Question: How many of the product listings currently on Amazon’s Marketplace are sold by third party merchants?
That’s a staggering statistic. And there are no limits to the amount of third-party sellers Amazon allow to sell via their Marketplace. Meaning that the market is ripe for those merchants to sell private-label, and products which are privately branded by the seller.
There is a serious amount of money to be made when you become an Amazon FBA seller, specializing in private-label products. Number one reason is that you eliminate most of your potential competition, as you aren’t trying to sell exactly the same product line as everyone else on Amazon. Number two reason is that your profits are substantially higher, as you can demand more revenue from private-label and own-branded product lines.
This works especially well for those Amazon merchants who specialize in re-selling liquidation stock.
If you didn’t know about this method of sourcing products to sell on Amazon before, it may be worth your while considering it as a viable way of making even more money on Amazon’s Marketplace and IO Scout will help you to learn more.
Liquidation Stock to Re-Sell
This happens when products are returned to Amazon by customers. And the vast majority of the time, these products are not faulty in any way. Because Amazon only allows free returns of goods if the items are faulty, consumers obviously choose this option quite a lot. If Amazon sellers only sell brand new, unopened items in their inventory, they aren’t able to put them up for sale again.
These products get consolidated in warehouses into liquidation packs. From there, these liquidation pallets are sold on to liquidation distributors, some of which are:
- Direct Liquidation
- Gem Wholesale
- 888 Lots
- Wholesale Clearance UK
In these liquidation pallets, it is often the case that they contain brand new, fully operational, profit-friendly items. Items which you can re-sell in your Amazon selling business. And there is a deal to be done with these liquidation pallets.
As well as checking out some of the online liquidation distributors, you can of course check locally, as you may find warehouses close to you that also have product pallets to sell you. The benefits of this would be that you can see first-hand the quality of the stock, and have the knowledge that you know exactly what you are buying, unlike online. You also have the opportunity to negotiate with the warehouse, which can be easier to do in a real-life scenario, unlike online.
You could potentially save a lot of money on shipping the pallets if you manage to secure a local warehouse deal, by simply renting a van and loading it yourself. Bear in mind that before you get carried away buying hundreds of pallets that you will need a fair amount of storage for your new inventory, and also the space to sift through the pallets and sort the products to catalogue them.
Liquidating your own Amazon inventory is something you can of course consider if you find yourself with a surplus of stock. This happens due to several reasons:
- Initial overstocking of a product line
- A product line that doesn’t sell as quickly as you had hoped, and you need to free some space and capital
- You want to diversify from the product ranges you initially ventured into
Selling your surplus Amazon stock doesn’t require much in the way of effort. Liquidation Distributors have established interfaces for selling and buying stock, and they aren’t short of buyers for liquidised stock.
Starting a liquidation business
- Find a liquidation distributor who you feel you can have a good working relationship with – there are plenty of reviews online about these companies, so definitely check them before placing any orders and committing with your capital
- Once received, sort your inventory and categorise your products accordingly
- Get the goods on Amazon to start selling them!
Talk to me about Freight Forwarding
A freight forwarding business is one which exists to organize the storage and goods as a third-party organization to the Amazon FBA seller. Services can include, but are not limited to:
- Arranging shipment documentation
- Monitoring overall transport
- Storage of goods in warehouses
- Arranging space for freight deliveries
- Making sure goods are collected and delivered in a timely manner
- Arranging customs clearance negotiations
- Freight consolidation
- Freight insurance
- Freight fees
- Insurance claim documentation
It's common for freight forwarders to arrange transportation using their personal bills of lading, and works as an intermediary between the merchant and the end destination.
Tasks of Freight Forwarders
- A freight forwarding company handles the overall, third-party international transportation logistics. There is no actual transporting of freight involved with freight forwarders, they act on behalf of transport services (i.e., sea freight, air freight, train freight, and trucking).
- A freight forwarder bargains with trucking businesses and transport services to work out the optimal price for shipping your goods, taking into consideration the speed of the services, the cost of the services, and how reliable the services are.
- A freight forwarder takes care of all the documentation surrounding shipping products from one country to another, and all the key logistics tasks.
Should you use a Freight Forwarder?
A bit like being associated with Amazon’s FBA service, a freight forwarder will remove the stress out of the transportation logistics of your business.
Your freight forwarder will handle and administer the managing of importing and exporting your products. If you are an Amazon merchant that deals internationally, then a freight forwarder is going to be of benefit to your business.
Freight Forwarders – The Benefits
Efficient on Costs
Freight forwarding companies specialize in what they do, and therefore have built working relationships with logistics services – which then they can pass on to you as cost-effective solutions for your export and import plans. Freight forwarders handle real-time data, to give accurate costs to you at all times; this comes into its own when you are negotiating with sea transport, which can fluctuate wildly. Efficient costs are ensured through the freight forwarders utilizing the identical means of transport, and the same terminal. In some cases, freight forwarders consolidate consignments with other consignments from different merchants, thereby utilizing only a single service instead of multiple.
Handling customs arrangements can be a minefield. Freight forwarders understand the intricacies of customs negotiations, and look after all the associated documentation for you regarding customs. The documentation is comprehensive, and if you are not familiar with it, can lead to excess delays with moving through customs. Your freight forwarder takes the stress out of the taxes, tariffs, documentation and fees to ensure a smoother transition through customs.
Power over logistics
It's usually the case that freight forwarding companies specialize in specific services, namely transport or market. You can therefore decide which aspects of your freight requirements you would like your freight forwarder to handle for you, so you can keep a close eye on proceedings.
Freight Forwarding – the key documents
- Telex release
This release refers to an email sent from the point of origin to the destination port which enables the carrier at destination to discharge your shipment without presenting the initial bill of lading.
- Bill of lading
This bill details the journey of your shipment from origin to its destination. The carrier issues a set of three initial bills of lading
- Commercial Invoice
The commercial invoice is required to ensure clear shipment through Customs in the U.S, and has to include the country or manufacture, the name and address of Importer of Record, as well as the name and address of the supplier (or manufacturer), a comprehensive list of the shipment in English, the number of units per item, and the value of each unit
- Certificate of origin statement
- Used for international trade contracts, this certificate assures that the items have met the standard criteria
- Export license
- An export license refers to the rules regarding certain categories of goods
- Inspection certificate
- This is the documentation you are provided with after your shipment has been inspected, and cleared as suitable for export
- List of export packing
- This list contains a detailed summary of the goods and products which are being exported
- Shipper’s export declaration document
- This document is from you to the port at the time of exportation. It signifies declaration of the goods required to be transported
- Shipper’s Letter of Instruction
This initial document contains the data that will be used for a lot of other forms, so it needs to be completed thoroughly, and completely. Once completed, it is sent to customs for clearance purposes, who will go over it with a fine- tooth comb! You can include product images within this letter of instruction to back up your documentation information.
- Power of Attorney (POA)
This document ensures that your freight forwarder can act for you, and in your best interests, when it comes to dealing with customs and officials.
- Credit Application Form
Required by some freight forwarding companies.
- Customs Bond Form
For merchants importing into the US, a customs bond and insurance policy is essential. Your choices for this vary, and will be dependent on your method of shipping. Your freight forwarder will be able to advise you further regarding this specific piece of documentation
Tips for finding your Freight Forwarder
It’s not such a straightforward task, this. Thousands of freight forwarding businesses exist, and it’s essential you find one in which you feel you can work comfortably with, and trust your valuable shipments with!
- Recommendations: If you have connections that already use freight forwarding services, ask them who they would recommend, and why. Chances are, if they use their services, and are satisfied with their company, you may well be, too.
- Engage with several freight forwarders to receive several quotes for direct comparison.
- Triple check that they do ship internationally, and ask for examples, ensuring the countries you require import and export into are covered by your intended freight forwarder.
- Ask about the service they offer – is it door-to-door, or is it port-to-port?
- Enquire as to any additional costs you may incur during the shipping process.
Obtaining Quotes from Freight Forwarders
A bit of preparation work is required before you start calling round for freight forwarding quotes. This list encompasses the requirements beforehand:
- Touch base with your product supplier, and request the Packing List and Commercial Invoice
- Establish contact details for the Buyer and Seller. These details need to include addresses for both collection and distribution
- Establish the FBA centres that the shipment will be sent to – or centre if you are registered with Amazon’s Inventory Placement scheme (more about that later)
- Establish the overall weight of the shipment, using the Packing List
- Establish the overall dimensions of each box, pallet and storage unit, as well as the cubic volume
- Ensure the product descriptions are listed on the Commercial Invoice
- The date the shipment will be prepared, and value of the whole consignment
- Shipping to Amazon – establish if your freight forwarder is going to prepare your stock for you, and whether your shipments are going solo, or with other shipments
- Do they have tracking systems in place for your cargo? Are their tracking systems using real-time data that you can monitor yourself?
- Ask if they offer product packaging services
- US Company Tax ID documentation
Get in touch with various freight forwarders for their quotes, making sure you verify that they are experienced with Amazon’s processes, and have enough time to work to the deadlines you have specified, including additional time in case of any substantial delays.
Oh, and enquire about cargo insurance, this is an absolute must-have, and something your freight forwarder can organize for you – just ensure your cover is substantial in the event of any losses that may occur. You should consider additional insurance if your product inventory includes items which are of significant value, or time-sensitive. There may be some restrictions on certain items that are invalid for insurance purposes, so this is another thing to check with your freight forwarder.
If you decide to pack your own shipment, rather than asking your freight forwarder to do this stage for you, here’s what you need to know:
Preparation of your products
Arm yourself with plenty of polybags. This is because each item needs to be packed in an individual polybag (and must include the safety label so it can be visible, clearly)
A handy list of things to have in your Amazon shipment preparation area are:
- Printer for labelling products
- Printed labels
- Weighing scale
- Tape measure
- Parcel tape
- Opaque bags
- Bubble wrap
- Labels reading Sold as set and Ready to ship
- Amazon barcodes
- Packing materials
It pays dividends to be super-organized with your packing station, and to have everything you are going to need to hand.
Next steps through Amazon Seller portal:
- Label your products either by using your own label printer, or Amazon can do this for you (for a fee)
- Print Labels for this page
- Pop your printed labels on your products – then Continue
- Go ahead and Approve Shipment if you are satisfied with everything. Now is the time you can allocate a name to this shipment
- Go to Work on Shipment – and choose between UPS or FedEx
- Everything in One Box is what you want to select next
- Go ahead and weigh your package, and take measurements of height, depth and width to add into the portal. Confirm.
- Shipping Charges will work out your shipping costs at this stage
- Agree Terms & Conditions, then Accept Charges
- Print Box Labels as per Amazon’s guidelines.
- Complete Shipment
You do have the option to select Merchant in the preparation drop-down, if you are leaving it up to your supplier to prepare your products for you.
The Stages of Freight Forwarding
- Export Haulage – transference of your consignment from you to the freight forwarder’s warehouse
- Export Customs Clearance – clearance for leaving the source country processed by Customs
- Origin Handling – the examining and inspection of shipment stage
- Import Customs Clearance – customs verify the documentation
- Destination Handling – your consignment is processed
- Import Haulage – now your consignment is moved from the warehouse to the end target
You’ve reached the final hurdle, also known as the last-mile delivery.
To get your inventory to Amazon as quickly as possible, and therefore, get selling as quickly as possible, it’s important to:
- Ensure your products are packaged correctly, and as per Amazon’s guidelines
- Ensure your products are labelled correctly
- Ensure your boxes are labelled correctly
- Ensure your barcodes are readable
Any errors with packaging and labelling can result in your entire shipment sent back to you, costing you time and money.
Your freight forwarder now takes centre stage, and organizes customs clearing, Amazon’s procedures, and any potential delays regarding congestion of trucks. There are many things that can happen during this last-mile delivery stage, so remain vigilant. These occurrences can include, but are not limited to:
- Consignments delayed in customs
- Inaccurate labelling of consignments
- Truck delays when distributing your consignment to Amazon
Your freight forwarder will navigate these issues for you, and make sure everything runs as smoothly as possible during this time. Amazon are not known for being flexible when it comes to shipment and clearing dates!
Amazon Inventory Placement Service
To avoid your consignments being dispatched to any number of Amazon FBA warehouses, you can select the IPS (Inventory Placement Service). This ensures your entire cargo is sent to just the one accepting warehouse. A word of warning however: doing so means you cannot select your FBA centre, and the end result may be that you ship your products from China to Florida, and as you can imagine, these expenses are going to soar then!
Inventory Placement Service Fees
Standard Size (per item)
1lb or less
1 to 2lb
2lb and more
$0.40 + $0.10/lb over the first 2lb
Oversize (per item)
5lb or under
5lb or more
$1.30 + $0.20/lb above the first 2lb
You can use this guide above to work out the impending fees for the Inventory Placement Service, if you are considering using this service.
Who should you use to check your inventory?
Some options for you here, and you should definitely consider an independent verification source for your goods.
Before you commit to importing your precious inventory to Amazon FBA, there are some important details to take note of.
- Are safety regulations adhered to?
- Do the products have any patent restrictions?
- Have you checked the period of time that the offer from your supplier is valid from and to?
- Have you verified how the products have been manufactured?
- Have you ensured your products are verified with the Amazon Brand Registry Search?
- Have you arranged your own shipping line? It’s safer to do this, rather than rely on the supplier, as this is not likely to be your most cost-effective option, and the control is taken entirely out of your hands
- Have you organized freight insurance? Up to 50% of shipments are refused by carriers, leading to costly mistakes!
Ship Full Containers or LCL?
LCL stands for less than container loads. And it’s a factor to consider when organizing your shipment plan for your goods.
LCL can actually be more costly than shipping full containers, so it may be beneficial to consider shipping as a full container, as your price per unit may well be lower. You can work out whether this would work in your favour or not by checking the amount of cartons you plan to ship. If your planned cartons add up to more than 50% of the space in the shipping container (approximately twelve to fifteen cartons), it’s probable that it would be cheaper to send your goods in a full container.
One of the downsides of shipping by LCL is that your goods will be combined with others. Leading to a likelihood of the container being opened multiple times during inspection and customs, which inevitably adds delays, or potentially, damage, to your shipment’s journey.
Storage of your Goods
Amazon fees regarding storage in warehouses can easily spiral out of control, so this is something to keep a close eye on, before you end up with all your profits going to Amazon for storage fees!
As it stands, Amazon charge the following for storing your inventory in their warehouses:
Month of the year
Standard Sized Items
January through to September
October through to December
As well as these fees, you will be charged for long-term storage of your goods for a period that exceeds 180 days.
There is another way, however. You can use a third-party warehouse for the storage of your goods, which is an avenue worth exploring. Let’s check them out in a bit more detail.
Third party Warehouses for storage
You aren’t tied into a contract when you use a third-party warehouse for your storage needs, and can absolutely be used on a “as the need arises” basis. There are two advantages to this plan:
- Fees can be lower than Amazon FBA warehouses, and more stable
- You can use a ship-from address when organizing your shipment plan
Using a third-party warehouse ensures you have better control over your goods, because sometimes products don’t sell as well as you had hoped, and therefore you are charged less for keeping your products in a third-party warehouse.
The FBA process is a no-brainer for those Amazon sellers who are selling copious amounts of products, every single day of the week. You don’t want to have to be dealing with all the packaging, posting, and customer queries every hour of the day.
To have a successful Amazon FBA business, you need to have happy customers. Happy customers who come back and buy more from you, again and again.
Here’s what you need to know:
- Organize how many units of products you plan to send to Amazon’s Fulfillment Centres
- Your products are installed within Amazon’s Fulfillment Centres for storage until they are sold
- Customers place their orders on Amazon’s Marketplace for your products
- FBA receive the orders
- FBA process the orders
- FBA pack the orders
- FBA arrange shipment of the orders
- And if any customer service questions, complaints or queries come up along the way, FBA deal with that, too.
- Oh, and FBA also handles customer returns
Amazon FBA Fees
Every seller can calculate fees using this free FBA Revenue Calculator by IO Scout. Performing your business through Amazon’s FBA process incurs the following fees:
- FBA Fees
These fees are dependent on the items’ size and weight, and takes place instead of you packaging and shipping the items yourself. Think small, and light!
- FBA Storage Fees
Your goods are warehoused within Amazon’s Fulfillment Centres, so these are the costs linked with this storage charge. Monthly or long-term storage are your options here
- Monthly Amazon FBA Fee
The monthly Amazon FBA fee relates to the Professional Sellers Account.
Air Shipping vs Sea Shipping
A quick note about air shipping versus sea shipping for your goods. In terms of time, air shipping is much faster than sea shipping. So, if you are shipping via the sea route, you need to be on top of your inventory requirements, and ensure you are stocked as necessary. Freight via the sea can take four to six weeks, on average.
Bear in mind that the following categories of goods cannot be shipped via air shipping:
- Public Health Risks
- Toxic Products
- Corrosive Products
- Chemical Medicines
- Magnetic Products
- Flammable Products including Perfume
Your decision here is impacted by your own business goals - is the impact on the environment part of your concern (shipping by sea generates a smaller carbon footprint than air), or does the monetary investment in air shipping vital to your business? Your freight forwarder will be able to advise you further on which method of shipping is going to be best for your particular consignments.
For bigger shipments, it is generally more cost-efficient for merchants to ship via sea freight, whereas lesser shipments will pay more to ship by air. Contemplate the load and volume of your consignments, along with storage costs, and make comparisons. And, of course, confirm that you are abiding by Amazon’s FBA shipping guidelines.
Freight Forwarders – Concluded
With some luck, this information has given you some valuable insights into the world of freight forwarders, and the tasks they undertake on your behalf. Obviously, this is not a service for the beginners of Amazon sellers, but something to definitely think carefully about once your Amazon FBA selling business starts to deal in the realms of international trade. Remember that freight forwarding companies deal day in, day out, with the logistics of shipping and freight requirements, and are seasoned experts.
The means of shipping your inventory to Amazon FBA may well be mind-boggling, but as long as you stay present and informed to the entire proceedings, and minimize your risks, it’ll soon become easier.
Partners in the industry that you can trust, including your suppliers, are paramount to success with your Amazon FBA selling business.
And there is definitely something to say in having experts handle some aspects of your Amazon FBA selling business, just like when you enlist the FBA services to look after all your order receiving, processing, shipping, and customer service queries.