Amazon Returns to the Lone Star State

It was just a few years ago (2011) when Amazon closed its Dallas-based fulfillment center due to a disagreement over state taxes. Now it appears that Texas and Amazon have reconciled. Amazon has just announced that it will be opening three new fulfillment centers in Texas in the upcoming months.
Amazon has recently changed its opinion on state tax collection in other states (including New Jersey, California , and Pennsylvania). With the opportunity to move into these states, Amazon opened more than 20 new fulfillment centers in 2012. The three in Texas will add an additional 3.3 million square feet of warehouse space. The new locations will be:

• Schertz (near San Antonio)
1.2 Million square feet
Will handle large items

• Coppell (near Dallas)
1 Million square feet
Will handle large items

• Haslet (also near Dallas)
1.1 Million square feet
Will handle smaller items like books, small electronics and DVDs

Having more fulfillment centers helped Amazon dropping the amount of shipping costs within its yearly budget. In 2011, the shipping costs for the holiday season covered 5.4% of Amazon’s budget for that quarter. In 2012, the amount for that same time period was only 4.5%.

Not only will the state benefit from the taxes collected, the three locations are projecting to hire more than 1000 workers (and this number will most likely increase dramatically during the holiday seasons).

Around the world, Amazon currently operates 79 fulfillment centers.

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Amazon Pours Itself Into a New Marketplace

Amazon has decided to begin selling wines online again. In 1999, it owned 45% of the internet site Wineshopper.com. That site closed in 2009 when it did not meet projected expectations. This time, it is starting out in much small way. This time it will sell directly to customers in the Napa Valley area of California. The wines may begin shipping in as little as a few weeks. This is perfect timing considering the upcoming holiday/gift-giving season.

Once that market successfully launched, Amazon could look into expanding into other wines from all over the world and customers from any area Amazon ships to. At a recent workshop in Napa that discussed Amazon’s plans, about 100 wineries were represented.

While nothing concrete has been announced by Amazon in regard to the terms of the new marketplace, there have been a few rumors. One set of terms that was mentioned (again NOT stated by Amazon) was $40 to join the wine marketplace and 15% of sales. (That $40 fee is probably on a monthly basis just like the Amazon FBA Pro Seller account.) If this is true, the cost is pretty much in line with most existing categories on Amazon. In this case, it is believed that the wineries will be handling the packaging and shipping side of the sales (using Amazon’s discounted shipping rates), while Amazon provides access to its large customer base and order processing.

Once this marketplace is online, it will be interesting to see if FBA sellers will be allowed to sell in that category as well. Or will Amazon leave it as a restricted marketplace. Either way, this could be a very successful partnership between Amazon and the wineries at the least. It could result in increased revenues, increased sales tax revenues, creation of more jobs, and much more. As with many of Amazon’s ventures, the possibilities appear to be endless.


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Amazon Considers Same-day Delivery

Amazon is working toward revolutionizing ecommerce yet again. To place itself in direct competition with retailers like Walmart and Target, Amazon is focusing on developing a business model that will allow it to deliver products to its buyers the same day the order is placed.


One change Amazon will have to make in order to move to this type of business successfully is revising how it handles state sales tax. Amazon is known as a fighter of internet commerce sales tax. It has excluded states like North Carolina, for example, from its affiliate program and its fulfillment warehouse plans due to the state’s instance on requiring Amazon to pay state sales tax. To make the same day delivery, Amazon will have to “play nice” with more states to create fulfillment centers that will allow its orders to qualify for the same day delivery option.


Amazon has become more willing to pay state taxes recently. The company is opening a new fulfillment center in New Jersey, a state that had pursued Amazon for state taxes in the past. Amazon has agreed to begin paying taxes to that state within the next year and a half. New Jersey will benefit from the additional sales tax along with income and property tax, as well.


How will this affect us as sellers? One by-product may be shipping products to additional fulfillment centers. Instead of having a couple of larger shipments to a few main warehouses, we may be shipping smaller boxes to more warehouse locations. Of course, this may also result in shorter distances for our shipments to reach more local warehouses and possibly the opportunity for our shipments to be checked-in more quickly.


There have been other companies that have attempted to use same day delivery for its online stores but on a very limited scale. Sites like Kosmo and Urbanfetch offered same day delivery of their goods to Manhattan. Kosmo offered books, games, and DVDs while Urbanfetch offers medicines, groceries, and DVDs. Amazon currently offers same day service to many metropolitan areas throughout the country, which include:

Baltimore

Boston

Chicago

Indianapolis

Las Vegas

New York City (and parts of New Jersey)

Philadelphia

Phoenix

Seattle

Washington, D.C.

It will be interesting to see what it will take for Amazon to roll out this service on a larger scale. To find out more about the current same say service known as Local Express Delivery, click here.



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First eBay... Now Apple?

Image courtesy of Pocketdroid.net

There is no doubt than Amazon has changed the way we sell online, the way we read, and much more. Now the company is working with an international manufacturing firm to create its own smartphone. The phone is set to rival today’s most popular smartphones.

Is this just a rumor? Signs point to no. The company is currently working with Foxconn International to create the new product. Amazon is currently registering patents to protect itself from possible infringement claims and has hired a new patents director. With this phone still in development, there is little information about pricing or features.

Just as Amazon’s Kindle Fire is a cheaper alternative to the Apple iPad, the smartphone being developed would be a cheaper alternative to the iPhone and the Android.

It will be interesting to see what impact an Amazon smartphone will make on the market.

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Amazon.com Rolls Out its Locker Service to the Nation’s Capitol

 

Image courtesy of Zatznotfunny.com 

To help its customers receive its packages, Amazon has its Locker Delivery Service. With this service, customers can choose to have his or her order delivered to a locker location instead of their home or office. The service, which was originally offered in Seattle, New York, and London, is now available in Washington, DC, as well. The DC area lockers are being placed in 7-11 convenience store locations throughout the Northern Virginia area.

With this offering, a customer in the serviced areas can choose to have the package sent to a locker location during the checkout process. Once the package has been delivered to a locker location, an email confirmation is sent to the customer. That email will include a pick-up code that is unique to that particular order. When at the locker location, the customer will enter the pick-up code on the locker’s touch screen and the particular locker that holds the package will open. The customer has three days to pick up the package or the order will be returned to Amazon and the customer will receive a full refund.

Below is a video of this service in action. (This video was taken during the pilot phase of the program in October 2011.)




As a seller, you may want to know what items are eligible for locker delivery. Here are the requirements:

       1. The item must be sold or fulfilled by Amazon.com
       2. It must have product dimensions smaller than 11.8 x 11.8 x 11.8 inches
       3. The item must have a shipping weight that is less than 10 lbs, and
       4. The order cannot require special handling.

The shipping speed for the package will vary based on the locker’s capacity and the number of orders scheduled for delivery time frame. For details on the service, click here.

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Amazon (FBA) Grows Yet Again!

Just when the issues with shipping to numerous warehouses seem to settle down, Amazon announces plans for more new fulfillment centers.  

Governor Chris Christie of New Jersey and Amazon have reached a deal that hinged on Amazon paying sales tax on purchases to New Jersey residents.  The collection of sales tax will begin in July 2013 at the end of a 15-month exemption period.  The agreement also resulted in Amazon making plans to open two new fulfillment centers in New Jersey (exact locations have not been determined).   As with other new centers, the projects are expected to created nearly 1,500 new full-time jobs in addition to thousands of full-time temporary, seasonal, and construction jobs.  Gov. Christie believes this new arrangement will bring in between $30 to 40 million dollars in additional sales tax revenue.

Expect to see these new centers online in 2013. 

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Amazon Now Offers Labeling Service for FBA

Image Courtesy of FBAPower

Amazon is expanding its services to help support the FBA seller. The recently announced FBA Label Service can help simplify sending in your products for Amazon fulfillment. Any item that does not qualify for Stickerless, Commingled Inventory and/or has a barcode qualifies for this service. For the fee of 20 cents per item, Amazon will label your products once they are received in the warehouse.

This could be a good option if you do not have a laser-printer readily available, are all out of labels, or have a large shipment but not the time to label each item. This may really work for you if labeling your items for shipment is a part of the process you really do not love.

With a large shipment, it will save a lot of time. With this service, you will not need to label each print out the labels and sticker each item before shipment. While this may cut into your profit margin, the time savings may be worth it.

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Amazon FAQ – What if an Item Has No Sales Rank?

Here is another common question I have received from my clients and see on message boards. Part of the decision making process when determining whether or not an item is a good fit for Amazon is sales rank. But what if an item does not have a rank, or the rank is zero?

No sales rank. We (experienced Amazon sellers) believe this means that the item has sold at least once in the past but a long time period has passed. It could have been months or even years since a sale.

Zero rank. The item has recently been listed and no sales has occurred yet.

So, your next question is, what do I do if there is not a rank, or the rank is zero?

Here is how I approach a zero rank situation. If I have a gut feeling about a product, based on my own experience with a brand name or type of product, I will watch the item and see what happens. Eventually a ranking will appear when some are sold. My feeling is that someone obviously knows enough to have taken the time to list the product and do all the work. If I don’t have enough experience to make the call, I can take advantage of another seller’s initiative and pay attention to the situation.

I also pay attention to the seller who listed the item. I look at these factors:

1. Does the seller have a lot of feedback – meaning are they experienced?


2. Does the seller have a large product offering?


3. Does the seller specialize in a certain category, such as toys or health and beauty?


4. Does the seller have a lot of products with a zero ranking, which would indicate that they experiment regularly?

If you don’t have the experience or knowledge to understand whether a zero ranked product is worth listing, watch other more experienced sellers.

Also, a note about zero ranks. I have experimented with products with a zero rank and sold maybe 25-30 of the product before a ranking showed up on the listing or FBA Scout. So, although the rank may show as zero, and it APPEARS that no sales have occurred, you can’t always make that assumption.

My best advice on zero ranked products is to go with your gut. If your inner voice is telling you that the item will sell, you know the brand name is a good seller, or you yourself use the product and like it, follow that instinct. Buy a couple and see what happens. You may discover a situation where the item sells and the ranking stays a zero for a few months. Competitors will look at the item thinking none have sold yet. And you will be laughing all the way to the bank!

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Selling Toys on Amazon this Holiday Season

Today’s post is contributed by my colleague, Kim Tarrant, who co-wrote our book, Amazon FBA Recipe for Success. Kim has sold on Amazon for several holiday seasons.

If you’re selling on Amazon there’s no doubt you’ve received the “Holiday Selling in Toys and Games” email from Amazon. These guidelines are implemented to maintain buyer confidence in Amazon during the holiday season. If you do not meet the performance criteria you will not be eligible to sell in the toys and games category from November 15, 2011 through the first week in January 2012. These guidelines are only applicable for merchant fulfilled items, they do not apply to items fulfilled by Amazon as long as your account is in good standing.

In order to sell in the toys and games category from November 15, 2011 and the first week in January 2012 you will need to meet these guidelines:

- Seller’s first sale on Amazon.com must be prior to 09/19/2011 (sale does not need to be Toy-specific).

- Seller must have processed and shipped at least 25 orders (do not need to be Toy-specific) during the 60 consecutive days preceding 11/1/2011.

- No greater than 1% short term order defect rate as of 11/1/2011.

- No greater than 2.5% pre-fulfillment cancel rate for the trailing 30-days preceding 11/1/2011.

- No greater than 5% late shipment rate for the trailing 30-days preceding 11/1/2011.

This email can seem intimidating at first but it’s really quite simple to achieve all the requirements. Amazon will periodically send emails to let you know where you stand on meeting the criteria. On or around September 21, Amazon sent an email to all sellers letting them know where they stand on meeting the criteria for the holiday season. Amazon will send several more notices out before the deadline of November 1, 2011. In my experience, these notifications will come around the end of September, the middle of October, the end of October and a few days before November 15, 2011. If you haven’t met the guidelines yet, don’t panic as there is still time. The sales quota guidelines (first sale prior to September 19 and at least 25 orders during the 60 days preceding November 1, 2011) can be met through merchant fulfilled orders OR orders fulfilled by Amazon.

If you’ve sold during the holidays in the past, you know it can be a wild a crazy ride. If you haven’t, relax, don’t get overwhelmed and take it one sale at a time.

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Electronic Gift Cards Not Allowed on eBay

Lots of people do it. I was doing it too - as a way to sell some of my Swagbucks gift cards. Selling electronic gift cards is SO easy and fast. But, it has come to my attention that they are not allowed. (Hey, I can't know everything!)

Here is the policy directly from eBay:

"You can sell most gift cards on eBay, though there are a few restrictions. This includes things like the number of gift cards you can offer at a time, the maximum dollar amount of the gift card, and the type of cards you can list. Gift card codes or electronically delivered gift cards are not allowed."

So there goes another one out the window. But you gotta play by the rules. I just checked - there are 33 active listings for Amazon electronic gift cards. I will go back to selling the Starbucks cards that are actual cards you have to mail. Click here to find out how I get $150 a month in free gift cards. Yes, it is legal!

Happy Selling,

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