5 Biggest Mistakes Sellers Make When Using Fulfillment by Amazon (FBA) with Ephraim Ausch


[00:52] Please introduce yourself.

  • I am VP of Sales at Tactical Logistic Solutions. Tactical has locations in New Jersey and California, and I’m based in New Jersey.
  • Tactical is an end-to-end provider of supply chain logistics. We go from our client’s overseas manufacturing location via air, sea, and land to their warehouse, our warehouse, or to Amazon’s warehouse.

[01:36] Tell us a little bit about your background.

  • I grew up in a Monsey, New York, a small town in Rockland County.
  • I attended high school in Monsey and Israel.
  • I’m a husband to a wonderful wife and father to two beautiful children.

[02:10] What was your first job?

  • My first job was working as a customer service representative for a bulk candy company that had an online store and 4 retail locations in New York.
  • The candy company had previously sold candy on Amazon, but they were unhappy with the results
  • I was given to opportunity to relaunch candy sales on Amazon and after a few struggles, we reached $1,000,000 per year in sales.
  • After my success with selling candy on Amazon, I launched a gift basket company which has done very well.

[04:21] When did you join tactical?

  • Since my gift basket business was seasonal, I outsourced the fulfillment, which gave me a lot of free time.
  • I realized that I had the opportunity to help more people, so I joined Tactical in 2017.
  • I had two goals: 1.) share my Amazon knowledge and experience with Amazon sellers and 2.) open a new service offering, Fulfillment by Amazon within Tactical.

[06:41] Explain what Fulfillment by Amazon is.

  • When you buy something with Prime on Amazon, 99% of the time that’s a product that has been shipped right from an Amazon warehouse instead of from the seller.
  • About two thirds of products on Amazon are FBA.
  • Using FBA allows you to offer quicker shipping to the whole country without destroying profitability.
  • It was a piece of cake to sell on Amazon in the early days, but now it’s getting harder and harder.

[10:51] What is the first mistake you see from sellers who use Fulfillment by Amazon?

  • A lot of sellers don’t realize that every single space in the warehouse is allocated.
  • I always tell FBA sellers to get their suppliers to do the labelling for them instead of doing it themselves in the US.
  • You can even get your freight forwarder to do it, because some sellers are afraid of their supplier becoming a competitor.

[14:53] What is the second mistake you see from sellers who use Fulfillment by Amazon?

  • When you use Amazon-partnered carriers, it’s very appealing because they’re crazy cheap.
  • When you do that, it takes two or three days for Amazon to pick it up from your warehouse.
  • They then schedule a drop off time that is chosen by Amazon.
  • The problem with that is Amazon will only accept deliveries during the daytime.
  • I recommend getting a 3PL or local trucker to deliver your shipment to Amazon.

[21:16] What is the third mistake you see from sellers who use Fulfillment by Amazon?

  • There’s a lot of sellers that import product from China that have it palletized.
  • They think that if they don’t have it palletized, it will get damaged.
  • In my experience, very few cartons get damaged because they make sure to fill the container to capacity.
  • You lose roughly 30% of space if you put your product on pallets.
  • It’s a little bit more expensive to deliver, but it’s still way cheaper than using pallets.

[24:21] What is the fourth mistake you see from sellers who use Fulfillment by Amazon?

  • In the last two years, Amazon has really decided they’re not in the storage business. They’re in the selling business.
  • If you don’t sell, they make you get out by charging additional storage costs after certain periods of time.
  • Keep your stock in your own warehouse until it needs to go to Amazon. Replenishing monthly is a good approach.

[28:00] What is the fourth mistake you see from sellers who use Fulfillment by Amazon?

  • Amazon has a performance index that goes from 0 to 1000. Under 350 is in the red.
  • If you go below 350, you get limitations of what you can send to Amazon.
  • The factors that affect your score are excess inventory, sell through, stranded inventory, and in-stock inventory.
  • These affected me because I’m a seasonal seller, and my score would be red when Christmas came around. I went to Amazon to discuss alternatives.

[34:03] Any closing remarks on these topics?

  • If you’re worried about damage from not palletizing in China, you can get insurance for very cheap that will cover you.
  • If you do everything correctly, you’ll be on the fast track to sales.

Learn More:

Ephraim Ausch LinkedIn profile: https://www.linkedin.com/in/ephraim-ausch-a6a88ab2/
Tactical Logistic Solutions website: https://tacticallogistic.com/

By | 2019-07-28T00:24:40-05:00 July 27th, 2019|Podcast|Comments Off on 5 Biggest Mistakes Sellers Make When Using Fulfillment by Amazon (FBA) with Ephraim Ausch

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