The FBA Problem-Solving Strategy

I thought about what I had accomplished and how far I had come. I was earning what most consider good money and saw the possibility of accomplishing my goals. My determination to adapt to what was important played such a critical role in being able to continue moving forward. Being successful with FBA and eBay was part of the plan. A part of my mind must have improved, and the power I had was dependent on my own outlook.

What motivates people to act or do things?

Researching critical thinking strategies eventually became the base of my motivation. It offered me thoughts for self-inspiration, frequently in the form of self-help or business motivation. I kept looking into this field and discovered a lot of themes I could identify with. There are several specialist categories exist that I could succeed in and comprehend.

When I am able to completely concentrate, I am more productive. When my thinking is cloudy, I struggle to solve challenges. I came to realize that my mentality is the difference between meeting and exceeding my goals.

At the time, I knew how determined I was becoming. There were goals and tasks to accomplish, but with my luck, there were problems. For the time being, I knew I was this really determined person who had goals and tasks to accomplish.

But, with my luck, I had a helpless feeling of having no control over how inventory will be received and shipped. A snow storm was about to damage my own ability to focus on FBA building. So, I thought to myself, “What can I do, and how can I make sure this will never happen again?”

When I learned to be a problem-solver

Three months later, I moved to Florida. This is when I realized another important aspect of what makes me successful in accomplishing my goals. I am a problem-solver. It’s whenever I make goals and map out the steps to accomplish those goals. I am responsible for solving problems that get in the way of my focus and frame of mind. They have such an impact on my ability to problem solve and, as a result, achieve my objectives.

After moving, I met a lot of people who were down on their luck or in financial trouble. I found myself striving to assist them in developing their own retail arbitrage business. Teaching them how to lay a solid foundation and set goals for their own success. Finally, I showed them how to break objectives down into tasks. Then use them to problem-solve if they “failed” to reach the targets they set for themselves.

Anyone I tried to instruct couldn’t follow through on a plan. It bothered me because it was a straightforward strategy, and it left me feeling like I let them down. This made me reconsider why I was successful. While everyone else struggled to get going, I found ease in getting a hang of FBA. Experiencing the good and bad seemed to be lessons learned, and I wanted to share this valuable information.

It wasn’t until later that I found that there is a gap.

What I learned about ROI and FBA fees

My idea behind moving to Florida (aside from the snow) was to find an area that had several outlets. Drugstore chains in my area can sometimes have decent items at a discount. I can tell if the store discount is worth selling through FBA for 100% ROI.

An important note on ROI:

I can explain ROI to you in a few different ways. Basically, if I purchased an item for $1 and it sold for $3, where Amazon’s fees in this example might be $1, I would end up with $2. My original investment of $1 and another $1 in profit means I made a 100% return on my investments, or 100% ROI.

Understanding ROI is critical for e-commerce businesses, as it tells you how hard your money is working for you. When I started FBA, I always wanted to make 100% ROI. If I sent one of my dollars out into the world, I wanted that dollar to find at least another friend to bring back to me..

In the thrift store days, I could make up to $5 profit for every $1 invested (500% ROI). Jumping into dumpsters means you don’t have to pay anything for your merchandise. I’ve found myself sacrificing ROI more as I wanted to solve other problems or grow a business in general.

Fun Fact: I sold my free Craigslist hollowed-out Pop-Up camper on eBay for about $400 just prior to moving. I also had a ton of inventory, most of which I gave to my mom. One of the first whom I taught the basics of eBay and Amazon’s FBA. Several hundred new clothing pieces from yard sales wouldn’t sell. I ended up selling them to the site ThredUP with their prepaid FedEx bags. They sent me a few hundred dollars off of what they could sell. The rest of the clothes were donated.

Florida brought me a new focus…

My inventory was selling faster than I could get it to Amazon. I had slowly developed a sense of what is called “sales rank”. Sales rank is an indication of how well something consistently sells on Amazon’s FBA platform. I found it easy to sell on Amazon with the cell phone app “Seller Central”. The app can be used to look up UPC codes on potential purchases, and I no longer had to tediously create an individual listing on eBay.

Easy as 1 2 3

When I started the selling on Amazon, the process, it was a bit more of a tedious concept. Now you can literally scan an item’s barcode anywhere with your smart phone! Step 1 is done. Scanning the barcode will pull up the exact item and ask you for the quantity you want to sell. That’s step 2. Finally, in step 3 you are prompted to decide whether you want to match the lowest competitor’s price or state your own. That’s it! You are one tap away from getting your item listed for sale.

My point is that listing an item on Amazon was a vast improvement over my experience on eBay. I could now focus on finding products instead of going through the tedious listing process.

When I moved to Florida, I did not know where I was going to live. I had a few ideas, but I was not set on an exact location. What little I owned, I put into my Ford Explorer and drove down to rent a 5×5 storage unit for my personal belongings. My SUV was basically my home until I decided where I wanted to settle in.

Inventory was not hard to find, and luckily, I had a small power inverter to run my computer and basic inkjet printer. I would then prep, process, and ship the products to Amazon straight from the back of my Ford Explorer. Stopping at UPS to send out the packages, I would hit a new part of town, check it out, and repeat the process. This type of work was later referred to as “Traveltage,” and I even considered purchasing a hollowed-out motorhome with only the necessities for living in it while also processing inventory into FBA shipments.

Learning to lay low with lots of stock

After a week or 2 of poking around, I found a week-to-week inn of sorts where I had my own little place with a shared kitchen and a bit of room to process inventory. I ended up piling inventory into my room to the point where I started to attract the attention of management. Wondering what I was doing and trying to make sure I was not doing something nefarious, they asked to inspect my room and did not appreciate the scale of my operation as inventory was stacked to the ceiling to the point they thought it was a hazard. I ended up staying there for a few weeks, trying to be a little more cautious about the amount of inventory I had on hand at any given time.

I began to consider one of the biggest issues I discovered with the drugstore chains. These stores were where I was primarily getting my inventory. Tons of other people all over the US were buying the same products from drug stores in their area. Following close to the exact process I was. So, something that I could sell 1-2 per month could take a few months to sell. This was only because more sellers decided to start sending in the same products.

Looking back, it was probably more of a misunderstanding I had of how a product’s sales rank functions. I might have just needed to find better-ranked products to overcome this obstacle.

Searching for a regional retailer

There had to be a place where I could buy inventory that was not necessarily in every single city in the country. I found a few retail outlets where I made some money, which led me to look for more. Finally, I found a much larger outlet retailer—one that was very regional and only sold its outlet merchandise in a small number of its own stores.

Their pricing was concise, and they would try to sell their goods through their main distribution points before sending them to outlet stores at a reduced price. Nothing was wrong with the products, they just didn’t sell quickly enough to make room for newer inventory.

I could buy “New” merchandise at up to 85% off and sometimes sell it for over the original retail price. The retailer had some competition from other people who were obviously reselling items but I typically focused on maximizing my profits by trying to only sell the most profitable items others were not necessarily looking at.

As I continued to buy and expand the products I was reselling, other sellers definitely took notice and started playing little games. From trying to figure out what I was buying to being downright dirty and removing items from my shopping cart. Even picking fights in an attempt to get me kicked out of the store. For this reason, I started wearing headphones and ignoring everyone else in the store. I just wanted to avoid the possibility of unnecessary difficulty or stress while I was trying to make decisions.

Diving deeper into FBA sales rank

At this point, I moved into a studio apartment that was about 700 square feet and basically consisted of a kitchen, a bathroom, and a tiny corner where my bed was. This is where the entirety of my place was set up for processing inventory into shipments.

I started sending hundreds of items at a time to Amazon FBA. Most of the items were household or beauty products because that’s what the regional outlet sold. I didn’t know much about the household or beauty product brands at the time, but they sold well, and I really dove into learning more about the Amazon platform, such as how sales rank is dependent on category and how many products are specific to that product category.

For example, the wine category might only have 8,000 listings, whereas the cellphone accessories category might have 100,000,000 listings. The lower the rank in each category, the better Amazon ranks the product because of how often it sells. So a listing rank of 5,000 in wine might mean only 1 bottle sells per quarter, whereas 5,000 in cell phone accessories could mean one sale every minute of the day.

While living in my studio apartment, I focused on my cash flow and was going back and forth between barely making more than I needed and relying on money I wanted to use for buying inventory for living expenses. I began focusing my efforts on reducing personal expenses, believing that the less I spent on myself, the sooner I would be able to stop worrying about money. At one point, I briefly took a job as a kitchen expediter to try and offset what I needed to spend to allow myself to get over the hump of not having enough working capital.

I also realized I could buy inventory on a credit card and just pay it back at the end of the month to try and accomplish my goals faster. This was potentially a dangerous decision to make. If my product analysis was incorrect or if the inventory did not sell, I could find myself unable to cover the costs. I started using my credit modestly while sticking to the strict rule that I would only purchase inventory and never pay interest. For example, the PayPal card I was offered back when I started selling on eBay would kick me back 2% of the profit on all of my purchases.