 3-dimensional letters plugged into a laptop with a blue screen

 

Probably the easiest way to back up your computer is with an online backup service like Carbonite.  With Carbonite, your files are backed up automatically.  For me, if I were forced to do backups manually on an external drive, they would not get done frequently enough or worse yet not get done at all.

: Carbonite logo with the tagline: The Better Backup Plan, Secure, Automatic Online Backup Starting at $59

Luckily, I have been using Carbonite for years.  When I discovered that all of my data was missing, I immediately went to their Information Center on my computer.

An image of the Carbonite Information Center for choosing Backup, Restore, Settings, Account or Help

After clicking the restore button, it opened up a second box for specifying what type of file restoration I was requesting.  After selecting the “Restore all of Your Files” button, Carbonite started retrieving my data from Carbonite’s cloud servers.

An Arrow pointing to “Restore All Your Files” in Carbonite’s File Restoration Selection Box

Carbonite then recreated all of my folders and replaced all of the missing documents, images and movies in their correct places.  It took almost half a day.  I figured it was a small price to pay when I considered it took years to create and accumulate these valuable files.

One issue I did notice after I completed my file backup, was that many of my Thunderbird email messages were still missing. 

A middle aged man scratching his head with a confused look on his face

 

My email outbox was empty, and it only restored the emails in my inbox to a date in the year 2014. It seems that Thunderbird only restores a certain number of emails in your inbox when you open it up.  Unfortunately, when Thunderbird restores your email inbox, they do it in the order they were received.  They also only restore a certain number of your emails (probably around fifty) every time you open the program.  I admit I am lazy about pruning my email.  As a result, I had over 20,000 emails to restore in my inbox before I could get to my most recent emails.

It took over two hours opening and closing Thunderbird to finally restore my email Inbox.  I could not find a way to restore the emails in my email outbox.  So it appeared that they were lost for good.  I learned my lesson about not editing my email list and spent about an hour removing emails from my inbox.

Here’s where things really got weird

A weird confused looking man that is wearing a round black rimmed glasses and a bow tie that is scratching his head

 

When I initially lost my data, my wife Rita recommended that I try re-booting my computer.  Being a typical male, I did not take her advice, even though she is an expert on technology.  In my mind, it just didn’t make sense.  How could rebooting my computer restore my missing files?  As a result, I went ahead with the restoration of my database.  After restoring my computer, I put a new background picture on my desktop.

Now this is where things got really weird.  When I turned on my computer the next morning, guess what I saw when I turned on my computer?  My original desktop picture of Yosemite.  Everything looked like it had before I went through this whole frightening episode.  When I checked Thunderbird, all my emails were restored in my inbox and my email outbox.  All the files I pruned from my inbox the night before were again on my email list.

So what were the lessons I learned from my road back to data recovery after a windows update deleted my files:

A cup of Coffee, a magnifying glass, a pen and chalk lying on a chalkboard with the words “Lessons Learned” written in chalk 

  • Listen to your wife. Many times, she will be smarter than you!
  • Whenever something goes wrong with your computer, the first solution you should try is reboot your computer!
  • Back up your data! An online backup service like Carbonite makes it simple and ensures that everything gets saved on their cloud servers.  Carbonite also does backups on an external drive if you want an extra backup.
  • Don’t trust Windows. I admit, Windows has gotten better, but it still has its glitches.  I am currently using Windows 7 for my operating system.  Overall, it has been fairly stable.  Yesterday’s experience has me wondering.  Awhile back I did take up Microsoft’s offer to upgrade to Windows 10.  What a nightmare!  I have always had my computer password protected.  After upgrading to Windows 10, I could not get access into my system.  After trying various solutions for the better part of a day, I finally got to a point where Windows gave me the option to go back to Windows 7.   I grabbed for that opportunity like a drowning man thrown a life jacket.  After I had done it, everything worked, and I vowed I would never again upgrade to Windows 10 again.

Should You Use Good Til Cancelled For Relisting on EBay?

Nic Hill YouTube VideoI strongly recommend that you watch this video.

EBay Sellers are discovering that single item listings that were automatically relisted using Good Til Canceled ranked poorly on EBay’s Best Match search engine results.

Nic Hills is an EBay seller in Britain.  The important discovery he made was that you should not use Good Til Canceled for relisting single items on EBay.  What he and other sellers found, was that when they used Good Til Canceled to relist automatically unsold items, their listing did not get the usual increase in EBay’s Best Match search engine results that new listings usually receive.  The longer that their listing lingered, the lower their listings showed up on EBay’s search results.

What Nic and other sellers did discover, was that their relisting showed improvement in EBay’s Best Match search engine results, when they relisted their item for thirty days using the “Sell Similar” option rather than the “Re-list” option.

Nic also suggested that you should also consider improving your title, description or pictures to make a better listing.  Nic did mention that he was still using Good Til Canceled for his multiple item listings.

Some of the important highlights that I took away from Nic Hill’s video were:

  • As a listing ages, Ebay’s Best Match search engine forces it further down in the search results.  Fresh listings score higher on EBay.
  • It pays to create a new listing for a single unsold item rather than simply re-listing it or using Good til Canceled.
  • Use the “Sell Similar” option rather than the “Re-list Option to re-list listings that expire without a sale.
  • Always re-evaluate your listing and try to improve it if your listing expired without a sale.
  • Good Til Canceled is still a viable option for listings that sell multiple items.  However, if they perform poorly, you should consider editing your listing and refreshing it by creating a new listing using the “Sell Similar” option.

I hope this proves useful to your selling efforts on Ebay.  The following are links to pages on ForPassiveIncome.com that provide more information about how to make money online, selling stuff on Ebay:

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