Amazon started as online book store and has grown to be the worlds largest online retailer.
What to do if Amazon FBA turned you away?
If Amazon FBA turned you away and you’re one of the merchants who can’t inject any more stock into the Amazon selling machine before the 5th of April at the earliest, now is the time to take action.
Amazon FBA turning you away today might not seem like the end of the world – after all, you probably already have stock in Amazon warehouses which will be sold and shipped and keep your income stream alive, but once that stock is sold it will likely be a month until it’s replaced. Amazon FBA won’t be accepting new stock in almost all categories until the 5th of April at the earliest. Doubtless when they reopen for general stock there will be a huge rush to ship to Amazon and it may be several days until your courier gets a delivery slot or once stock is within the Amazon warehouse until it’s processed.
Until the 5th of April, products in six categories can still be sent into Amazon, so this might involve segmenting your stock so that limited products can be replenished. The categories Amazon will still accept incoming shipments are:
- Baby Products
- Health & Household
- Beauty & Personal Care (including personal care appliances)
- Industrial & Scientific
- Pet Supplies
In the mean time, we would advise that you take action now and there are many options available to you:
Self-fulfil with couriers or postal services
For many, FBA is a small part of their business and if you are already running a warehouse to fulfil orders it will simply mean that you need to increase your capacity. The downside of Fulfilment by Merchant (FBM) on Amazon compared to FBA is that your products will no longer show the Prime badge. In the short term this may mean offers from other merchants will be highlighted to consumers where they still have products in FBA.
If you don’t already have a warehouse and carrier agreements because you source stock and send it directly into FBA then this causes a much more acute problem in which case a third party fulfilment option may be more suitable. There are a number of companies in the Tamebay Guide that can assist you setting up shipping either using your own couriers or using their courier relationships.
Seller Fulfilled Prime
If you are already qualified for Seller Fulfilled Prime, then the obvious solution is to increase your sales on Amazon through this method. The costs may vary from FBA with a requirement to use particular carriers but even with varying costs it’s a method to keep your products visible with the Prime badge and keeping sales flowing.
Mothball your stock
It might sound easier to simply store your stock and wait until you can forward it on to FBA. However, unless you have spare storage, there will be costs incurred. Even if you have free warehousing, retailers only make money through churn – if you normally sell your stock and replenish monthly then your churn rate is 12 times per year. Mothball your stock for a month and this year you’ll only turn your stock 11 times – effectively taking an 8% cut in profits. For this reason it may be more attractive to seek a way to continue selling even if it incurs a lower profit margin than normally.
Seek a fulfilment house
There are many fulfilment houses around the UK and some indeed sell on Amazon on their own accounts with access to Seller Fulfilled Prime.
The type of fulfilment house you choose will depend on your needs, some will already use the same multichannel solutions as you which makes migration a snip, but for many there may be an on-ramp period as stock profiles are accepted, first shipments accepted and stock made available for sale. The on-ramp period may in some cases mean simply waiting for Amazon to open their warehouse doors again so speak directly to the fulfilment companies you’re considering using before you make a decision.
The situation will be exacerbated for overseas sellers as there will be more stringent standards from fulfilment houses to ensure they comply with HM Revenue and Customs VAT arrangements. Some however will offer bonded warehouses where stock can be held until it’s needed with VAT only becoming chargeable when stock is moved out of the bonded area of the warehouse.
You’ll find fulfilment companies ready and willing to assist you in the Tamebay Guide.
Sell on other platforms
Some Amazon FBA sellers use Amazon exclusively. If that’s you consider selling on other marketplaces immediately. You’ll be exposing your products to new groups of buyers although the method of listing and selling will be markedly different on for instance eBay compared with Amazon.
If you lose your Prime eligibility due to FBM rather than FBA, listing on more platforms and attracting new sales will go some way towards mitigating slower sales velocity on Amazon.
Consider third party selling assistance
It’s time to get serious and if your sales are faltering it’s better to take action sooner rather than later. It may make sense to start using a third party to sell some or all of your stock for you and this will be especially attractive if you don’t have a warehouse, or only a small warehouse without room to store stock about to arrive which was destined to go straight into FBA.
The best known eBay Trading Assistant in the UK is StuffUSell and they can accept bulk stock directly into their warehouse and they will then take on the task of listing and selling the stock on eBay. This is likely to realise you much higher returns than liquidation.
A last resort should be liquidating your stock and shutting down your business although sadly for some this could be the end result. There are plenty of companies who buy liquidation stock or who will auction it on your behalf but you’ll only receive pennies on the pound in most instances. If Amazon FBA turned you away then there are options to handle your stock but the time to act is now in order to both preserve your income flow and protect your business from collapse.
Another depends on the cash pile that you are sitting on or get access to. If you have sufficient, cash flow won’t be too great an issue. And if you have more cash than cash flow requires then you may be able to benefit from ‘fire sales’ from other less fortunate sellers!