I’m sure you have heard of “Margins” in business. I was a wimp at keeping it in mind when I first started to sell products on Amazon FBA. Chris Green has pounded this into my head – so it’s like a mantra now.
Keep Your Margins In Mind To Keep Your Profit
When I had my retail stores… I always priced my products at 2.25 times the cost. That 2 times is normal… I added the extra .25 to cover things like shipping costs, lost/damaged products and returns.
It was an extra cushion – I carried products that were unique enough (I wasn’t competing with big box stores) they could command those prices. I also had “wiggle room” if I needed to have a “sale” or “clearance”.
I learned the hard way – that margins are extra important on Amazon. The requires that I buy “smart” and know that I can command the price needed to make/keep my intended profit.
I want you to listen to this one little segment of the Ask Janelle Radio show:
http://filesource.abacast.com/wsradio/askjanelle/122711/segment2122711.mp3
Chris Green wraps up where you will “fail” in this Amazon Retail Arbitrage Business in a neat little bow.
Look at “ALL” the numbers – all the numbers have to make sense. The numbers will help you make good buys AND prevent you from making bad buys.
If you are worried about returns – and what they mean in your Amazon Business (some people are really angry with Amazon for having a “No Questions Asked – A-Z return policy” – then I am of the opinion that you haven’t built enough margin into your prices.
We pay for Amazon to handle customer service… let them do it for you! They strive to keep the customer happy… and we pay for that privilege. It’s not personal for us… it’s business.
I’ve had issues myself with how Amazon handles some of my products… I learned two things:
1. Amazon is not the only one responsible for product packaging/shipping. If we send them something that will get damaged when they ship – we need to “fix” the problem from our end.
2. Move on to new/different products when you get a lot of returns for a single product. When you loose money because your margins won’t cover damage/returns – you need to rethink “the numbers”.
I’m just saying…
p.s. Remember I have all kinds of resources for you to check out when you are learning about selling on Amazon FBA: http://debraconrad.com/recommended-tools/
{ 2 comments… read them below or add one }
Hi Debra,
Good information to make me think as I’m trying to plan the new year.
I was wondering if there is a problem with your RSS feed. The last article to show up in my reader was “Selling On Amazon’s FBA Program” from back in September. I thought maybe you had given up on this site until I came across a link today.
Thanks for the good info.
John
Sorry Deb, I posted that comment on wrong post. Meant it to be on the New Year New Stategy post.