Hope everyone had a good weekend. I only did one post last week, as I was visiting some friends in Austin, TX from the 5th through the 9th. I also did some sourcing in Austin while I was visiting on the 5th through the 7th. It was sort of a practice run to see what shipping items to amazon fba from the road is like, for when I take a longer “sourcing roadtrip” later in the year. If you missed the post where I discussed the goal of taking a sourcing roadtrip, you can read a little more about it HERE.
It was great to be able to take this trip, and not have to worry about taking any vacation days or getting approval from a company or manager. As with this trip, I am often mentioning the positives of selling online full time, but it’s not all sunshine and roses, so in this post I will be discussing a few areas where I went wrong this past month.
Let’s start with some items I lost money on in February of 2014. In total, I sold 11 items via FBA at a loss before factoring in inbound shipping into the equation. The largest of these losses was $6.42 on a Star Wars Operation game. HERE is a link to the amazon product detail page if you are interested in taking a look. This item was purchased back in December for $19.20 with the intent to resell it as new. It turns out that upon getting the item back home, there was a puncture in the box and it had to be sold as used. In addition, it did not sell until February when the prices were a bit lower than in December. This item ended up being sold in very good condition as a result of the puncture for $18.99. Selling for less than you pay for is never fun, but the price did not appear to be going up anytime soon, and for me having the cash is more valuable than waiting for someone to possibly purchase my item with an artificially high selling price.
In addition to the 11 items that I lost money on without inbound shipping factored in, there were an additional 14 items that I sold where I profited less than $1 before factoring in inbound shipping costs. So in reality, these 14 items were likely items that I lost money on as well, or at best broke even. In total last month, there were 25 items that I sold at a loss or breakeven.
In addition to items that I sold for unprofitable prices, there were a couple of other mistakes that I made (that I am thinking of right now, there were probably more).
One of these is buying expired grocery products. You would think I would know by now to check the expiration date for EVERY grocery item that I buy before making a purchase. However, in February, there were at least 4 separate instances where I purchased items that were expired, or the expiration dates were too close to send into FBA. Some of these items I purchased multiple of, and some I only had one of. One trend that I have noticed is that I will often check the expiration date of the first of an item when I am making a purchase of multiple of the same item assuming that all of the products will have the same expiration dates. This is not a very good assumption to make, as I have now been burned by this several times. In one instance I purchased about $75 worth of one product that was all expired, and in this case I returned the items to the store for a refund. If it is just one or two items that cost me less than $5 I will often just toss the items to save myself the time of going through the return process. In theory, (most) stores should never have expired items on the shelf, but be sure to double check as it creates somewhat of a hassle if you buy expired products. Here are a couple examples:
Another mistake that I made this month was buying damaged products. Take a look at the main picture for this blog post. This was an item that I purchased on clearance from Wal-mart, and did not notice the large rip in the stuffed animal prior to making the purchase. Here is what I saw when initially looking at the packaging:
If I would have examined this item a little bit closer, I could have saved myself from this mistake. I have noticed that clearance items tend to be a bit more beat up at Wal-mart than many other big box retailers, so carefully examine items you are buying on clearance from Wal-mart before going through the check out.
Overall, these are relatively minor mistakes, but in total they do add up to having a fairly significant impact on your bottom line. One of the less obvious issues with these mistakes is the loss of time associated with the items as well. For example, the items I broke even or lost money on, consumed time sourcing them, and shipping them into amazon. The other mistakes require me to either return the items to the store (which can require a rather excessive wait) or to just eat the cost.
From these mistakes I know I need to carefully look over items that I am buying before going through the check out and make sure it is in a proper condition to resell. For the items that I lost money on, I have gone through and looked at each one to see what (if anything) I could have done differently to have either not purchased the item, or sold it at a profitable price. There are instances where I would have made the same decision, but there are also instances where I could have avoided these losses.
My goal is to turn all of these mistakes into learning experiences, and make sure I do not replicate them in the future. Making a mistake once is just fine in my opinion, as it can be a great teacher, but making the same mistake over and over again is where the problems begin. I plan to learn from each of these mistakes and avoid them in the future.
Hopefully you can learn from some of my mistakes as well, and save yourself some money in the future. I encourage everyone reading this to go through items you have sold on a regular basis to identify any items you lost money on. Then look to identify ways to make sure you don’t replicate those losses in the future.
If you have any mistakes you would like to share, questions, or comments, please leave them below.
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