FBA Coachingwith Chris GreenCEO of FBAPower

Part 3:Retailer Secrets & How

To Lower Your Costs

Already Gone Through PAC• How do I sell on Amazon?

• What is FBA?

• How do I use FBA?

• What tools & programs do I use?

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Lowering Your Costs&

Retailer Secrets

Where Did I Learn All This Stuff?I worked for Bosch Power Tools for five years

Vendor for Home Depot and Lowe’s

Started as a Sales Rep, then Territory Manager, then District Manager

Won Salesman Of The Year in 2006

Saw product cycles, seasonal cycles, clearance items over and over again

Lowering Your CostsResellers don’t pay sales tax

Discounts, Coupons

Military, Senior, Student (if legit)

Rewards, Points, Credit Cards, Store Club

Special Buys, BOGO

CHOP SHOP

Rebates

Price Matches

Watch for Price Drops

Online tricks

How To Buy Tax FreeComptroller’s Office (Google it)

Get a tax ID

Ask each store how they handle tax exempt purchases

Require tax ID certificate

Setup an internal account

Fill out state provided paperwork

Learn your state’s rules and each store’s rules

When To Pay TaxSome stores don’t do this very often

Can take a long time

If the tax savings are not worth the time, pay and move on

You can request credit for sales tax later, but I see it as better to not pay than to pay and have to file to get it back

Implications of Not Paying Sales Tax

Items have to be for resale

You have to collect sales tax on items sold within your state and remit to the government

Items sold across state lines are tax exempt

KEEP TRACK: even if you don’t collect sales tax on Amazon sales within your state, you should still pay the sales tax on those purchases to the state

Sound complex? It’s really pretty easy

Find a CPA to help

DiscountsVolume Discounts

Buy in bulk, get better rate

Direct Purchase DiscountsSpecial Order – never on sales floor

Active Items – limited number on shelf, but store can order as many as they want to

Simply ask the manager

CouponsCoupons can save you big bucks!

#1 Easy Coupon – Lowe’s 10% offIn USPS Mover’s Packet – just pick up at Post Office and look inside

10% off entire purchase at Lowe’s

Accepted at Home Depot as well

Costco, Sam’s Club, BJ’s

Special DaysMilitary Discount – Lowe’s & Home Depot

Senior Citizen’s days – thrift stores

Student Discounts – computers

RewardsStores with Rewards Cards or Club Cards

Send you coupons in the mail or email

Points to redeem for cash or merchandise

Credit Cards points, miles, rebates

Home Depot Mastercard (no longer, booooo)

Special Buys/BOGORetailers will have ‘Special Buys’ that are in-and-

out special deals

Usually advertised – can be ‘loss leaders’

Once sold out, no more available

DeWalt radio with free 18 volt battery ($80)

BOGO – Buy One, Get One (free)

Grinder two-pack – split them up to sell online

CHOP SHOPThis is where we made a small fortune on eBay

Parts are worth more than the whole thing

Example: Power tool combo kits

We buy (with lowest cost using same strategies here) and then break it into all pieces

Sell to people who just want one piece at a higher price

You can do this with any product that has multiple, saleable pieces inside

RebatesMail in rebates

In-store instant rebates

Manufacturer rebates

Can be stacked, double-dipped, and exploited

Read the details: limit per household?

Email or call manufacturer to ask for exception

Ryobi deals example

Price MatchesMany stores will price match their competitors

Many stores will also BEAT their competitors on a price match

So one store wants to take a loss on an item, you then get another store to take the same loss plus an additional discount (+coupon?)

Read your local flyers and learn each stores’ policies – make a notebook for each store

Price DropsMost stores have a price drop guarantee

If a price drops within 30 days (or whatever the store’s policy is) they will refund you the difference

Keep your receipts!

Near the end of the price drop window, call to verify prices. If lower, go get your refund!

Stack and ExploitTry to stack rebates with in store discounts and

coupons

Tell the store personnel what you want to do – they want to sell you a ton of stuff and will try to make it happen

Keep it related to the numbers – at a certain price, you’ll buy $XXXX. If not, then it’s not profitable for you. Don’t get ‘sold’

Online TricksGoogle ‘coupon code’ + website

Google ‘discount’ + website

Just ask! Ask for a discount (email or chat)

Homedepot.com – chat popupJust ask for 10% off code and you’ll get it

Can save you hundreds to thousands of dollars

Retailer SecretsHow, when, and why items are clearanced

How to get all the store’s inventory

How to hunt with radar at other stores

(Work smart while your competition works hard)

Retailer SecretsHow to get your hands on all of the inventory

Keep it simple – find great products (not just good) and get tons of them

Easy to list one item 100 times than 100 different items

Check the ComputerSo simple, but even I forget to do this sometimes

Almost all stores have an in-store inventory system

Find an item you like? Ask someone if they have more (they WANT to sell you things)

Voila! They have more in the back or overhead

May be an ‘Active Item’ – order more!

Next Step: Check Other StoresMost of the large retailers link their store inventories

Stores that are sold out can send customers to other stores for items

Use this to find what you want!

Home Depot Example – 60 stores with one hour drive. I went to the 15 stores with the most inventory. Don’t waste time going in ‘just to check’. Go with certainty!

Call Ahead - YESTie up inventory

Pay over the phone

Verify on-hand quantities

Verify in-store price

Call Ahead - NODeals that are TOO GOOD

Store employees may buy for themselves (even if not allowed)

Store employees may alert their friends

Store management may decide to not sell if price mistake

(Worry about this more with technology items)

Buy & Hold StrategySometimes best to ‘buy & hold’

Retail clearance deals can be picked up by many people

You may encounter some irrational competition

Let them cut price and margin, you focus on maintaining margins and profits

Example: Ryobi Auto HammerBought 200 from HomeDepot.com for $20 each

Tax free, free shipping, $20 cost

Many other sellers did same thing (although I’d be surprised if they all got tax refunded)

So many sellers competing for the next sale that price was down at $27.95.

I held my 200 for about 4 months and sold them all for $84.95

Don’t ‘Chase the Next Sale’

Amazon marketplace is dynamic

Items sell, sellers sell out

Prices rise and fall

Don’t get in pricing wars

Don’t try to see who can make the LEAST amount of money

Ultimate Backup PlanSince you purchased items at retail, you have a

receipt and a return policy

Learn the returns rules for each store

Evaluate inventory for acceptable profitability prior to expiration of return policy

..but don’t make a habit of this. Stay in good graces with store personnel. Buy good stuff and you’ll never return anything. Just use as a safety net.

FBACoaching Parts 4 & 5

• Part 4: There is always gold, lazy scanners, advanced FBA

• Part 5: Open questions. Send them in ahead of time. No time limit; I’ll answer them all!

Questions?