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All About Inventory and Logistics - Amazon Seller Tips with Chelsea Cohen - Part 2
January 10, 2022
All About Inventory and Logistics - Amazon Seller Tips with Chelsea Cohen - Part 2
Things we discussed in this session:

A. Part 1

B. Part 2

Things we mention in this session of Seller Round Table:

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Transcription in this episode:
[00:00:01] spk_0: Welcome to the seller roundtable e commerce coaching and business strategies [00:00:05] spk_1: with and er not and amy Wiis, [00:00:08] spk_0: what are, what are your favorite methods to send stock to amazon, you know, is it going direct, do you recommend people go direct from china? Do you recommend they go from a three pl um kind of what do you, what are the different processes um you know that that can be used to get stock to amazon and which one is your favorite and which one is the most reliable? [00:00:28] spk_1: Yeah, so direct from china. Always, always, always a good way to go. It gets a little bit difficult to do that nowadays. So that was always the preferred method because you avoid a lot of the fees that you know, the middle man takes up in your three pl so if you can send some straight from china that is recommended. So if you have enough to send a container load and you're able to get that in, you know in terms of your restock limits, that's great but a lot of people are not able to do that now so they're going to have to truck in inventory and it's important to understand the trucking and what's happening with trucking in the amazon ecosystem right now um had a conversation with sebastian of scott, see who will be speaking at our event that Amy and I we haven't mentioned but Amy and I are having an event and he's going to be speaking at it. So I was picking his brain, I really wanted to understand what's going on with trucking these days And it's actually pretty interesting. There's two types of contracts that amazon has with trucking companies. They have agreements where a trucking company can just drop their trailer and then leave and you know pick up sometimes pick up an empty trailer on their way out. Or there are some contracts where basically the shipping company says I'm not dropping my trailer because you are not going to give it back to me and we're running out of trailers. And that's where you get into the trailer shortages. So they have refused. T. Force is one of them T force used to be ups freight and was bought out by a Canadian company earlier this year. But their basic agreement is we are only coming when there's an unavailable doc open and we just unload our stuff and we leave with our trailer. Um And so that that helps to even if they're scheduled appointment is later then say some of these other companies there's some companies that work with amazon freight which amazon freight is basically just a bunch of trailers that they give to other trucking companies and they say here's your trailer, drop it off leave with an empty one. But when they don't unload it that becomes the problem. So you have to understand the companies that you're dealing with the companies that you're loading all of your L. T. L. N. How how do they what arrangement do they have with amazon. And is your net check in time going to be better or worse depending on what's happening in the freight in the freighting industry and amazon warehouse is currently. [00:03:14] spk_0: Yeah that's a really interesting insight because you know a lot of people think that you know all the lT Ls all the shipping, all that stuff is handled the same way. What's interesting is, you know, I've I've done in the past, you know these quick little shipments you know using like the postal service and what people don't realize is like the postal service is actually one of the most reliable when it comes to like small shipments to amazon like I can even do priority. You know get there two days and they check it in like almost immediately because there's somebody there like handing it to him, right? It's not like this giant truck or I mean not necessarily, I mean USPS still backs the truck up but what I'm saying is it's the same kind of set up where they're like handing stuff off. It's not just getting dropped in the yard and then forgotten like in the heaps of containers that are in the back corner that you know the The guy who just worked a 10 hour shift is like I'll get to that tomorrow. You know so [00:04:03] spk_1: that's a parcel delivery, it can be more, it's usually more expensive but if you've really got to get something in and you want to make sure it gets in the check in times can be a lot faster. [00:04:14] spk_0: Yeah, absolutely. So one of the other things that a lot of people have a lot of trouble with is packaging, and that's part of this whole equation right there either not double bagging stuff that needs to be there, not labeling it correctly, they're sending in restricted products, um can you talk to kind of how to avoid that and and maybe some common best practices to not hit some of those pitfalls? [00:04:38] spk_1: Yeah, so, um first of all, you know, amazon has all of that data on their website, so making sure that you go through all of that information and, you know, if you have to create a checklist for yourself, create a checklist. That's something that we've been diving into um in a way, uh in terms of packaging, like obviously if you're packaging and incorrectly, you're either gonna be caught charged fees, amazon will charge you prep fees. Uh and if you're on the other side of things, there's certain requirements for pallet size, there's certain requirements for carton signs. And the very interesting thing is that there are certain requirements right now for minimums from your freight forward. That's something that we've been really diving into, is that, You know what you used to to how used to package your inventory, they might be charging you more because your pack your load is too light. So for example, you know, uh freight forwarder charges, you know, a minimum of 12 kg per carton. Well if you've got seven kg or you've got nine kg, you're still going to be charged as if you've got 12 kg. So reconfiguring, looking at reaching out to your freight forward and saying, what are your minimums and then reaching out your supply, your supplier and saying, what are my packaging dimensions? And seeing if those two are in agreement or if you're being charged thousands of dollars more simply for having light cartons. That's something that we've recently uncovered. And I'm I'm a complete nerd, but I've created a carton calculator or I'm working on creating a carton calculator because I think that's uh an extremely valuable part of a conversation. We know about optimizing containers, but nobody is talking about optimizing your cartons now that we've got the U. S. Customs has certain requirements. Amazon has certain requirements and your freight forwarder has certain requirements. [00:06:48] spk_0: Yeah. Absolutely. I think you brought up a lot of great points there. One of the other things that uh one of them you mentioned that you don't want amazon is to do your prep right? I mean I've been doing this for a long time and I have stories of like, you know when I've sent something and they say something's wrong and they re label it and the entire thing, they re label is wrong and then I have to do it all. Like finally I just get so frustrated. like send it back to me, I'll fix it and send it back to you because you know, it's not your product, right? If somebody else is prepping your product, they're not gonna know what the product is, they're not gonna know, you know, you know, your your product better than anyone else, right? So if you like, outsource that to somebody else, you're taking a chance, especially amazon who, you know, it might be that that person is, you know, I assume their turnover there's probably pretty high, I've heard it is, but I don't know that firsthand um you know, so it might be somebody who's just like, you know, slapping stickers on as fast as they can, they might have pushed the wrong button on the screen and now you've got, you know, hundreds of items with the wrong sticker. So, um, I definitely think that's something that people want to put more time into, especially on the first shipment, is just kind of making sure all those boxes are checked. Like you said, maybe a checklist would be a good thing to, to come up with on your own. The other really interesting thing on this conversation is weight and size. You kind of mentioned that, right? And so many sellers don't realize there's so much profit margin to be had in getting really creative in terms of your packaging, your product, you know how it's packaged all of those kinds of things because if you get creative, I mean, like for example, one of Amy's products, you know, she went from something that was this huge thing in this huge box to something that could collapse down now. It's, you know, a lot of places are charging volume rather than weight for shipments, things like that. So you can really squeeze so much more profit um, out of your product if you're getting creative and being really informed on the types of packaging that you're doing any other uh, kind of tips that you can use in terms of squeezing as much profit out of these shipments as you can without, you know, sacrificing quality of the product or packaging. [00:08:51] spk_1: Um, I mean, I think optimization all along the line, you know, from the carton to the palate to the container is extremely important. I think that you're really missing out on a lot of profit. Like you said, one of the other places to consider looking at getting more profit is your units per carton, especially if you're stopping by a three pl doesn't really matter as much if you're going from china directly to amazon. Um, but a three pl will charge you for the, for putting a sticker on a, on a container or on a carton, right? Every sticker is a dollar 75 something like that. Like literally just putting a label on a carton and then, you know, carton pull fees and you've got, you know, labor fees, so you've got all these fees that stack up. So if you have a product where you know 11 shipment is you know 1000 boxes and you can get it down to 800 boxes just by changing how many units you're putting in there, you can save a lot of money. And so that's something to consider when you're doing that though, you have to make sure that the size of the box isn't too big for either U. S. Customs, your freight forwarder or amazon. And then you also have to consider that if you have way too many units amazon restricts how many units you can have a box, you have to make sure that if you put enough so many units that it's not gonna be crushed. So you might want to increase the thickness of the box, maybe you know a box that's either you know five layer or seven layer because that becomes an issue. So if you are saving a bunch of money but then half of it arrives broken, you know what is the point? So those are all things to factor in. And the final thing to factor. And this is where I just, I geek out and I'm like we need a calculator with the final thing to factor in is if you have 100 you know, if you have 100 units but you're only allowed to send in 50 because of restock limits, then that's going to be a problem as well. So you don't want to have so many units in there that it doesn't allow for the flexibility of sending inventory into amazon. [00:11:05] spk_0: Yeah, absolutely. One of the things so you know creating a shipment amazon, you know I learned this the hard way. Um but I'm sure that you can give some great insight in terms of and it's something fairly simple but a lot of people don't know the difference between like you know when you're going through all the steps case pack and then the single items right? Like and a lot of times if you can do case packed it's it's a lot better in terms of only having to go to one fulfillment center and things like that. Can you kind of explain the difference between the two and the pros and cons between that too. You know those two different setups? [00:11:34] spk_1: So the individual in the case pack. [00:11:36] spk_0: Yeah. [00:11:37] spk_1: So most people who are shipping private label I believe are going to do a case pack. But the difference is, you know, you've got, you've got basically it's all the same product all all put together in so you don't have multiple different products kind of mixed in the same carton. Um So if you're able to do that, it helps to save on confusion. It also helps to save on prep time prep time, especially if you're packing your own stuff. It can be very labor intensive when you have to uh you basically have three different locations that you have to ship to and then you have to figure out how many things go in this box, these boxes to go to one place, how many things going those boxes to go to another place. And if you get that confused or mixed up then you know you're going to have problems with amazon having to correct your mistake and delay, you know the availability of the inventory when it actually checks in. [00:12:34] spk_0: Yeah absolutely. So what are some recommendations for new sellers who are just getting started selling any kind of tips that you can get people you know to be successful out of the door. [00:12:46] spk_1: Um Yeah I would say you know having something to track your inventory. I you know we are our software is a little bit um I wouldn't say advanced but when you there are tools out there so when you're just getting started you either can have a spreadsheet which we have a. D. I. Y. Spreadsheet that we make available to people who aren't at the point of being ready to pay for a software. But just understanding um understanding your numbers and understanding how to track your inventory. If you have a third party warehouse, you actually have to be checked tracking both your reorders and your transfers. So it can quickly get complicated. So having a system in place from the get go will help to ensure that you don't run out of stock. [00:13:36] spk_0: Yeah, I love that. So one of the other things I'm interested in is if you you maybe you know this or not, I'm not sure if there's anything new. I haven't done a shipment in a while, but you know in the past you were able to create shipments to FDA like when you're selling a lot And be able to kind of lock in that inventory, right? So if you didn't get to it right away that you could then ship, it you know like uh I think it was within 30 days um to kind of lock in that inventory space. Any tricks like that, anything that's kind of any workarounds right now because I think they decrease at two a week. Right? When you create a shipment now, I think you can only have up to a week, but that's still something to think about. If you are going to stock out to try to shoot that gap, right? [00:14:15] spk_1: Yeah, so they so they will sometimes cancel your orders and sometimes they won't, so it's kind of a crapshoot. Um but one of the things that was was working well for people um it was kind of a hack that we were using amazon's very interested in multi channel fulfillment. So they want to know they want two things. I think it's it's basically they want data, they want to know how much their, their um their competitors are actually moving. So Shopify, if you connect your Shopify account to full filter, amazon amazon gets to things that you get to know how much you're actually moving through Shopify. But they also get the customer addresses as well, which I think is pretty devious. So they've had this program where they're pushing and promoting to get people to move their inventory back to multi channel fulfillment. A lot of people when the restock limits occurred switched and said, you know, I'm just going to have someone else fulfill this. So they're trying to get people to start fulfilling their off amazon sales through amazon newly. And one of the things that they were able to, um, to, to do, to try to reward people was last last quarter. They rewarded them by giving them additional space. And so you have some people who are getting approval. We have people overnight. Their limits were doubling or they were increasing by 50%. And there was an email, um, it's multi channel fulfillment sales at amazon dot com also seemed to work for amazon dot c o dot UK. I'm still encouraging people to send them an email and basically what you're looking for is you're looking, they're looking for 30 day projections. What do you plan to sell on amazon and On your other channels within the next 30 days, It was a program that they implemented for Q3, but as, as recently as about a week or two ago, people were seeing success with it still. So it's, it's interesting but multi channel fulfillment actually contributes to your restock limits. [00:16:28] spk_0: Yeah, that's interesting because I think that part of the reason, like you said the inventory limits pushed a lot of people to three pls and also merchant fulfilled, right? So I've been doing that pretty much from the beginning. I've always had backup stock on merchant fulfilled because I've run into so many issues with amazon fulfillment, especially during the holidays. And I feel like a lot of people the last few years got burned by that, right? They were like selling like crazy and all of a sudden like, wait, I can't send any more in what like, and a lot of them didn't even have, you know, merchant fulfilled backup or anything like [00:16:57] spk_1: that. So [00:16:59] spk_0: I think this might be their, you know, their uh effort to try to win trust back. But in my opinion, it's still really smart to diversify that inventory, right? Like have it at, at amazon, have it at a third party and even have some in your garage if you need to, you know, just have some backup. Um of, and even if you do the 80 20 and it's just your best selling product, right? Or your two best selling problem, whatever, it is just a kind of hedge against that because you know, amazon talks a big game on all this stuff, but you know, if all of a sudden the shipment start going up like crazy because there's some event that happens in the world or you know, Covid or whatever, you know, whatever the event is now that we've learned that you know that that kind of stuff can happen, [00:17:39] spk_1: I [00:17:39] spk_0: always like to be prepared, but you know, I'm kind of a prepper anyway, [00:17:42] spk_1: so you know, one of the, one of the bright thoughts I had a couple of days ago that I actually haven't, haven't shared around very much on the topic of restock limits and F. B. M. Is the, we know that the sell through, you know, F. B. M actually contributes to sell through, it contributes to restock limits. We know that the top of the of the formula is sell through in the bottom of the formula is your FBI utilization if you're selling F. B. M. Those sales are going to contribute to improving that top line and going to contribute to improving the bottom line because the inventory is actually not being held there. So you could essentially, let's say source of products that um is very lightweight, very easy to sell, let's say for example, you know, tattoos, you know, women's tattoos or whatever you stick it in a little sleeve and you send it off and it's extremely cheap to fulfill. Um you could be do at a very, very discounted price, you could improve yourself through at the same time, you're not holding any of that stock at F. B. A. And so you can actually use F. B. M. To improve that sell through rate significantly. And I don't think anyone really started thinking about or talking about how F. B. M. Actually offsets both of those portions of the formula. [00:19:06] spk_0: Yeah. And it also what people don't realize too is when you do like for example F. B. M. Or seller fulfilled prime, something like that, just another category of another class of of offer, right? When you go and you're listening and you say I want to create a new offer, you say you know uh one's FDA ones, F. B. M. Ones, you know, third party logistics partner. Um What what people don't realize is that the that amazon also takes into account things like your location right? Like if you're F. B. M. Location, like say you're in California right? You're in near san Francisco. If somebody pulls up your inventory from san Francisco and you're, you know if you drop it and say the postal service or if you do, you do whatever it is. They know they know how long that shipment's gonna take to get from your F. B. M. Location to that customer. And sometimes they will actually push the customer to your F. B. M. Listing in order for it to get to the customer quicker because amazon is all about delighting the customer right? So if it's coming from their fulfillment center, maybe in southern California, maybe it's going to take two days. But if it comes straight from you it's only gonna take a day. So those are all also, so to me it's like the more offers you have, the also the more opportunities you have to sell because amazon will see that in the algorithm and if your your competitors gonna take two days from, from the amazon fulfillment center, they still may push your offer. You know, we can't guarantee that because they don't share the algorithm, but that's my guess and we've kind of seen that happen before. [00:20:26] spk_1: Right? Yeah. [00:20:28] spk_0: All right, last but not least we we love getting to this point is, you know, we always talk amazon here, but but as you know, it's funny because in the amazon world I always see like people are into amazon crypto and real estate if you like. Those kinds of three things always go together. So it doesn't necessarily have to be e commerce or any of that kind of stuff. But what what are you what kind of things are you interested right now? Anything you're studying, anything you're doing in personal development, We always love to hear about those kinds of things. [00:20:56] spk_1: Me personally. Um funny enough, I'm actually, we got something called a farm stand. So I've been kind of addicted to this farm standards, this hydroponic, a guy from a company called lettuce grow, pay about like $600 and you get this big stand and we're growing things. So we haven't eaten lettuce that we've grown there. We've got little green beans growing, we're trying to grow zucchini, having a little bit of trouble with that little mini egg, eggplants, and tomatoes and peppers and things like that. Um and they grow extremely fast, like you can have a head of lettuce, you know, from a seedling to a head of lettuce at your eating, you know, on your dinner table in like three weeks. So that's been really, really impressive and exciting because I used to kill everything. I've always wanted to be a gardener and I've always been horrible at it. Um and that's been, you know, extremely exciting, especially knowing that I can grow my own food supply chain. You know, it's crazy. People are always talking about how, you know, we're all going to starve and you know what, that paper's still, so that's been um probably the most exciting thing that I've been doing recently. [00:22:05] spk_0: Oh, fellow prepper. I love it. Yeah, we are uh we're doing the same things like I said, you know, like, like we were talking about before this all started, you know, the world's just seems like it's going in a strange place and nowadays it's hard to know who's telling the truth, You know, that I think that's the biggest issue right now is it's so hard to gauge. There's no really, you know, unless you're getting it for like I feel like a lot of people are going back to community driven information right? So now it's all like we ask our friends and family like what was your experience with X, Y or Z. Because there's an agenda no matter where it's coming from. Right? So I love to get it from the horse's mouth. So yeah, that's uh I always say this, I could do, I I've thought about it doing a podcast just on this kind of stuff because I think it's super super interesting. But anyway, back to you where can people find you tell us about what you're up to uh you know what you're offering and how people can get in touch with you. [00:22:56] spk_1: Sure. So you can look up so stocks dot com and learn about our software you can also go to, so stocks dot com forward slash connect my social media. Is there my email? Um also I do webinars, so I do webinars on the subject of inventory management, on the subject of the basics best practices and restock limits and then logistics as well. And we also have a demo. So if you go to so stock dot com forward slash connect you can see a demo of the software. Um The other thing that we're doing is Amy and I are putting on a texas meet up event it's a seller, meet up, meet up isn't even appropriate for this what we're doing, there's just so many amazing sellers that are coming out to come speak at this event And so I think that if you have the ability to jump on a plane and come to austin texas, austin texas, it's going to be on the 15th of october we have a mixture that's being hosted by the guys that sellers funding that's going to be on that thursday. So the 14th thursday night we have a V. I. P dinner hosted by the guys that elevate brands and just a ton of amazing people, it's going to be an intimate event. So the caliber of people that you'll be able to connect with on an actual real deep level, not just one of those, we've got people who speak at events that have 3, 4000 people, you know when we can gather right, like prosper, they speak these huge events and they're going to be speaking at our intimate event. So you'll have the ability to connect with them. People like Tim Jordan and norm Farrar, um, the guys from solos, Oh and john Tilly, whose co founder or who is the founder of song guru. Just all of these guys um canopy management, brian johnson, all of these guys are going to be there, Speaking about the fourth quarter, basically, How do you, how do you optimize your fourth quarter, How do you make sure that, you know, you really get as much as you can as much as possible out of the next four or the next three months. It's three months, right? Yes. The next three months of selling on amazon [00:25:12] spk_0: of it and you get to go and say, y'all and eat lots of good barbecue food, right? [00:25:16] spk_1: That is correct. It's a requirement. And to find out, go to seller seller meet up dot com. That's where you can find more information about the event and about the tickets and the speakers and everything like that. [00:25:31] spk_0: Awesome. Thanks so much for being on today. Chelsea is super interesting and I think that this is a definitely a subject that doesn't get enough play because you know, a lot of people just think that it's like an afterthought right? I just send my stuff in, right? And then I sell it, but you know, it's just like Amy and I are talking about listings all the time. You know, this is a foundational thing and if you don't get this right, it can bite you as you grow. Um so it's good to get it dialed in now, So great information. Thank you so much. It was awesome to talk to you. As usual folks. If you would please rate review subscribe, let your friends know if they're getting into amazon about the podcast. You can join us live in the zoom meeting to ask questions to interact with us to get stuff that we don't record or uh published on the livestream. So a round table dot com forward slash Live every Tuesday one PM pacific time. Thank you guys so much for being here. We'll see you next time on the seller. Roundtable, [00:26:22] spk_1: awesome. Thanks guys, [00:26:24] spk_0: Thanks for tuning [00:26:25] spk_1: in, join us every [00:26:26] spk_0: Tuesday at one PM pacific standard time for Live Q and A. And bonus content after the recording at cellar round table dot com, sponsored by the ultimate software tool for amazon sales and growth seller S c o dot com [00:26:40] spk_1: and amazing at home [00:26:41] spk_0: dot com.