The top Amazon FBA mistakes: If you worry about these things, you’re probably over-thinking your Fulfillment by Amazon business.
War on FBA micromanagement
I’m probably going to offend some people here, but I can’t help it.
You’ll hear a lot of frantic concern among Amazon sellers about different facets of the business. These are the top 5 that make me say to myself:
- These are not real problems.
- You’re focusing on the wrong things.
- It’s this kind of FBA micromanaging that is the reason you’re not making that much money.
To be blunt: No one who makes a lot of money on Amazon is fretting about this stuff.
Why overthinking your FBA business is a fast track to ruin
The sellers who do worry about the things below are guilty of among the most common Amazon FBA mistakes: Overthinking the business.
With each one of these five, there are a lot of people who are convinced they are a very big deal and deserve a looooot of attention and worry. I don’t mind stepping on a couple toes, as long as my message is understood.
And my message is:
It’s not that these don’t matter at all.
It’s that these things receive an inordinate amount of attention, and are an impediment to profits by sucking up time and attention when they really aren’t that important.
This is a classic “80/20 rule” thing: 80% of your results will come from 20% of your efforts. And these five things are nowhere close to being in that 20%.
Here’s one thing I promise you: The mega-sellers making real money on Amazon aren’t worried about any of these. They’re too busy focusing on what matters: Sourcing massive amounts of inventory, and repricing it. The rest is just a distraction.
Amazon FBA mistake #1: Overthinking packing & shipping
Here’s how many FBA sellers do it:
- Wrap each item individually and with great care, as though they were sending their first born on a cross-country train journey.
- Fit each item in the box with Tetris-like precision.
- Fill each square-millimeter with some shock-absorbing agent.
- Take an hour or more obsessively doing all of the above.
Here’s how you do should it:
- Put items in boxes.
- Tape shut.
In other words: Don’t make a giant production out of something that really isn’t that important.
By all means, if you’re sending something genuinely fragile, ensure it doesn’t arrive damaged by taking steps to package well. For example, if you’re sending in items made of glass, boxes of eggshells, or nitroglycerine.
But Amazon buyers understand their items are coming to their house at the end of a long postal journey, and aren’t going to be offended by a slight bump to the corner of a box of cereal.
I’ve sold tens of thousands of items via Fulfillment by Amazon, and literally the only thing I recall ever wrapped individually are a few vinyl records that were extremely prone to bending, and maybe a few hugely expensive and collectible books.
Nearly everything gets packed like this: Item in box —> tape shut —> ship.
Amazon FBA mistake #2: Superstition about selling items in New condition
Then there are those who talk themselves out of selling new books as “new.”
This is probably the weirdest mistake on this list. The concern centers around some vague superstition that any book with a previous owner can’t be sold as New.
This is just factually incorrect. If a book is by all appearances unread, and in cosmetically flawless condition, it is “new.” No genealogical survey of the book’s history is required.
There are even people who get upset and hostile that others sell new books on Amazon. Oddly, their superstition never seems to extend to other categories on Amazon. In fact, many of the people who insist you can’t sell new books practice retail arbitrage. Yes – they buy new items and resell them as new. (They hate it when you bring that up).
If an item is new, you can always list it as new. Over-thinking this is a mistake that will cost you a lot of money.
Amazon FBA mistake #3: Overthinking sales tax
Of course you should comply with all state and federal laws, and so on and so on….
But if you’re letting internet chatter from other Amazon sellers get you worked up, focus your attention elsewhere. A lot of that chatter will have you believing that state sales tax is so scary of a subject that you should be intimidated out of selling on Amazon. Distracting your attention and focusing on the wrong things (like growing your business) is always a mistake.
It’s probably illegal for me to give any tax advice, but I will say that I’ve talked to some Amazon sellers much bigger than me who think the “sales tax nexus” conversation is completely overblown.
If you’re that concerned, hire a CPA to sort it out. But at worse, sales tax is just another part of doing business on Amazon Not an obstacle.
Amazon FBA mistake #4: Worrying about investing in software & hardware that will make you money
In other words: Mistakenly insisting on using primitive equipment & software because the alternative is too “expensive.”
I’m referring here to sellers who insist on using free apps that are slow and limited in their functions, versus spending $40 a month on robust software that will easily make them 10x that in their sleep.
This Amazon FBA mistake also extends to hardware.
This is kind of a no-brainer. Anything you invest in as part of your business should be making you many times your investment. And nowhere is that more true than with scanning apps, using a bluetooth scanner versus scanning with a phone’s camera, and so on.
You will get out of your business what you invest in it. Being concerned about minor investments with a virtually guaranteed multiple return will guarantee your FBA business remains stagnant and small. (i.e. the Amazon Seller app is not a sourcing app.)
Amazon FBA mistake #5: Overthinking & over-concern about FBA storage fees
Bottom line: If Amazon FBA storage fees are a factor in whether or not you make money on a particular item, your margins are way, way too low.
Storage fees are among the smallest and least significant expenses of operating an FBA business. They also offer among the highest returns. You get indefinite storage space for just about any item in the universe, and visibility in the biggest store in the world (Amazon), for a few cents a month. Hard to believe this gets a moment of thought from any Amazon seller.
Let’s say you ship in 100 books with an average Amazon sales rank of 3 million, and an average selling price of $15. This is unrealistically terrible. But if only one of these 100 books sell in the next year, you’ve broken even on Amazon storage fees. The rest is gravy.
The point is: Excluding the occasional multiple-unit, long-term storage fee disaster, it is virtually impossible to lose money on Amazon FBA storage fees. And if it happens, you have much bigger problems.
Storage fees aren’t just a small factor in buying decisions, they should be no factor at all. And fixating them is a huge Amazon FBA mistake.
Your focus when running an Amazon FBA business should always be: Sourcing inventory and repricing it. That’s it.
Almost everything else is a distraction.
PS: Feel free to debate me in the comments below.
Jordan Malik says
Peter – THANK you for posting this. Amazon forum/facebook group trolls – you know, the ones that spend more time berating other sellers than they do growing (or minding) their own business – have instilled fear for zero reason with zero logic. Your factual article here dispels all that. Thanks again.
Peter Valley says
Thanks man! Those people know who they are. And hopefully the rest of the world knows who (and what) they are too.
Bravo PV ! I hear applause in the background, finally somebody has the balls to say something.
I love your books – learned a TON of information – keep up the great work! ~Bob [grayelephantclub- books on Amazon]
Peter Valley says
I have fretted about ALL these things. No more! You make a lot of sense.
Peter Valley says
Live and learn. Or sell and learn.
Totally agree with your 5 points. I’m guilty with #4. More to do with not understanding the technology than with spending the money. Need to figure out what and how to put the technology to use. Waiting on your next book on technology use…LOL
Just want to say Peter, I have all your books and they have helped grow my business. Highly recommend them to anyone who is thinking of making the plunge.
j s mcminn says
How about return or disposal charges at FBA?
Peter Valley says
Another one for the list. Just another (small) cost of doing business.
Love your articles, always. They inform and they amuse! I agree with all your points except I’m guilty of shrinkwrapping my books before boxing up for FBA. Yes, yes, I know, it’s a time waster, I suppose. But I no longer worry about books banging around in the box and falling on Amazon’s warehouse floors, etc. And – a key piece of info – I only sell part-time so my shipments are quite small compared to yours and, probably, most of those of your other readers. So I have a little time while catching an NBA game to shrink and wrap and doodle around. 🙂
Chris H says
Thanks for the kick in the ass Peter!!! So you send all the books etc into FBA and let them label for you?
Peter Valley says
No, I do my labeling myself. As long as you’re listing anyway, it’s an extra 3 seconds per unit.
OK, I confess… we put every book in a poly bag. BUT – we call them “new” whenever possible. AND – we buy what we need to run our business. Including a new house in a new state with a 1200 sq. ft. out building! And, Peter, you are definitely one of the people who has made it possible for us to go into pre-retirement. That means we’re going to work our butts off for ourselves.
Hey, how do I get my picture to show up with my post? I’m not shy.
Peter, thanks for the reminder to focus on the important things, No.1 being massive sourcing. I have just upgraded to a database scanner, and its speeded things up already. Might I ask what is your scanning setup? Anyway, as always, your advice is great, and always cuts directly to the point. By the way, 4th month on FBA, & have built inventory of 2400. I heard you mention in an interview (a while back), that you were carrying an inventory of 5000 approx.so that is my next goal. Thanks for your inspiration. Ed
Peter Valley says
Current setup: FBA Scan + Scanfob bluetooth scanner + older Galaxy S3. There are less expensive options for each, but I’m happy with my current setup.
Book seller says
Peter thank you for the article. I have just started selling books via fba after reading your book. I am guilty of worrying about sales tax. Do you have any advice on how you keep track of the accounting aspect of your business along with collecting sales tax? This is the part of my new business that worries me most as I do not have a system in place as of yet. I am printing out the monthly report straight out of Amazon at the end of each month and then keeping track of my monthly expenses on a separate sheet for expenses outside of Amazon. Thanks for your great advice!
Peter Valley says
I have a local CPA who I talk to, but here is what I would do if I were to start over;
Find someone who *specializes* in ecommerce and Amazon related tax issues (and has nothing to sell you). You might even hire a tax lawyer for an hour at https://www.upcounsel.com/
Get them to thoroughly and soberly explain the issues to you.
Don’t listen to anyone on the internet.
This may not be as complicated as you think.
Thank you so much!!
Bill W says
Great article Peter.
What would be your criteria to have a return or disposal order issued for certain high rank books on FBA. I have a quite a few books that are well over 3 million rank and have been listed for a while and there are so many low ball offers.
I’m good on all these EXCEPT #1. I’m afraid I’m a tetris packer…
I think one other thing that I’ve heard you mention elsewhere, but that deserves space here is sticker removal. I hear on other sites sooooo often people worrying about peeling off all the stickers on all their books. Huge waste of time.