Selling Globally on Amazon with FBA

This is a good question without a lot of public answers on the internet so I figured I could help.

Why The 999 Trick Won’t Work

Some sellers restrict the number of items a person can buy.  There are a number of reasons to do this, but the primary reason is probably to prevent having your inventory cleared out through a misconfigured coupon code.

The second reason is to keep your competitors from knowing when you’re running out of stock.  There are a number of things you can do to take advantage of your competitors stockouts, we’ll save that for a later post, but for right now I’ll explain how to fairly accurately track the inventory of an item. that has this blocked using it’s BSR.

What is BSR, in this context?

While no one knows exactly how Amazon’s ranking method works, it’s safe to say that one of the strongest determining factors is sales per day.

So if an item with a BSR (Best Seller Rank) of 10 sells 20 per day, and an item with a BSR of 20 sells 10 per day, it’s safe to assume that an item with a BSR of 15 sells somewhere between 10 and 20 per day.

However it’s a little more specific than that, because Amazon calculates this number _per_ category.  That means an item with a Best Seller Rank of 20 in PETS might sell far more than an item with a BSR of 20 in “Industrial & Science” because it’s like 99% more fun to buy a dog a pet than it is to buy a pocket protector. That’s science.

Use Neighbors

Because of the “category specific” ranking you can use the category neighbors of an item to find the rank.

Let’s use an example

This Zilla Premium Reflector Dome has a BSR of 818 in Pets.  Lets pretend the 999 trick isn’t working.

What you would do is try to find a BSR of AROUND 818 in the Pet Department and track that item instead.   You could either click on one of the sub category links or browse through the main category.

By browsing through the main category, using the extension we see that there’s an item with a BSR of 811 right above it.

And using the sales estimate for this item we can see that it appears to sell 1 – 2 more items per day on average.

By clicking *track* on this item, Amachete will automatically perform the 999 trick on this *neighboring* item every day, and we can use *that* items BSR/Sales per day to very accurately predict what the daily sales are for the heat lamp.

I hope that helps, Chris.

Sincerely,

Phil

An Amachete user (Thanks Henrik!) recently referred me to this review, where someone suggested that a Keyword Index Checker got their account suspended.

The two most important things for me, with Amachete, are the privacy of user data, and preventing our users from engaging in TOS violating behavior.

Since an Index Checker is a fairly trivial piece of technology, it’s on my “list of things to do”, so I thought it’d be worth taking a moment to see whether or not this review has any merit, and answer the question:

“Can a keyword index checker get you suspended?”

Wait what’s a keyword index checker?

Well, to answer that question, you have to know what being “indexed” is.

Let’s say, for some inexplicable reason, you decide to sell ‘pet birthday hats’.

Before you go into it, you decide to check out the competition, so you type ‘pet birthday hats’ into Amazon, and a number of listings pop up.

http://imgur.com/a/YwOqL
All of those listings are *indexed* for Amazon’s database, for the search term ‘pet birthday hats.‘  Meaning that because of their backend/front end keywords/search index/whatever Amazon thinks these accounts matter.

So why do I care about Keyword Indexing?

Periodically, for reasons that aren’t entirely clear, to me anyway,  Amazon doesn’t always index your item for Keywords.  Maybe when you uploaded your flat file there was an error. Maybe you changed root nodes and something didn’t save right.  Whatever. Periodically your sales will just slip away and it’ll be because you aren’t indexed for  ‘pet birthday hats’.

More simply: Users type in the phrase, your listing doesn’t show up.  You aren’t indexed.

How do I know if an ASIN is indexed for a keyword?

Pretty easy. If you do a search for that keyword, and the ASIN, it’ll show up, and be ‘above the fold’.  Here’s a link you can try:

https://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22pet+birthday+hats%22+B00CJQ3B6S

http://imgur.com/a/oIO5n

You can see that the image/item is what i’d call “hard indexed” because it’s above the bar “pet birthday hats see all 22 results”

Compare that to this search

https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=%22cat+feeder%22+B00CJQ3B6S

http://imgur.com/a/6iBEE

You can see that this item is nowhere to be found for “cat feeder.”  It is completely UNINDEXED.

Now, for a third example “puppy birthday hat”

https://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22puppy+birthday+hat%22+B00CJQ3B6S&rh=i%3Aaps%2Ck%3A%22puppy+birthday+hat%22+B00CJQ3B6S

http://imgur.com/a/bxryP

I would say this is “soft indexed” meaning that Amazon knows that this item *probably” is right for this search term, but it’s *not* because this phrase is in the product listing. (because this person hasn’t put the word puppy in the product description, rookie move.)

That suspicion is confirmed here, by checking to see if it’s indexed for “birthday hat”

https://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22birthday+hat%22+B00CJQ3B6S&rh=i%3Aaps%2Ck%3A%22birthday+hat%22+B00CJQ3B6S

Okay great, so I can search for all my search terms, with my ASIN to make sure that Amazon has them indexed?

Yes.

Awesome! Wait that’s going to take a while, someone should make a program that…OOHHHHHHH.

Exactly. A keyword index checker is a pretty boring piece of technology in the grand scheme of things.  All you do is ask the user for a list of search terms (Cut and pasted from their back end), their ASIN, and then visit the above URLs with all of the search terms, and compare the results and make sure that they are there.   Using the trial of KW Checker indicates just that it does exactly that.

http://imgur.com/a/TzTuR

Interesting thing here, is that it appears that “puppy” is actually indexed for this listing, which makes me reconsider my initial thought about “puppy birthday hat”.

http://imgur.com/a/kQCcz

Interesting.  Removing the quotes gives some credence to the idea that Amazon, through some mechanism or another indexes search terms (“puppy birthday hat”) differently than they do back end keywords (“puppy, birthday, hat”) as this item shows up as being indexed for the keyword one, but not the search term one.  However it does show up for the search term “pet birthday hat” which is right there in the title.

This will take some diving into, but my current thought now is that if you have a search term that is converting, make sure it’s _hard indexed_ and not soft indexed.

You’re rambling. What does this have to do with KW Checker?

It just means there’s no way that KW Checker caused that guy’s account to get suspended.  Why? Nothing links KW Checker to the selling account. *

Without this link between seller and checker, it’s harmless, because if it *were* harmful without the link  you could weaponize KW Checker.

You could easily use it to shut down your competitions accounts simply by taking your keywords and aiming it at their asins and running it again and again and again.  There’s no world where if you just enter a bunch of asins and keywords and check them constantly then Amazon will just start shutting down all those listings.

*Unless you are a tinfoil-hat person who thinks that Amazon is linking your browser activity to your seller account, etc etc,  which is really the path to madness.  If this is really a concern, (which it shouldn’t be), then just use a proxy or a different person’s computer but honestly don’t bother.

In closing…

The good news about KW checker is that it’s almost certainly safe for checking keyword indexing. The bad news is that it’s probably not very good for checking search terms.

Jeff Bezos published his annual letter, where he just sorta Bezoses everywhere much to the delight of shareholders and Amazon fans, which don’t have a nickname, until now…. Amafans.

Thank me later.

So, what does his yearly letter mean for you as an FBA seller?

Not much.

Sure, there are tangentially interesting things for you, of course, the idea that Amazon uses Machine Learning to help with product rank, fraud detection, language translations, that’s all great.  But it’s not actionable.  You aren’t going to click on “MACHINE LEARN MY FBA BUSINESS” any time soon.

But there’s a lot to learn from his yearly letter, because he doubles down on his concept of … DAY 1.

I’m not going to describe the entirety DAY 1, because that’s why he wrote the letter. So he could restate it. Not so that I could restate his restatement for you.

That’s nonsense.

But since you might be either lazy or busy I will break it down into a super pithy phrase:

“Act fast, Act confident, Accept the new.”

Act fast – Don’t spend a ton of time making your decisions. Just do them. It’s like the lean methodology, FAIL FAST. It’s better to make all your mistakes in the span of six months than it is over the span of six years.  You’ll get to the same place both routes, it’s just that the first route leaves you with five and a half more years to figure it out.

Act confident – I very, very, very, intentionally did not write “Be Confident”, because that’s a very different thing. Being confident suggests that you have thoroughly vetted the decision you are making, and feel like you have a good handle on things. This is good if you are (say) performing an organ transplant.

This is bad if you are (say) picking a product to launch on Amazon.co.jp.   The difference between the outcome of a 70% confidence decision and a 100% confidence decision is generally trivial.  Especially if you’re making those decisions quickly.  The difference in the time it takes to go from 70 to 100% confidence is significant.

Accept the new – I used the word Accept here just so I could keep the Act- theme going, but really it should be something like Embrace. Or Chase.

When I first started selling on Amazon, 18 months ago. Everyone said “Focus on America, there’s so much demand” but I just didn’t have the time or energy to deal with it.  Amazon.de seemed different. New even.

Two months later I had a product generating four figures profit, with 1 picture and no reviews, with copy that I made using google translate.   Selling outside of America was new.  And since I’ve accepted it, early, I’ve been able to help other people like you find low-competition profitable opportunities abroad.

In the next post I’ll go into more detail about more examples of how you can apply “Day 1” to your Amazon FBA business, but for now just remember to Act Fast, Act Confident, and Accept the new.

You can probably guess from the name:

VALUE ADDED TAX(VAT) is a tax on the value added to an item.

But just in case that’s not entirely clear, lets revisit our Salt and Pepper shakers from yesterday.  Actually, no lets try a new product, I’m sure we can find one that’s been done to death in one of the “Amazon Review Groups.”

Pour over coffee maker? Yikes.  This is a bit saturated, but okay.  Here’s how VALUE ADDED TAX works in the world of product sales.

Unlike SALES (Consumption) TAX which is applied at the last stage of a product (Right before it gets thrown in the trash), VALUE ADDED TAX (or VAT) gets added (surprise) each time value is added to the product.

Let’s assume the VAT for this country is 10%, just because that’s easier mathetmatically.

So… assuming this is made out of metal, a… it’s rare that you get to use a word for the first time in your life, but I’m pretty confident this is that time for me.  Here it comes… a metallurgist (maybe?) takes a bunch of metal and using something that is probably not super safe or easy to use bangs this into shape and sells the raw pieces to the manufacturer.

METALLURGIST: I’m not putting this together, but you can CLEARLY see that if you did, it’d be a pour over coffee maker.
MANUFACTURER: Yeah I can put that together, no big deal, how much?
METALLURGIST: $1
GOVERNMENT: AHA! YOU MADE SOMETHING OF VALUE.
METALLURGIST: Crap. Yes. I did.
GOVERNMENT: 10% GIMME.
METALLURGIST: Wait why again? Oh right. Death squads. Here. Take it.
GOVERNMENT: KTHXBAI. SEE YOU IN A MINUTE MANUFACTURER.

TOTAL SPENT: $1
TOTAL VAT COLLECTED: $0.10

Now the manufacturer has his employees assemble the pieces for this pour over coffee maker, slap a box on it, and a label, and then sells it to YOU, the RETAILER.

RETAILER: I’d like to buy ONE pour over coffee thinggy, just to see if I can sell it on Amazon.
MANUFACTURER: Sounds good that’ll be $1.50.
RETAILER: Damn that’s cheap. I can probably sell this for like $15.
MANUFACTURER: Okay, fine $1.75.
RETAILER: I desperately need an inner monologue.
MANUFACTURER:  I meant $2.00.
RETAILER: Sigh. I’ll take it.
GOVERNMENT: WE MEET AGAIN. YOU ADDED MORE VALUE!
RETAILER: That makes 2 of us.
MANUFACTURER: Shh. Death squads. That’s a real thing. Show some respect.
GOVERNMENT: 10% please.
MANUFACTURER: Of $2? Fine. This costs $2.20, I’ll give you your twenty cents if that’s what it costs to NOT have death squads.

GOVERNMENT: No, not TWENTY cents. Just TEN.
MANUFACTURER/RETAILER: Wait what?
GOVERNMENT: Paying TWENTY cents would mean the TOTAL VAT for this would be 30 cents, 10 cents from before, and 20 cents now. I don’t need you to pay for the value THE METALLURGIST added. Just the value that YOU added. Which was $1. So, 10% of $1 please.

TOTAL SPENT:$2
TOTAL VAT COLLECTED: $0.20

It’s probably worth restating.  In a VAT system the government doesn’t tax for the price of the item. The government only taxes for the *additional* value of the item, at each step.  The value added. So if you make something for $10, and sell it for $20, you’ve added $10 of value, and will be taxed on those $10.

If the person who bought it from you for $20, then sells it for $25, they’ve only added $5 of value to it, so they get taxed on that $5.

If that person then sells it for $200, after purchasing it for $25, they’ve added $175 of value, and will be taxed on *that*.
With me?

So, to re-state. Value Added Tax is applied to a product on the value that is added to it at each step of the chain.

WHEW.

We’re not done yet, but we’re close.  There are TWO more aspects to Value Added Taxes, and once you’ve learned that, you’ll have learned as much as you realistically need to know.

Those two things are IMPORT VAT, and THRESHOLDS.   But we’ll save those for later posts.

VAT.

There. It’s worth staring at those three letters for a little bit, because you’ve probably seen them before, and they made you a little sad inside.  That’s perfectly okay. That’s a perfectly healthy reaction. VAT kinda sucks, especially when you don’t understand it.

By the time you’ve finished reading this series of posts  you’ll understand exactly what it is, how it affects your business, and the easiest way to set up your company so that you rarely have to deal with it again.

VAT is the European equivalent of SALES TAX.  It stands for VALUE ADDED TAX.

While it is the EQUIVALENT of sales tax, it is not the same, and perhaps the best way to understand VAT is to understand how it is different from SALES tax, and maybe the best way to do that is to have a good understanding of Sales Tax.

Think of sales tax as a consumer tax.  Or more specifically, a tax for when a product is consumed.  It is at the end of the line.  You have purchased a laptop, or silicone glove, or salt and pepper shaker, and that’s it.  It’s done. Chances are the next place this thing is going is the trash.  Sales tax is the tax that is applied to a product right before it gets thrown in the trash.

But before it was SOLD/CONSUMED, that thing had a pretty exciting life. Let’s check it out… we’ll use SALT AND PEPPER SHAKERS.

Striking.

Okay. So in order for these to show up on the shelf at Amazon, a number of things had to happen, starting from manufacturing, and at each step the government checks to see if this product has been consumed.

MANUFACTURER: Dear glass-maker.  I’d like to buy some glass.
GLASS MAKER: Sure thing, it’s $1.
GOVERNMENT: HEY GUYS ARE YOU THROWING THAT AWAY WHEN YOU’RE DONE?
GLASSMAKER/MANUFACTURER: No!
GOVERNMENT: jeesh sorry relax guys just asking

TOTAL SPENT: $1
TOTAL TAXED : $0

The manufacturer then realized it needed some wood because you cant just sell a glass tube and call it a salt shaker.

MANUFACTURER: Dear wood-grower, I’d like to buy some wood.
WOODGROWER: Sure thing, $10.
MANUFACTURER: Seems high.
WOODGROWER: Tough. You think this shit grows on trees?
MANUFACTURER: …
WOODGROWER: Okay fine. $1.
MANUFACTURER: Deal.
GOVERNMENT: HEY GUYS ARE YOU THROWING THAT AWAY WHEN YOU’RE DONE?
MANUFACTURER/WOODMAKER: NO!
GOVERNMENT: chill out guys just asking.

TOTAL SPENT: $2
TOTAL TAXED: $0

Having attached the wood and glass in the shape that would be most conducive to pouring pepper (or salt) on food, the manufacturer now decides to sell this glorious salt shaker to someone who will handle all of the sticky stuff like getting a person who has visited Amazon.de to think this is better than the other 900 salt shakers on the market, and to handle all of the questions like “Dear person who sold me this. Will this work with, say, rock salt, or glue?”  This, poor, sainted person, is you, the retailer.

RETAILER: I’d like to sell some of your salt shakers to the public at large.
MANUFACTURER:They’re $3 each. Are you sure you want to do this to yourself?  You know that’s going to be kind of unpleasant right? Maybe you could learn a trade?
RETAILER: Nah,  at $3 I can sell that for literally 10x more than you’re selling it to me for.
MANUFACTURER: Did I say $3 each? I meant $5.
RETAILER: Okay sweet. What’s your MOQ?
MANUFACTURER: One, I guess.
RETAILER: Okay I’ll take 1.
MANUFACTURER: $5
RETAILER: Okay I thought it was $3 each.
MANUFACTURER: It was.
RETAILER: Okay here’s my credit card.
MANUFACTURER: I promise not to keep an eye on your business and then cut you out of it later when you’ve created demand.
GOVERNMENT: WOOHOO BIG MONEY IS IT GOING IN THE TRASH YE–
RETAILER/MANUFACTURER: NO.
GOVERNMENT: you guys are mean.

TOTAL SPENT: $7.
TOTAL TAXED: $0

You, the retailer then ship it to Amazon, who then presents it to the customer, who then then BUYS it from you, through Amazon.

CUSTOMER: Oooh. This salt and pepper shaker set is striking.
RETAILER: Yep I know.
CUSTOMER: Nice pictures.
RETAILER: Thanks, I spent extra on those.
CUSTOMER: Your copy really sells the benefits, and not just the features, fancy.
RETAILER: Yep, that’s no accident.
CUSTOMER: I’ll give you $50 for them.
RETAILER: [gasp] I mean, sure, sounds fair.
GOVERNMENT: ALRIGHT THIS HAS TO BE GOING IN THE TRASH NEXT.
CUSTOMER: Of course it is, I’m not passing it down for generations it’s just a salt and pepper shaker.
GOVERNMENT: GIVE ME 10%
CUSTOMER: Why?!
GOVERNMENT: Because you live in a land without death squads rolling around shooting people up.
CUSTOMER: Fair.

TOTAL SPENT: $57  ($7 manufacturing, $50 retail)
TOTAL SPENT ON TAXES: $5 (10% of retail price)

And that’s how SALES tax works.