How to Nail Your First Shipment to Amazon FBA

Shipments to Amazon

If you can’t beat them, join them. Amazon FBA is a natural next step to help you grow your business. But sending out your first shipment can be ripe with potential problems.

On today’s episode, we’ve got a novice and a pro weighing in on the intricacies behind FBA, including the differences between a UPC, FNSKU, and an ASIN, along with expert tips for optimizing your FBA experience and nailing it right from the get go.

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(With your host Andrew Youderian of eCommerceFuel.com and Bill D’Alessandro of RebelCEO.com)

Andrew: Welcome to the eCommerceFuel podcast, the show dedicated to helping high six and seven-figure entrepreneurs build amazing online companies and incredible lives. I’m your host and fellow eCommerce entrepreneur, Andrew Youderian.

Hey, hey, guys, Andrew here and welcome to the eCommerceFuel podcast. Thanks so much for tuning in today. And today on the show, talking about how to not screw up your first inbound shipment to FBA, something I don’t have any experience with. I’ve got a shipment of goods coming in that I’m going to be sending to FBA for the first time and figured who better else to grow with questions about this, for my own benefit and hopefully yours as well, other than Mr. Bill Dalessandro, the man behind Rebelceo.com and Elements Brands. Bill, how’s it going?

Bill: It’s going well, man. It’s great to be back on the show, as always.

Andrew: Yeah. I feel like it’s been…I don’t know if it was just the holidays or the New Year, but I feel like it’s been a while.

Bill: Yeah, the ECF Live and holiday hangover. It kind of all ran together.

Big Goals for 2016

Andrew: Quickly before we jump into this one, any big plans for 2016? Or did you like sit down and have a big kind of pow wow with yourself to really plan out the year? Are you big on the New Year’s resolutions things? I know we’re talking about this much after the New Year, but…

Bill: So I’m not big on the New Year’s resolution thing, but I am big on planning for the year and setting goals. So I sat down with all my employees. We’re trying something new this year, and we’re doing bonus programs. So we sat down with all the employees, and I set six goals for each of them for the year. I set up a bonus pool of 12% of each of their salaries, and each goal was worth 2% of their salary as a bonus. So everybody has sort of six goals for the year for 2016 hanging above their desk, and if they hit all six goals they get a 12% bonus at the end of the year.

So as a way, something new I’m trying this year to…and I made some of the goals were monetary. They were hit a certain number. For my salesperson like a certain number in wholesale sales, or for my eCommerce marketing manager a certain amount of website sales or a certain number of new accounts, new products in stores, or getting a new website launched. So some were monetary, some were more kind of projects that needed to be done. Like we’re implementing a new shipping and inventory system. Things like that. So like getting that launched was a goal for my warehouse manager. I basically looked at this list of all these things and said, “Man, if all like 20-something of these things are done by the end of the year, I’ll feel really good, and it’ll be easily worth me paying everybody a 12% bonus.”

Andrew: Nice, very cool. One thing we did this year, at least on the eCommerceFuel site was tried to focus more. I mean, we’ve got kind of this dashboard across all of our businesses with a myriad of different metrics. You could come up with 100 probably metrics you could track for a business, if not more. We tried to focus in on three metrics this year. One that was like the overall king metric, and two other kind of secondary ones, but be able to…

Bill: What are they?

Andrew: For eCommerceFuel, they are the biggest one that we’re focusing on is new members that hit the leader board in the community. So as you know, Bill, there’s like a little leader board that shows for every month who’s contributed the most value to the community, and we’re really trying to grow in a meaningful way and incorporate new members. So our biggest goal is to make sure that every month we’ve got at least one person that’s a new member on that leader board, that we’re really working into the community, and make them feel at home to the point where they contribute.

And then the other two are podcast downloads. Laura’s coming on board to help with a lot of production of the podcasts, and so really trying to focus on putting out quality podcasts and increasing the downloads we see there. And then the third one is just number of paid members in the community. So those are our three big metrics that we’re tracking for there.

Bill: Nice. So you’re really refocusing a lot on the community it sounds like, for goal-wise. Yeah.

Andrew: For eCommerceFuel. Yeah, at least on the eCommerceFuel side. Yeah, absolutely. That’s what we’re really doubling down on this year. Trying to improve, keep quality high, and grow in a way that doesn’t undermine what makes it special. So, yeah.

Bill: Yeah. I like that you’re focusing on not just as many new members as possible, but also member engagement. So people are hitting the leader board and actually interacting with the community.

Andrew: Yeah. It was interesting thinking through trying to set those metrics. You know, you want to try to come up with metrics that if you can focus on that metrics a lot of the other ones will fall into place. So we measure things like the number of comments people make, the overall level of activity in the community, all these different things. But we figured if we can do a good job of incorporating new members authentically in, which is what that metrics tracking how many new members are on that leader board, a lot of those other ones will fall into place naturally. So I think if you can set up the big KPIs, you follow with that in mind, it can help a lot.

Bill: Yep. That makes sense. Cool.

Andrew: Anyway, Bill, I’m excited to dive into your experience with FBA. So, shall we get started?

Bill: Yeah, absolutely.

Bill’s FBA Experience

Andrew: So, Bill, quickly before I just barrage you with questions, what’s your experience with FBA like? I mean, you’ve been doing it for how long? Multiple years at this point, right?

Bill: Yeah. So I think we’ve been selling all of our brands on FBA for at least probably three years. I started my company five years ago, and when I started, I was…well, in the very early days I was shipping it myself, but I very quickly ended up in outsource fulfillment. FBA was kind of a thing three or four years ago, but it wasn’t the monster that it was today. But a good friend of mine, Mike McAdams from Drinkwel, and he was selling supplements on FBA. He was all over me.

I would see him at trade shows, and he’d be like, “Are you selling FBA yet? You’ve got to do FBA. It’s going to be huge for you.” I was like, “I don’t know, man. It’s kind of a pain in the butt.” I was like, “I’ve got to manage inventory in two places. I’ve got to pay shipping to ship it from my warehouse and then shipping to Amazon FBA. We’re already listed on Amazon and people buy our stuff, and we just fulfill it from our outsource warehouse. I don’t think I’m going to do it.”

I drag my feet for like a year until finally about three years ago, we started to sell on FBA. So we got the little Prime eligible batch. Mike finally convinced me to send a case into FBA. Within a month of going to FBA, our sales tripled on Amazon. And that has been a sort of rule of thumb I have seen over and over again, both with my own brands and other entrepreneurs that I work for and do consulting with. When you send your product to FBA, it usually triples your sales kind of without doing anything else. So it’s been awesome.

Andrew: Yeah, I love it. I feel like I’m actually kind of late to the party. The product I’ve got…I’ll be doing some kind of content in the future about this. But as a proprietary product that I’ve designed, it’s currently inbound from China, the first kind of limited size production run. So, yeah. Completely proprietary, not white label, so it’ll be the first chance I’ll have to use Amazon. Because on Right Channel we pretty much resell everything. Bill, as you know, like you try to resell existing SKUs on Amazon, it’s a pretty brutal game. So I needed something proprietary to be able to actually, at least from my perspective, make it worthwhile to dive in.

So first thing I want to ask you is for receiving the item. So items are coming in. They’re getting shipped to Bozeman, Montana. The way I set it up is they’re coming into my offices before I send them onto Amazon, especially the first time because I want to do a little QC, quality control, on the production run. But also get a sense for how everything gets labeled and stacked up before sending it on to Amazon. But on an ongoing basis, would you recommend having kind of a stopover at your home office or warehouse, or would you recommend having it go straight from your manufacturer to Amazon?

Stay in Charge of Quality Control

Bill: If you’re ordering from China, I would definitely recommend the stopover. I think you’re doing it the right way. The reason for that is quality control, yes, quality control on the product. I’ve spoken to lots of people who source from China, and you get the first manufacturing run and it’s great. And then the second manufacturing run…they quote you a great price on the first one you got. It’s a high quality product. Then second manufacturing run, they change the plastic out for like a cheaper more brittle plastic.

Third manufacturing run, the seams aren’t sewn quite as well. The Chinese, they make their margin on you not on the first order, but on the 2nd, 3rd, 4th, 10th orders where they compromise the quality. So I would absolutely recommend, even if you don’t send all of them to you, you at least send a little bit to you to check on the quality. This is less of an issue if you’re manufacturing in the United States, although of course you still want to do quality control. I haven’t seen the quality just so dramatically erode on purpose as much with the United States manufacturers.

So not just the quality of the product you want to check on, but also sometimes depending on your product Amazon can have fairly specific ways they want it packaged and labeled. If it’s not packaged and labeled that way, it’ll get held up for weeks in their receiving, and it might even need to be returned to you. So it might end up coming to you in Bozeman anyway if the factory in China did not label things appropriately, which, as I understand, is probably a pretty high likelihood.

Andrew: So you’re saying maybe a compromise could be, especially when you start getting bigger production runs, having…well, maybe I misunderstood. But having that your manufacturer ship the majority of the goods straight to Amazon, but then having 20% of them come to you for QC?

Bill: Yeah, you could do it that way. There’s also intermediate ground here, which is instead of shipping things to yourself, there are a number of companies that all they do is FBA prep. This is their entire business. So you ship your goods to them. They QC it, they apply all the labels, they make sure it’s bagged and sealed and packaged appropriately for Amazon, and then they send it onto Amazon. You pay them some price per unit for the QC and the prep and everything. That’s all they do. That’s their whole business is prep for FBA, which is pretty crazy when you think about it. There’s a whole industry.

Andrew: It is crazy. I’m surprised Amazon hasn’t done that, actually. Any of those companies that you know that you feel comfortable recommending?

Bill: None that I’ve worked with and recommend, but I know that if you type FBA prep service into Google, you’ll find a bunch of them.

UPS, FNSKU, ASIN…Oh My!

Andrew: So, have the stopover. So I get the products. The products are going to show up here. You’re going to have boxes all over the place, pallets. So, next step is kind of getting them processed, ready for an inbound shipment, which includes a lot of labeling, and things like that. So in terms of labels, I want to make sure I understand this. So you’ve got three different acronyms here. You’ve got UPC, FNSKU, and ASIN.

Let me make sure I’ve got these correct. So UPC code is what you’re going to see on pretty much any product you go to the grocery store. It’s what they scan. It’s got the barcode. Universal Product Code, it’s universal for that product. So, an iPad Mini with 32 Gigabytes is going to have that same UPC code whether it’s in Bozeman, Montana, or where you are out in North Carolina.

Bill: Yes, and those need to be registered globally. You can register them with a company called GS1 that maintains the UPC database, or you can buy blocks of UPCs for dramatically cheaper through a company like Nationwide Barcode that will issue you a bunch of UPCs. But the key is, once you have a UPC, it is only used for your product and it is always printed on your product wherever it is.

Andrew: And then FNSKU, that is the actual barcode or the code that Amazon’s going to give you. So when you have stuff coming in and you register it, that’s the little sticker they put on there. On that, there’s a barcode that can be scanned, but there’s also a number, a 10-digit number. And that number is your ASIN number, which is your unique identifying number in Amazon’s system, is that correct?

Bill: So I’m not actually sure the ASIN prints on FNSKU barcodes. It’s important to realize that when you talk about a barcode, a barcode is just a way of representing a number. So, a barcode is just like saying Morse code. A barcode is just a graphical way to represent a number so it can be easily scanned by laser, by a machine. So your UPC is just a number. Just like Morse code is a way of translating numbers into bit, dots, and dashes. Barcoding is just a way of translating numbers into little lines that can be scanned. So your UPC is really just a number, I think it’s 10 digits. A then you use that 10-digit number to generate a barcode. And that 10-digit number is issued by GS1, and is kind of controlled, and then you put that same barcode.

The FNSKU, the Fulfillment network SKU from Amazon, is just a number again. I don’t know how many digits it has. Then you generate a barcode from that number, the FNSKU. And then similarly an ASIN is an alphanumeric identifier, the Amazon Stock ID Number I think is what it stands for, and that’s your unique identifier on Amazon. It’s important to know that the ASIN and the FNSKU are not the same.

Every product on Amazon has an ASIN. Once you list it on Amazon, it gets an ASIN. I think an ASIN is most equivalent to a UPC, and that UPC its Universal Product Code, is supposed to be on that product everywhere it goes and represent that product everywhere. ASIN represents that product everywhere it goes on Amazon. It can’t exist on Amazon without an ASIN.

Andrew: When you say exist on Amazon, we’re not just talking FBA. Even if you’re doing like third party fulfilled merchant. If you hold the stock, you list it on Amazon, your listing is still going to have an ASIN number even though your inventory isn’t at Amazon.

Bill: Exactly. Exactly. So every product listed on Amazon, whether it’s FBA or not, has an ASIN. Your product only gets a FNSKU, a fulfillment network SKU, when you convert it to FBA and send it to their warehouses. And the fulfillment network SKU is just a number, and it gets locked. A fulfillment network SKU gets locked one to one with your ASIN. So your product, once you send it to FBA, your product will have a UPC, an ASIN, and a FNSKU, a fulfillment network SKU.

The fulfillment network SKU is only numeric, whereas an ASIN is alphanumeric, which I think means it can’t be encoded into a barcode. I think that’s why you end up with FNSKU, which is only numeric and it’s longer. An ASIN is, call it roughly 10 digits but because it’s alphanumeric, there can be so many combinations. So the FNSKU is like 18 digits, but it’s only numeric. So you need more digits to have the same number of combinations.

Clarifying the UPC

Andrew: Let’s say the product I have coming in, I do not have a UPC code for it yet. If I’m going to be filling it solely through my own channels, my own existing eCommerce stores as well as FBA, I’m not going to be selling it. I’m not doing wholesale. I’m not doing any of that. Do I need a UPC code? Or can I just use the FNSKU, the fulfillment network SKU, that I’m guessing I can print out when I get ready to send it in to FBA?

Bill: You do not need a UPC code with an asterisk. So for most products, you won’t need a UPC code. In fact, and many people do, you could just print the FNSKU barcode right on your label. If you only ever intend to sell on Amazon, there are lots of Amazon sellers that do this. They just print that FNSKU barcode right on the label, because that’s the barcode that Amazon uses to scan it around its warehouse and know what it is.

Andrew: When you say label, what do you mean label?

Bill: For example, if you’re selling shampoo like me, we have a UPC code printed on our label, printed on the product itself.

Andrew: Actually printed on the packaging of the product…

Bill: Actually print it on the packaging.

Andrew: …so not a sticker you put on there, but like at the factory it’s printed on there.

Bill: Exactly. If you only ever intend to sell that product on Amazon, which a lot of people do, a lot of people just incorporate the FNSKU right into the packaging of the product. And then, that can be just your unique identifier, and as long as you never want to sell it anywhere besides Amazon, that’s fine. The asterisk to that though is that in some categories on Amazon, Amazon does require a UPC.

Andrew: Are there any problems? I’ve heard problems or at least reading through the documentation where Amazon says sometimes barcodes have to be covered, if you have a UPC. It has to be covered up if you have a FNSKU as well. Is there any kind of things you need to think about if you do have a UPC and a FNSKU to prevent confusion when it gets to the warehouse at Amazon?

Bill: Yes. So now you’re getting into the difference between regular inventory and what’s called Stickerless, Commingled Inventory at Amazon. So, picture you have a widget, and it’s a widget, you know it’s an iPad, right? Well, iPad’s not a good example, because Apple’s the only one that sells them on Amazon. Let’s say it’s a laptop from some PC manufacturer. Lots of different people are selling that laptop. What Amazon has is a program called Stickerless, Commingled Inventory, and that laptop has a UPC.

So what happens is if we’re both selling that laptop on Amazon, we both send in some inventory. Amazon is going to keep track that I sent five of them and you sent five of them, but Amazon isn’t going to keep track of which five we sent. It’s going to stack them both on the shelf right next to each other. That’s why it’s called commingled inventory. So it will know they have 10 laptops, and five of them are mine and five of them are yours, but it won’t know which.

So if I win the buy box and sell a laptop, they’ll pay me for that laptop, but they’ll just grab the top one on the stack. That’s commingled inventory, and the reason it’s called Stickerless, Commingled Inventory is in that case Amazon uses the UPC as the identifier. Because it considers every laptop with that UPC to be the same. So in that case, you don’t need a FNSKU label on the item itself, because Amazon is using the UPC effectively as the FNSKU.

Pros and Cons of Comingled Inventory

Andrew: And I’ve heard lots of people warn me against commingled inventory, because, for example, you commingle inventory. If somebody starts sending in, let’s say, fake goods and it gets commingled with yours, you really don’t have a lot of recourse. You, in effect, are open to shipping products under your company, your fulfillment account, that you did not source, you don’t understand the origin of, and they could be fake. They could be lower quality.

What’s the upside to commingled inventory? Is really the only upside that you can have your inventory in more locations throughout Amazon’s fulfillment network without having to ship to, let’s say, half a dozen different fulfillment centers?

Bill: Well, that happens anyway. Amazon already metastasizes your inventory across their network. The advantage, as you probably will not be surprised to learn, is mostly on Amazon’s side. The Amazon is to them. It’s logistically easier for them to not keep yours separate from mine. But the other advantage that you don’t have to apply the FNSKU labels. So you can just have a UPC. Particularly like, if you buy from the wholesaler and then are sending it in to Amazon.

They already have UPCs on them, but the wholesaler isn’t going to print FNSKUs on them because these aren’t Amazon specific products. So you would have to put a FNSKU label on literally everything before you send it in. Imagine you’re talking truckloads of goods here, and not having to put stickers on every single one is looking pretty appealing at this point.

So that’s your advantage as a seller is you don’t have to sticker everything. So that’s why you might do Stickerless, Commingled, but I’ve read about a guy who was selling almost $10 million worth of DVDs and CDs on Amazon, and somebody sent in some fake DVDs. A customer reported it as fraudulent DVD, and he lost his account, and it wasn’t even his DVD that got sold. It was just Stickerless, Commingled, and somebody got one, and he had won the buy box for it. They suspended his account, and he never got his account back.

Andrew: So if you wanted to, let’s say you wanted to be able to streamline this a little bit more. Let’s say this product I’m bringing in takes off, blows up, and I’m starting to send a lot more inventory in. I don’t want to sticker it every time. I could potentially go out, get a UPC code, get that printed on the actual product itself on the label on the packaging, send it in. Then as long as my UPC was registered to that product on my Amazon account, that would be good enough. I wouldn’t have to sticker everything. Is that correct?

Bill: Yes, assuming that you don’t sell it to anybody else, then you would effectively be Stickerless, Commingled. But nobody else would be sending anything in, because they would have had to get it from you. Do you see what I’m saying?

Andrew: I do.

Bill: You would be the only seller in the commingled, so you would be safer. That being said, there are some exceptions. There are certain products’ categories that are not eligible for Stickerless, Commingled. One of which is very relevant to me, which is cosmetics, personal care, anything with an expiration date. Because obviously then all of the units aren’t the same, so you can’t commingle them. You need to keep track of whose are expiring, etc. So you can’t do it. You need to apply FNSKU labels.

Registering Your Brand

Andrew: So how does the brand registry tie into this? Brand registry with Amazon is when you have a proprietary product. You can go on there, pretty much claim it, and say you were the only manufacturer of that. If I do, let’s say I do Stickerless, Commingled. I put a UPC on my proprietary product coming into Amazon. I know that no one else could authentically source this product, because anyone else who’s trying to send it in to Amazon is going to be a fraud, because I control 100% of the distribution. Can I prevent anyone else from sending in inventory? Can I effectively say to Amazon, “Hey, I’m the only seller in the entire world that owns this UPC, and if anyone else tries to submit inventory into FBA for this listing, they’re a fraud.” Or is that something that Amazon doesn’t let you do?

Bill: If you asked me this question a week ago, I would have said that was no, completely impossible, and it was not something Amazon allowed. However, I just read an article that Amazon has begun striking deals with big brands. Mostly fashion brands like Burberry, things like that, where fraudulent goods are really a problem. To actually lock it down and not let anybody send any more stuff in to FBA unless it’s authentically from Burberry.

That being said, small sellers like us are probably never going to have access to that. So the effective answer is, “Even if,” and this is the case for all my products too, “they’re all our proprietary brands, you can’t prevent people from sending in.” Let’s say they bought one from you and they don’t want it, and it’s outside of return policy. They can list that one on your ASIN. They can send it in to FBA. Now that being said, if it’s Stickerless, Commingled Inventory, it’s going to end up in your inventory.

But if you’re putting FNSKU labels on everything, and you’re not commingling inventory, you’re not going to be liable if that one’s messed up and they sell it. Because Amazon will be able to track it’s theirs that they sold. So, I had this experience. I was selling some electronics on Amazon for a little while, and the counterfeit problem was horrible, because those electronics were coming from China. The company that was selling me the electronics was also selling the same body to a different guts to other people.

Even though it was in different packaging, the product itself looked identical. So there were counterfeit sellers popping up on the ASIN, I mean, daily. The only way to get a counterfeit seller kicked off your ASIN…you can’t just email Amazon and go, “It’s physically impossible for them to have one of my products because I didn’t sell it to them, and I’m the only place it comes from.” That’s not good enough for Amazon. What you actually have to do, you have to do what’s called a test buy.

So you have to buy the thing, the counterfeit thing, with your consumer Amazon account. Wait until it comes to you. Submit pictures to Amazon that proves that it’s counterfeit, at which point Amazon refunds you and will kick them off from being able to list on your ASIN. But that takes a couple of weeks, during which time they’re stealing your sales or potentially damaging your brand by listing against your ASIN. Keeping counterfeit people off your ASINs is very difficult, and a pain in the butt.

Label The Right Things

Andrew: So, I’ve got everything I’ve got. Let’s say I’m just going to use my FNSKU to send everything in. When I start labeling things, I need to put a label, of course, on every individual product that I’m sending in. Do I need to put a label also on the outside of the box as well? What other places do I need to label in addition to the individual products if I’m using the FNSKU?

Bill: So when you ship to Amazon, I’m not sure if you did this, did you have Amazon pay for the freight? Or you haven’t done it yet, have you?

Andrew: I haven’t done it yet. The product’s in the middle of the Pacific right now.

Bill: Right. So when it comes to you, you’ll create inside of seller central a shipment to Amazon. The cool thing about that is Amazon has a deal with UPS, so you get just bonkers cheap UPS rates. You can send like 40 pounds across the country for like $8. Just crazy, like the cheapest shipping rates I’ve ever seen by like half. It’s just bonkers. So what you’ll do is you’ll go into Amazon and you’ll generate. You’ll say, “I’m sending so many boxes. Each are so big, and they weigh so much.” Then Amazon will generate you pre-paid UPS labels. Amazon will charge you for them, but as I said they charge you almost nothing.

Then you just slap those labels on the boxes and hand them to your UPS guy. It used to be that in addition to the pre-generated UPS label, you also had to put a barcode label on it and a FNSKU label on the box. But probably six months ago, Amazon did away with that. They’ve incorporated all that information into the single UPS label, so now all you have to do is just put on the pre-generated shipping label on the outside of the box, and it serves as both postage and box identifier for when it gets to Amazon.

Andrew: Got it. So you still have to have the individual products with the FNSKU labeled or with the UPC code. But for the boxes, the UPS shipping label on there does the rest.

Bill: Correct. The only exception to that is if you’re sending a whole pallet. If you’re sending a whole pallet, then each box doesn’t have a postage sticker, right? So Amazon will generate box stickers for you in that case that must be applied to every box on the pallet. So if they get separated from the pallet, they still know what’s in it. Amazon works the same way. They send a freight carrier at a really discounted rate to pick up your pallet. They also give you four labels, labels that have to go on each face of the pallet, as well as box labels.

A Lesson Learned the Hard Way (Don’t Make the Same Mistake!)

Andrew: Perfect. Bill, anything else? Either common mistakes people make sending in stuff to FBA or final tips for people just getting started with it, for things not to screw up?

Bill: Yes. This is actually one I learned the hard way. So when you send stuff into Amazon, it might arrive at Amazon. Then it basically sits in a queue until the Amazon folks at the warehouse can get to receiving it into inventory. You would think that it would get delivered at Amazon, and it would make its way through that queue within a couple of hours. That is not the case. I once sent a pallet and had it sit for two weeks. UPS dropped off a whole trailer basically in the parking lot of Amazon, and they didn’t get to unloading that trailer for like two weeks.

So my inventory per the freight carrier had been delivered, but was just sitting in the parking lot. So, if you are on a timeline, like if you’re selling and about to run out, leave several weeks of buffer in case that happens to you. The other thing that I learned the hard way is that, as I said before, Amazon will metastasize your product across their fulfillment network. So you might send all of your products to one fulfillment center, and then you’ll see some of them go into reserve status. What that is, is Amazon is basically putting them on trucks to other fulfillment centers to distribute them nationally so it’s closer to all of their customers. They’ve got a whole algorithm.

Andrew: And they do this for free? They don’t charge you additionally, right?

Bill: Correct. In fact, they will charge you though if you don’t want them to do that. So like if you want to send all of your stuff. If you’re going to send 1,000 units, Amazon will often say, “We want you to send 227 to this fulfillment center, 445 to this fulfillment center, and 192 to this other fulfillment center,” and you have to pay for freight regardless of where those are. I mean, you’re paying for freight anyway, but sometimes you’re like, “Uh, you want me to send these to California?” or “You want me to send these to Florida? That’s a little more expensive.”

So they make you do some of that job upfront of the metastasization by sending them elsewhere, and they typically break them down further. If you want, you can pay for something called inventory placement service. Which they charge you per item you send in, but it guarantees that you have to send it only to one fulfillment center. It won’t break it up into multiple shipments. Now I think they might still metastasize it after it gets there, which by the way has all sorts of sales tax implications, because you actually have nexus in every place that Amazon has a fulfillment center. That’s a topic for another podcast, with somebody, a tax attorney smarter than me.

Andrew: Sounds like a nightmare.

Bill: Yeah, so that’s a mess. So they actually will charge you if you don’t want them to spread it out. Other thing to keep in mind is, and I only learned this by going deep with some of the Amazon support people, the seller central seller support stuff. So there are some fulfillment centers at Amazons that are what they call transshipment only fulfillment centers. That means they don’t actually hold any inventory there. So you just ship it to there, and they break it up and send it to all the real Amazon fulfillment centers. So there are three of those, and I found out which three they are.

The reason it’s important to know which three these are is because if you see that Amazon is asking you to send your goods to one of these three fulfillment centers, then you need to bake in an extra week or two. Because they’re going to receive it, and then they’re just going to repackage it up and send it back out to the other fulfillment centers. So, if Amazon is having you send goods to one of the transshipment only fulfillment centers, you should count on an extra 7 to 10 days of your inventory in reserve status after it’s delivered and before it’s available for sale.

Andrew: And which three centers are those?

Bill: So the three centers are, and you’ll find they use these a lot, so these will definitely come up in your Amazon shipments. The first one is AVP1, which I believe is Hazleton, PA. The next one is CVG3, which is somewhere in Tennessee. Murfreesboro, I think. Then the other one is ONT8, which I think is in California someplace.

Andrew: They have such romantic names.

Bill: They do. So the three codes that are transshipment only are AVP1, CVG3, and ONT8. So if you see those in any of your shipments, just know that your inventory is going to sit in reserve status for an extra 7 to 10 days before it becomes available for sale.

Andrew: Bill, such good stuff, man. Mr. Bill Dalessandro bringing 100% of the value in this episode. Thanks for letting me just mine you for information, more or less.

Bill: No problem, man. It can be fairly complicated if you’ve never done it before. I’ve learned all this stuff through many years of mistakes.

Andrew: Hey, man, the only thing I think maybe you love more than Amazon is football. You’re a huge, huge Denver fan. I know you’re looking forward to watching Denver just crush the Panthers.

Bill: That is not true. I grew up in Charlotte, N. Carolina, and we’re recording this episode Friday, February 5th. Two days before the Panthers kick the Broncos’ ass in the Super Bowl.

No Episode is Complete Without a Bet…

Andrew: Bill, you’re a closet Broncos fan. I’ve seen all the Broncos gear you’ve had. I don’t know why you’re ashamed of it. You lived in Boulder.

Bill: Yeah, I rooted for the Broncos for six years, because you know, they’re AFC team. They never play the Panthers. So I never thought that kind of my number one team, the Panthers, would be playing the number two team in the Super Bowl. Panthers are my home town team. I am Panthers all the way, but if the Panthers were to lose, I guess I would feel good for Peyton Manning. Because I am a Peyton Manning fan. But I am still all Panthers all the way.

Andrew: You up for doing a little $5-$10 bet?

Bill: Yeah, but I’ll do better than that. Instead of a $10 bet, the loser has to take that $10 and purchase a shirt of the winning team on Amazon, and post a picture on social media of them wearing that shirt.

Andrew: Deal. Now as a true negotiator, I’ve got to say the odds…I mean, the Broncos are definitely the underdogs, probably by a factor of two to three. So to be fair, for this really to be an even, even bet, it should be more like I would have to purchase a hoodie and you would have to purchase a sweatshirt. Something like that.

Bill: Are you angling for points? You want some spread here?

Andrew: Oh, absolutely. I mean, it’s only fair. You know, you look at Vegas. The Panthers are clearly favored to win.

Bill: I think the spread is five points. So I’ll give you five points.

Andrew: Five points, okay. If the Panthers don’t win by more than five points, I win. Otherwise, you do.

Bill: Exactly.

Andrew: Okay, deal.

Bill: Deal.

Andrew: Deal on the sweatshirt. The loser has to buy the t-shirt on Amazon of the other person’s team and wear it.

Bill: And post the picture on social media.

Andrew: We will post the picture on social media as well as in the wrap-up episode we do next time you come on for whoever loses.

Bill: Yes. Perfect. I love it.

Andrew: Love it. Bill, only here could we take it from Amazon FBA to football betting, but I love it.

Bill: Sounds good, man.

Andrew: Hey, thanks for coming on.

Bill: Of course. Any time.

Andrew: Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerceFuel private community. It’s our tight-knit vetted group for store owners with at least a quarter million dollars in annual sales. You can learn more and apply for membership at eCommerceFuel.com/apply. Thanks so much to our podcast producer, Laura Serino, for all of her hard work in making this show possible and to you for tuning in. Thank you for listening. That’ll do it for this week, but looking forward to seeing you again next Friday.

What Was Mentioned

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Post tagged in: Lifestyle & Growth, Operations, Podcast, Starting a New Store

2 Comments

  1. Hey Andrew – how did you generate the transcript of the podcast? Surely you didn’t type it out by hand? I’m a podcaster too, and am really interested in an automated solution for transcribing podcasts.