fbpx

The Ultimate Guide to Onboarding an FBA Business after Acquisition

So you’ve bought a new Amazon business and you’re excited. You should be. Owning a new business is energizing for any entrepreneur.

But reality is going to set in soon...and there’s a lot to do.

Luckily, you’ve got us.

We’ve built and sold FBA businesses. We’ve worked with clients from day one of a newly acquired operation. We’ve seen what works and we’ve seen what entrepreneurs wish they had done sooner. Our team has over 50 years of combined experience across supply chain, finance, e-commerce, and Amazon. And we can tell you exactly what you need to know.

This is not a guide to say “think about this” or “keep this in mind.” No. This is much more valuable. You’ll get explicit instructions and the exact SOPs we used to sell our businesses and what we continue to use with clients.

You’ll get screenshots, direct links, and access to templates that go along with those SOPs. All you need to do is plug in your information and you’ll be good to go.

We’ve been where you are now. You have a brand new business that you KNOW can be optimized and a million ways to do it.

This guide will go through six of your most important first steps. As you go through, you’ll learn how to make your business more organized and more cash efficient, getting to your ideal ROI with less headache.

Don’t feel overwhelmed by the length of this guide - we’ve divided it into the six main steps you need to take control of your new business.

Are you ready? Let’s get started.

Step 1: Start Organizing Core Operations

Before you do anything, you need to get organized. Don’t even think about investing in an email marketing campaign or Facebook ads until you have your business set up properly. You can’t run a train until the tracks are laid down and your business is no different. If you try to get ahead of yourself, you will waste your time, energy and money.


Therefore, it is imperative to organize your operations before any other step. You need a strong foundation before you can build and scale. So take a deep breath, and get ready to get organized.


Categorize Your Business Documents With Proper Files And Folders


The first
blog post on our site was about file organization.

It sounds simple, but its importance can’t be overstated. It’s a lesson we’ve seen entrepreneurs learn over and over - without properly organized files, your business will suffer.

In that post, we laid out the five things you must do to get organized:


  • Assign Reference Codes To Vendors
  • Put Coding Reference Names On Purchase Orders
  • Create Folder Structure
  • Set Up Purchase Order File Naming Structure
  • Establish FBA Shipment Naming Structure


For instance, one of the ways to give a useful reference name to an FBA shipment is as follows:

[Product] | [ship month] | [FC] | [qty]


Example: T-Shirts (TS), 3000 units, to be shipped out by March, shipping to BHX1 Fulfillment Center would be TS|MAR|BHX1|3000


Mnemonic: (what | when | where | how many)

Having these five things inserted as proper labels in your organizational system is a key that goes far beyond the simple act of codifying.

This system helps to keep your records in order, but it also helps tremendously when onboarding someone new. Plus, with organized records, you’ll be able to find something (for a PO, tax reasons, or cashflow projections) easily.


We’ll show you just how effective a file naming system can be. Here’s a scenario for example:


If you are managing multiple businesses, you’ll want to assign readable codes to each business entity and use those codes for naming Purchase Orders, related reports, files, folders, etc.


If a given business is present on multiple AMZ markets, add the use of the location in the codes.

 
Let’s assume that a given business owner operates two AMZ accounts:

Account #1 has brand name “AB” and is present in US and Europe (EU). In this case, suggested codes are

AB-US / AB-EU.


Account #2 has brand name “CD” and is present in US and Canada. In this case, suggested codes are

CD-US / CD-CA.

PO names examples:

  1. 1
    AB-EU-20190401-P005-008 - Brand name “AB”, order is made for the EU market - placed on 2019/04/01 - purchased from supplier P005 - 8th order year to date.
  2. 2
    ​CD-CA-20190115-P004-002 - Brand name “CD”, order is made for the Canadian market - placed on 2019/01/15 - purchased from supplier P004 - 2nd order year to date.

Important: make sure that your internal team as well as your suppliers, other vendors put the proper reference codes on all related documentation such as invoices (including freight, warehousing, etc.), pack lists, BLs, files, folders, reports, as well as email subject line.


It may take some time to train your team and stakeholders to put these reference codes everywhere, but it will be well worth it.


Additionally, once you implement a proper naming system, you will probably get the most gratitude from your bookkeeper. There’s no telling how much time these things save in terms of taxes, cashflow projections, and other financial calculations. Things like cost of goods sold, specifically, becomes much easier when you can quickly glance at the invoice name and simply from that name or code, a financial manager can tell which business entity placed an order, at what time, who was the supplier, etc.


Once you set this up, it will run as a system. The same naming standards will stand for as long as the business continues to run. It is an upfront investment that will show you returns day after day, and at times when you least expect it.


Organize Data Into A Master List


The file and folder naming system is a first step, but your organization isn’t yet complete.


The next step is to form a Master Product List. This will save tons of time and help you and your team avoid unnecessary frustration in instances when a given manager ends up having to spend two, three or ten minutes looking up product data that should be available with a single click of a button. 

Get your FREE SOP swipes, including a Master Product List Template

Amazon Seller teams should use the Master List to look up and systemize ALL product-related data, such as product names, reference numbers, shipping dimension/weight and supplier’s information. 


Use supplementary tabs to organize your suppliers’ and vendors’ data such as contact information, supplier’s reference codes, payment terms, etc.


The best part? The work you did in File and Folder naming will come back as it’s pasted and copied into the Master List where you can track everything between your List and your document folders.

Back-up Your Product Listings


It’s also important to implement a flat file backup for your Amazon store. You can not go without this.


It is good to back up your product listings at various times, such as:


  • If you take over management of an FBA business, prior to making changes (if any) to the listings.
  • If you are going through a listing optimization to improve the content, it is good to back your listing content once you are done. 


Regardless, if don’t have a back up right now, do it! Just in case. Thing happen - if any of your listings get accidentally deleted, you will need to recreate them from scratch. It’s better to be prepared and have it backed up already.

Get your FREE SOP swipes here

Amazon gives two options for updating the listing:


  • Manual updates. This is a good option if you need to make minor changes.
  • Use Flat Files for mass updates. This works well for updating the listings in bulk and specifically for backing up all the listings at the same time. The downside of using Flat Files is that they may be hard to deal with for someone who is not familiar with the format. Thus, it may be hard to fix any issues that may arise.

Remember, we’re giving you the EXACT steps you’ll need to take to prepare your backup. It’s always better to be safe than sorry. Take a few minutes now to back up your files. You won’t regret it.

Clean Up Your Listings


Now that you’ve acquired new listings, you’ll want to clean them up.

Cleaning may be needed for old and outdated details, or for sprucing up copy for items that haven’t sold as well as they used to. You’ll see tips on keyword strategy later in this article.

While you do your listing cleanup, we recommend that you also plan a periodic product listing cleanup as well.

Every once in a while, you should clean up your account and remove all unused SKUs. Think of it like your closet. It can get messy in there. Sometimes you need to tidy it up and sometimes you can get rid of a few shirts for donation.

For those products that can be removed, we give this guidance to clients:

You may close a listing at any time, up until the time it is purchased. There is no fee associated with closing a listing. The SKU is still retained and you can easily re-list a closed listing.

​This cleanup will make your Amazon Seller account easier to navigate and give it a sharp, organized look. This will be crucial in the case of an external audit (by a potential buyer, for instance).

Clean up your account today

​Step 2: Get Your Supply Chain In Order

Your supply chain is a vital part of your new business. You’ll need to keep it running while optimizing other parts of your business. This is no easy task—running a full-scale supply chain in FBA needs frequent attention and oversight.

But it’s well worth it. We worked with
one client who missed out on crucial holiday season revenue because his supply chain was not in order.

He lost thousands of dollars in revenue because he didn’t have key items ready to go and instead relied on a third-party “expert” who was in over their head. He had to come in and save his own business.

So how do you ensure your Supply Chain is in order? Start by reviewing and defining these Core Processes:


  • Purchase Order Process
  • Purchase Order Master List
  • Regular Report showing Inventory Levels / Sales History / Reorder Calculation

Purchase Order Process


A structured and consistent Purchase Order (PO) process will have a positive effect on your organization and overall control over your Purchase Orders, leaving less room for error.


The PO process should allow your FBA business hit the following Goals:

  1. 1
    To be able to track orders and shipments efficiently and effectively through proper and complete documentation trail. You should have organized documentation for proper accounting and traceability when the need arises. For instance: for bookkeeping purposes, tax audit reporting of financial statements, etc.
  2. 2
    To ensure all supplier payments are properly accounted for and done in a timely manner, as per agreed payment terms and conditions.
  3. 3
    To ensure that your organization does everything within its span of control to ensure that your purchase orders are produced and delivered to the destination (Amazon FCs in most cases for FBA business) in the fastest, and most effective manner.

Review your current PO process. Evaluate whether your FBA business is currently struggling to hit any of these above-listed goals. In order to obtain the information on current process as you acquire a new business you should:


  • request the current SOP (if there is one); 
  • conduct interviews with previous owners and/or employees responsible; 
  • ​investigate a few recent purchase orders and shipments;
  • look at successful as well as “problem” cases;
  • ask for related email chains and documentation for all supplier, broker, freight forwarder conversations.

This may sound like a lot. Supply Chain is a complicated facet of your business. Luckily, you can get our full SOP for this PO Process.

Grab the full PO Process SOP now

Sellerplex’s Recommended Purchase Order Process:

  1. 1
    Form the Purchase Order document using a Template, email the PO document to the Supplier. Assign PO reference number (CODE) right away.

    Side note: It’s good to put PO reference number in the email subject for easier email search if needed later.
  2. 2
    Obtain the Proforma Invoice(PI) from the supplier as a form of confirmation of price and quantity. Make sure that the PI contains full set of data regarding the order for future reference. See details in a full SOP version.
  3. 3
    Arrange the necessary payment (depending on the terms) within 3 days from receipt of PI from the supplier.

    Note: An absolute majority of suppliers will ask for a partial advance payment in order to start production, so make sure you wire the payment quickly so that there is no delay with production.
  4. 4
    Request the PACKING LIST from the supplier about a week prior to the end production date in order to set up a new shipment in AMZ Seller Central, generate FBA labels, and preset the shipment with your Freight Forwarder.

    Note: Our SOP package has a Packing List template. If necessary, send it to the supplier to fill out.
  5. 5
    When the product is packed and ready to ship, ask your supplier to take photos showing particularly the FBA labels and shipping marks (if any) and send it back to you or your supply chain management team to review.
  6. 6
    Wire the remainder of the Invoice Amount as per agreed payment terms. Usually, suppliers will ask to make a final payment prior to shipping the goods out.
  7. 7
    Obtain and review the Commercial Invoice(CI) from supplier prior to shipping. For all cargo going into US, CI has to follow 19 CFR 141.86 of the U.S. Customs regulations.

    If the supplier provides an incomplete set of data regarding the order in the SOP, it may cause delays or issues with customs clearance, so make sure you double check the content of the documentation. 

    Note: See full CI requirements in the full version of the SOP.
  8. 8
    Send a shipping order to the chosen forwarder before the cargo ready date. Connect the forwarder to the supplier (email or to make the shipping arrangements. Obtain the Commercial Invoice for freight-related costs from the forwarder and put it on the Invoice Due List).
  9. 9
    If any part of the shipment is controlled by Supplier contracted forwarder (as per set Incoterm), request a shipment timeline from the Supplier’s contact responsible for shipping. Ask for ETA to the point of cargo release such as Port of Origin, Port of Destination, domestic destination warehouse, etc.
  10. 10
    As soon as available, obtain a copy of Ocean Bill of Lading (OBL) or AirWayBill (AWB) via email.
  11. 11
    When cargo has been cleared from your domestic country (US or EU, for example) customs, obtain Customs Entry documents from the forwarder or customs broker in charge. If customs tax & duties are paid by forwarder or broker, the associated costs will be included to the Freight/Tax invoices.
  12. 12
    When cargo is finally delivered to Amazon, obtain a copy of the POD signed by Amazon warehouse personnel from the forwarder/3pl provider in charge.

Use the SOP above for your projects and, if necessary, adjust it to match your business specifics. We highly recommend you build a set of steps for ongoing PO checking that you can complete each week, and then hand off for delegation once set.


Purchase Order Masterlist


It sounds simple, but having one source of truth for all products/SKUs that you can use to fill in the proper information on purchase orders is more valuable than almost anything else we’ll discuss here. A PO master list will make your entire team’s workflow easier, save tons of time and essentially improve the efficiency of your entire FBA business.


Why?


Because it allows you to get your system to the point where it’s hitting those three goals. We start every client off with a PO Master List, especially post-acquisition.


A good PO Master List will include every important detail for each order, including:


  • PO Date
  • SKU
  • Number of Units
  • Pieces per Container
  • Supplier Company
  • Mode of Transport
  • Cargo Ready Date

See print image of the PO master list below:

Get access to this template in our SOP swipes

Having a master list means you’ll never have to search for these details. 


Important Note: We suggest to use Column A in our template to link to the proper folder (in whichever cloud storage you use) for each purchase order, set up in Step 1 of this document and named specifically for its proper order. To recap, we highly recommend putting in all related documentation regarding the PO, such as: invoices, packing list, payment slips, BOLs, related freight costs, warehousing costs, and even print screens of important pieces of email or chat correspondences with the suppliers, when you think necessary.


Regular Report Showing Inventory Levels / Sales History / Reorder Calculation


The next big step is to get on top of your inventory. The basic rule of inventory management is to make sure orders are done in a timely manner and that enough is ordered to not run out of stock. You should be able to determine when orders need to be made within a few minutes -- or, better yet, have this done on a time schedule when certain measurements are hit. 


When you take over management of an FBA business, review your inventory levels in a comprehensive manner. This means you must know the inventory count at Amazon Fulfillment Centers, and also be fully aware of the product quantities that are in production, being shipped/in route, in storage at third-party warehouses, etc. In addition, run Amazon sales reports for the latest week as well as historical sales (ex. 30 days, 90 days periods) in order to evaluate the sales volumes and most recent trends.


We highly recommend running inventory reports on a regular basis. Our team runs the reports every week for our customers. You can use our Inventory report/calculator template to speed up the process.


One of the advantages of using a simple Excel format is that it is easily adjustable and can be tailored to your specific business needs. See this screen shot of an inventory report template.

Get your Weekly Reorder Report here

Additional notes:


  • Determine if there is any seasonality throughout the calendar year. If your particular product is not seasonal, account for things like Q4 holidays sales upswing and Amazon Prime Day sales (usually takes place in mid July) and stock up in advance. 
  • Typical lead times for products from China shipped via the ocean are about 90 days, which include production time, processing time, shipping, customs, and potential delays. Lead times may vary.
  • There are a number of inventory management apps/software tools available on the market and many of them can pull inventory as well as sales data directly from Amazon Seller Central. Consider using automatic tools for inventory reports.


Manage Your Costs


An easy way to optimize your earnings is to reduce costs in your new business. Fortunately, there are many places to cut costs. We recommend looking at a few specific ones right off the bat.


Review Your Costs of Good Sold


COGs is a complicated calculation. If you do it quickly and with just a few inputs, you run the risk of doing it wrong. 
Read this case study to see just how that could threaten to derail your business goals.

Luckily, you can use our SOP for the true calculation for COGs numbers. This should illuminate what you’re spending and help you think about ways and places you can start cutting costs—especially on specific items.

But cost of goods is only one way you can start to cut costs—even on your product line. You’ll also want to do legwork in price comparing and other methods for reducing costs before sale. If the business you acquired has not done a supply chain cost optimization in the last 6 months, it’s due for one.

Another excellent way to cut costs is through negotiating supplier terms and costs.

Negotiate Supplier Terms


Negotiation efforts with product suppliers in particular can have a direct positive effect on your bottom line, profit margins, and cash flow.


It is important to realize that you can negotiate not only the price of goods, but also costs like payment terms and added services such as FBA labeling.


Perform price comparison for your products. Make sure to look into your best sellers as those products’ volumes account for a significant portion of costs. Shop around. If you get lower quotes for the same kind of products, ask your supplier to price match.

Get the full version of this SOP here

Logistic Costs


It may be obvious, but it is important enough to say: cut logistics costs when possible. Logistics-related expenses are going to be your second most significant cost-center for FBA sellers after the price of goods. Here are a few ways to optimize your logistics in order to save money and time.

First, get multiple freight quotes. Shop for a freight forwarder and rates in the same general way that you shop for the best quality product at the best price.

It is important to know what you are looking for. Ask your supplier for a Pack List, which contains dimensions, weight, and number of packages of the goods being shipped. Also prepare information on the Incoterms (or Sales terms) that you set with the supplier. Know your origin and end destinations, of course.

Next, determine the mode of transportation—your main options would be to ship by Air or by Ocean mode. If you lack experience or understanding of the difference between transit times and prices of each mode, you may ask a few forwarders to quote on both options.

Regardless, send multiple requests with all of the aforementioned information for freight rates and compare prices apples-to-apples style. Then, track how quickly freight forwarders respond with the price. Quality and speed of their response could be an important indicator of the quality of their future service.

Get your SOP swipes here

Turning Toward Cost-Effective Logistics

  1. 1
    Split shipments between Air and Ocean modes

There may be times when you need orders urgently, especially shortly after a business acquisition. Instead of air shipping an order in full, split urgent purchase orders and use both modes of transportation—air and ocean. This will allow you to get the inventory in quickly and avoid paying high air shipping per kilo rates for the entire order.

Get the full vesion here

  1. 2
    Freight Consolidation

Consolidate small parcels over the sea shipments (LCLs) into full container shipments (FCL).

Rates for LCL shipments are generally higher than FCLs because of the set of additional fees that come when you ship an LCL. With FCL you get bulk shipping rates. When possible, consider consolidating your LCL shipments into a full container.

If you happen to be shipping from multiple manufacturers in the same origin country and you have enough of your own product, that can be a financial advantage. If you time your POs right, you can then manage such consolidation for your own goods. In a scenario when you don’t have enough of your own goods that are ready to ship at about the same time, then you can collaborate with other shippers to fill up a container.

Doing this is a bit complicated but we’ve prepared an SOP on freight consolidation that can help you pull off this money-saving tactic. Contact us for more information on how we can help your business.

Get your SOP on Freight Consolidation (and more!)

  1. 3
    Minimize Storage Fees with a Domestic 3PL warehouse

Another way to save money is to store your goods at a third party warehouse until you need them at the AMZ FCs.

If you use AMZ FCs to store your goods for extended periods of time, you’ll be charged AMZ premium rates for its warehousing and fulfillment services.

Find and use a good 3PL US-based warehouse with high quality service and experience with shipping FBA goods. If you find a 3PL provider with the right combination of location, service, and price, you’ll save on warehousing fees and have a short lead shipping time when you need to add to your FBA stock.

Grab the full version here

Inbound Shipment Reconciliation


Many Amazon sellers are leaving money on the table simply by not working through inbound shipment reconciliation.


It’s true! The process may mean doing some extra work upfront but there’s potential to get back money overspent on shipping.


You can find the information you’ll need in Seller Central. Our SOP will guide you through how to go through your cases.


The real value is tracking this in your Product Order Master List so you have a visual of money saved, reconciled cases, and a place to organize ongoing cases that might require some extra work.


This is also where all the organization in the previous sections will help you—having all your purchase order information is going to be immensely valuable when it comes time to reconcile.

Get the full version of the SOP here

Improve Efficiencies, Get Rid of Hassles


It’s easy to get overwhelmed when you need to manage multiple FBA business - you need to deal with numerous brands under one roof, purchasing from multiple suppliers, and shipping from a variety of locations. This often results in errors and inefficiencies in your managerial efforts. Of course nobody can blame you with all of that on your plate!


There are a few supply chain management techniques you can use that will help you become more efficient and get rid of management hassles:

  1. 1
    Consolidate Logistics vendors (3PL warehouses, FFs)

Again, in a situation when multiple businesses are acquired or just being managed under one roof, it is common to see that each business uses its own set of vendors, including logistics vendors. The nature of this trend usually comes from the fact that previous management teams were independent from one another and made their own choices of vendors.


Compare freight forwarders as well as 3PL vendors in terms of the quality of service that they provide, their location, pricing etc, and then pick one vendor as a primary option. If you want, you can also choose a secondary vendor to have as a back up. When you start assigning a majority of your shipments to one primary vendor, you gain leverage for better pricing and also will spend less time and effort navigating through communication and operations in comparison to a set up with multiple vendors.


When you perform a vendor comparison, it is useful to put all the data being compared in an excel sheet with a goal to essentially perform apple-to-apple comparison, especially when it comes to pricing. Here is a snapshot of such a vendor comparison.

Grab this template (and more) with our SOP swipes

  1. 2
    Consolidate Service Providers

The same technique applies to other service providers. For instance, if you are using a paid software tool for one of the businesses, ask the company representative if you can add more SKUs at a discounted rate or even waive additional charges.

  1. 3
    Schedule Large Purchase Orders for Every 90 Days

If possible, specifically if your cash flow allows you to, try to make large purchase orders every 90 days or so. First, it will decrease time spent on processing orders, payments, control of shipments, etc. Second, you will save on operating costs. Furthermore, it usually takes about 90 days of lead time from the day of order placement to final delivery to Amazon or a domestic storage in case of imports from southeast Asia (China).

Step 3: Take Control Of Your Finances

Of course, finances are always top of mind. Your ROI may be months and years away, but taking control of your new business finances early will pay off later.

This is true whether your goal is to optimize profits, ready the business for a flip, or stabilize it to a point of passive income.

A business owner without a true understanding of financials like cashflow will find themselves scratching their heads quarter after quarter. Like this
Case Study on our client Duncan, proper cashflow numbers take some time to find. And until you do, you’ll never truly have the right picture of the health of your new business.

Get your FREE SOP swipes

Cashflow Management


It is important to realize that during a time of transition businesses do not stop. While you spend time getting into things, your ToDo list can pile up. With that said, see below for the two essential immediate steps your team needs to take when taking over accounting books:


  • Get in control of Outstanding Payables
  • Get in control of the Receivables


Payables:

For an FBA business it is definitely important to be on top of Invoice payments to Suppliers and also Logistics vendors. Delayed payments may result in issues with freight release or late shipping. Some suppliers will not ship until the invoice is paid in full. Most shipping lines won’t release your containers until the freight invoices are paid.

We recommend to set up a simple invoice tracker in an excel sheet. See below for a screen shot of such invoice tracker. Invoice tracker would help to coordinate payments across the team. This usually includes different people, roles who are responsible for Supply Chain management, supplier communication and Financial tasks, like Accounts Payables. The invoice tracker can be updated by a person in touch with suppliers, vendors, and the A/P department can use the tracker to stay on top of payments.

Get this template (and more!) here

Receivables: 

Upon acquisition, if your primary source of funds is the payouts you’ll be receiving from Amazon, there’s some critical steps you need to take.

For one, it’s important that you can schedule payments of unpaid invoices (this is usually your largest payable bucket) at the same time that your Amazon payments hit your bank account.

This timing and scheme may not have been set by the previous seller, so you may need to adjust dates and expectations. You can also work out a payment spread situation.

You need to avoid a situation where invoices are due before you’re paid out. Otherwise, your cashflow headache will grow.

If you have access to outside funding, you can pay off invoices at any time, but be sure to keep close track on finances and payables and receivables as money comes in and out.

Review Payment Terms:

In particular, if there are issues with cash flow, you should immediately review the Payment Terms you’re working. See where the largest costs are allocated and start there.


Most likely the main costs will be coming from the suppliers of your best selling products. In many cases, if your volume is high and consistent, there will be opportunities to improve your payment terms.


For instance, we’ve worked with sellers who get to a point of paying the larger portion of their supplier costs after shipment (a lower down payment). Some work with a 30% advance payment, with the remaining 70% paid 30 days after cargo arrival in the US. Some supplies have even worked with a 15% down payment with the remaining balance spread out.


Of course, this kind of negotiated payment term comes with high volume, so if you acquire a business that’s experiencing growth, look into what you can do here.


Perform Month-Ending Inventory Valuation:

Knowing your inventory balances in terms of quantity and cost is an important tool in determining whether your business is utilizing current assets properly. When performing this, you may find there is too much working capital tied to products that are not sold as fast as they should.

Your new business should never put itself in a position where it may run out of stock, but you also don’t want to put cash in unnecessarily large inventories.

Lastly, for 
accounting method using the accrual basis, the ending inventory cost will also help calculate cost of sales for a certain period.

Cost of Goods Sold


At the initial stage of onboarding a new FBA business, even prior to making a final decision to acquire or invest, make sure to review your Costs of Goods Sold and continue doing it on a regular basis.


  • CoGS is one of the most important financial metrics for Amazon sellers as the nature of the business is in accumulated profits coming from sales of all the different product lines.
  • CoGS analysis will help evaluate which products are bringing you best profits and positively affecting your bottom line.
  • Then, you can focus on selling your “Stars” and add more products like these to your list.
  • CoGS will also let you determine which products are “Dogs” - poor-performers and can be dropped.

CoGS analysis will also allow you to increase margins by identifying which cost component can be optimized or reduced. If the aspect happens to be the cost of the product itself, you can check if current purchase volume can be leveraged to negotiate price breaks. If CoGS is high because of shipping costs, you can look into identifying forwarders with competitive rates that are still reliable.


Overall, reviewing the CoGS at the initial stage will help you and/or your team get familiar with the vendors, suppliers, and processes along the way as well as determine if there is room for cost improvement.


Bookkeeper’s Role


​This is an important one. Needless to say that having an accountant star on your team will save you tons of time and effort and help you avoid finance-related issues.

Review who has been handling the bookkeeping previously. Determine if the result was satisfactory. Ensure financial transactions are properly recorded and classified in the accounting books. Review the financial statements and ask if there were any year-end issues or discrepancies in the books. Determine the nature of the issues.

Decide whether to have an in-house accountant or hire an outside firm or a freelancer.

​Step 4: Secure Your New Brand

To get your store set up for success, you’ll next register your brand with Amazon. Registry comes with organizational benefits that too few sellers take advantage of such as protection of your product listings from other Amazon sellers, enhanced brand content, and a better overall Amazon experience.

You can read more about those benefits
here.


Enhanced Brand Content


One important upgrade that comes with the Brand Registry is the ability to use the Enhanced Brand Content (EBC) feature. This feature allows you to get creative and make your product listings more attractive to shoppers.

Brand Registry is a more advanced tool, and can be slightly complicated to set up, especially if you don’t have a registered trademark (which is one of the requirements for Brand Registry).

To register your brand, you’ll need three things:

  1. 1
    An active registered trademark for your brand that appears on your products or packaging.
  2. 2
    The ability to verify yourself as the rights owner or the authorized agent for the trademark.
  3. 3
    An Amazon account.

Do this as soon as you can.

The biggest hurdle for most is having a registered trademark. You may not have thought about trademarking your brand, but you should!

The trademarking process varies country by country, so check to see your country’s requirements. Or, ask us! We’ve helped businesses through this from all over the world and would be happy to help. No payment needed, just contact us through our website.

Do note that it typically takes Amazon one (1) to two (2) weeks to approve your Brand Registry application given that they will not require more proof of ownership from you. When that happens, they usually ask for a copy of the Trademark License.

If you don’t have everything ready for this, put it on your to-do list (and later into your organizational chart under an umbrella like ‘Product’ or ‘Operations’). If you’ve tried to set it up and can’t quite figure it out, contact us and we’ll help guide you through.

These Amazon steps are important. In one way to think about it, Amazon is the host or landlord in the metaphor of your store. You want to have a clean and organized relationship with the site in order to move forward.

Website


It is a simple thing, but we would like to point out that setting up your website with the domain name matching the brand name is important for various reasons. Once you get further into the process of application for trademark, USPTO will most likely ask for allegation of use, or proof that you sell the branded products you are inquiring about. Showing a website with your brand name will be a great way to prove that you are indeed the Seller of the brand. Note that website domain does not have to be an exact match with your brand name. More often than not, the desired domain name will be taken, so a close match will do.

Sign Up for your full SOP On Brand Registry

Step 5: Clean Up and Delegate Operations

Plan Customer Service Strategy & Delegate


If you get too many complaints or unresolved issues, Amazon can block your listings and you may no longer be able to sell. If you are having issues with any part of your customer service, we have SOPs available in our DIY package that can help you with the following issues and more:


  • Responding to Customer Messages
  • Product Replacements
  • Product Refunds and Refund Follow-ups
  • Creating Invoice Per Customer Request
  • Answering Amazon On Page Questions
  • High Touch Response to Negative Reviews
  • High Touch Response to Positive Reviews
  • Negative Feedback Removal
  • Answering On-Page Queries

When thinking about customer service, we suggest you think about this quote: "Ask your customers to be part of the solution, and don't view them as part of the problem.” - Alan Weiss, Author of Million Dollar Consulting

Below are some templates that can help you accomplish this.  

Customer Service Templates


Work with your customer service team to write out a set of templates with response messages for your most common customer requests and/or questions. Here is the list of typical customer service issues that we see most often and our response templates:


Sample Template: For Defective Product (you should predetermine your strategy on replacements and refunds)

Hello {first name},


Thank you so much for taking the time to send us a message and letting us know about this problem.


I can understand it can be quite frustrating that {problem}.


{insert quick fixes and/or why the problem occurred}
Customer satisfaction is very important to us so we really appreciate your email.


{if the problem cannot be fixed right away} It might be a while before we can get this one fixed. We're keeping an eye on other reports and will let you know if we have news!


Please reach out if you would like a replacement for your current order or let me know if you would prefer a refund. The choice is completely yours. your customers to be part of the solution, and don't view them as part of the problem.” - Alan Weiss, Author of Million Dollar Consulting

Sample Template: For Damaged Product

Hello {first name},


Thank you so much for taking the time to leave us a message and we are so sorry that the package did not arrive in pristine condition :( Sometimes the package gets beat around during shipment. We will pass this note to our production team, so thank you so much for letting us know.


Since Amazon is in charge of shipping all of the orders, they will be the best people to talk to about this issue. They will be more than happy to refund your order.


There are two ways to contact them directly: call their 24-hour customer service number at 1-866-216-1072 or use the following link: http://www.amazon.com/contact-us/


Please let me know if you need any help and I'll be more than happy to reach out to them for you!

Sample Template: Delay with order receipt or did not receive the order whatsoever

Hello {First Name},


Thank you so much for taking the time to send us a message! We are so sorry that your {product name} got lost in transit :( According to your tracking number, it looks like the package was delivered on {date}.


We will be more than happy to ship you another one tomorrow or issue a refund, the choice is completely yours. Before we go ahead with that, would you mind double checking to see a neighbor didn't accidentally take it?


I look forward to hearing back from you and please let me know if there is anything else I can help you with.

Sample Template 2:

Hello {First Name},


We are so sorry to hear that your order was never delivered! Amazon is in charge of shipping all of the orders, so they will be the best people to talk to. I’m sure they will be more than happy to refund your order.


There are two ways to contact them directly: call their 24-hour customer service number at 1-866-216-1072 or use the following link: http://www.amazon.com/contact-us/


Please let me know if you need any help and I'll be more than happy to reach out to them for you!

Sample Template: Invoice request

Hello {First Name} ,


Thank you so much for taking the time to send us an email! According to this sale, VAT is not indicated or required. If you would like to print an invoice, it is quite simple!

 

  1. Go to Your Orders.
  2. Find the order for which you need to print or download your invoice or order summary. Tip: If you don't see the order you're looking for, select another option from the Orders placed on the menu.
  3. Click on Invoice.
  4. You can now print your invoice and/or order summary.


You can always refer to Amazon's help page if you need any further assistance with printing your invoice. If you have any other questions, please don't hesitate to let us know!

Sample Template 2:

Hello {first name},


Thank you so much for taking the time to send us an email! We will be more than happy to send you an invoice. Would you mind letting me know if you need this for VAT purposes?


All of our products are VAT exempt since [product] is considered a "zero-product" on the UK government website. If you would still like an invoice without the VAT indicated, please let me know.


Thank you very much!

Empowering Your Customer Service Team


It is important that your customer service team is provided with a complete set of information about the product, so that they are able to respond to any customer questions on the fly.


Depending on the nature of your products, some of the following product information will be important to have available on the product listing page itself as well as for your customer service team to have.


  • Product features
  • Product “perks,” benefits of using the product (sales points)
  • Ingredients
  • Products testings / certifications (particularly important for organic goods, baby products etc.)
  • Country of Origin
  • Instructions/ Manuals


If you bring someone on to help you soon after your acquisition, make sure they document all the actions they’re taking for later keeping. We’ve also seen success in asking to hire some customer service agents from your acquisition to help create these materials.


Once you have your team and these materials, you’ll need to get them up to speed. That’s done through delegation. Our suggestion? Use the
I Do, We Do, You Do path of delegation.

I Do, We Do, You Do is a simple, proven instructional model that has been around for years now. New employees (like students, which explains why the model is often used by teachers) learn best when responsibility is given in a gradual manner.

First provide a direct instruction. Set up a way that you can show your employee how you do a task (I do). Second, practice a task together with your employee (We do). Finally, move the task to an employee to perform in his or her own (You do).

​Step 6: Optimize Your Listings

We recommend you perform Product Portfolio Analysis at an early, initial stage of working with your new FBA project.

Here are our steps for Product Portfolio Analysis:

  1. 1
    Identify your top selling SKUs.

Run the Sales report - Inventory Health Report will show sales history for 7/30/90 days periods. Screenshot example:

  1. 2
    Determine where your products/SKUs stand in terms of BSR - Best Seller Ranking.

There are many options to check the BSR. The easiest and cheapest (free) method is to just simply check the ranking of ASIN’s on AMZ.

Note: Brand IDs are removed as this is an example of an actual product listing.

  1. 3
    Analyze Reviews and Average Ratings (how many stars your products have)

To automate the product listing analysis, you may also decide to use external tools. We recommend:


  • https://www.helium10.com/*
  • https://www.junglescout.com/*.

*Disclaimer: We are not affiliated with either company, but find their products useful. You can see pricing on websites.

  1. 4
    Conduct Competitors Product Listing Analysis

Junglescout can be one of the most useful tools to analyze your product listing in terms of BSR, Reviews, and Ratings because it lets you compare your product to your competitors’ listing’s performance.


  • See the screenshot below showing how you can analyze your listing performance compared to competitors using JungleScout:

Note: Brand IDs are removed as this is an example of an actual product listing.

Analysis of this example:


  • Line one highlighted in the green box is showing our subject listing, ranked at 8137 vs average 50182, which is a good indicator, well above average.
  • Our subject listing (highlighted in blue) appears to be in a correct Category - Patio, Lawn & Garden.
  • Compare with a product in line 6 (in the red box), which is the product of the same nature but listed in Sports & Outdoors(wrong category), which is probably one of the reasons why it is ranked so low (#165573).
  • Instead of performing a manual analysis of each product listing, you may decide to use the Product Listing Grader** tool in JungleScout to automate the process.

Here’s an example of the outcome of an automatic Product Listing analysis.

This particular product listing appears to be well set up. However, there may be room for improvement of its Product Description (3/5) as well as Product Title (15/20).

**Note: tools such as Product Listing Grader (Junglescout) may be paid and will come at a certain cost. SellerPlex team is not associated with the mentioned service providers.

As a result of your Product Listing Analysis, you can make conclusions and put together an action plan, if necessary. Here is the list of possible conclusions:

  1. 1
    You may conclude certain listings are placed into incorrect categories.
  • To recap, we recommend to check on the top competitors/best performing product listing and which category they are placed in. Move your listing to the commonly used category, if necessary. Another possible way to approach the category issue is to place your product in a similar, closely-related, but less-saturated category with fewer competitors.
  1. 2
    You may conclude certain listings are placed into incorrect categories.
  • Title
  • Image
  • Description
  • Key Product Features

Note: Make sure you follow Amazon policies (based on Category) when you work on listing content. Failure to do so can result in listing bans or removal.

Manage Your Catalogue


Once that’s done, it’s time to move on to specific organization every Amazon seller should do. One vital Amazon organization technique is to consolidate related products to the parent-child variation.

For example, if you’re selling a specific style of sweatshirt that comes in different colors, it’s good to give your customers a choice of colors within the single, parent listing. The idea is to make the shopping experience easy enough that it will improve your sales volume. As easy as that may sound, it can take time and effort to set the variation relationships between your SKUs properly.

We host a complete checklist for how to do this consolidation. It includes what you’ll need for your parent items and your child items. It also features the full checklist for combining two ASINs into one variation family. Here’s that full checklist for you:

Combine Two ASINs Into One Variation Family

  1. 1
    Download the appropriate category template for your category using the Product Classifier or Templates for Specific Categories. Refer to the Valid Values tab in the template to see what variation themes are available.

    Note: If no variation theme is listed, you cannot create a product with variations in that category.
  2. 2
    In the inventory template, create parent and child SKUs.
  3. 3
    On the parent item:
  • Enter values for the required fields, including SKU. This can be any alphanumeric string of 40 characters or less, but must be unique (i.e. must not duplicate any of your other SKUs). Sellers often append "-parent" to their base SKU to remind them that this is a parent SKU.
  • Leave Parent SKU field blank
  • Enter a value of "parent" in Parentage and enter a valid value in Variation Theme.
  • Leave Relationship Type blank.
  • Leave all other non-required fields blank.
  1. 4
    For each child item (ASINs to be combined into one family):
  • Enter values for the required fields.
  • Fill in the Parent SKU field using the value from the parent's SKU (value will be the same for all child items).
  • Enter "child" in the Parentage, and enter "variation" in Relationship Type.
  • In the Variation Theme field, enter the same value that you entered for Variation Theme on the parent (value will be the same for all child items).

It is vital you do these steps with any parent and child variations. The value of having a clearly organized operation is big enough on its own, but this is customer-facing. You don’t want confused customers leaving your page because they weren’t able to find what they were looking for.


Improving Your Listings


Once you’ve done your Analysis, you’ll want to take the necessary steps to improve your listings.

Some entrepreneurs choose to do this directly after acquisition. While we recognize the importance of these improvements, especially for top line revenue growth, we highly recommend you do the steps listed above first.

Growth will be painful if supply chain, operations, cashflow, and other important core processes are not aligned.

When you’re ready to improve your listings, here are the key steps to take:

  1. 1
    Define Your Keyword Strategy

Before you optimize anything, identify a strategy for your keyword targeting. Use the Analysis tools above to find competitors in your space who you can study for keyword targeting.


We recommend MerchantWords and JungleScout as tools to help with your keyword research. You can use our Keyword Targeting SOP to see HOW you can use these tools effectively and target the right words to build new customers.


We also think the team over at
AMZ Pathfinder have been doing some great work on Keyword Strategy. They have some great playbook content on basic keyword spend strategy and utilizing tools like the Search Term Report. They also have more tactical ideas like spending against your own brand name. A good strategy can unlock massive growth for you, which we’ll be covering more in later posts.

  1. 2
    Improve Your Listing Copy

Next, you need to work on the copy for your listings. Of course, research and work in keyword targeting will drive your copy listing strategy as well.


Below, you can sign up for our SOP for copy and helping Amazon sellers target who they want to sell to with high quality content. Be sure to keep in mind Amazon’s category-specific Style Guides for reference.

Get Your FREE SOP Swipes

Pro-tip: Use product reviews to redesign listing content. Another pro-tip we don’t see enough sellers using is to read your product reviews to understand content strategy. If the product description is confusing for customers, and they are mislead into a purchase, they may leave a bad review saying something like “product quality is not as good as advertised.” Content improvements based on the reviews will eventually help improve the overall review rating. Note that it is a long-term process; do not expect overnight results.

  1. 3
    Improve Your Listing Images

Your images should be high-quality, on-brand, and consistent. Find images that are licensed for open use and improve them through image manipulation. If this is not a skill you have, we recommend outsourcing via Upwork, Fiverr, or contact us at Sellerplex for other ways we can help.


It is important for images to be saved and uploaded in the same manner. Here’s what we use:

  • CHILD SKU_MAIN (for main image); CHILD SKU_IMG1, CHILD SKU_IMG2, and so on.

Everytime you finish a CHILD SKU, create a folder in Google Drive. Title it CHILD SKU_Product Name. Note that the picture has been uploaded in your Master Product Tacker.

  1. 4
    Create Enhanced Brand Content

Enhanced Brand Content (‘EBC’) establishes uniform styles and layouts across listings and brands to ensure that your design is uniform and the experience is consistent. EBC options are listed under ‘Advertising’ in Amazon Seller Central.


Templates are available to use which will showcase high-quality images, videos, or enhanced text and copy options.


EBC is vital to a brand’s success. You can access our SOP and Guide on how to use EBC below. 

Note: Remember that the same EBC will be used among child SKUs under the same parent. The only difference is if you add a module for each swatch.

Get Your FREE SOP Swipes

  1. 5
    Improve Reviews/Ratings

Address product quality issues with your supplier, if they are mentioned in the reviews.

You can read through our SOP on Quality Assurance / Quality Control for help and ideas.

You do not need to settle for low quality. Respond to reviews once the issue is fixed, and announce the changes in product listing themselves.

You can also suggest a replacement product to a customer.

We have proven history records of customers made happy that changed the reviews to a higher rating as a result of a good customer service follow up.

Ask Amazon to remove malicious reviews.


You may realize your competitors are manipulating your ratings by posting negative reviews. Specifically, the malicious reviews will often mention competitors product as superior to yours.

If you start a case with Amazon, you can explain your concerns. There are no guarantees that Amazon will take your side, but we have seen this work multiple times.

Negative reviews that are not related to your Seller performance can also be reported to Amazon and they will be removed. For instance:


  • Negative review regarding FBA fulfillment, including delays with shipping will most likely be removed by AMZ
  • References to cheaper priced alternatives at other online or offline stores in the reviews will also be removed, especially if you point these out to Amazon reps.

Submit The Information Below To Get Started

Please answer the form below and someone from our team will be in touch shortly.

  • *Select all that you need help with
  • This field is for validation purposes and should be left unchanged.

Sign up for your FREE access to our core SOPs for running better and more organized business!

Copyright 2019 SELLERPLEX. All Rights Reserved.

>