Understanding the Amazon Prime Customer - Become One!

Fulfillment by Amazon is the hot thing in ecommerce right now. Many people don't understand why sellers go to the extra "trouble" to pack up their items, ship them to Amazon, and pay Amazon to store and ship their items to the final customer. FBA is much more than just shipping and storage. In a conversation on my Facebook group yesterday, a member asked this very question, "I just don't understand FBA. Is it really an advantage to pack up your stuff & send it to them to sell? Not easier to list yourself? Seems like a lot of additional fees."

What most sellers not doing FBA don't understand is the Amazon Prime customer - these customers are the lucrative part of FBA and an FBA seller's best friend. A special group of Amazon customers, called Prime Customers, pay an $80 a year membership fee and anything they purchase with the “Prime” logo is shipped free, within 2 business days. The only way to sell to these customers, and to the ones who choose free super saver shipping with an order of $25 or more with the SSS logo, is to do FBA and have your items in an Amazon warehouse. In other words,


YOU CANNOT REACH THE CORE GROUP OF BUYERS ON AMAZON UNLESS YOUR ITEMS ARE IN AN AMAZON WAREHOUSE AND AMAZON TAKES RESPONSIBILITY FOR SHIPPING THESE ITEMS.

If you are only doing merchant filled, you can not reach these people and you are missing a huge % of the Amazon customer base. Also, Prime and SSS customers are not as price sensitive, they will pay more than for MF items, and buy more at a time. Point #2:


IF YOU SELL ON AMAZON, AND ARE NOT PARTICIPATING IN THE AMAZON FBA PROGRAM, YOU MISS OUT ON SELLING TO CUSTOMERS WHO ARE NOT PRICE SENSITIVE. YOU ARE LEAVING MONEY ON THE TABLE. LOTS OF MONEY.

When you switch to FBA, some magical things happen:

1) Your competitors drastically decrease. You are no longer competing against every other seller with the same product, only other FBA sellers and Amazon.

2) Your customer base increases because you now get to sell to Prime and SSS customers, whom you could not reach before.

3) Prime and SSS customers use a filter, "Show prime offers only." So many do not even see the MF offers. They don't care if they pay $5, $10 or even more for an item because they aren't looking at the MF items. This is a case of "what they don't know won't hurt them."

4) Your orders ship 24/7 (media goes intl), and you can spend your time sourcing and shipping box loads of items to FBA rather than shipping items. Once you get your inventory built up, you can spend your time at the gym, going on vacation, or goofing off, and you will still make money because Amazon is shipping your items for you!

5) AZ handles all post transactional activities like returns, customer inquiries, etc. Again, a time saver.

6) This is an economy of scale. Maybe now you are selling 100 items a month at an average of $8 profit per item. With FBA, you can sell 400 items a month at maybe $6 profit, with less effort and less time invested. Yes, there are fees, but the increase in sales offsets that. So you can go from making $800 a month to $2400 a month with very little extra effort.

So, yes, there are tremendous advantages to packing up your items and sending to FBA.

Thought for the day:

THE ONLY WAY TO FULLY UNDERSTAND YOUR CUSTOMERS IS TO BECOME ONE.

If you are new to FBA, or interested in seeing how it works from a customer's perspective, why not become an Amazon Prime customer? Amazon offers a 30-day free Prime trial. I highly recommend that you sign up for the free trial just to see what our customers experience. (Holiday time is a great time to try it out for your own benefit!) You start to think differently abut how you shop and how you can utilize your Prime membership - the other day I needed an item that Target carries. (For personal use, not to sell.) It was a rather large item. I was thinking that I may have to go to multiple Targets to find one in stock. Then I remembered my Amazon Prime account - found the item, it was offered on Prime, for only a few dollars more than the Target price. So I ordered it online, it was at my door in less than 48 hours, and I did not lose any time going on a wild goose chase trying to find it. I did not have to hassle with a large item, wheeling it out to the car, putting it in the car, unloading it from the car. I was able to use my time for other tasks while Amazon handled the problem for me - for only $4 more than I would have paid at the store (if it was even in stock).

The Prime trial requires a credit card, but it will not be billed until the free trial is over, so as long as you cancel by the 30th day, you are not charged anything. (I did the free trial last year, was not charged, and then converted to the paid Prime membership earlier this year.) This is not an affiliate program, I do not make any money or receive any perks if you sign up. This is an easy and free way to get inside your customers' heads and start to understand why Prime customers will pay more for items on Amazon. And once you understand this convenience and enjoy it yourself, you can better serve your customers as a seller and make more money in the future. Knowledge is power.

Click here to sign up for the Amazon Prime Free Trial.

Strategy for Using Grocery Stores as a Source for Inventory

Grocery stores can be a gold mine for sourcing both eBay and Amazon inventory. And its not just about hitting the clearance section - there are other creative ways to find inventory that work for selling online. Grocery stores are a great way to find products that you can sell consistently with very little (or no) competition. It just takes some searching to find products that work.

When you use your regular grocery store to source products, you don't feel the pressure to over-buy like you might at Big Lots or a closeout store. These products will be available to you any time you need to restock. A grocery store can be like your own personal warehouse with thousands of items to choose from any time you want.

Did you realize that some stores flag items on the regular shelves with special closeout tags before moving them to the clearance area? If you are only checking the designated clearance aisle or kiosk, you won't find these deals - you are leaving many opportunities behind. Closeout products are offered at a reduced price because they may not be moving well at that particular store, the manufacturer may be doing a packaging change, the store may be resetting the shelves for a new season, or a number of other reasons. These markdowns happen every single week.

If you know what to look for, and use a scouting tool or have internet access on your phone, you can find these items (and check the online selling prices) as you do your regular grocery shopping. The photo above shows a closeout item on the regular cosmetics aisle at a local grocery store in my area - look at the price cut and look at how many items are available to purchase. Score!

You may not think selling groceries is very glamorous or profitable, but consider these points:

Not everyone has access to what you have in your stores or geographic area. This is the #1 assumption that causes sellers to walk right by profitable opportunities.

Groceries are consumables and buyers will purchase multiples - consumables are where you get those wonderful quantity buyers!

Grocery items are easy to find and abundant - grocery stores stock thousands of different items and are constantly adding new products.

More and more consumers are buying online - they like the convenience of having merchandise delivered to their door, they save time and gas by avoiding having to drive around, and Prime customers on Amazon get free shipping, so they utilize their membership whenever possible.

Baby Boomers are loving the convenience of online shopping, especially in the winter months - trips to the grocery store can be physically demanding.

Online shopping can be less expensive and is definitely less hassle than regular shopping.

Knowing what the shelf tags mean and how the store positions the items is crucial to finding these opportunities.

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Canned Pumpkin Shortage - Big Money on eBay and Amazon!

The Northeast has had unfavorable weather conditions this year - flooding from Hurricane Irene, a wetter than normal spring, and fungus problems. The South has suffered record heat and drought. This combination of a tough growing season has caused a pumpkin shortage, which in turn, has caused a canned pumpkin shortage and rising prices.

Contrary to a press release by Libby's (the major supplier of canned pumpkin), shelves are bare in many grocery stores across the country. Back in August, Libby's stated,

“While much of the country has been suffering from unusually high temperatures this summer, the weather seems to be perfect for growing pumpkin! That’s right, thanks to Mother Nature and the hard work of the dedicated pumpkin farmers in Morton, Illinois – the pumpkin capital of the world! – Libby’s Pumpkin is happy to report that consumers will be able to find a bountiful supply of their beloved pumpkin on grocer’s shelves in plenty of time for the 2011 holiday season.”

So, you be the judge. I've checked the grocery stores in my area around Atlanta, GA. There are a few straggler cans of pumpkin, but it is far from plentiful. Retail price for a small can of pumpkin is $1.39 and for a large 29 oz can $3.69 at the stores I checked. Here are some completed listings on eBay:

Overall, there are not so many completed listings with sales on eBay.

Amazon prices are even higher and grocery items sell better on Amazon. Check out this listing:

Stats on some Amazon listings:

12 can case of 29 oz cans: SR = 37K in grocery, 9 sellers, 1 FBA, AZ does not have it

24 can case of 15 oz cans: SR= 41K in grocery, 6 sellers, no FBA, AZ does not have it

4 pack of 29 oz cans: SR= 11K in grocery, 6 sellers, no FBA, AZ does not have it

(Please note that prices may vary in different areas of the country.) Whether there is a shortage or not, people are sure paying a premium for canned pumpkin online right now. If they are buying online, the prices are steep. Seasonal products can be very lucrative - timing is everything. Check your stores and see what you can find! Be sure to do your own research on this product before stocking up to sell and understand that market conditions can change quickly.

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The Early Bird Gets the Niche Product on eBay

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Join the Discussion on my Facebook Group

Invent Your Own Product to Sell Online

Today’s post is contributed by Beth Sprague Maus, a regular contributor of my Facebook Group. Beth and a partner have recently developed a board game which they have successfully marketed and sell both locally and on Amazon. Here is Beth’s story:

“Necessity is the mother of invention.” Three years ago my husband and I both lost our jobs. We then spent 2.5 years unemployed or underemployed. Last year, as we were praying about how to increase our income, my husband got an idea for a monopoly type game based on our favorite vacation place, the Mackinac area of Michigan. It is a great tourist destination with hundreds of thousands of people going there every year.

We wanted it to incorporate all the wonderful things about that area. Discouraging thoughts came to us immediately: “Surely someone else has produced this game”, “How would we, who have no idea how to manufacture anything, figure out what to do”… But that necessity – taking care of our 5 kids – spurred us on. We did our research and teamed up with a friend who had made the Toledo version through her company.

We then spent 6 months working hard putting all the pieces together. Every aspect of the game, from tokens to money to spaces on the board, all center around the Mackinac Straits area. The game was released on June 30, 2011. Several of the businesses sold out of their stock in just a couple months. Since these businesses are seasonal, we also personally sell the games on Amazon through our FBA (Fulfillment by Amazon) account so they are available year-round. The nice thing for us is that it will be residual income - the businesses will re-order each year and we will continue to sell through Amazon. I hope this encourages the ones who are reading to pursue their dreams with hard work and dedication. You can do it!

You can check out Beth’s game on Amazon here.

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How to Start an eBay or eCommerce Meet Up Group

I recently recorded a podcast with Stephanie Inge, the founder of the oldest and largest eBay Meet Up Group, Dallas eBaybes and eMales. The Dallas group was established in 2002, meets once a month, and has over 350 members. Stephanie has been successful in starting, growing, and maintaining this group. During the podcast, Stephanie gives us the following tips:

Where to have a meeting
Best days and times to have a meeting
How to use the Meet Up site
How to invite guest speakers
Meeting format
Whether or not to charge guests a cover charge

Click here to download or listen to the podcast. You can also access the podcast on iTunes here for free.

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