The recent issue with sending Amazon 2x50 packs of cards, and them logging only 49 received was interesting. It was something like 3 weeks before I could raise an issue, and then 2 weeks to resolve. Even then they (a) recorded 99+0 cards, (b) blamed me for sending to wrong fulfilment centre (I didn't pick it, then did), then finally agreed it was sorted 49+50 cards, and refunded £3.91 for the missing pack. I have no idea where they got the £3.91 figure from!
I do think we are getting a pretty good handle on Amazon now, and I think building up our reputation with them is next step, so cards are good for that as not a lot can go wrong with them (though we have sold one FireBrick FB2900 which is nice). I am happy that the quality of the cards is good, and Ivory Graphics are doing a good job, as I would not want A&A or RevK branded goods not to be the best quality.
So, here are the latest I have listed...
They are here: A&A, FireBrick, Left handed, White. Some will not show until next week as we have only just shipped inventory, but do feel free to add to wish list :-) It would be great if people bought some and left honest feedback.
They are selling for £12 (inc VAT and postage), which seems a lot, so I thought I would break it down so people know what this is all about:
- In the quantities of only 100 these packs cost £5.62+VAT.
- Amazon charge £1.62 fulfilment charge
- There is also around £8.50 charge to send them to Amazon, so lets say 9p a pack for 100.
- There is a storage cost too, but probably only a few pence given the size of a pack of cards.
- Amazon also charge a referral fee (their commission basically) of £1.80
- And of course at £12, there is £2 VAT.
Sell for £12.00 - £2.00 VAT - £1.62 FBA - £1.80 Referral - 10p post/storage - £5.62 cost, leaves 86p profit per pack.
But, there is cost of advertising, without which they seem to literally just sit there and not sell. I was hoping some would sell just because of people searching for cards, but they show up in popularity order, so you have to advertise to get sales to get high in the list, and then maybe you can sell on inertia. 86p a pack is not really enough to cover any sort of advertising, though, so far, twitter seems to be the best for this. So I'll try some twitter advertising once they show in inventory. I'll do another post on that I expect.
It may be that the novelty packs (the minimalist and the left handed) do get some sales based on searches - we'll see. I saw one other minimalist pack sold by loads of people and selling around £20 a pack, so maybe novelty is key here.
All in all, these are going for almost no profit at all, and Amazon make way more than we do out of it.
Of course the economics are better if you buy 1000 at a time. The cost goes down to around £3+VAT then. Even so, you are still selling around £10 to make any sort of profit.
This allows nothing for my time on the designs, or even just the time for Mike at the office packing and sending to Amazon (thanks Mike).
It is a good job we are not trying to sell the cards as something profitable really, isn't it!
Update: As per comments, we have to get cards below £5.31 ex VAT cost price, which just means buying in slightly larger quantity. At that level selling at £8.94 means fees of £2.14 (including only 80p rather than £1.62 FBA fees for small and light). Any lower than £5.31 cost and we can make a profit at £8.94. As for the cards costing £5.62, selling at £10.56 is about cost price, so I have changed to that. Once this batch is sold, I'll get a larger batch and list at £8.94 or lower.
"I think building up our reputation with them is next step".
ReplyDeleteHmm. Given their broken and dysfunctional systems/processes outlined above I would perhaps rephrase that as:
"I think Amazon building up their reputation with us is next step"
Frankly the economics are what you make them. Of course selling a tiny number will mean it's really expensive.
ReplyDeleteCurrently £12 is very high I agree - so what is a better price for a pack of cards delivered to the door? About £6 would be 'good value' for AAISP/Firebrick branded cards I would say making limited or no profit on them as they are marketing items and say £7 for other blank cards enabling you to keep making at least your 86p of profit.
First thing;
As your cards are 113g and 9.4 x 6.8 x 2 cm you can use amazon small and light fulfilment (as long as you sell under £9) - this drops your FBA cost to 80p (plus very minimal storage and import costs, yes).
This more than halves your FBA cost.
Buy your cards in 1000 quantity. If you do not feel ready for that sized commitment why not negotiate with your cards supplier that you will order 1000 packs but as 250 of each design or similar. This almost halves your cards cost (you say £3+VAT vs £5.62+VAT)
VAT and Referral fee are half as you're selling for £6 instead of £12. So costs wise we have now got:
£3 Cost of a pack of cards.
80p Amazon fulfilment charge.
90p Amazon referral fee.
Lets call it 10p per pack of cards on FBA import and storage fees.
£1 of VAT.
£5.80 of cost means you make 20p profit each time you get promo materials in to the publics hands (nice one!) - your customer is only paying half the price now too!
As for the non AAISP/Firebrick cards you can make some fun, non marketing ones and sell them for £7, £8 or £8.99 and make a couple of quid on each pack sold.
Matt
Thanks for the detailed breakdown. Yes, the 100 pack price meaning selling over £9 was kind of what kicked it all up rather a lot. So maybe next time we'll go for a different quantity. Sadly they could not do an aggregate print run for the cards (I did ask).
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