Hustle Lab Episode 7 : Product Quality and Amazon Stock

The devil is in the details, they say. Today I bring you a couple of stinky little anecdotes to bring this lesson to life. Just because they’re details doesn’t mean the damage isn’t significant!

First I’ll talk about how you only find out your stock is damaged when it’s too late, then you’re managing a problem and not making money. Then I’ll cover how Amazon’s grinding monster of an FBA machine made my life a confusing hell since I sent them a parcel, ages ago.

That Time I Got Sold Damaged Goods

Amazon FBA and Online Selling : WHat to do when you buy bad stock

As you’ll know if you’ve read the Hustle Lab episode on acquiring stock to sell, this experiment is all about buying ex-display, returned and overstocked goods and selling them on Amazon and eBay.

The problem with this sourcing strategy is that there are an awful lot of bad actors out there. This channel is a useful dumping ground for products that are difficult to shift, but it’s also a convenient place to pass on the pain of fraud.

That’s exactly what happened here.

What I saw during the auctions were a number of Apple Earpods with Lightning Connectors. I thought, hang on, I have a pair of these and the genunine Apple earpods cost a fortune. These were genuine, the photo looked identical to the official product, the price was easily low enough to make a comfortable 50% margin after all costs, so I bid for 5 pairs of these.

I won, and they arrived. In various conditions.

One pair looked like it was 10 years old and went straight into the bin. I listed two pairs as Used, possibly ex-display and two pairs got listed as New, Box Opened.

Appearances are deceiving. I sold one of the new ones and one of the used ones and sent them off, and those two items are the only source of returns and/or complaints I’ve received so far.

I should have tested them. They were broken. And dirty.

Here’s what happened: Someone bought a pair of earphones, very carefully unpacked them, cleaned their old, broken earphones to make the cables nice and white. Then they very carefully repacked their old earphones and returned them to the shop in the new box using the UK’s 14-day cooling-off period for online purchases.

It’s fraud, plain and simple.

The shop knows this happens, and rather than reopen the boxes to check, they just dump these kind of items on the auction circuit.

I checked the two remaining earphones and found only one that worked and was new. I sold it last week. Over all, on the Apple Earphone products, I’ve lost 80% of my money. It’s a good thing I only bought 4.

As for my unhappy customers, I issued immediate refunds and personal apologies and told them to chuck the product in the bin rather than waste money on postage. They’re all happy with my reaction.

The Lesson: You will get sold dud products. Stay away from products from big-name brands that look too good. Remember that some people go to the auction and examine the product. If no-one’s competing for an item, they probably know something you don’t.

That Time I Got Crushed In Amazon’s Gears

FBA Bad Stock and Amazon Shipping Issues

Let’s not get personal. I’m way underneath Amazon’s radar and I’m managed by their automated systems. Nevertheless, those automated systems have utterly devastated my December earnings.

I really wanted to use FBA because it relieves me of the burden of shipping stuff out all the time.

I sent them a big box of products and followed the parcel as it made its way through DHL’s network. Then it stopped in a depot miles away from the fulfilment center, and waited there for days.

I called DHL and, after getting passed from agent to agent, one of them finally admitted to me that DHL hold onto Amazon FBA stock at Amazon’s request when they’re overwhelmed or short on space in their fulfilment center. So I called Amazon and grumbled and my stock soon unstuck. I lost a week.

After things arrived at the FBA warehouse, I waited as the FBA system tallied my stock. Everything appeared to be going well, then a large portion of my stock (51 pairs of headphones) vanished. Then two drones were marked as unfulfillable without any explanation, and then the same thing happened to 7 wifi keyboards.

You have to wait 14 days from the date of receipt by Amazon before you can raise a ticket about missing inventory. Their system also keeps you waiting days before telling you what’s wrong with your existing inventory.

I finally received a note telling me they needed me to redo all the battery safety information for the keyboards (because there was an “audit” in progress), which I did, and the keyboards are once again available.

I’m still waiting for the results of the stock audit explaining what happened to all my earphones and I still don’t know what’s going on with the drones.

These delays mean that I can’t take advantage of the hugely profitable Christmas period. Sales aren’t exactly reaching new highs in January each year. If I were being cynical, I’d suggest that Amazon’s done very well at holding the stock of a new entrant back during this critical period, for reasons that are entirely under its control, and which it has not shared.

At the end of the day, the answer will almost certainly be, “Oops, sorry, here’s your stock now.” There will be nothing I can do. I’ve also paid £25 for access to their platform for a month with almost nothing to sell.

The lesson: You will get screwed. By accident or by design, these big organisations only look like they’re going to be super efficient from the outside. In reality, the teething pains of working through a new channel will take months to iron out and you can never count on their goodwill to figure things out. They’re a machine, and you are dealt with as part of a process. Nothing more.