Amazon news to end January
In this January news roundup:
1. New profit and loss spreadsheet
As the title suggests, I’ve got a profit and loss spreadsheet for everyone.
All charges and fees have been neatly organized into a profit and loss format. You can easily see what your Amazon gross and operating profits are.
The spreadsheet is unlocked so you can make any changes you want.
I told our team today to start playing defense for products we source from China.
This is not the time to try and grow sales – but to maximize profit.
Focus on building cash flow, keep things steady and have a buffer to make inventory last 2 months longer than usual.
I’ve already canceled promotions and raised prices slightly to slow down sales of our made in China items.
Yes I am being conservative early on. But I’d rather be proactive and be realistic than to be overly optimistic.
Here’s my reasoning.
- Factories need at least 2 weeks for things to get back into order under normal conditions anyways
- The China holiday is extended 3 days, but it could be more
- Most people are in lockdown mode
- If people do go back to work, my estimate is 2-3 weeks later than usual and factories will be understaffed
- Bigger customers will order more than usual to stock up
- Order backlog will likely be 2-3 weeks longer than usual
- More shipments and delays held at customs if your products happen to be in a container with something that raises a red flag from China
Add all of this together and it easily becomes a 2-3 month delay.
There have been some videos and information from people on the ground and it’s a lot worse than what the media portrays. The goal is to adjust and plan for the worst, but hope for the best.
Luckily we ordered inventory at the end of last year and our shipment is due to arrive. However, we probably have 2 months of inventory remaining at our current velocity before we must reorder.
Not the best situation to be in, but it’s something we have to deal with and try to flip the traffic to our other products.
3. Amazon FBA fee increase Feb 18, 2020
Another reminder for the fee increase in a few weeks.
I’ve run the calculations on our products and had to adjust some prices up.
These 3 shipping weight classes go up the most.
- Small standard goes from $2.48 to $2.63.
- Large standard goes from $3.28 to $3.48
- Medium oversize goes from $9.79 to $11.3
4. Amazon prep service in Montana
It doesn’t sound too bad, and I’d say the business is more stable and recession proof.
Sellers are highly dependent on Amazon with little to no control. Just a couple of weeks ago, our best selling ASIN was flagged for investigation because a customer left feedback saying a piece was missing when everything was included.
Long story short, a random level 1 customer support in India was close to shutting down our best seller listing refusing to look at any evidence and reasoning. Photos and explanations don’t work. You probably already experienced this.
Luckily, I managed to reach an account executive from the advertising team (in USA) and he was able to find the agent and send a direct internal message regarding the case. He requested that support investigate properly and provide valid reasoning and proof.
But these prep centers are not reliant on Amazon.
Their customers are the sellers. And because there are so many sellers, their customer base is diversified and can be replaced if one customer decides to no longer use their services.
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