The 80/20 Of Ecommerce – Feb 19, 2021

First off, I hope our readers in Texas are keeping safe and well in spite of the effect of the winter weather conditions and power outages.

Chinese Suppliers are back to work from Chinese New Year Holiday

If you’re sourcing products from China then you know about the long CNY holiday where factories may be shut down for weeks.

The good news is that some factories are already back to work as early as Thurs Feb 18, 2021, the official restart of work.

In actuality however, most factories will not be at full capacity until later once their staff returns, hires are made to account for workers that don’t return, and the rest of the supply chain returns to normal.

But if you are actively sourcing from China, it’s a good idea to check with your suppliers to see if they're back and to get the wheels turning again.


Online Retail sales continue to soar in Jan

In a recent live webinar I hosted for the 7 Figure Seller Summit - A panel consisting of an 8 Figure, a 7 Figure Amazon seller, and a service provider said that they saw better sales in January 2021 than in November 2020.

One potential reason is the stimulus checks from the US Government in January according to NBC News.

A second reason is the widespread adoption of online retail in many new shoppers including “baby boomers”, Americans over the age of 65.

All in all, signs continue to point that ecommerce growth will continue in the near future.


China Sourcing workshop conducted by Global Sources.

This is a 2-day live, interactive workshop conducted by sourcing veteran Steven Selikoff. The workshop will cover topics related to product differentiation, pricing, negotiation, inventory management, business protection, QC, shipping, scaling and more.

Participants get assigned a faux-product which they use in value/price validation, sourcing exercises and negotiation role-plays during the workshop.

The event is ideal for both veterans and new Amazon sellers. The strategies can be utilised for selling on Amazon as well as in retail stores.

Dates:
Session 1 - Fri Feb 19, 4pm - 7pm PST
Session 2 - Fri Feb 26, 4pm - 7pm PST

Use the coupon code 8020 for 10% discount.

Sign up here: www.globalsources.com/china-workshop


Get Your First Month Free at Helium 10

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Only the first 100 people to reply can claim this offer and you’ll receive one free month of a Helium 10 Platinum Plan… No strings attached.

Offer expires February 28, 2021 at 11:59pm PT.

Please note that to be transparent I am an affiliate for Global Sources and Helium 10 and I believe that they can help you with your business depending on your needs.

If you do sign up through the links above, then I will get credit and will receive a small commission. This helps pay for my coffee! If not, and you’re interested then please feel free to visit their websites directly. Thank you!

Ecom sellers are partying like it’s 2012

In 2012 E-commerce was like a gold mine. It was so early on it was like the wild, wild west.

The market was out there for the taking because ecommerce was growing as demand rose around at a healthy 17% year on year in 2012.


But in comparison, year to year e-commerce growth in 2020 was a whopping 44.45% in Q2!

Source: The Census Bureau of the Department of Commerce.

In 2012, there was not much competition.  

 

Amazon FBA was starting to take off and people were just starting to realize the potential of tapping into Amazon’s growing marketplace and using their fulfillment services so you wouldn’t have to worry about picking and packing your own orders.  

 

There were so many open markets with little to no competition.

 

If you sold on Amazon then you were like a pioneer venturing out in the wilderness looking for new territories to explore.  

 

If you were able to plant a stake in a few niches, rank as a bestseller, and hold that position with a high quality product and solid reviews, you could have built 7 Figure businesses over the years.  

 

I have interviewed a number of Amazon sellers on the 7 Figure Seller Summit who started around that time and did exactly that.

 

At that time incentivized reviews and allowed!  Ranking on Amazon was not hard so long as you were willing to give away products for reviews.

 

Gradually it became harder as more and more sellers got word of the Amazon FBA opportunity… and competition increased.  

 

There are now over 5 million of 3rd party Amazon sellers across all of its marketplaces as of 2020.  

Instead of just a few competitors, certain product niches became saturated with pages and pages of sellers selling seemingly the exact same item. 

EVERYONE IS SELLING THE SAME ME-TOO SELFIE STICK

This led to price wars with a race to the bottom.


The worst thing that can happen in a price war is if you win one. Margins are next to nothing and you put all that work and time to get next to no results.


Then Amazon tightened up their rules and no longer allowed incentivized reviews. This made it harder for sellers to generate reviews and get social proof for products they launched.


Add to that, not everyone likes to play by the rules.


There are sellers that fake and manipulate reviews…


They hijack your listing to take your customers away from you...


They steal your product images…


They may falsely report your product as an adult product to Amazon to restrict your listing.


They might even falsely report YOU for infringing on their copyright to try to get you banned from Amazon, just so they can get a bigger piece of the pie.


“Black hat” tactics are becoming more common.


These shady sellers include the “infamous” Chinese sellers who seem to play by a different set of rules to succeed.


In fact I know of sellers who have armies of employees who register for dozens of Amazon seller accounts so they are not afraid of getting their account shutdown.


They have a lot more where that came from. This emboldens them to bend the rules.


They may buy confidential reports on their competitors off the black market.


And your Chinese factory may go direct to sell on Amazon to circumvent you!


Not only that, they are willing to take tiny margins leading to price wars.


The local Chinese online marketplaces Taobao and Tmall are fiercely competitive and most sellers are fortunate to earn 10RMB on a sale. Translate that to US Dollars that’s about $1.50 in profit!


No wonder Amazon is more lucrative when sellers can make $10 or more on a listing. That’s about 6X what they are earning on the local market and they are certainly willing to take less in profit when they are only making $1 in the local marketplace.


That’s why they are willing to price products so low.


But then 2020 happened.


COVID-19 was like injecting a growth serum into Amazon in 2020!

COVID-19 was like injecting a growth serum into Amazon growth in 2020!

The pandemic led to lockdowns and social distancing.


Most people didn’t feel safe shopping in-store.


More and more people who had not made it a habit of shopping online became online shoppers for the first time.


In 2020, the number of digital buyers is expected to be 2.05 billion.


In fact even baby boomers (aka the elderly), gradually warmed up to shopping online as they feared that making a trip to the local mall or Walmart could pose health risks. 

Baby boomers aka the elderly are shopping online in droves during the pandemic

Previously grandma was worried about putting her credit card number online but now during the pandemic, even she is buying on Amazon! 

She's even getting her groceries delivered to her home to save her a trip to the grocery store.  

Even when we were to return to life as “normal” and we don’t know when that will be…  I doubt grandma will go back to her old ways when she discovered the convenience of ecommerce.

That's a perfect example of how the consumer habits are changing.  And they are here to stay in my opinion.

“We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” Nike CEO John Donahoe 

Looking forward, we don't know even with a vaccine, assuming you can get it, if it's going to help get us back to life as normal.

There will be the DOUBTERS who think that the vaccine is going to end the pandemic and the growth spurt in ecommerce but they are the ones who will miss the boat.. 

2020 has shattered all sales records.

More than 71,000 sellers worldwide have sold over $100,000 on Amazon this Q4! 

Now, in 2021 the scales continue to tip in the seller's favor. 

 

Even though there are millions of ecommerce sellers, there's so much more demand for online shopping. 

 

There’s a huge gap between the monstrous demand from online shoppers to the supply available online.  In fact many of the traditional bricks and mortar retailers are STRUGGLING to adapt.

 

Case in point - J.Crew, Brooks Brothers, JCPenney, and many famous offline retailers have declared bankruptcy and are shutting down their stores.  

 

Shopping malls are struggling to stay in business as the quarantine is really hurting their foot traffic.

In fact Amazon is considering to takeover the empty store spaces from JCPenny and Sears in shopping malls to convert them into Amazon fulfillment centers!

What does this all mean?


Right now is the best time to get in on this e-commerce opportunity because regardless of how many sellers there are right now - they cannot keep up with the disproportionate spike in demand.


The PIE HAS GOTTEN A LOT BIGGER.


As you can see, there’s a bigger opportunity in ecommerce that you can seize right now.


Because there's more shopping online as consumer behavior is evolving from offline to online.


Also we don’t know WHEN things will go back to “normal”.


We don’t know how effective the vaccines will be in stopping and controlling the effects of the pandemic.


Uncertainties continue but that means that it’s certain that the trend to ecommerce shopping will continue.


Offline sales are drying up - you see all these stores going through bankruptcy, liquidation, and shutting down entirely.


Black Friday 2020 foot traffic declined by 52% year-over-year, while Thanksgiving declined 95% according to Bloomberg.


Even though nobody can predict the future, you can see by the offline retail bankruptcies, the change in consumer behavior to favor online shopping, and uncertainties when things will return to normal.


CONCLUSION: E-commerce growth is extremely likely to grow tremendously in 2021.


And the most dominant player in e-commerce is Amazon.


Amazon accounts for 47% of all US Ecommerce sales as of 2020 according to Statistica.


Just like in 2012, There will be BELIEVERS who are going to jump at this opportunity.


Others will be DOUBTERS. They will continue to sit and watch from the sidelines and regret it later on.


If you’re one of those that are taking action let me know...


What will you do to crush it in Ecommerce in 2021?


Please fill out this short survey and let me know! https://forms.gle/vudDZfxgvzvquBV79


Gary

PS: I’d love to hear your plans about what you will do to succeed in Ecommerce in 2021? Take this survey now and I’ll share the results with you if I get enough submissions. https://forms.gle/vudDZfxgvzvquBV79

How to Prep Your FBA Business for Acquisition if you’re planning for an Exit

At Thrasio, we want sellers to know they don’t need to have everything perfect before talking to us about selling your business. We’d rather have sellers connect with us when they first start thinking about selling their business than put off connecting with us because they’re trying to package everything up. However, sellers can do a few things to make the process run more smoothly for both themselves and potential buyers.

​Think About Your Ideal Exit

Start by asking yourself what you’re looking for from the deal. A few things to ponder:

  • What’s the minimum sales price you are willing to accept?
  • What are you hoping to do or accomplish with your earnings?
  • Do you want to wash your hands of the business altogether, or are you hoping to remain involved?
  • What’s your ideal timeline for selling your business?
  • Do you have any employees to consider?
  • What do you want to do next? Are you launching a new business? Retiring?

Once you firm up the big picture, you’ll be better prepared to talk to a buyer or a broker, and you’ll be more comfortable sitting at the negotiating table.

Put Together Performance Data

When you sell your business, the prospective buyer will go through all of your performance data during the evaluation phase. Before entering into an LOI (Letter of Intent), which often requires a non-compete agreement, you’ll need to have at least a bare minimum of shareable data on how your business has performed historically—such as a Profit & Loss statement and sales data from each revenue channel.

In initial discussions, buyers will want to know simple figures like net monthly revenue, gross margins, and costs of goods sold. It’s good to have the most up-to-date information on hand to streamline this part of the process.

Clean Up Your Finances

Keep your books in ship shape and up to date throughout the entire process. Make sure you’re paying your bills and keeping up with inventory. Our team does craft P&Ls for every deal, but you’ll want to have as much of the business financials in order as possible before reaching out to any other buyer or broker. If you’re working with a broker, you’ll likely be required to have a full accrual-based accounting of your business.

Secondly, but perhaps more importantly, you want to reach out to your accountant regarding selling your company. Identify any tax liabilities, and figure out the best overall deal structure for your tax position.

Choose Between a Broker and Direct Sell

There are pros and cons to both, and we work with both.

On the upside, when working with a broker, you have their experience and guidance to lean on throughout the process. If you are unfamiliar with selling a business, this may be a good option for you.

Additionally, brokers often have hundreds or even thousands of buyers looking at their listings.

On the other hand, the high volume of interest that comes through a broker often leads to many people wanting to “kick the tires.” You may be on multiple calls with buyers who are “shopping” that never go anywhere. As mentioned above, you need to have your financials entirely in order before your business can go on the market through a broker. Working through accrual-based accounting can be tedious. Your broker can work with you on this, but they’ll also have several other clients they’re working with, which may make the process feel transactional.

Broker fees and commissions are often 10-12% of the total deal price. These fees may be well worth it if you’ve never sold a business before or have other reservations. But you may make up those savings if you can forego paying for a financial audit and work directly with a buyer instead.

When you work directly with a buyer like Thrasio, you get a one-on-one relationship. It’s not transactional. We take the time to get to know you and your business through a series of conversations and emails—no pressure to take calls or entertain offers that don’t work for you.

There’s no commission, so you get 100% of the purchase price—saving you that 10-12% commission rate. And the deal typically moves much quicker which is important to many people who run their own business and don’t want to draw out the process. If you aren’t a Quickbooks wizard or you need help creating a P&L, Thrasio can help you through the process and get you a valuation for your business typically in a few days.

Business as Usual

Even when you’re confident a deal will close, you should always continue to operate your business as if you will still be the owner a year from now. You might assume since you’re selling or closing on a deal to hand over your business, you can pull back on PPC or don’t need to replenish inventory. But, if the deal falls through, you’re left holding the bag. We’ve seen it before when sellers have come to us after a previous deal fell through, and their business has lost significant value.

Do yourself (and potential buyers) a favor, and streamline your operations when you start thinking about selling. Continue doing everything that made your business a success throughout the entire acquisition process. You’ll protect yourself should you want to walk away from the deal at any time, and you’ll preserve the value of your business when it is time to negotiate its Value.

Want to learn more about selling your business? Reach out to Thrasio now to get a free valuation!

Q4 Check-List for Amazon Sellers

This article is to provide a useful Q4 check-list for Amazon sellers. The fourth quarter (Q4) of every year presents the most opportunities for Amazon sellers to maximize their earning potential. The fourth quarter of 2020 is expected to be an historical all-time high. In order to make sure you get the most out of the greatest shopping season of the year, we have prepared a useful check-list. Amazon sellers can use this list to quickly check if they are set up in the right direction for crushing it during Q4.

Inventory Management
​

The first and foremost mission of online sellers is to ensure that their entire in-stock inventory is effectively available for sale. If you are not ensuring that your entire inventory is available for consumers to purchase during Q4, you would be failing to perform your main duty as a retailer, which is generating online sales, by selling ALL your available products. 

Therefore, you should make sure not have any stranded inventory on FBA, nor any suppressed listings. Stranded FBA inventory simply means, that your Amazon FBA inventory for a certain listing (ASIN) is inactive. A suppressed Amazon listing means that your listing is technically available on Amazon, but cannot be found by shoppers when searched on the Amazon search box. This practically means that your listing is dead, since shoppers cannot search, find and purchase your product. Make sure to look for such issues on your Amazon account and fully reactivate your listings. Amazon usually specifies what are the issues that need to be fixed by the seller. Make sure to get this done with no delays. 

The second mission you should focus on is trying to predict how much inventory to source and have in stock. This mission is a bit tricky since you have to balance between having enough inventory for a successful Q4, and potentially overstocking, thus having too much stock left when Q4 is over.

The most recommended strategy for Amazon seller is to stock up inventory for Q4, only if you are able to financially afford to have your funds tight up in inventory. And then smoothly sell your overstock during Q1 for a decent profit, maybe also for break-even, and avoid taking a loss.   

Listing Optimization

Your Amazon listing is the virtual shelf of your digital storefront where you can present your products in the most attractive way possible. Make sure that all your Amazon listings are “sparkling with glitter”, and are fully optimized for conversion. 

If you sell a seasonal product, make sure to put a strong emphasis on the seasonality of your product and “dress up” your listing in the holiday spirit. Showing off your product as a seasonal gift in your images, and mentioning on your copyright that the product makes a great gift, can do most of the trick. 

Do not assume and take for granted the mindset of consumers. Capturing their attention and turning it to the holiday spirit can tremendously help your listing greatly convert, when compared to a competing listing, that is plain, boring, and not focused on the holiday spirit.  

Finance

Many Amazon sellers can expect to triple their revenue during Q4 and beyond compared to regular year. If you can clearly identify being able to triple your sales, and your profits accordingly, make sure you can financially afford to source triple of the quantity you usually do. 

If you do not have enough cash to lock your funds into inventory and still run your business smoothly, you should consider taking a loan and raising debt. You should always do so responsibly after clearly identifying that by taking debt, you will ultimately increase your sales, fully repay the debt, and generate more profit as a result. 

There is no glory in tripling sales revenue and making the same or even less profit. You should remember, that the purpose of your Amazon business is to generate the most profit possible, and not the most sales revenue possible. 

Cashflow management is a major component that all retailers must master. Growing rapidly in sales, but not staying attentive to the financial consequences of your business can be lethal and greatly damaging. Many upcoming Amazon sellers are revenue millionaires, but they are bleeding money and are generating losses without even realizing it. The reason is that they do not manage the financial side properly and get drunk on the power of revenue growth versus profit growth.    

Logistics

The year 2020 and the Coronavirus pandemic presented itself as the most logistically challenging year for Amazon sellers to date. During the end of Q1 and most of Q2, most Amazon sellers were not able to ship their inventory to Amazon’s fulfillment centers all over the country. Amazon has blocked products from non-essential categories from shipping to FBA centers at the height of the pandemic lockdowns. 

Many sellers needed to pivot quickly and adapt to the new logistical realities. Now it is safe to say that the best set up for Amazon sellers is to have each ASIN set with two SKUs for two separate fulfillment options. One SKU for FBA mode, and another SKU for Fulfilled By Merchant (FBM) mode. This way, if you stock out of your FBA SKU, your FBM SKU will kick in as a backup, and allow your sales to keep running, and not take a hit on losing your Best Seller Rank (BSR). 

Amazon sellers can set up listings with an FBM mode using their own warehouse, a garage, basement, and/or turn to a third-party logistics center (3PL) to handle the logistics. If you need a 3PL, it is recommended not to simply turn to the cheapest option, rather, make sure to turn to a 3PL that is really experienced working with Amazon sellers, shipping FBM and FBA orders, and is highly reputable. 

Even if working with high-performing and experienced 3PL centers can come at a premium cost. It will be far less costly if you encounter setbacks with an inexperienced lower-cost 3PL provider, which might result in loss of revenue, listing rank, customer satisfaction, and Amazon suspensions. Using high performing 3PL centers is especially important during the prime time momentum of Q4. Do not be cheap. Less can cost much more in this specific matter. 

Advertising

When you are watching the NFL Super Bowl game, the advertising ads during the game are the most expensive on earth. And for a good reason. The eyeballs of everyone are fully attentive to the advertisement, and the impacts of these ads generate lots of Return On Investment(ROI) for the advertisers. 

The same principle applies to advertising on Amazon during Q4. The eyeballs of so many shoppers are fully attentive to the Amazon marketplace. Much more than the regular season. These eyeballs are ready, able, and are with full intent to make a purchase. It is your mission as a retailer, to capitalize on this great momentum, pay the premium for the ad spend, compete for the advertising space, drive tons of traffic to your listings and boost sales. 

Advertising costs will sharply rise during Q4 due to the great potential stored with the eyeballs and attention of shoppers. Make sure to be ready to spend more, and have the financial ability to do so. The key here is to spend more so you can generate more sales, but most importantly generate more profit. If you can clearly identify that by spending more on ads, you will generate more profits, GO FOR IT, and do not hold back. 

Sourcing  - Chinese New Year Warning

If you source your products from China, make sure to keep in mind that the Chinese New Year of 2021 will take place between the end of January until the end of February. Therefore, make sure to place all your orders during Q4, so you will get your inventory during the end of Q4 or at the very latest during mid-January of Q1. 

It is very important to juggle this matter smoothly, so you do not stock out on inventory. Especially after having a strong momentum in Q4. You do not want your Amazon BSR to peak just to crash right afterward due to the lack of inventory. If you can financially afford it, the best practice would be to source your products for Q4 and Q1 with a bulk purchase, and maybe even try to negotiate a better price from your suppliers due to the larger bulk order.

Account Health

Your Amazon account is the most expensive digital machine you probably have at your disposal. Therefore, make sure that there is no rust in your machine in the form of complaints and notifications received from Amazon Seller Performance(SP). 

The best practice to keep your Amazon account in good health is to quickly respond and reply to any SP notifications. Make sure to have all your available information ready for action. This information involves any documents that can prove you are a legitimate seller such as invoices, trademark certificates, patent registration, copyright registration, and much more. 

The Amazon marketplace can be notoriously brutal when it comes to having your Amazon listing or account suspended. A suspension can happen to any seller, at any size, and at any time for whatever reason. The best way for Amazon sellers to handle this frail reality is to, firstly be a fair and square seller, and to not involved with anything that is not legitimate in any way. And have all the documentation and evidence to support your position if you ever get challenged. 

Accounting

Needless to say that Q4 closes the tax year for Amazon sellers and therefore you should focus on closing the year strong along with financially closing your books. By capitalizing on the huge momentum of Q4, many Amazon sellers can greatly improve their financial results and bring some reassuring news to their accountants.

Do not forget to include in your end of the year inventory count, your Amazon FBA inventory, FBM inventory, and even your inventory under production (if you are the factory, or you paid a factory for production). Amazon will provide you with a end of the year tax statement called the 1099-Form. Make sure to download this form, and send it to your accountant.

If you have paid any interest during the year on a loan, do not forget to expense the interest payments as they are tax-deductible. Make sure to use a Profit and Loss tracker that will clearly calculate all your business expenses, and drill down your numbers to see if you turned a profit or a loss at the end of the year.

If you or your accountant are having trouble understanding Amazon’s income statement reports on Seller Central. Here is a free eBook that is available for your convenience.

Amazon FBA Auditing & Reimbursement

If you really want to boost your Q4 profit and finish the year strong, you can conduct an FBA audit to find FBA discrepancies, file claims for FBA reimbursement claims, and maximize your available Amazon FBA reimbursements. Many Amazon sellers are not even aware that they are eligible to get a handful of reimbursements back from Amazon for a variety of FBA discrepancies. 

The overall Amazon FBA discrepancy rate can range from 1%-3% of the annual FBA revenue for sellers. Amazon generally provides an 18-month lookback period for most type of FBA discrepancy claims. After the available time frame, the eligibility for getting paid for discrepancies eventually expires. 

If an Amazon FBA sellers do not cash in on all the available claims at their disposal, they are guaranteed to be leaving lots of money behind. It is highly recommended for Amazon sellers to cash in on all available FBA reimbursements, and significantly boost their bottom line profits. DO NOT MISS OUT!  

If you are an Amazon FBA seller and never audited your account, and have no idea even where to begin. You can reach out to GETIDA for help. It is free to join GETIDA as they do not charge any money upfront. They only charge a fee from successful FBA recoveries they generate. 

GETIDA is providing a $400 offer for the readers of this article so you can get $400 in free FBA reimbursement to get things started. Remember, your money is always best kept in your pocket instead of elsewhere. An effective utilization of your available FBA reimbursements can ensure that your money always stays in your pocket. Hopefully this added money will help you keep growing your Amazon business. 

Summary

We hope you have found the Q4 check-list for Amazon sellers useful in clarifying the main business functions you should focus on. According to all expectations and projections, the fourth quarter of the year 2020 is expected to a record-breaking season on Amazon. We wish you to be highly successful making history this year and many more years to follow.

The Cost of Sourcing from China may be getting more EXPENSIVE soon – here’s why

​Did you know that sourcing products from China may be getting more EXPENSIVE soon?


This is especially true if you are sourcing from China.


Recently the Chinese Yuan (RMB) has steadily gained in value and is at its highest point in the last 2 years.  

Currently the exchange rate is approximately 6.6 CNY for $1 USD. 

What does this mean?  

Since the beginning of the trade war, China has been devaluing the RMB to make their products more competitive to offset the tariffs.  

Now is China gradually allowing the RMB to appreciate as they gain confidence after their economy rebounded relatively quickly from the pandemic.  

This means that the Chinese suppliers may adjust their prices given the currency appreciation.

Furthermore with the upcoming Biden Administration, China’s leadership may sense that upcoming policies will be “less hostile” or and more predictable according to a Bloomberg article recently.


Moreover, in an informal poll I ran earlier this week on a small group of ecommerce entrepreneurs, 46% feel that the new US Administration will have a positive effect on their sourcing and supply chain.    


19% felt it would have a negative effect.  11.5% felt it would have no effect.  And 23% are unsure of the effect. 

I’m curious - how do you think the new administration will affect your business’s sourcing and supply chain?  

If you haven’t taken this short survey yet, I’d love to hear your opinion!  

Please fill out this 5 min survey

Thanks and have a great weekend!

Gary

80/20 of Ecommerce Weekly Newsletter Nov 06, 2020

Here’s this week’s 80/20 of Ecommerce:

China Sourcing Updates

First off, keep your eye on the clock! Expect longer delivery times as factories are slammed with orders the past few months. If you have orders placed, then I would definitely monitor the lead times as they may get dragged out from 30 days to 60 or even 90 days as factories are struggling to keep up with demand.

Moreover, word on the street is that manufacturing is shifting BACK to China from India and Vietnam as those other locations are impacted by the pandemic and uncertainties in their supply chain.  This is especially true in the fashion and apparel industries. So this means even more production is being diverted to China adding to delays as factories struggle to keep up.


Secondly, many of you may be so focused on Q4 sales right now that you are overlooking the next big milestone on the calendar - Chinese New Year.


As you know Chinese factories will shut down for a month (or more) every year for Chinese new year which is the longest holiday of the year in China.


Just to give you an advance heads up if you’re sourcing from China, I recommend that you have your purchase orders placed no later than the end of November so that your suppliers have plenty of time to deliver before Chinese New Year. Remember the delays we just mentioned?


You can learn more about Chinese New Year Sourcing best practices in the article I wrote here.

Did you know that NIKE has restructured their company to focus LESS on offline retail stores and MORE on e-commerce?  

 

According to the Associated Press “Nike said in July it will spend up to US$250 million cutting jobs worldwide as new CEO John Donahoe refocuses the business to emphasize online sales directly to consumers.” 

 

The writing is on the wall folks.  

Nike is doubling down on ecommerce (THE CANADIAN PRESS/Paul Chiasson)

​Ecommerce continues to boom and this is being felt by the biggest brands in the world as they are shifting their business models to emphasize ecommerce.  

 

Next one of my favorite Online conferences is taking place next week - the Global Sources Virtual Summit which takes place Nov 10-12.  

 

They have a strong lineup of speakers and I have attended their in-person conferences previously so I can vouch for the quality of the content.

 

If you get a chance I recommend you check it out to learn more best practices to level up your ecommerce business.  

 

If you decide to join, here’s a 10% off DISCOUNT CODE especially for our readers.  Enter code 8020 .

 

Global Sources Virtual Summit URL: www.globalsources.com/summit

Finally for those of you who missed our live training last week on How to delegate Amazon Seller Central tasks to VAs so you can work ON your business (not in your business) with John and Brian from Seller Candy, please check out the replay here: https://youtu.be/Nt7bESgU_KQ

Since so many of you have submitted many questions to Seller Candy. co-founders Brian and John have opened their calendar to free discovery calls with you to answer any questions you may have.


They will discuss your Amazon business and how the Trained Virtual Assistant Experience works, and how you can get your Seller Central managed at an expert level without becoming an employer or a manager.


You can book a free call with Brian and John here https://calendly.com/sellercandy/discovery


Also they have offered a limited time $200 off discount Seller Candy’s managed Amazon Seller Central VA services to our audience - learn more here.


Note: To be transparent, I’m an affiliate for the Global Sources Summit and Seller Candy. I personally have attended or used and recommend them. If you do purchase then I will receive a commission which helps to offset expenses to keep this content free for everyone. If you’re not OK with the affiliate offer feel free to visit their sites directly or ignore this.


Thank you and have a great weekend,

Gary

5 Key Things to Claim Your Amazon FBA Reimbursements so you aren’t leaving money on the table

Good news – I’m super excited to announce that we will be launching the THIRD edition of the 7 Figure Seller Summit online this August 17-21, 2020.  

Given the pandemic and the fact that many of you are in lockdown and all in-person events are on hold indefinitely, now is the best time to level up and scale your e-commerce business ONLINE.  

As you know, E-commerce is one of the few industries experiencing a huge growth spurt during the pandemic.  And this Q4 will probably shatter all records.  

So I invited THIRTY 7 Figure Sellers and Ecommerce experts to teach you the different phases of scaling your ecommerce business to 7 Figures:

  • The Mindset and Fundamentals of a 7 Figure Seller
  • Branding and Marketing Strategies 
  • Scaling your Business
  • Increase Profitability so you keep more money in your pocket
  • Exits – Building your business to maximize your selling price

Details will be coming very soon so please stay tuned!

Meanwhile I would like to take this opportunity to thank our Platinum Sponsor GETIDA which helps many 7 Figure Amazon sellers to claim their Amazon FBA reimbursements back from Amazon through their automated services.

They came highly recommended by an 8 Figure Amazon Seller friend of mine and I am testing them out now with my own Amazon business.

Rather than offer you a sales pitch, I asked them to provide you value so here are the 5 Key Things to Claim Your Amazon FBA Reimbursements so you aren’t leaving money on the table.  

As a special bonus for the 7 Figure Seller Summit attendees, GETIDA will help you get your first $400 in Amazon Reimbursements from Amazon at no cost to you.  

5 Key Things About FBA Reimbursements

Here are 5 things about FBA reimbursements that can be useful in turning a loss into a profit. Especially for Amazon sellers that are in need to access more cash. Maximizing FBA reimbursements is a powerful way that assists many FBA sellers in growing their revenue and getting cash back from Amazon that is rightfully yours.

FBA reimbursements – is there more to recover?

1) Know the Rules

Amazon provides an 18-month window period for sellers to audit all the FBA related transactions. Sellers can open cases for any eligible discrepancies and get reimbursements under Amazon’s FBA reimbursement policy.

2) Know your Numbers

According to research by the technology company GETIDA, the discrepancy rate of products shipped into Amazon FBA fulfillment centers can range between 1% to 3%. 

This means that for every 100 units shipped to FBA, between 1 to 3 units will get affected.  In other words they may have fell off the truck, got miscounted, or just went missing!

All in all, Amazon does an excellent job of handling the inventory of third-party sellers between 97% to 99% of the time. This is a remarkable achievement considering Amazon are dealing with a colossal scale of tens of billions of dollars worth of inventory.

But on the other hand, if you are an Amazon FBA seller generating $1 million a year in FBA sales, your 1% to 3% discrepancy rate can range between $10,000 to $30,000 which you can claim back which is significant. 

If you are not contacting Amazon about these discrepancies, you are literally leaving a ton of money on the table!

Amazon and Jeff Bezos are probably not going to inform you about this… So it is your responsibility as a seller to maximize the recovering of all your eligible FBA reimbursements.  

3) Know the Types of Discrepancy to increase chances of getting your money back

Type 1: A common logistical discrepancy includes inventory that gets lost during the initial FBA inbound receiving. Once in the FBA center, your FBA inventory can also get lost, damaged, destroyed, or disappear.

Type 2: A major financial discrepancy that can reduce FBA fees once resolved, is when Amazon incorrectly overcharges sellers on FBA pick and pack fees.

The reason is due to the incorrect information on the weight and dimensions in Amazon’s data. Amazon allows a time frame of only 90-days for providing such reimbursements. 

Note: This has happened to me before in terms of the dimensions of my private label products inbounded into Amazon FBA.  

Sometimes Amazon may inaccurately measure the products and use measurements LARGER than the actual product size.  This means increased storage fees, pick and pack fees, and Amazon fulfillment fees.  

Sometimes I catch the error and contact Amazon to get reimbursed.  But when I’m busy it’s easy to overlook this.

Therefore, today more than ever before, Amazon sellers need to keep auditing their Amazon FBA transactions at least every 90-days to reclaim any FBA reimbursements you may qualify for.

4) Turn Losses Into WINS

Amazon sellers need to maximize the FBA reimbursements that they are eligible for under Amazon’s terms and conditions. If they don’t, they experience a double loss.

The first loss is the cost of inventory. Meaning the cost a seller pays to source an item.  Essentially you are paying for inventory that has gone missing.

The second loss is the loss of profit. The reason is when a seller gets reimbursed, Amazon is “purchasing” the affected inventory from the seller as if the product sold on Amazon’s platform. For most Amazon sellers, selling products on Amazon includes a healthy profit.

Thus, if you recover the maximum available FBA reimbursements, you will shift the double loss into a double win. The FBA reimbursements that recover your cost of goods AND your profit effectively turns a weakness into a strength.

Amazon sellers must maximize unlocking FBA refunds

5) Take Action

Whether you have never audited your account, or already have an Amazon FBA auditing process put into place, or rely on Amazon to auto-reimburse your account, you owe it to your business to get maximum reimbursements.

To make sure you are recovering everything you are owed, you can reach out to an Amazon FBA auditing service such as GETIDA. 

One of the cool things about GETIDA is that they only charge fees if you get money back.  

More specifically they only take a recovery fee from successful FBA reimbursements. 

If no reimbursement is secured, there is no cost. Every dollar of recovery is a pure value add for your business.  

This is especially critical during challenging times we are experiencing right now.  

In addition there are no monthly subscription fees and you can cancel at any time. 

In fact, signing up with GETIDA takes about 4 minutes and you will get instant access to a free dashboard that will provide you with data analytics and visibility into your Amazon account. The dashboard will also give you a free estimate of how much FBA reimbursements potential you can recover on your account. If you wish to unlock these FBA reimbursements, you can then upgrade your account to the GETIDA FBA recovery service, and enjoy all the benefits of maximizing your FBA reimbursements.

Next steps: Get up to $400 back from Amazon reimbursements for Free (no fees)

GETIDA has partnered with the 7 Figure Seller Summit to help FBA sellers get access to more funds. Simply click on GETIDA and you will get the first $400 in reimbursements free of charge. 

Obviously your mileage may vary and how much you can get back (if anything) depends on the details of your business.

We hope that you find the 5 things about FBA reimbursements helpful to recover your Amazon reimbursements during these challenging times.

In addition the folks at Getida have recorded 2 Bonus Quick Tips about what NOT to do when opening cases with Amazon and a way to get a reimbursement from an area not many people talk about… (hint – Shipping).

Bonus GETIDA – 7 Figure Seller Summit – Quick Tips – Watch Video

Thanks and stay safe!

Gary

PS: Get up to $400 back from Amazon reimbursements using GETIDA using this link here. 

[Video Masterclass] Best Practices in preventing Amazon Suspensions featuring CJ Rosenbaum

For those of you who missed the live training, here’s the replay on “Best Practices in preventing Amazon Suspensions in 2020 featuring CJ Rosenbaum.”  

I have invited CJ Rosenbaum to walk us through on how to protect your brand from suspensions on Amazon

In this 1-hour masterclass, you will learn:

  • The common problems you’re seeing from Amazon sellers 
  • Prevention
  • What newbies should do to mitigate risks of having Amazon suspend business 
  • Brand protection
  • How to make sure you never get suspended
  • Protecting your brand from hijackers.
  • The safest way sequence of steps to change the address without accidentally risking locking up the account. 
  • How to open an amazon account without all the unapproved hassles.
  • The best course of action when being attacked by competitors

 Watch CJ’s training here.

If you do watch, comment below and let me know what was your #1 takeaway in preventing Amazon suspensions?

Thanks,

Gary

PS. Can you do me a quick favor? I’m trying to learn what’s the biggest challenge you’re facing selling on Amazon right now – if you haven’t already pls fill out this quick survey.

The 80/20 of Ecommerce: Amazon raises its IPI index threshold, How to protect product designs sourcing from China [VIDEO]

As the world continues to open up and close down again, one of the ways to stay productive is to focus on the things we can CONTROL.

As I mentioned last week the Entrepreneurial roller coaster will bring you to high highs and low lows.  To succeed, you need to find ways around these problems during the lows so you can ride it out and make it back on top.  

One of the things we can control is how we prepare for, strategize, and grow our business.  

Here the 80/20 of Ecommerce news this week. 

E-commerce sales continues robust growth during COVID-19

According to ACI Worldwide: “Global eCommerce sales rose 28 percent in June 2020 compared to June 2019, making it the largest year-over-year (YoY) increase in sales since COVID-19 restrictions were put in place in March”. 

One of the safest bets right now is a bet on yourself if you’re considering getting into the e-commerce business.  

This week I’ve spoken with entrepreneurs from Florida, North Carolina, New Zealand, Australia, Israel, and Japan and while COVID may be striking back in a second wave, online e-commerce continues to surge ahead.  

That’s why right now is the right time to get started in e-commerce if you haven’t already.  This year’s Q4 is likely to shatter all records as it’s not clear when we will get out of the pandemic.  

I’m working with a small group of motivated entrepreneurs to help them launch and scale their business as we are approaching the 4th quarter.  If you’re interested in learning more you can apply for my coaching program here: http://8020sourcing.com/coaching.  

Amazon Raises its Inventory Performance Index requirement in the US and Europe

If you are selling on Amazon this week Amazon changed their Inventory Performance Index requirements.  

This matters because if your IPI is below their IPI threshold you will have storage limits in terms of the amount of inventory you can send to and store in Amazon’s fulfillment centers.  

And with existing inventory which over Amazon’s storage limits you will be charged additional fees.  

You can view your IPI score by logging in to Amazon seller central here: https://sellercentral.amazon.com/inventory-performance/dashboard

According to Amazon US “We are working to manage inventory performance to ensure all products have space available during peak. To enable this, we are changing the IPI minimum threshold requirement to 500. Sellers below 500 will be subject to limits effective August 16, 2020 through the end of the year.”

According to Amazon Europe “Effective immediately, we are raising the IPI threshold requirement for Q3 storage limits to 400 (previously 350).”


Here’s the Amazon FAQ on Changes to the Inventory Performance Index

How can you increase your IPI?  Amazon closely guards this algorithm and has never publicly disclosed it.  

However from a common sense perspective, it makes sense  that Amazon wants you to store fast-moving inventory in their warehouses.  As of right now, Amazon US is offering free removal, so it may be a good time to remove some of your slow movers.

Or you may want to liquidate your slow-moving inventory but cutting prices.  

Reader question: How to protect your product designs when sourcing from China?  [VIDEO 8min]  

One of my readers sent a great question about sourcing product from China

– How to protect your IP so it doesn’t end up all over Alibaba

– What are fair payment terms?

– Should she use Alibaba Trade Assurance or Not?

– Should you get a EXW vs DDP shipping quote?

– How can you get quotes quickly? 

How to protect your product designs when sourcing from China? [VIDEO 8min]

Stay safe!

Gary

PS: If you’d like to get help with building your e-commerce business I have a coaching program which you can apply for here http://8020sourcing.com/coaching

The Entrepreneurial Roller Coaster for Ecommerce Sellers and the 80/20 of Ecommerce News

Hope you all are staying safe and a special shout out to those of you in Serbia.  Crazy times we’re in now and I hope you all are staying safe and keep moving forward with your businesses.

This week was tough for me.  I’ll be honest it’s been really challenging finding a healthy balance between taking care of my family and running my business at the same time.  

We are living in temporary housing out of an AirBnB in Japan.  We can’t return to China or the US due to Covid and travel restrictions.  The situation with Covid-19 is stable here and living conditions are pretty good all things considered.

But it’s not easy for my wife and I since essentially we have been traveling out of 2 suitcases with a 19-month-old toddler since last November.   

In terms of work, for various reasons, many of our projects have fallen behind deadlines.  And it’s really been a struggle for me to delegate and trust others to get things done on time.  

I know it’s not the right mentality but sometimes I do think by the time I delegate this task to someone else, I could have done it myself.  

The third thing is that my dad has been sick and he’s in Los Angeles and I can’t visit him now due to Covid.  He’s in his 80s and it’s been tough not being able to visit him or even know if I can see him again.  

In any case, I’m sure many of you may be struggling with similar or even worse issues so I wanted to offer some advice to you guys as fellow entrepreneurs (as well as myself).

This entrepreneurial journey is not all rosy all the time.  

The journey is filled with high highs and low lows.  

Most people only focus on the highs with Lambos, Lifestyle, and Luxury but it’s simply not the real picture.  It’s only a highlight reel like what you see on ESPN Sportcenter.    

So I recorded this short 3min video about the Entrepreneurial Roller Coaster to explain the highs and lows that we entrepreneurs go through.  

Note: I didn’t invent this concept – it was based on a book written by Darren Hardy of the same name. 

[VIDEO 3mins] The Entrepreneurial Roller Coaster for eCommerce sellers

The key takeaway is when you hit the lows, stay strong, keep moving forward and you will ride it out!  

Sometimes it’s only when you hit rock bottom, that’s when the next breakthrough will come.  

Whether it’s a product idea, making a new connection, or simply surviving long enough for people to discover you.  

Next in the Amazon news world…

Amazon will require US sellers to reveal their names and addresses on the Amazon marketplace.

This requirement was already the case in Europe, Japan, and other marketplaces but if you’re a US Amazon Seller, effective Sept 1st, 2020 Amazon will list your Name and Address publicly on the seller details page.  So if you have your home address listed you may want to consider having an alternate address for your business for the sake of confidentiality.  

https://www.cnbc.com/2020/07/08/amazon-sellers-in-the-us-will-have-to-list-their-names-and-addresses.html

Below is an example of an Amazon UK Sellers Detail page with their Business name and address listed publicly for any shopper to see.

Free Trump Tariff Tool

Finally, for those of you sourcing new products from China, I learned that the good folks at the freight forwarder Unicargo is offering a free “Trump Tariff Tool” where you can check the tariff rate of your products based on the HS Code.  If you’re not sure what it is, you can either ask your supplier or a freight forwarder like Unicargo.  

Note this should not be taken as formal advice and it does not replace checking with a customs broker but for your initial cost calculations this is a quick way to estimate your tariff rates.

https://www.unicargo.com/trumps-import-tariff/

Hope that helps.

Gary

PS:  Are you on Instagram?  If you’d like to follow me on my entrepreneurial journey then please follow me at garyhuang8020