Amazon.com, Inc.'s Q4 Preview

Amazon.com, Inc. (NASDAQ:AMZN) reports on 2/2 after the close. Bank of America Merrill Lynch is slightly below on revenue and above on EPS vs. the Street. Amazon’s use of Google PLAs ads, November AWS price cuts, and weakness in select offline retailer sales (online shift?) are three key variables for the quarter. Amazon’s holiday press release data was not conclusive on 4Q spending, but highlighted several solid growth trends, including Fulfillment by Amazon (FBA) delivery growth, Alexa/Echo demand, and Amazon Business strength. While Amazon remains its top eCommerce idea for 2017, BAML is cautious into 4Q’16 results due to: 1) Historical unpredictability of 4Q; 2) Increasing revenue expectations due to offline retailer misses (share shift to online), and 3) Risk to 1Q margin outlook due to content/fulfilment ramp.  

BAML has below Street margin expectations in 2017 at revenue/GAAP profit of $35.6bn/$978mn vs. the Street at $36.0bn/$1,337mn. While BAML anticipates cuts to Street 2017 profit expectations, the firm thinks the Street will view content and fulfilment investment positively and see potential for retail margin to rebound in 2018 as recent fulfilment centers better leverage fixed costs, 3P mix increases, India investment growth slows, and streaming content costs are better absorbed (Prime Video expected to launch globally in 2017). Any commentary on the border tax or COGS deductibility implications will also be important for the stock (unlikely that Amazon provides much guidance), BAML estimates that loss of imported COGS deductibility could be more than 50% dilutive to EPS.    

As in the past, BAML thinks investors will quickly move past a near-term profitability miss if the top-line trajectory remains solid, retail market share is rapidly shifting to Amazon, and the Street is constructive on Amazon's investment initiatives. BAML views any downside on conservative 1Q profit guidance as a particular buying opportunity as core drivers (Prime, AWS, delivery infrastructure advantage) and new opportunities (SaaS, India, B2B, autos, apparel) remain intact. BAML views Amazon as the most attractive long-term risk/reward for Internet mega caps., and maintains its $1,125 PO.  

(SOURCE)

Amazon Valentine’s Day: Prepare Now and Love Those Profits!

By Erik Mathes

If you’re not feeling the Q1 love yet, don’t get too down: Amazon Valentines Day sales are on the way. Hitting smack in the middle of Q1, Valentines Day brings in a bonanza of high-conversion, high-spending shoppers to Amazon.There are so many reasons for online merchants to get excited for Amazon Valentines Day sales. Just look at these stats from a survey conducted by the National Retail Federation (NRF):

• 54.8% of Americans celebrated Valentines Day in 2016

• 27.9% of Valentines Day 2016 revelers planned to shop online

• $146.84 was the average amount spent on Valentines Day gifts per consumer in 2015

• Men spend approximately $191 and women $97 on gifts for their partners on average

These numbers tell you that Amazon Valentines Day sales are there for the making—if you prepare early and strategically.

Sure, there are plenty of obvious items that sellers can source for this love-themed holiday, as seen below:

But, there are just as many products you can stock up on for Amazon Valentines Day that aren’t as intuitive.

To help you prepare, we put together this crash course on Amazon Valentines Day products to source that’ll maximize sales.

And, we also discuss Valentines Day best practices for Amazon sellers to follow for V-Day, including optimizing:

• product descriptions

• gift options

Keep reading to see if you’re ready for the Valentines Day shopping frenzy.

Stock the most popular Amazon Valentines Day items

Let’s start by getting the obvious stuff out of the way: the products that are typical Valentines Day top sellers on Amazon.

For women, these include:

• jewelry

• perfume

• flowers

• chocolates

• beauty products

• romantic books and movies

• lingerie and intimate apparel

For men, you’ve got:

• cologne

• watches

• grooming supplies

• clothing

• sporting goods

• techy gadgets

If you opt to source chocolate, make sure to read up on Amazon’s Date- and Temperature-Sensitive Products guidelines:

You should also stock stylish his-and-her products, such as lockets, clothing, and bracelets, as these will be in-demand.

But it doesn’t end there. Smart sellers know that there’s more to Amazon Valentines Day sales than gifts for significant others.

More demographics to target for Amazon Valentines Day sales

In addition to targeting people buying gifts for significant others, you should also target people purchasing gifts for:

• family

• friends

• co-workers

• neighbors

• classmates

• teachers

Valentines Day items for these demographics need not be intimate or expensive. Really, anything red, cute, and with hearts on it will do.

Consider stocking up on platonic gifts like:

• decorations (for the home, classroom, and/or parties)

• stickers

• cards (especially sets that little kids can use for classmates)

• gift wrap

• plush toys

Platonic gifts can also include chocolates and flowers, as well as some of the other ideas mentioned for significant others. But, they can (and probably should) be smaller, less intimate versions.

Round out your inventory with some of these products and you can seriously cash in on Amazon Valentines Day sales.

Don’t forget to source gifts for pets

People love their pets. I mean, they really LOVE them.

According to the NRF, Americans spent a whopping $681 million on Valentines Day gifts for their pets in 2016. That’s actually a decrease from the $701 million spent on pets in 2015, but it’s still a massive market segment.

Products to consider sourcing as Valentines Day gifts for pets include:

• leashes

• collars

• hair clips (for all the dog bedazzlers out there)

• bandanas

• pet t-shirts/sweaters

• themed food and water bowls

• toys

• pet treats

Of course, make sure your V-Day pet products are red, pink, or dotted with hearts.

And, if you don’t sell out, remember that these products will always be in demand every year around Valentines Day.

Source products that help people catch a cheating lover

It sure sounds crazy, but it’s true.

Sales of spy and surveillance gear that helps people catch significant others cheating routinely skyrocket in the weeks before Valentines Day.

Perhaps it’s because cheaters anxiously give away clues of their misdeeds as the day of love approaches. Or, maybe people just become suspicious of their lackluster lovers after seeing other doting couples acting affectionately in public.

Whatever the case, your Amazon Valentines Day sales can get a boost from products like:

• GPS trackers

• spy cameras

• audio surveillance tools

The listing below is the perfect example (although the product itself could use some help with its rating…):

Which brings us to our next Amazon Valentines Day sales tip:

Boost Amazon Valentines Day sales by optimizing your product descriptions

We can’t stress enough how vital Amazon product descriptions are when it comes to attracting customers for seasonal/holiday sales. Valentines Day on Amazon is no exception.

By strategically writing “Valentines Day” into descriptions, your listings will appear higher in Valentines Day-related searches. Just look at the gold foil number balloons pictured below:

There’s nothing about these balloons that screams “Valentines Day.”

But look below at how the seller chose to list this product:

Clearly, this seller understands the power of having listings optimized for search, and you should mirror that technique. This seller was even savvy enough to also include “Birthday,” “Wedding,” and “Party Decoration” in the description to attract other demographics.

Write your listings assuming that many Amazon shoppers will use “Valentines Day” in search queries. And, if you have any products (like the balloons) that make sense for other holidays, make sure to update those listings to be optimized for the nextholiday.

Lastly, don’t be afraid to optimize the copy in your product detail pages down to the bullets in the description. Even adding a line of text saying “Your wife/husband will love this” could be the difference-maker in getting that next sale.

So, go all-out in tailoring your product listing pages—from title to details—in order to maximize who you attract via search.

Offer gift wrap and other special gift options

A great way to make your Amazon store stand out is to offer gift wrapping and gift messaging to your buyers. And, when you allow customers to select an item as a “gift,” Amazon will omit the price on their receipt.

Here’s what Amazon writes about managing your Gift Options in Seller Central:

To learn how to set up gift wrapping and gift messaging on your account, visit Amazon’s Gift Options page.

Amazon Valentines Day sales: The bottom line

Don’t be fooled into thinking Q1 will be a bust; Amazon Valentines Day sales can seriously boost your bottom line.

Think outside the heart-shaped chocolate box and source products for platonic relationships, pets, and paranoid lovers seeking a cheating partner. And don’t forget about his-and-her products for those types of couples.

Also, consider offering gift wrapping and gift messaging options for buyers. You can even charge extra for these added services to further pad your profits.

And, don’t forget to optimize your product descriptions for search by including “Valentines Day” in the title. Even inferior products can become top sellers when they’re set up to appear high in Amazon’s search results.

(SOURCE)

What to Expect From the Amazon Marketplace in 2017

By Karon Thackston

I’m excited to welcome back Bernie Thompson of Efficient Era. You probably remember Bernie from the first post he enlightened us with about Amazon hijacking listings and what to do if it happens to you. Today I have the pleasure of sharing with you his predictions for the future of Amazon in 2017.

“What three trends do you see shaping the Amazon marketplace in 2017 and how can sellers prepare and adapt to these trends?”

1) Amazon over-corrects in protecting the integrity of the review system

It took several years for Amazon to notice and take effective steps against the gaming of its review system. But by the end of 2016, Amazon had all guns blazing. Overall, it’s a good thing. The challenge now is in policing these much stricter rules without harming the selling community that is trying to live within them. Years ago, eBay started suspending and downgrading seller accounts in ways that were capricious and felt unavoidable for most sellers — and in doing so insured they would all take up shop on Amazon’s Marketplace. Amazon is now the company everyone is dependent on, and they too are mechanical about policing their systems. Amazon is now the one that can seem capricious — no warning, little information provided, and not a lot of statistical perspective or account history considered.

But there isn’t another marketplace to jump to in 2017. Walmart’s weeks of paperwork and hand-holding to get started on their platform is indicative of their chance of success. So sellers are going to take the brunt of any over-correction. In 2017, Amazon will struggle to get rid of sellers gaming the system (it’s still good that they’re trying), but some sellers trying to do the right thing will also be collateral damage. Given these risks everyone will be nervously trying everything they can to diversify off Amazon — and largely failing to do so as Amazon continues to dominate e-commerce in the USA and beyond.

2) Geographic Expansion

From 2011 to 2013, Amazon quickly expanded the geographic reach of their programs for 3rd party sellers. Marketplace and FBA quickly went from USA focused to globally focused — spanning North America, Europe, and Japan. However, the past few years Amazon has got stuck in a bit of a quagmire in China and India — you could say it’s like a snake digesting a panda and an elephant. Efforts in China continue, but they don’t look healthy, especially considering the headwinds against non-Chinese companies there. India continues to have difficult regulatory barriers, but looks to be a more competitive playing field. Amazon is doubling down there and doing better.

But for 2017 and beyond, Amazon seems likely to clear the blockage and begin seeking out new worlds and new civilizations. Public news reports have Amazon hunting for warehouse space in Australia. And perhaps even some countries that would seem poorly matched because of their high import duties and protective customs, such as Brazil where public reports show Amazon having one warehouse already. Sellers would be wise to jump on each of these new opportunities, keeping watch for country-specific tax and regulatory burdens that could kill the deal.

3) The Retail Empire Strikes Back

Jeff Bezos views Amazon’s Retail (1P) and Marketplace (3P) teams being separate entities which compete with each other, and either way Amazon wins. For the last 7 years, it’s been the Marketplace team that has been winning by making it easy to get started, by giving sellers control over listings, pricing, and customer communication, and by having transparent and predictable fees. But in 2016 there were signs that the Retail team wanted their ball back, with the launch of the Vendor Express program, Amazon Launchpad, and the Official Contributions (to Q&A) program.

So far, these initiatives have been very tentative, not nearly as compelling as the Marketplace features, and have had the downside of increased confusion as Retail has allowed a wider set of distributors to override the product listings of Marketplace sellers — including Brand Owners. But if Retail were to get serious, they might get rid of all the crazy, time-consuming, seller-specific negotiations over margins and marketing budgets, and instead move to a transparent pricing model like Marketplace. If they did, sellers would have two viable choices within Amazon, and everyone would benefit.

And a bonus #4:

4) Amazon’s house brands conquer more categories

AmazonBasics is a known category killer. But did you know Amazon has a nuts and coffee brand called “Happy Belly”? You won’t find Amazon’s name anywhere on the package, but yep – it’s them, just like AmazonBasics. And check out Lark & Ro for women’s dresses, Mama Bear organic baby food, and Pinzon towels and sheets. All are Amazon house brands. All of them are launched using what Amazon has learned about the market from the rest of the products selling on Amazon — including yours.

Amazon’s well-known strategy is to compete with itself and the world at every level of the business — from low-level service, to integrated marketplace, to branded product, and every layer in-between. It’s only a matter of time before Amazon moves into a nearby business. Every year, competition with the “house” will affect more product categories. The only question is how level the playing field is, and whether sellers can find ways to differentiate themselves from Amazon’s own offerings.

(SOURCE)

Give Your Amazon Business a 2017 Sales Tax Checkup

By Kym Ellis

The beginning of a new year is a fantastic time to evaluate what went right (and wrong) in the previous year, and make big plans to kick butt in the year to come. As a business owner, it’s worth it to take this time to assess your current business processes and decide if there’s anyway you can “work smarter, not harder.”

One business process that tends to bog ecommerce sellers down is sales tax.

Sales tax is an ubiquitous administrative hassle. Most everyone has to deal with it, but since states don’t provide great guidance on exactly how to collect and file, many online sellers can’t feel confident they’re doing sales tax “correctly.”

That’s where giving your sales tax processes a good once-over comes in. Read on to find out how to evaluate your sales tax activities now so you can get on with a happy and prosperous 2017!

Why should you give yourself a sales tax checkup?

Forty-five U.S. state and Washington D.C. all have a sales tax. Any retailer, including online sellers, is required to collect sales tax from buyers in states where they have nexus (more on that below). Retailers collect a percentage of sales tax on each taxable sale and then remit those funds to the state.

States and local areas (such as cities, counties and other special taxing districts) use the money collected by retailers to pay for budget items like schools, transportation and public safety. Many U.S. states and localities make the majority of their revenue from sales tax, so they are very interested in making sure that retailers collect, file and remit sales tax!

That said, you should never have to pay sales tax out of pocket! Sales tax is a “pass through tax,” meaning that you collect it from your customer and pass it on to the state. You should never spend your own profits to comply with state sales tax laws.

Ready for your checkup? Let’s dig in.

Take Stock

Ask yourself how much time you spent on sales tax last year? If you spent more than a few minutes per filing, you’re probably spending too much time on an administrative activity that doesn’t make your business a profit.

Also, what nags at or concerns you every time you file a sales tax return? Are you afraid you aren’t filling out all of the cities, counties and districts correctly? Or afraid you aren’t collecting the right amount of sales tax from your customers in the first place? Maybe you sell on multiple channels and aren’t sure you’re collecting the right amount of sales tax on each.

Before you can fix the problem, first know what it is!

Determine Where You Have Sales Tax Nexus

As a retailer, you are only required to collect sales tax from customers in states where you have sales tax nexus. Sales tax nexus is just a legalese way of saying “a significant connection” to a state. Though every state’s nexus laws are slightly different, nexus is generally created in the following ways:

• A location – an office, warehouse, store, or other physical place of business
• Personnel – an employee, contractor, salesperson, installer or other person doing work for your business
• Inventory – Most states consider storing inventory in the state to cause nexus even if you have no other place of business or personnel
• Affiliates – Someone who advertises your products in exchange for a cut of the profits creates nexus in many states
• A drop shipping relationship – If you have a 3rd party ship to your buyers, you may create nexus
• Selling products temporarily at a tradeshow or other event – Some states consider you to have nexus even if you only sell there temporarily

You can see what creates sales tax nexus in each state here.

The first of the year is a good time to double check if your recent business activities may have caused you to have sales tax nexus in a new state.

If you do find that you have sales tax nexus in a new state, you should register for a sales tax permit in that state and begin collecting sales tax. Don’t skip this step! Collecting sales tax without a permit is illegal. (States think you’re keeping their money for yourself!)

On the other hand, you may have stopped doing certain business activities that gave you sales tax nexus. If you find that you no longer have nexus in a state, you can cancel your sales tax permit in that state. When you do, just double check with the state to make sure they don’t have any “trailing nexus” provision that require you to collect sales tax for a few months to year after your nexus in the state has been abolished.

Also, once you’ve cancelled your sales tax permit in a state, be sure you are no longer collecting sales tax from buyers in that state on any of the online shopping carts and marketplaces on which you sell. One of the biggest mistakes we see at TaxJar is online sellers forgetting to collect (or stop collecting) sales tax on one of their carts or marketplaces.

Know Your Sales Tax Filing Frequency

You’re not the only person who will be completing a sales tax checkup at the beginning of the year. Many states do, too! And this may mean that they change your sales tax filing frequency.

You were assigned a filing frequency when you first signed up for your sales tax permit. At that time, your state assigned you to pay sales tax either monthly, quarterly or annually.

States generally assign you to file and pay sales tax more often if you are a high-volume seller. Around this time of year, some states will evaluate the amount of sales tax you are collecting and remitting over a period of time. Then they will change your filing frequency to either more or less often. Be on the lookout for a letter or other communication from your state’s department of revenue in case they change your filing frequency!

Know Your Sales Tax Filing Due Dates

Once you are sure of your sales tax filing frequency, you should the note your sales tax filing due dates.

In the majority of states, sales tax is due on the 20th of the month after the filing period. For example, if you are a quarterly sales tax filer in the state of Georgia, your Q1 sales tax return would be on April 20th – the 20th day of the month after Q1 is over.

Other states want to hear from you on different days. California’s sales tax filing due date isn’t until the last day of the month after the filing period. Florida’s sales tax filing is technically due on the first day of the month after the filing period ends. But you have until the 20th of the month before the filing is considered late.

It’s important that you pay on time, because every state assesses penalties and interest for late filings. Plus, about half the states with a sales tax offer sales tax discounts (generally, a very small percentage of the amount of sales tax you collected) to businesses that file on time!

Your Sales Tax Processes as an Amazon Seller

There are a few reasons why you may be spending too much time on your sales tax returns. You may sell on multiple channels and have a hard time reconciling all of your sales. Or you may find yourself spending hours filling out your sales tax amounts collected within in each state, county, city and special taxing district.

If this is too time consuming, you can use a sales tax automation solution to make your sales tax life simple. You can connect each of the online shopping carts and marketplaces you sell on. From there, you’ll receive a return-ready sales tax report with your sales broken down just the way your state wants to see them. You can even AutoFile your sales tax in most states, meaning you never need to look at your sales tax filings ever again.

Sales tax is a necessary part of your business, but it doesn’t make you any money. If you’re spending too much time on sales tax, try automating it so you can get back to doing what you do best – running your business.

(SOURCE)

Amazon.com: Fulfillment by Amazon Sellers Are Thriving

On Wednesday, Amazon.com (NASDAQ: AMZN) announced some telling metrics on its Fulfillment by Amazon (FBA) service, or Amazon's service that stores, picks, packs, and ships third-party seller's products in its fulfillment centers, as well as provides customer service on behalf of the seller.

FBA is "thriving," Amazon said. FBA items shipped worldwide during the holidays increased 50%, highlighting the growing popularity of the service. To understand just how strong this growth rate is, consider that eBay's (NASDAQ: EBAY) year-over-year growth in sold items on its platform was just 5% in the company's most recently reported quarter. And eBay's marketplace revenue in the company's most recent quarter was up just 2% year over year. The big difference in the two company's recent growth clearly shows how hot FBA is with sellers right now.

Further, Amazon said active sellers using FBA increased an impressive 70% during 2016. And the service is particularly taking off outside of the U.S., where FBA units shipped increased over 80% last year.

Does it matter?

With Amazon's e-commerce ambitions spanning far beyond theproducts it can produce, market, and sell itself, the fact that FBA is firing on all cylinders is good for Amazon investors. Not only does this data validate how sellers are increasingly relying on the program, but it also points to a growth opportunity for Amazon.

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(SOURCE)

Is Private Label with Amazon FBA still a good business opportunity?

Find out if Private Label is still a good business opportunity 

NEW 2017 Amazon FBA FEES Shutting Dow FBA Sellers.

Watch this video to find out about the new 2017 amazon FBA fees

3 New Year Business Resolutions That You Should Consider Doing Too

By Dean Sotto

Well, I'm sure that you already have a whole list of goals that you've set for this year, but after reading this you may want to consider adding more. Whether you are in business now, or will be in the future, I know that these 3 resolutions will help you to make more money and grow as a person if you choose to put them into action.

1. I will never do anything for free this year (Church/Charity Excluded)

I'm a nice guy - but we honestly do finish last.  Here's what I've got for being a nice guy and for doing things for free:

• A previous client that I almost had to take to court because I did work for them for 2 months without pay.
• A past customer that is #1 for most keywords that they've been targeting, yet cancelled service because they were scared to expand and didn't trust me to help them grow their business.
• The same client neglected to give me referrals when I asked once in the middle of a successful marketing campaign and at the end of service.
• A friend and client that doesn't understand why I won't build a website for him for under $100.
• and a many similar situations...

Here's the truth, people will trust you, respect you, and value you more as entrepreneur when you charge them what you or your services are worth.  You don't tell your boss at your full-time job that you'll do some work for him for free because you are friends do you?  Why would you do the same thing in your business?

Of course, you can give things away for free in order to get testimonials or to generate buzz, etc.  But to give your services away in the name of friendship or because you are a nice guy is a sure way to kill your business and your reputation.

2. I will make at least 20 calls/emails per week to prospects

Sales will cure the majority of your business problems.  I am lazy.  I hate making sales call...  but who doesn't?  I am pretty sure that nobody wants to be told no 20 times every week.  But, until you've built enough gravity toward your brand it's what you need to do.

I resolve to make at least 20 sales calls or to at least send out emails.  On average, you should get about 2 meetings for every 20 touches that you make with prospects.  If you sign up for my newsletter, after a couple of weeks you'll see how I find targeted prospects.

3. I will write 1 -3 blog posts per week on my blog

First off, blogging is useless if you don't have a goal with it.  My goal is to sell my products, build gravity toward my brand, and to make some extra money through some of the affiliate programs that I use.

Products

If you don't have a product this year, make one.  Even if it's just an audio product of someone asking you questions about a particular topic, package it and sell it using something like E-Junkie.  Even if you only sell 1 a month, that's $9.99 - $99.99 that you didn't have before.  Plus, you'll be teaching someone how to do something in an hour what would have taken them many hours or days to learn.

Gravity toward your brand

What I love about blogging and about podcasting is that it is a great way to reach out to people without having to do much work.  Don't get me wrong, having a blog takes persistence and requires a bit of expertise (I cringe when I see people starting out with blogger or WordPress.com blogs), but it's nothing compared to making cold calls.

Think about it, when someone comes to your site the only expert is you.  Of course, if you are a good blogger you'll link to other people as well (you'll see me link to folks like Pat Flynn from Smart Passive Income, Paul Tran - sales genius and franchiser, Ted Nguyen - PR guru, and Neal Schaffer - Social Media Expert and consultant).  When people see that you have amazing content and that you can teach them something of value, you will be seen as an expert.  If your content is remarkable enough, it will lead to opportunities that come to you.

Affiliate sales

If you have services that you've used in the past, by recommending them to other people you will be saving them a lot of time and money.  I don't know about you, but I'd hate to waste money on a service that didn't solve a problem that I was facing.  Even if you make a little money off of your resources you'll be doing your audience a huge favor in recommending the best product out there.

Recommending products that you've used or that you know is of high value is also a great way to earn some side income.  In fact, (no lie) I made $100 today from affiliate sales ($60  from a niche site that I've had and I'll be talking about in my Profitable Niche Adventure Series, and $40 from a sale from an affiliate on this site).

This is the year for business

We are in recovery mode, so this is your chance to make things happen.  Don't be a faux Mr. Nice Guy.  Don't use your talents for free (unless it's for church or charity).  Now's your chance to get out there, talk to people, make sales, and build gravity toward your brand.

(SOURCE)