October 2020 – Month in Review

When I first started this site, one of the most popular things I did was publish a monthly results post that detailed my financial progress.

I stopped doing this because I didn’t want all the financial details of my business to be public knowledge, but you can still go back and read them if you are interested. The first one (October 2013) is here.

Readers of the blog have been asking for me to bring these back. While I am not going to bring back the full financial details, I’m planning on a new form of these posts and will be publishing a month in review post sharing some details of what we’re up to in my business and things we are learning.

This is the first one. Please read and let me know what you think. If there is anything in particular that you enjoy or something you wish I would have included, let me know in the comments so I can improve on the idea next month.

Enjoy!

Actual Item Sold via Retail Arbitrage in October 2020

One of the most common requests I get from readers is for examples of products that we sell, so I’m planning on sharing details on at least one actual sale that we made in the business in each month in review post.

This month we’ll be taking a look at a book that one of the in-store retail arbitrage buyers on my team purchased from Barnes & Noble.

The book in question is called Chromebook for Dummies.

Here’s a link to the actual item on Amazon:

At Barnes & Noble, the book has a regular price of $24.99 and was on sale for $19.99.

If you read our recent post on how we get the best deals possible for arbitrage, you know that we leverage several different strategies to save as much as possible on our purchases. One of those is being a member of any loyalty programs available at the stores we shop at frequently.

In this case, Barnes & Noble has a membership program that costs $25 per year and saves you 10% on most purchases. This brought the cost before tax down to $17.99. Then there was 7.5% sales tax charged, for a total of $19.34 on each copy of the book purchased.

We sold 3 copies of this book during the month of October for between $40 and $43. Here’s a screenshot of the sales from our InventoryLab account:

Once fees are factored in, we made $28.59 in profit on this one item.

Now that might not sound like a huge amount, but when you do thousands of sales each month, the potential adds up quickly.

I plan on sharing more examples like this in future months. If there is anything specific about the process that you’d like me to go into more detail on, let me know in the comments.

The purpose of these examples are not to serve as leads. If you want leads on products that are currently available and match our profit targets, check out our Arbitrage Finds group.

Top News For Sellers

Below you’ll find a round up of the biggest news for online sellers from the past month.

Increased Storage Fees in Q4

Items stored at FBA warehouses are charged substantially higher storage fees from October through December. The rates are nearly triple what they are other times of the year.

In Q4, it’s more important than any other time of the year to make sure you don’t have inventory sitting around at FBA warehouses that’s not selling.

You can learn more about removal orders here.

Changes in Seller Communication Guidelines on Amazon – Effective November 6th

Amazon is updating the communication guidelines for sellers in their interactions with customers. These changes are set to take effect on November 6th.

There are a decent number of changes, but the point of all of them is to only message customers when it’s specifically required for the order. Messages simply saying “thank you” or just including delivery information from the seller will no longer be allowed.

If you send requests for seller feedback on Amazon, you likely will be relatively unaffected.

If you currently send emails saying thank you, send customers delivery information in addition to what Amazon says, or any other types of messages, I recommend taking a close look at the policy to ensure you stay compliant. You can review the changes to the policy in this PDF from Amazon.

Higher Shipping Rates

UPS, Fedex, and USPS all announced that their service prices will increase this holiday season. Some of the increases are quite substantial, so if you ship direct to customers it’s important to pay close attention to these changes in case it impacts which carriers you use.

You can read a breakdown of the increases from each carrier in this article.

Expanded Access to Remote Fulfillment with FBA

Amazon is opening up their “Remote Fulfillment with FBA” program more widely. This program allows US-based sellers to make their inventory available for purchase by customers in Canada and Mexico.

If you want to expand the marketplaces your products are for sale, this is likely worth a look. There are no additional fees for using this program, and you can adjust your settings so that Amazon will adjust your selling price on international orders so you make the same amount as if you sold the item to a US based customer.

If the option has been enabled on your account it will show up under the “inventory” tab when you are logged into seller central.

For weekly news updates, sign up for our free eCommerce Insider newsletter.

Things that went well in my business over the past month

In this section I’ll share any key updates from the online retail side of my business.

We launched 2 new products (under our own brand)!

In my business, we primarily focus on arbitrage and wholesale sourcing methods. We’ve done a bit of private labeling and working to build our own brands, but it’s never turned into anything that generates more than 5% of the sales we generate from arbitrage and wholesale.

This month we launched 2 new products from our own brand.

So far, we’ve focused on having an optimized listing, having coupons running on the product, and spending significantly on PPC.

We’ve been generating between a few sales per day and are starting to get organic sales in addition to the advertising spend. It’s looking like these products will have some solid potential, and I’m looking forward to see how they play out.

We’ll likely be testing some other ways of getting traffic, and I will likely be sharing more about this in future blog posts.

Local Sales

We’ve been testing out selling on Facebook Marketplace over the past couple of months. And the results are promising.

We’ve mainly done this on items that are at higher price points so that it’s worth the time to coordinate meeting up with individuals.

In October we sold over $6,000 on Facebook Marketplace and generated over $2,000 in profit. One of my team members has been helping run this process, and it’s been going smooth so far.

The main items we will consider this on are items that sell for $100+ retail, are cost prohibitive to ship, and have a $50+ profit potential on Facebook Marketplace.

With COVID we’re doing all of the transactions outside and taking electronic payment whenever possible.

Prime Day 2020

My business saw 2.18 times our average daily sales during Prime Day 2020. This is in line with the increases we have seen on past Prime Days, and was a nice boost. Outside of starting to have more inventory in stock and going through our pricing on all items, we didn’t do anything special to see this increase. It was due almost exclusively to increased traction on the platform due to Amazon’s promotions.

Arbitrage inventory

We’ve been seeing lots of good opportunities for both in store retail arbitrage, and online arbitrage. Our spending on inventory has been higher over the past month than any other time of the year. That’s likely to continue in November for sure as we continue to build up inventory for the holidays.

Wholesale inventory

Our wholesale purchasing opportunities have been going well this past month as well. We’re getting in some large orders to be ready for the demand throughout Q4.

Each year in Q4 we try to get some inventory in as early as we can to start to gauge demand so we can forecast how many units we’ll need on hot selling items in November & December. We also look at the sales history on the items from prior years to help gauge increases.

Overall our wholesale spend is up significantly compared to the middle of the year.

For those interested: our next Wholesale Accelerator has been scheduled for January. This program is designed to help you place your first wholesale order, and if you don’t you get your money back. I’m offering a free wholesale training session on Monday, November 23 at 5:30 PM CT, and enrollment will open immediately following the presentation. You can sign up here.

Things that didn’t go well in my business over the past month

In this section I’ll share some things that didn’t go quite as planned. In any business it’s not all sunshine and roses, so in this section I’ll go over some of those things.

Challenges getting the new products live on Amazon

As mentioned above we launched 2 new products on Amazon. These took longer than I would have liked to get available for sale on the platform. We ran into some issues with having our images show up on the listing, and a couple of snags with getting the barcodes setup properly through GS1.

There were a few snags along the way but we were able to solve the problems. And we’ve learned a good amount in the process so future products we add to the catalog should go smoother.

Slow Moving Inventory

In October we had a couple pallets of inventory come back to our warehouse that was previously at FBA warehouses. These were removal orders we did on some inventory wasn’t selling through fast enough to be likely to sell by the end of the year. We did this to avoid paying the increased storage fees that are charged in Q4, and in many cases to list the items on eBay to get them available in multiple marketplaces.

Overall this is a very small percentage of our overall inventory, but removing items like this takes up a good amount of time. We’re continually optimizing our purchasing process, so the amount of inventory that doesn’t sell in our desired timeframe is continuing to shrink over time. Receiving large removals all at one time are a good reminder of how important this is.

Shipping delays on some products

We’ve been beginning to see some delays on shipments. This is both in shipping to FBA warehouses, as well as on shipments coming to our location from our suppliers.

We’ve closely monitoring this to figure out what carriers to use when receiving shipments at our location to try to avoid delays. When shipping to FBA warehouses we’re now using UPS for almost everything versus using LTL shipments to get things in stock as soon as possible.

With COVID and more people buying online than ever before, some shipping disruptions this year are expected. Now through the end of the year we’ll continue to monitor, and will be prepared to ship more items directly to customers from our location as opposed to using FBA if needed.

New Content published on Online Selling Experiment

Here are links to our most recent posts:

Random Recommendations

In this section I’ll share some random things that I’ve been enjoying or think are worth checking out for others.

A new beverage I drink almost daily

My new favorite sparkling water is Spindrift, and I know I’ve been missing out on it as it’s been around for quite awhile.

They flavor their sparkling water with fruit juice, and I have really been enjoying it. I like the flavors better than any other sparkling water I’ve tried so far. My top 2 flavors so far are Pineapple and Lemon, but I enjoy just about all of the flavors I’ve tried. The lowest price I’ve found is Costco in 30 packs generally for $14.99, and occasionally they’ll have a further discount to get the price down another $3 to $4. If buying a specific flavor then I buy it on Amazon as their price is competitive, especially if ordering through subscribe & save. Checkout Spindrift on Amazon.

A book I’ve been enjoying

Book I’ve been listening to again on Audible and enjoying: The E-Myth Revisited.

I’ve read this book in the past but decided to listen to it again at a friend’s recommendation. There are many good concepts shared in the book. I’ve read the book before and heard many of the ideas before, but it’s resonating more than the first time I read it. It has some great ideas on how to setup your business, and making sure you are creating a business that can run with or without you as opposed to a job.

Clearer communication & More Understanding

My fiancée and I have been going through premarital counseling over the past month.

We’ve both been enjoying it and learning more effective ways to communicate together. We’ve both been enjoying it and it’s led to a better understanding of each other as well. It’s something I’d highly recommend other couples consider.

Entrepreneurs Organization

At the beginning of 2020 I decided to join Entrepreneur’s Organization (EO). I wanted to get to know other business owners located in Minnesota, and so far have found it to be a great experience.

EO facilities a variety of events and learning opportunities for members, there’s a lot included that I won’t try to go into detail in on this post. The group is specifically for business owners who are doing $1,000,000 or more in annual revenue.

If you’re over that threshold and are interested in expanding your network of other entrepreneurs I’d encourage you to check it out. And if you happen to be in Minnesota and are interested in more information on the Minnesota chapter, feel free to reach out.

The Month Ahead

In this section I’ll share some of the things we are focused on for November.

Spend Goal of $350K+ on inventory

November is one of the months of the year where we buy the most inventory. November is a great time to move product, and it’s also a great time to get inventory in to sell in December. We’ll be buying a lot of inventory between retail arbitrage, online arbitrage, and wholesale.

Our goal is to invest at least $350,000 on inventory during November. And if you’re reading this thinking that sounds like an insane goal, it’s been quite a progression to get to this level. If you told me when I first started that my business would be investing these amounts on a monthly basis in inventory, I would have thought you were crazy. But continually reinvesting and compounding returns have made it possible.

You can read more about my journey scaling the business to 7 figures in sales in this blog post.

Ship, Ship, Ship

We’re aiming to ship inventory to FBA warehouses as quickly as possible. We’re aiming to have inventory at our warehouse for an absolute max of 5 days. Ideally we’ll get it out even faster than that, but we’re receiving more this time of the year than any other.

We’re closely monitoring how long it’s taking to ship to FBA warehouses, and so far it’s slowed down a bit as I discussed above, but things are still moving. So the plan is to keep sending to FBA early and often. If it gets to the point where the processing times with FBA are too slow, we’ll be looking to transition to merchant fulfilling.

Get as much in stock for Black Friday & Cyber Monday

Similar to the point above, we’re looking to get inventory in stock by Black Friday. With less people being able to go shopping in store for Black Friday this year, there’s the potential this year could be even bigger than past years. There’s also the potential people are doing more shopping earlier in the holiday season as well, so it will be interesting to see where the numbers fall.

Either way, we’re getting as much inventory in stock as we can to be ready for the demand from Black Friday through Christmas.

Preparing to Merchant Fulfill like Crazy

We’re getting things in place to be ready to ship items directly to customers in December. After about the first week of December our plan is to shift the focus to merchant fulfilling as opposed to shipping product to FBA warehouses. The reason is that many products shipped to FBA after this will end up being in transit and won’t get checked in at FBA warehouses until after Christmas.

Last year we did nearly 1,000 merchant fulfilled orders in about a 10 day stretch in December. This year the goal is to at least triple the amount of merchant fulfilled sales we did last year. To get ready we’re buying rolling shelves to be able to hold the items, setting up another shipping station, and scouting items that we’ll be targeting to sell in December.

Until Next Month…

Have questions or comments? Things you’d like to have me talk about in future monthly update posts? Want to share how your month went or what’s up next for you in the month ahead? Let me know in the comments section below!

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