Month: July 2021
7 Common Mistakes to Avoid When Shipping from China to FBA
This is a guest post from Leeline Sourcing. Leeline Sourcing is a China shipping agent that can help with your sourcing and shipping to the US.
International shipping from China to FBA is a time-consuming process, least of all because of the distance your products have to travel. There’s a lot of space and steps in between getting your items manufactured at the source and successfully getting them into FBA. Unfortunately, that process is riddled with mistakes.
Avoiding them takes thorough planning, communication, and a good understanding of a number of regulations, from customs to FBA requirements.
To prevent losing time and money, we’ve compiled the most common mistakes we’ve seen when shipping from China to FBA and how to avoid them. This post should equip first-time and veteran sellers alike with a checklist to use whenever they want to send items into FBA from overseas.
9 Common mistakes we’ve seen when shipping from China into FBA (and how to avoid them)
1. Assuming everything will go according to schedule
You can plan everything out, from product research to the best manufacturers to partner with, and sometimes things just don’t work out. For example, you may underestimate the time it takes for items to reach the US, or you could run into a hiccup at customs.
You should always have contingency plans for when shipments are delayed. This could include working with more than one manufacturer, or finding a local backup supplier that is slightly more expensive than your manufacturing process, but can help you restock in a pinch. It can also mean reordering when you have plenty of inventory, and prepping and storing those items locally to provide some padding.
If your shipment is late, without a proper contingency plan, your listing could stock out before you’re able to replenish inventory, opening up your buyers (and any high search result positions you achieved) for competitors.
2. Not researching a new manufacturer or getting enough details
Sometimes it’s tempting to rush into a new deal and start selling right away. Or you may have found a great price from a new manufacturer and want to lock it in.
Before signing a contract or shifting your reliance onto that manufacturer, you should find out a few things:
- The specific manufacturing process and requirements for your product.
- China’s export requirements.
- Your manufacturer’s expected shipping time.
- Any holidays the manufacturer observes.
All of those things affect the production quality, shipping process, and delivery time of your goods. Without a good understanding of those basic details, you could find yourself with a sub-par product, late deliveries, or unexpected delays.
Tip: Most sellers already know about Chinese Lunar New Year. However, there’s also the Dragon Boat Festival, Mid-Autumn festival, and other holidays to keep an eye out for.
Read: TOP 20 China Manufacturing Cities and what they are known for.
3. Proceeding with an order even if the sample had a small defect
Sometimes sellers will get a sample from their manufacturer that has a small problem, or isn’t exactly what they wanted (different color, missing part, etc.). Then, a manufacturer might say, “Now that we know that’s the case, your full order will be made to specification.”
Don’t proceed with your order if this happens. Even if their price is right, this supplier is likely unreliable and irresponsible. If you must work with them, for example, if you’ve already put a down payment and have everything in place, use a sourcing agent in China who can inspect goods during production. If the larger batch still doesn’t meet expectations, have your sourcing agent refuse payment until the issues have been resolved.
4. Not knowing whether to choose Direct or Indirect Shipping into Amazon
Whether to use direct or indirect shipping to Amazon is one of the most important decisions you need to make before sourcing your goods.
When shipping directly from China to Amazon FBA, you use your product supplier to ship your products from the main factory to Amazon FBA. This is considered one of the most straightforward ways to get items into FBA.
However, it assumes you trust your supplier, know they deliver uniformly high-quality items, and have an excellent prep process.
You can use this method if your stock runs out in the FBA inventory or if your budget is tight.
On the other hand, indirect shipping means you ask your supplier to ship your goods to an intermediary, who will then ship the products to FBA. This is a much safer option if you’ve received complaints about quality, it’s your first time testing out a new supplier, or if you use different manufacturers.
Indirect shipping makes the most sense for sellers who protect their supply chain by diversifying manufacturers, because you can use one local company to inspect, consolidate, and prep items before they go into FBA.
Tip: If non-compliant or damaged items land in FBA from your manufacturer, it’ll be expensive and time-consuming to fix.
As a bonus, indirect shipping also hides your supplier information from Amazon and prevents your suppliers from knowing that you sell on Amazon. This can protect your business from copycats.
Use MyFBAPrep to consolidate inventory
Amazon sellers can use MyFBAPrep to get all the protections of indirect shipping and the convenience of direct shipping. You can send items directly into the MyFBAPrep network, and they will take care of inspection, quality control, prep and compliance, and sending them into the FBA network.
This is also a great option if you’re a multi-channel seller, because MyFBAPrep can send items into both FBA as well as your other fulfillment centers for your DTC or other marketplace sales.
5. Manufacturing goods without calculating total costs
Before settling on a manufacturing company, it’s important to keep your finances organized to account for all expected costs — and consider any unexpected ones.
Ask about the cost of manufacturing, shipping, packaging, and any other services involved in creating and delivering your product. Poor planning and wrong expense forecasts could result in lost revenue.
Some of the costs we’ve noticed sellers overlook include:
Shipping to multiple Amazon warehouses
Once you have your shipping plan, Amazon will allocate FBA warehouses for your products. They can divide your shipments to three or more locations. This can affect your shipping costs, especially if you’re shipping directly from China to three US locations. Be prepared for this, or use a local prep service to mitigate those expenses.
Tip: If you want to save on shipping fees, focus on light and small items from China. A cell phone case, figurines, and chargers won’t cost much to ship. However, if you’re sourcing refrigerators, dumbbells, or life-size plush toys from China, be sure to calculate your shipping fees before placing an order.
Prep work and packing materials
Before you ship goods into FBA, you need to prep them to make sure they arrive in the right condition, and with the proper documentation. That could include breaking down larger shipments, labeling and packaging individual items, bundling different kits, and more.
You should include the cost of all the prep work and packing materials when calculating your expenses. You can work with a prep center that consolidates these costs per unit to make things easier on visibility.
Customs inspection fees
You also need to account for the custom inspection fees. Expect the United States Customs and Border Protection to inspect your shipment one way or another, so be sure to calculate and prepare for these charges.
Taxes and duties
You should know what category your goods fall into based on customs. This helps you avoid underestimating or overestimating how much you should pay when importing. Keep an eye on any other potential fees, like an anti-dumping fee or environmental fee based on what you’re selling.
6. Using a 3PL with complicated fees
Once their items reach the US, many sellers opt to work with a 3PL to prep and ship to different Amazon FBA warehouses or directly to consumers. However, 3PLs often come with complex pricing structures and hidden fees.
There are many 3PLs that charge for pickup, pick and pack, storage, labeling, and more. All of these can make it hard to know what your end price will be until you get the final bill.
Look for a logistics provider with transparent, per-unit pricing. This will help you avoid surprise expenses that cut into your profits.
7. Not choosing the right shipping mode
Selecting a shipping method should be the first decision you make when sending goods to Amazon FBA. It will help you estimate the transit time for your goods and the shipping costs. The most common shipping modes you can use include air freight, express shipping, and ocean freight.
If you’re dealing with weighty cargo, this should be your go-to shipping option. The cargo can be more than 200kg and 2 CBM (cubic meter). When using air freight, your goods will arrive much faster than by sea, which is usually about five to nine days.
It may also cost you less if your cargo is small since the per-kilogram rate is usually less than air express. However, although it’s much cheaper than air express, there is a time cost, which can affect your inventory availability.
You can use this method when shipping products that weigh under 200kg and 1 CBM, and the charge is higher than gross weight and volume weight. Express is the fastest way to ship your goods to Amazon FBA, but the costs are fairly high, currently running about $8 to $12.
Ocean freight is the best shipping option if your cargo is more than 400kg and 2 CBM. You can choose to use less than container load or full container load, and the price for each will vary. Ocean freight is usually less expensive relative to express shipping or air freight. It’s also ideal for transporting cargo you can’t send by air. However, it also takes much longer to deliver goods.
Tip: Work with a freight forwarder who can advise you on which method best suits your needs, based on your budget and timeline.
8. Ignoring Amazon’s guidelines for FBA inventory
Amazon has strict, but manageable guidelines when it comes to storing and fulfilling items with them. You must meet all the weight, labeling, size limits, and packaging requirements.
If you don’t follow those guidelines, you risk Amazon denying your inventory or charging expensive fees to fix any issues. This can get expensive and cost time, because you have to go through an additional process (or multiple ones) to have your items properly prepped and then approved.
Tip: Use MyFBAPrep to guarantee your products are in great condition before shipping them to FBA. They’ll inspect the products, follow the prepping guidelines from Amazon in detail, create a shipping plan, and deliver them to the FBA network.
9. Not appointing a product sourcing agent
A reliable sourcing agent is imperative when shipping items from China to FBA. A China-based sourcing agent will help you through the whole shipping process and ensure your products get to FBA on time.
Here are just a few things a sourcing agent can handle for sellers:
- Identifying suppliers: China sourcing agents can connect you to the best manufacturers for your products. In addition, most of them have insight on the local markets, so they know where to find the best suppliers.
- Quality control: Once your production is complete, they’ll inspect the products and check their quality. They’ll also follow up with the production process.
- Preparing products for shipping: The sourcing agents will oversee labeling, packaging, and ensuring the product is in the right condition for shipping.
- Shipping to the US: They’re also responsible for shipping your products to FBA. They identify the right methods to ship your goods and the right time.
Working with Leeline Sourcing
Leeline Sourcing is a China shipping agent that handle the necessary prepping of your goods before shipping, plan the right shipping mode, and give you an accurate estimate of what costs you’re likely to incur. All of these add up to the ultimate defense against unexpected expenses and losses.
Leeline Sourcing has 10+ years of experience in product shipping. We can help sellers find the right manufacturers, source items, and get goods shipped to the US affordably. To date, we have served close to 2,000 clients who reported 100% satisfaction with us. Our main focus is customer satisfaction, so we work hard to get your products to FBA with minimal hassle.
Final thoughts – Shipping from China to FBA
Shipping goods from China can rarely be accomplished alone. You can remove much of the burden and save money by engaging a product sourcing agent in China and a prep network in the US to handle your operations until your goods reach FBA.
To avoid costly mistakes when shipping from China to FBA, check your math, do your research, and work with reliable partners.
eCommerce sellers should never assume that a single purchase means a consumer will keep coming back. There are countless brands all vying for your customers’ attention—and marketplaces like Amazon are quickly eroding brand loyalty.
However, taking an active stance on customer retention can improve your chances of bucking this trend. In fact, studies show that a 5% increase in customer retention can lead to a 25% increase in profit.
Check out the tips below to build a strong customer retention strategy, and learn how to turn existing buyers into long-term customers.
The importance of eCommerce customer retention
It’s cheaper to maintain
Recruiting new customers costs five times more than retaining existing ones. This is fueled by the fact that most marketing teams are focused on generating new customers through ads, events, and other costly campaigns.
By contrast, retaining an existing customer could mean leveraging your existing resources and simply reinforcing a customer’s positive impression of your brand. A simple email, quick SMS, or engaging social post could be all it takes. This tends to result in a better ROI.
You’ll land more (and possibly faster) sales
When you’re reaching out to an existing customer, you don’t have to spend as much time educating them about your brand. You can cut to the chase and share relevant information through personalized product recommendations and/or promotions.
Your efforts are likely to result in quicker transactions, since customers already know that they can trust your brand with their money.
It keeps your brand thriving
All in all, customer retention is a major factor of brand longevity and customer lifetime value. If your company is struggling to keep buyers coming back, then you’re losing relevance and missing out on profitable opportunities, like word-of-mouth marketing. For your brand to stand the test of time, you must actively work to keep your brand top of mind.
10 Examples of eCommerce customer retention strategies
So, what can you do to retain more customers? Here are eight tried-and-true strategies that you can test out.
1) Start a loyalty program
One of the best ways to keep customers coming back is by rewarding them for their commitment to your brand. Paleo-friendly food company, Caveman Foods, puts this into practice via its Caveman Club Rewards program.
The brand promises special promos, early access to new products, and a points-based system that helps members save money with every purchase. Caveman goes a step further by offering points in exchange for a ‘follow’ on social media, and a $10 discount when buyers refer a friend.
Read: Customer loyalty programs: 8 Benefits you can provide to encourage repeat customers
2) Offer auto-replenishment
Another way to clinch a sale is by making it ridiculously easy to repurchase from your brand. Subscription services like Paula’s Choice auto replenishment, for example, helps to ensure that customers never run out of their necessities.
Subscribers save 15%—plus get free shipping—on every order and can choose how often their products are auto-replenished.
Read: How to use auto-replenishment as your next subscription strategy
3) Launch subscription boxes
Subscription boxes, such as Cratejoy, add an extra pinch of excitement to every customer interaction. They make customers feel like they’re receiving a present every time they open a box full of new items.
Subscription boxes are delightfully personalized to every recipient, make great presents for others, and are highly Instagram-able, providing an opportunity for your brand to boost its virality.
Read: How to start a subscription box business: 15 Subscription boxes to create today
4) Send out email marketing
Whether it’s a newsletter, promo emails, or abandoned cart messages—going the extra mile and actively emailing your customers can go a long way. Today, only a mere 19% of the top 1,000 eCommerce companies engage in abandoned cart recovery, even though half of customers will likely complete their purchases when asked. Make sure you don’t leave money on the table by forgetting to check in with your customers regularly.
- (Source: Really Good Emails)
Read: 7 Keys of eCommerce email marketing
5) Utilize retargeting ads
Think about all the times you were browsing Amazon, then left, only to stumble across an Amazon Gift Guide post on Instagram an hour later. This is a classic example of retargeting.
After someone comes across your site, you can leverage social media or Google to serve up content that brings visitors back to your site. This is key to modern-day marketing, where it takes around eight branded touchpoints for a buyer to make a purchase.
6) Focus on fast, frictionless delivery
It’s easy for many customers to take quick delivery for granted. But, by keeping your promises (or shipping faster than expected), you can leave a good impression that incentivizes buyers to repurchase from your brand.
Consider, also, how you can make tracking shipments easy. For example, you can notify buyers the moment that their products are packed, shipped, and delivered so that they remain in the loop at all times.
Tip: Optimize your fulfillment operations with the right partner, from prep and packaging to delivery.
7) Give them easy checkouts
How many clicks does it take for someone to find what s/he is looking for on your site? Is there anything within the user experience that’s causing shoppers to ditch their shopping carts?
One culprit could be extra checkout requirements, like forcing buyers to register for an account instead of signing out as guests. Ensure that your UX is smooth from start to finish before inviting customers back to your site.
Read: How to optimize your checkout process
8) Communicate with SMS
One way to provide a great customer experience is by using SMS strategically as a communication channel. You don’t want to lean too hard on marketing via this channel, as it may come across as spammy, especially since it goes directly into their phone’s notifications.
However, if you can capture your buyers’ phone numbers during checkout or give them the option to opt-in to text messages, this is an amazing channel that most consumers check at least 5x every hour.
Try using SMS to confirm purchases, communicate shipping status, and share tracking numbers. This primes your text messages as “useful content” in the minds of your buyers, so they’ll be more receptive to the occasional marketing text (if they’ve opted in).
Read: How to leverage SMS marketing for your DTC business
9) Provide great customer support
Customers always want to feel supported, especially when they’ve encountered issues with their orders. At bare minimum, you’ll want to make sure that your brand is accessible via phone, email, and/or chat when this happens.
Avoid burying your contact information under multiple pages, and make sure to respond to inquiries promptly. Buyers tend to connect best with people, not brands—so make it a priority to offer great customer care.
Read: How to use post-purchase surveys to boost your eCommerce brand
10) Have a clear return policy
Finally, it’s important to have a transparent return policy. Make it easy to find by placing it in your FAQs, or offering a link upon checkout. You should outline how many days a customer has to return an item, what qualifies for a return, and alternative options (for example, if they would prefer to get store credit instead).
Wrapping up: eCommerce customer retention strategies
One of the worst mistakes your business can make is taking your existing customers for granted. Your customers could be some of your biggest brand advocates. Take the time to show them that you care and prove that you deserve their business, now and in the future.
9 Signs it’s Time to Shift From Your Own Warehouse to a Nationwide Network
Many growing eCommerce businesses end up investing in their own warehouses to streamline and take full ownership of their operations as they begin to scale up. For larger eCommerce businesses, owning at least one warehouse is often a given.
There’s no question that in-house warehousing brings enormous benefits, from full control and ownership of the process and products to the ability to call the shots around accepting shipments and beyond. But, there are downsides as well.
Warehousing your own goods comes with many costs, from purchasing or leasing the warehouse itself to hiring employees and machinery, managing deliveries and shipments, and the necessity to learn about various rules, regulations, and processes for warehousing prep for various online marketplaces. Then there are there the requirements around delivery times, marketplace compliance, and service level agreement results to manage.
For small to medium-sized eCommerce businesses, holding your own and managing inventory, warehousing, and prep might work just fine. But for eCommerce professionals seeking to expand, identifying a warehousing and prep partner is one of the single most effective ways to change your business for the better.
If you’re an eCommerce entrepreneur, you already know that there’s never been a better time to sell online. As COVID-19 impacted consumers’ ability to shop in-stores, online retailers are grew at breakneck speed and the average shopper learned how to adopt — even embrace — eCommerce.
For eCommerce businesses seeking to scale up and optimize their business, understanding how outsourcing your warehousing and prep can benefit your bottom line and help you grow is important. Here’s how to know the time is right.
9 signs it’s time to expand to a nationwide warehouse network
1. You’re running out of space
Your existing warehouse has a finite amount of space, no matter how you configure and reconfigure the storage. If you’re beginning to feel cramped, it might be time to consider outsourcing your warehousing and prep as opposed to finding a second or larger warehouse. Why? Bigger spaces (or additional spaces) cost more, require additional staffing, and the expansion is pretty minimal in the grand scheme of your business. By outsourcing your warehousing and prep to a nationwide warehouse network, you gain the benefit of additional space along with a network of multiple locations with a single partner.
On the other end of the spectrum are concerns around seasonality, where certain times of the year may result in higher sales volume and others are quieter. If you’ve purchased a large warehouse, you’ll carry all those costs even when your inventory isn’t filling it completely making it even less cost-effective. A nationwide warehousing partner can help you better manage warehousing costs while eliminating concerns around the ebb and flow of inventory and business so you never have to fret about underutilized space or running out of room again.
2. Your manufacturer doesn’t want to get involved
Many eCommerce sellers we work with have a shared challenge — their manufacturers don’t want to work with Amazon or other marketplace prep requirements, and don’t have time to do things like bundle, label, or polybag individual products.
In this case, you’ll want to partner with a nationwide warehouse and prep network like MyFBAPrep to handle your goods, so that they can be uniformly prepared across various geographic locations before landing on your buyers’ doorsteps or into FBA.
3. Your processes aren’t as efficient as they could be
A common complaint from merchants is that manufacturers are unwilling to get involved beyond the initial manufacturing process, which means they can’t get their items pre-prepped for sale and delivery unless they’re doing it themselves. Depending on the marketplace — Amazon and Walmart, for example, have varying requirements — this can take up large amounts of time as you prep, package, and label goods for fulfilment. And, depending on the manufacturer or supplier, your stock could require more or less prep — making your processes even more difficult to streamline.
If you’re managing prep yourself at your own warehouse, you’re receiving shipments of goods which must then be inventoried, checked, and then manually prepared for fulfilment based on the marketplace(s) you sell on by you or your employees. With varying requirements for different products and marketplaces, this can create an enormous burden — and slows you down.
If you’re currently manually training employees on their tasks, prepping, and assessing/checking your entire inventory for fulfilment readiness, you’re losing time and money that could be spent expanding your business.
With an outsourced approach, you eliminate the time spent bringing your employees onboard, training, and doing the manual preparatory work and can refocus that time on business expansion efforts.
4. You’re growing fast
Is there any better problem to have? (We think not!) While fast growth is the best possible situation for any business, the simple fact is you need a warehousing and preparation solution that can grow with you so that you’re able to expand quickly, not scramble to find a new warehouse and hire and train more staff.
As you grow, so too will your expenses: a larger facility with higher bills, more employees (including recruitment costs), and more stress for you to manage it all.
With a warehousing partner, you can simply send your items to the warehouse network and keep on selling more and more without the worry of managing logistics.
5. You need expert guidance
Even the most experienced eCommerce business owners need support from time to time, especially if you’re switching things up. As you tweak your business, you may choose to expand your sales channels from a singular channel to multi-channel expansion or switch up your selling strategies.
Many eCommerce businesses begin with 1P relationships that allow them to test how various channels will fit with their business model. Once you’ve established that a channel is right for you, it’s time to move up.
If you’re currently in a first-party relationship (1P), you’re not in total control of price or sales as you’re selling to the marketplace and who then goes on to sell to the consumers. While there’s nothing inherently wrong with 1P selling, at the end of the day you have less control of your business and lower margins. But the shift from 1P to 3P isn’t always clear, which is where an outsourcing partner comes in.
3P is a third-party relationship, whereby you are the retailer and sell directly to your buyers on the marketplace. This does two things: First, it puts you in control of our sales and margins and secondly, it removes the dreaded “middle man”.
But (there’s always a but, isn’t there?), becoming a 3P seller isn’t as simple as 1, 2, 3.
The challenge in shifting from 1P to 3P is that most brands and businesses simply don’t know where to begin. An outsourced partner can help you build and follow a strategic plan with a data-driven understanding of 3P marketplace dynamics to set you up for success. Most third party logistics (3PL) partners are already well-versed in the complexities of operational brands and are well-equipped to manage high volumes of single-line orders, sales quantities, and can keep an eye on and manage pricing fluctuations.
6. You need more coverage
As your eCommerce business grows it’s inevitable that the geographic range of sales will grow, too. When you own a single warehouse in one place, it becomes increasingly difficult and costly to serve your customers in other parts of the country. For sellers on the East Coast with buyers on the West Coast, this equals higher shipping costs, longer shipping times, and smaller margins.
By shifting to a national warehouse partner, you’ll not only have inventory located closer to your existing buyers but you’ll have the ability to expand into new markets, attracting new buyers and growing your revenue.
A nationwide solution will cut your delivery times, reduce shipping costs, and diversify your market in a meaningful and low-impact way.
7. You’re spending too much time on inventory & prep
If you’re spending 10% of your time (or more) on inventory and preparation tasks, it’s likely you’re already losing money.
Warehousing, prep, and other logistics tasks are low return on investment (ROI) activities. They’re necessary to execute well, but they don’t increasing your revenue in a meaningful way.
Now, imagine if you could refocus that time into high ROI activities — like refining or refocusing marketing, acquiring new customers with ads, researching and purchasing new SKUs, and optimizing your listings for more visibility.
When you outsource your warehousing and prep activities, you can focus your time and energy on those higher ROI activities to see a tangible difference in your bottom line. Further, when you consider the cost savings you can realize by not needing to lease space, pay bills, and hire employees, you can also funnel those dollars into revenue-generating initiatives.
8. Your current setup can’t handle all of your sales channels
As the number of sales channels you play in grow, it’s likely that managing the nuances and requirements of those channels will become more and more difficult.
For example, if you’re trying to manage prep work for Amazon while also meeting Walmart.com standards or struggling to manage delivery times for your Shopify store, it’s time to outsource.
Finding a full-service solution that can handle warehousing, prep, and logistics for multiple channels will save you time and help you realize a greater ROI through a streamlined process that delivers value to both you and your customers.
9. Your reporting can’t give you the full picture
One of the most critical elements of growing your business is making the right decisions at the right time, but for many growing eCommerce professionals, tracking metrics can be difficult and often falls to the bottom of the list as day-to-day logistics tasks pile up.
Many 3PL and warehousing partners can supplement your existing tech stack and deliver real-time metrics to help you make the best decisions for your business — like understanding what product is selling best or when, your real delivery times, and actual costs to running your business.
How to find the right warehouse and prep partner
You know the time has come to outsource your warehousing, preparation, and logistics management but one big question remains: how do you find the right partner for your business?
There are many factors to consider when it comes to choosing a third-party logistics (3PL) partner. It’s important to find a partner who can help you grow and remain a partner in the long run – the last thing you want is to outgrow your solution and need to go looking for a new one!
Know where your business currently stands and where you’re going
Understanding exactly where your business currently stands and documenting or communicating your goals is critical to finding a partner who can help you achieve them. What channels do you want to expand into? How many SKUs do you currently have versus how many you want to have? Are there new product categories you plan to develop? What about your current vs. forecasted monthly order volume?
Answering these questions can help you set the list of business requirements for choosing your 3PL partner by enabling you to shortlist quickly and avoid wasting time.
Understand and clearly detail your shipping requirements
You already know that the name of the game nowadays is “direct to everywhere” which means you must be strategically selling and expanding on every online channel your customers are buying on. That’s obvious. What’s less obvious is managing the challenge of each channel’s shipping complexities.
To begin, know which channel(s) is most critical to your business and use that to determine your 3PL partner. If the vast majority of your business is Amazon Prime, you know you need fast fulfilment and 2-day shipping as a bare minimum requirement and can start building up from there.
Dig deep on pricing and determine what your margins must be
Don’t go with the cheapest partner just because you see dollar signs. Run your own numbers and communicate with prospective 3PL partners to determine what price works for you and make sure you truly understand what those prices mean. Sneaky, hidden costs can add up quickly and eat into your margins faster than you can say ‘label and bundle’.
There’s a price for everything when you ship through 3PLs — from the number of orders shipped, items picked, pallet storage, packaging and on and on and on. Use your requirements to outline storage and service needs, calculated expected costs, and determine your potential savings (or losses) with each partner.
Consider warehouse locations and network
Finding a nationwide partner who can help you break into new markets is important – and it’s especially important that your partner has a strong network of warehouses from which you can operate your business. As detailed in point number one, remember your goals: if you’re currently selling mostly in the Midwest but have goals to break into the East Coast market, be sure your partner can service that geographical area.
Strategically located warehouses in lower-priced shipping zones will allow you to maximize your shipping efficiency without incurring additional shipping costs when selling into major city markets.
Never forget the data
You need access to data that can help you understand the efficacy and efficiency of your partner against your growth goals. Even when you’re outsourcing to a 3PL partner, you need to have some fundamental warehousing processes set out.
- Master SKUs set up for all products you sell
- UPC codes and barcodes for each product
- Careful tracking of inventory costs of goods sold & profitability reporting
Many — but not all — 3PLs can provide this level of metric tracking. Determine what your comfort level is and identify ways to work with 3PLs to ensure you’re gaining access to the data you need to make the best possible business decisions.
At the end of the day, choosing to outsource your warehousing and prep is not a decision you’ll make lightly. It’s important to choose a partner who understands your business, is reputable and knows the ins and outs of warehousing and the preparation required for a variety of digital marketplaces. By outsourcing warehousing and prep,
Amazon opens up a lot of opportunities for high ROI and a healthy stream of revenue. However, selling on Amazon isn’t a cakewalk. If you’re new to eCommerce, you can expect a steep learning curve, which makes you susceptible to costly mistakes. If you’re an established business, even one careless mistake may end up destroying your profits for an entire quarter.
In this article, we’ll go over some common mistakes Amazon sellers make and how to overcome them.
What are common Amazon FBA mistakes?
1) Getting lax on the rules
Amazon is notoriously strict, and they can and will suspend any sellers they suspect aren’t following the marketplace rules. Unfortunately, their rules are also always changing, which means sellers must constantly stay up-to-date on the latest rules to avoid Amazon suspensions.
Getting suspended on Amazon costs you revenue (all the money you would have made otherwise) and can make you lose the high rankings you worked hard for.
2) Not vetting new suppliers
Not all global suppliers can be trusted, no matter how big they are. If you’re planning on sourcing products from new suppliers, try to work with companies that other sellers have already tried and tested. Start with a small order to check their process and quality, then scale up slowly from there.
3) Not optimizing listings regularly
With more than 6 million Amazon sellers, the competition for customers is fierce. The typical shopper isn’t willing to scroll through dozens of different listings to purchase an item they’re looking for, which means you need to be one of the first to be seen in order to convert.
It isn’t enough to optimize your listings once in a set-it-and-forget-it manner. You need to update your listings with professionally-shot photographs, accurate descriptions, catchy copy, and competitive pricing.
4) Ordering too much inventory
Some optimistic merchants order a large bulk of inventory without proper demand planning, or looking at sales projections. Sometimes it works out if there are sudden spikes in sales, and those sellers avoid going out of stock.
However, if you over-order and end up with slow-moving stock, you risk paying more to store items that you can’t sell. Amazon also imposes higher fees on items that sit in their FBA warehouses more than one year. To avoid these storage fees, you can move inventory back to your own storage space, but that costs money, too. Another option would be liquidation, but it’s likely that you won’t receive your full investment.
To avoid this, stick to your historic data and use it to guide how much inventory you order and send into the FBA network.
5) Running out of inventory
The opposite problem is also common for many sellers. Sometimes, sellers miscalculate how much inventory they actually need on a sales channel, and don’t send enough in or order enough from their suppliers.
They end up selling out, losing loyal customers, dropping in Amazon search rankings, and missing out on revenue until they can restock.
6) Taking your eye off accounting
Mishandling your accounts can bankrupt your business without anyone noticing, or leave you needing more inventory with no capital to order it. When you’re running an Amazon FBA business, you need to stay on top of your cash flow. You should always know what’s coming in and going out, as well as the aspects of your operations you need to tweak in order to reduce overhead spending.
Wrapping up: Avoid these Amazon mistakes for more ROI
Make sure to avoid these common mistakes to save yourself and your team time, money, and headaches.
If you’re running an Amazon business and need help with logistics, customer service, and account management, get in touch!