Category: Warehousing
Smooth Stock Management
Managing inventory can be a real pain when a business is just getting off the ground. Sometimes, tracking and sourcing can continue to plague even seasoned sellers. From underestimating sales to forgetting to check inventory to dried out supplies, there are several things that can go wrong, leaving you out of stock and out of luck. Your business may be based on a stellar concept and have all the support it needs to thrive, but if you do not have an effective ordering system in place, you are going to find your profit gears all mucked up before you can get up high. Fortunately, we have all the technology today to help get that system in place and keep it running smoothly without too much fuss.
From start to finish, here are the basic areas that need to be kept under control for effective inventory management that facilitates the smooth flow of lucrative orders and happy customers.
Open Supply Options
It is always good to have a trusted supplier who has been able to provide you with the product you need when you need it. A good relationship with a supplier is gold. It is always better, though, to not get stuck with a single supplier who may at some point fail to come through for you. Cherish your best supplier, but maintain at least one or two others to whom you can run just in case things with your main man go south.
Balance Your Stock
Two main stock issues are overstocking and running out of stock. Balancing stocks very early on is essential to maximizing your potential for profit and business growth. After a business has experienced running short on stock, there is a tendency to go overboard and order too much the next time around. This can result in huge losses if the items are perishable, easily degrade over time, or might quickly become unpopular or outdated. Even if they can be kept long-term, however, you can still lose out because of increased warehousing costs and a lack of capital needed to purchase other stock items or new product to add to your inventory.
If you find yourself out of stock on certain items, it is important to take the time to immediately reevaluate. Do a quick investigation and note the reasons why this happened. The aim here is always to look for ways to improve, and not to beat yourself – or anyone else – up over the issue. It does not have to be a huge drama if you can act on it right away.
If the problem rests in not having enough financial resources to reorder, consider working out a deal with your long-term supplier, or even a new one. Either way, they will probably be willing to cut you some slack. Once the pressing issue is resolved, don’t forget to trace your steps so it doesn’t happen again. Rethink and rework your sales so you can avoid overstocking slow-moving items and be able to better fund your best sellers.
If the issue is the result of an increase in demand, figure out whether you were unaware because of a failure in your tracking system or because it happened suddenly. If the former, rectify the supply issue then sit down with your team to make adjustments to better keep an eye on things. Communication is essential to the smooth flow from supplier to warehouse to sales to shipping.
If your problem stems from inaccurate estimates for peak seasons or a lack of research into buying habits, you will find your backup suppliers very handy. Peak season will often mean that supplies are running low because your competition has stocked up. If you are not able to make late orders for additional stock, you may have to accept the lost opportunity. You can take this time, however, to do a thorough analysis of your individual products, how they have moved in the past – not only from your experience but as you can observe from other sellers – and which ones are likely to be in high demand during different times of the year. This way, you can also plan to distribute your capital accordingly so that you don’t miss out on holiday fever again.
Leverage Technology
Many problems with managing inventory stem from an inadequate system. Tracking is really the bulk of the work when it comes to maintaining proper stock levels. Once you get the supply, warehousing and logistics worked out, you will need to track at a high level to make sure that none of these links break down. Remember that a break anywhere along the line will often mean that business is going to stall.
Several professional software and online systems exist that can help you keep accurate records and automate many of the processes involved in managing stock. Using specially designed software instead of manual counts and spreadsheets can greatly reduce errors in receipts, fulfillment, and stock damage that can throw a big monkey wrench into everything. It is a great help for bookkeeping as well, since you can easily export and send monthly reports to your accountant. Backups are very important, and you can easily schedule them for security or download them manually anytime you need them.
This kind of system is also designed for multiple users so that you can reduce the number of problems caused by people getting out of sync. The system will furthermore keep you and everybody else concerned properly informed. For instance, even if someone still has the guts to steal from you with so many eyes on and such pristine records, you will notice it right away. It can take a while to move everything over to a new system, so prioritize you’re a item – usually 20% of the total – and your problem items, slowly adding a manageable volume at a time so things don’t get out of hand.
If you need help sorting out warehousing, shipping, logistics, labeling, or any other aspect of working the kinks out of your business, contact us today. Add to Cart Consultants can work with you to get your business running like a well-oiled machine so you can jet to the next level.
Be Location Independent with FBA
Running a profitable business and having freedom of movement are usually mutually exclusive. Any experienced business owner knows that there is always a choice to be made between being present and being successful. Thankfully, the connected world that we live in today affords us a way to avoid being tied down to a desk 24/7 or working a 9-5 job while retaining the ability to increase revenues.
The Fulfillment by Amazon (FBA) business model allows anyone to trade in the 9-5 hamster wheel for a business that can be managed from home, the beach, another country, or really anywhere you choose that has a decent internet connection, and flourish.
Take the Load Off
Running a business based on the sale of physical products takes a lot of time and effort. There are several stages involved – sourcing product, generating sales, fulfilling orders, providing customer support, and executing expansion plans – and each of these stages comprises a multitude of small and big tasks that will pull you in six different directions along with losing track of time.
Amazon has created a system that can take care of much of this for you, leaving you free to focus on what you want to sell so you can grow your business – and live virtually permanently on vacation. The Amazon fulfillment network has been continually developed for over two decades and is now recognized as the most advanced in the world. Amazon has the experience to expertly handle the logistics and provide the needed customer service.
With your products stored in Amazon’s fulfillment centers or Add to Cart’s warehouse, there is no need for you to build or maintain a vast warehouse system, which already saves you a lot in terms of time, money, and energy. From these centers, Amazon takes care of carefully packing and shipping your orders to Amazon Prime members. Add to Cart allows businesses to also offer fulfillment by merchant (FBM) to non-prime members for Amazon shoppers and open the door to other e-commerce platforms like eBay, Etsy, Jet, Walmart, etc. If any issues arise on the customer end, Amazon is there again to step up and help resolve any complaints. With the FBM orders Add to Cart handles, they can either help you with the customer service side or assist you with a dedicated virtual assistant to manage all of your customer service needs.
With FBA, you are not limited to the products that you sell on Amazon. You can use Amazon’s superior network to keep all your stock in one place and fulfill all the orders that you get from your website or other sales channels. In addition, you can leverage a user-friendly online interface to manage all your inventory and communicate to Amazon how you want it handled.
If you are not sure that you want to go this way, Add to Cart Consultants also provides an excellent alternative backed by a wealth of experience. If you want to have more control over your warehousing, logistics, labeling, and shipping, we can provide you with a customized solution that understands the concerns that are unique to your business and your customers. We also provide consulting services to help you more effectively manage and build your business.
By cutting out all the middle parts to your business responsibilities, you are left with ample resources to refocus on managing products and sales exclusively, which means that you can start to scale your business and broaden your target market.
FBA Perks
Once you get started with FBA, you are qualified for a number of additional benefits that can further reduce your business costs. For instance, Amazon Prime members can take advantage of Amazon Prime FREE Two-Day Shipping. The longer you use FBA, the greater your chances are of winning additional benefits, such as the Buy Box. This prime location for your Add to Cart button dramatically increases your visibility to customers. As you learn more about Amazon’s policies and show consistently high performance as a seller on criteria like pricing and feedback, you increase your chances of being awarded.
Registering for an Amazon.com seller account earns you the privilege of selling not only locally but also on Amazon.ca (Canada) and Amazon.com.mx (Mexico). By using FBA on these marketplaces as well, you can instantly increase your customer reach by as much as 200%.
Starting Amazon FBA? Make sure you know about your Sales Tax obligation
The 20th of every month, every 3rd month, every 6th month, on annually; this sales tax due date will loom over you and penalize you if you are late! Selling online and sales tax can be very difficult for anyone to understand. Some old school accountants might even wonder and have to search for the answer on this messy and complicated but required business practice you have to perform. Basically, if you sell on Amazon and have Fulfilled by Amazon (FBA), you probably (if not 100%) have to pay sales tax in that State, County, and City.
Since FBA allows you and Amazon to ship products to customers within 2 days, Amazon places your products across the country closer to all your (Amazon’s) customers. If you are new to FBA or been selling for a while, you might have already been required to collect sales tax and be paying that state. Yes, we know your business is not located in a state that has no sales tax for Amazon purchases, but your business and product is national and you have product all over the US via FBA.
What happens when Amazon gets your shipment in? You might ask, I shipped everything to North Carolina and they don’t require a sales tax. Amazon FBA opens your box of goodies and leverages their mass network of warehouses across North America. They break up your units shipped to them and send them all over. They want to be able to ship an item to a California resident from a warehouse in California. This saves Amazon on shipping rates to. Ever seen one of those Amazon trucks? It could be carrying your products from one of their warehouses to the next waiting for a happy customer to place their order. Amazon FBA feature also allows Amazon to fulfill your 3rd party sales channel orders. Know how to do this? We talk about it here.
Love Amazon FBA? Of course you do but quickly you will see the con of FBA called, Sales Tax Nexus. Have to say, all the benefits of having these services outweighs the burden of sales tax.
We’ve mentioned sales tax nexus a few times, so what is it?
Nexus: Sufficient physical presence.
Basically it’s a legal term that describes having physical products an out of state company has and is doing business (selling) in that state which would require to collect and PAY tax in that state.
If you want to read more about nexus and your possible obligations; we suggest checking out the pages of articles on taxjar.com
Without getting too deep into politics, states, counties, and cities survive off taxes to pay for this or that program in their respected geopolitical location. So, charging sales tax is the perfect way to generate income for that government office. Nexus as always been around to describe in state sellers, but now the definition has expanded and includes the online seller or out of state business.
Raise your right hand and say sadly, I have nexus and will agree to collect and pay sales tax. Now the fun part begins. You must go onto the various states that require you to collect and pay sales tax and register for a sales tax ID. Once registered you must submit your sales tax ID to Amazon. On your Amazon Seller Central page, Settings -> Tax Settings -> “View/Edit your Tax Calculations” -> enter in your sales tax ID for that state -> Review Changes -> and just follow the continue and accepting pages.
Now, why are we telling you this? With Add to Cart Consultants, we offer warehousing within the state of Florida and provide international shipping from China to the US that might come to our warehouse before getting sent to Amazon or another 3rd party. When you fill out your sales tax information, you are going to be asked when you had Nexus in that state. Since Amazon won’t charge sales tax until you have a Sales Tax ID, you will be paying for this uncollected tax out of the profit you make on your goods. What if you don’t apply nor tell the state that you sell as an out of state business to one of their residents? They will eventually catch on and ponce on you like a puma. I personally don’t want a puma pouncing on me. They will latch on and keep on you until you pay with interest and penalties, which might be worse than a puma.
With our fulfilled by merchant services, you will also be required to charge sales tax for shipments we provide for you. The good news is, when selling on Amazon, either FBA or FBM, Amazon will charge for you sales tax. You don’t have to make any changes here to offer FBM to potential customers. Being able to offer FBM to our clients expands their ability to sell on other platforms like Amazon.ca, .uk, .com.mk, sears.com, jet.com, ebay.com, etc and etc. Since you are set up with sales tax ID and you have the products here in the US, we are here to help you expand your business into other arenas to showcase your brand and products. We do all the tracking, shipping, and reporting to the platforms so that both the software and customer knows their order has shipped.
Haven’t had enough sales tax information and still have questions? Here are a few links to some tax software sites that can provide more info or answer some questions for you. Also, please feel free to send us any questions you might have at Add to Cart Consultants Contact us.
Next Step:
- Locate where your inventory is and when you established Nexus
- Determine if your product is a taxable product
- When are you required to pay sales tax (you might owe for back months)
- Are you monthly, quarterly, semiannual, or annual?
- Should you file your sales tax or have someone like Taxjar auto file for you or your accountant.
We are here to help point you in the right direction and get you the resources needed to succeed in your business. We are more than just someone people moving boxes, we can help with your shipping logistics, inspections, labeling, and even a little knowledge on tax law. We look forward to hearing from you and helping your business grow.
We are, by no means, state sales tax CPA’s and all info should be checked with your accountant.
Amazon Storage Fees; Get Ready to Pay More in 2017
Did you survive the 4th quarter Monthly Inventory Storage Fee increase? The monthly storage fee goes up almost 400% during the Months of November and December. These are most company’s crucial months for selling and want the most inventory sitting and waiting to be bought. We, Add to Cart Consultants, know what this pain is and what it feels like to pay high storage fees. That is what got us to help the small business that doesn’t want to worry about having these fees.
How Our Services Can Help the FBA Seller:
First, Add to Cart Consultants provides free pick & pack services to clients that warehouse their products in our warehouse when items are being sent to FBA. The client is still responsible for the freight. This is great; a FREE service. We want our clients to have a ZERO storage fees every month with Amazon. So, to help our clients do this is by offering free pick and pack for their FBA shipments. We warehouse the product, you let us know how many items to send, we go in as an admin to your Amazon Seller Central Account, input the data, package up the units, label the boxes, and off it goes to Amazon FBA. We recommend a bi-weekly shipment to Amazon and we can help you with your inventory control with a simple formula.
Second, we have a lower yearly storage fee than Amazon. Our current rate is $30 per pallet size. We define a pallet size as 48”x48”x48” which breaks down the $30 to $0.47/cuft. Amazon was charging $0.54/cuft and is increasing that to $0.64/cuft. Now for October, November, December 2017, our per pallet price will go up to $2.35/cuft. For 2016, Amazon only increased the storage fee for November and December. This year (2017), they are adding in October with the increase in storage fees. What’s the big picture price difference? That’s almost $150.40/pallet per month compared to our $30/month. So, why pay more?
Third, You don’t have to send all your inventory to Amazon every time. Buy more units from your supplier to get a better rate and have them shipped to a non Amazon warehouse to inspect, label, and warehouse until the units are needed at an FBA center. Many suppliers will offer you a better per unit price if you order more. Worrying about your storage fee might have held you back from placing a large order.
Forth, Add to Cart Consultants will ship your product for you to customers that are Fulfilled by Merchant. Ever thought about getting onto another e-commerce platform but didn’t know what to do about sending your customers the order? Well, since we are warehousing the product for you, we have the ability to pick & pack the item and ship it off. We aren’t greedy when it comes to getting your orders out. The client gets charged the same amount of shipping that we do; no bump up in shipping rates for FBM.
How does Amazon calculate the Storage Fee?
First, get the dimensions of your product in inches. You will get three measurements; length, width, and height.
Second, to get a cubic foot into inches; 12”x12”x12”= 1,728”
Third, Multiple your three measurements from step 1 (LxHxW) and divide by step 2 (1,728). This gives you you’re cubic feet. An example a gizmo is 3” by 9” by 17” divided by 1,728 = .27 cu. Ft.
1st through 3rd Qtr: $0.64 x .27cu. ft x 500 units = $86.40/month
4th Qtr: $2.35 x .27 cu ft x 500 units = $317.25
Our Client’s storage fee
All Year: $0.47 x .27 cu. Ft. x 500 units = $63.45
Year Cost Difference
Amazon: ($86.40 x 9 month) + ($63.45 x 3 months) = $967.95
Add to Cart: $63.45 x 12 months = $761.40
Difference: $206.55 in SAVINGS
Now times this for how many different SKU’s you might have and the savings start to add up.