Saul Talks Episode 3: Amazon FBM Receiving, Organizing, and Processing Flow

Hello, this is Saul Talks, episode three. I guess I'm a Sol and this is where I talk. I come on here and I talk and answer questions that you guys pose to me through Twitter. Discord on the comments on YouTube. And usually these are about 15 to 30 minutes long. They're unscripted, they're unedited, and I just kind of talk about whatever the topic is. Sometimes there are things that I show you on screen and sometimes it's just me sitting here talking at you a little bit about me, if you don't know who I am. My name is Saul. I've been selling online for about nine years. I sell mainly on Amazon and Shopify. We do ebay, Walmart and a little bit Mercari and whatnot as well. Also in two software companies, A3PL, and A Group called the Buy Box, which operates to help Amazon sellers mostly, but general E comm kind of support your needs and make it a little bit easier to navigate the life of business ownership.

We do about $8 million in DTC sales. So that's products shipped from our warehouse to consumers directly, and that's across all platforms. So not just one, but kind of combined makes it a little bit easier. So today there was a question that came through on Twitter and that question was.

I apologize.

How I handle FBM and manage all the inventory and never mess up. That was. That was the exact question. And so for those that are watching, FBM is specific to Amazon. So today's gonna be an Amazon topic. FBM is fulfilled by merchant, which means that instead of fulfilled by Amazon, which is where we ship it to Amazon and they store it and ship it to the customer, we're shipping it directly to the merchant ourselves. This is very similar to pretty much every other platform, right? The same thing that you do on ebay and Poshmark and Mercari, where someone buys your product and you pack it up and you ship it to them with. With FBM on Amazon, people tend to ask this question because scale comes into play. If you want to be a seller that sells a fair bit, or at least profits a fair bit, you're going to end up with hundreds, if not thousands of products at any given time. And the downside to FBM is that you have to store them somewhere. You have to store them, you have to organize them, you have to be able to pack, prep and ship them on time because you do get dinged, right, if something doesn't arrive, if you have to cancel an order or something occurs. For the first seven years of Being an Amazon seller, I was pretty much 100% FBA, which means I always prepped all my items with FN SKUs or little indicators. I shipped them to Amazon and Amazon handled all the delivery for me. I did very little fbm, maybe during Christmas time, but pretty hands off. I was in and out of apartments, I was in homes, I lived with my mother in law for a while. It was not, it did not make sense for me to do FBM and I really had no interest in it for a period. We'd use prep centers and that's where you buy products and you ship it to a prep center and then they handle fulfillment and they can either ship it to Amazon or they can ship it to the customer. Either way, you're not touching it. But in the last two years, two and a half years, we've gotten our warehouse, we've upgraded a few times because we keep on growing it. And as of last December, I have staff, so I have two staff members that work in the warehouse every day. And with some changes that Amazon's been making recently, mainly around reimbursements and time to, to get it into Amazon and kind of get filled, I've been switching pretty much entirely to fbm. So sometime, I think today it's September, probably sometime in.

July, maybe June or July, I stopped really doing any fba and I probably did my last FBA shipment in April. And everything I purchased was with the, with the intent of fbm. So I have a little bit of FBA left, but I'm 85% FBM now. And so this is a great question because I had to learn on the fly. You know, it's, it's when I first started the first 10, 20, 50 items, it's easy enough to figure out because you're just getting the products in, you're putting them on a shelf, you're getting the products in, you're putting them on the shelf. And when something sells, you just look at the shelf and you go, there's, there's my product. But then as the SKUs grew and as you're cycling through maybe let's say 150 SKUs, which still sounds reasonable, but every one of those SKUs you have 15, 20, 100 of, then it becomes more of a like, well, how do I organize this so when something sells I can find it quickly? Especially if you have staff. Because the last thing you want to do is pay someone for time to just look for things, right? Like you're paying people to do things that they should, you should be able to do within a minute and it takes them 10 minutes. You know that you're leaking money, right? Leakage isn't always about loss inventory. You can leak time. And so I worked with them honestly on a system because if I had just done it by myself, it made sense for me. I'm not there every day prepping and shipping the products they are. So they need to be as involved as I am, if not more involved into exactly how we're going to do this. So what happens now is my role is really just to buy stuff and to price stuff. I sit at the computer, I go on my phone and I buy inventory that ships to the warehouse. I then have a buy sheet as well. So everyone should have a buy sheet, regardless of the model you use, regardless of software. Buy sheet is simply a list. It could be a Google Sheet, could be Excel, Google Sheets. Great, because you can share it easier. The product you bought, the day you bought it, where you bought it from, the price you paid, the type of product it's going to be. So, fba, fbm, any notes about the product, anything to look out for if it's a bundle or debundle, etc. And then when it was received is great. Any tracking information that you might be able to quickly put in there, how many were received and what condition they were received in. Right. So you should be able to look at that sheet at any given time and know pretty much all the stuff that you've purchased, how much money you spent, where it is, if it's arrived, how many arrived, and if there's any issues with like returns or you have to reach out to retailers, all of that. So buy sheet number one, I primarily do Amazon to Amazon, so I'm buying from Amazon and selling back on Amazon, which means that my buy sheet is actually a little bit simpler than someone doing a lot of oa, particularly doing ra, because I can automate a lot of it. So I use. This is not. I mean, this is kind of a plug, but not an intentional plug. So one of my softwares that we built is called Flip Alert. It allows you to find Amazon, Amazon Flips, but it also tracks your orders on Amazon for you. So I use Flip Alert to track all my orders. You can export them pretty seamlessly, right to a Google Sheet or to Excel, which you can enter into a Google Sheet. So I don't have to manually record anything. I have all my orders there when I purchased it, what I paid, all of that, even the tracking information can come over. My staff have that information. So when products come in, boxes, arrive at the warehouse, they open them up, they compare what has been arrived to the buy sheet. So that's step one. Did it arrive? How many arrived? Check off all those things. Because we do occasionally have problems with leakage. Where we order four, we only got three. Maybe we order two, but both are damaged. Maybe we ordered from someone and they totally scammed us. So all that has to go onto the buy sheet because I technically am also in charge of that. Like I want to know when I'm going to reprice because I do the listing, what is there, what isn't there. And so if there's a problem, I can simply just create a return or talk to the retailer and then my team can handle actually getting the product back to where it needs to go. So that's step one. Step two is once it's, once it's opened and they review it, then they categorize it into different sections of the warehouse. So we first started, I wasn't in the warehouse. I was in my basement while it really was an apartment. And then I was in my basement. So even before I did fbm, I was doing buys and holds, which means I was buying inventory and holding it for six months to 18 months to two years and waiting for the profit to go up. So something, you know, I have this, for example, right? So like this, this pickleball leaf, pickleball card thing. I purchased this in 2023. It is on 2025. I've held this for two years. I paid $80, I think maybe $500 right now.

So there was a lot of this I was doing. And you need to store these and organize these just the same as you would for fbm. So that system made sense to me. But I did get a little messy sometimes in my basement and was trying to avoid that in the warehouse. So regardless where you're using, if it's a warehouse or a basement or an apartment, or a side bedroom or a storage unit, because at one point we had four storage units. Ideally you have different spaces in those units for different types of products. And by that I mean when I do hoa buying, they're not all smalls, right? They're not all these size little things. Sometimes they're big, sometimes they're £50, sometimes there's £100. Sometimes they're super long, like fishing rods. Sometimes they're really, really fast movers. So I feel like I'm gonna sell 100 in the next week and a half. And sometimes they're really Slow, like, oh, I'm only gonna sell two a month. But the profit was really good, so I'm gonna buy it. All those things kind of matter for where I put them or where you put them in the warehouse. I for something that's a slower seller, let's say about 10 of something. And I think I'm going to sell three months. So I have three months worth of inventory. I don't need to keep all 10 on the floor. I don't need to keep them in a place that I can easily grab because most of those I'm not going to touch until next month, the month after. So for those, we put them on the higher shelves, we stack six on the top shelf and put three somewhere that we can grab them, versus if I bought 200 or something and all we're going to sell in the first month, based on what I believed, then all 200 would stay somewhere close that we can kind of grab them. So I put ideally those notes in the buy sheet so the team knows what to do. Obviously, if you're doing this all yourselves, you don't necessarily have to do that. I do recommend it though, because when you buy something on Monday and it arrives the following Monday, you might not remember all that information. So as much detail as you can give your future self, the better. And then it gets categorized by that. So I have one space for really big products like air conditioners and things. I have another space again for those fast movers. I have places for holes like toys that I might hold a month or two. We have a separate high shelf that we're not going of needs to get to. So all of them go separated into the different areas. Once we've kind of decided where they're going to go, then they get numbered. So we use a SKU system. A lot of ebay sellers do the same thing. If it's really small stuff like this pickleball thing, it would go in a box. So we have individual boxes that are labeled, those boxes that have numbers that we print and put on there. So like A, B, C, D or letters or numbers. A one, A two, a three. And it goes in that box. And you have two options. Now. You can either individually label the product, which I don't really like to do.

Because it's just unnecessary time. I think at least the way we operate. I'm not going to label this product A1. Instead, though, this is going to go into the box A1. And the A1 box is, you know, not huge. Right. So maybe a large Lowe's box. So 18 by 24. And so there might only be 30 products in the box. 25 products. So that a one that gets tracked and put into our SKU system. So they put it in the buy sheet. So then when I go and create the listing and there's a SKU section when you create an FBM listing, I then put a one in that in my sku. And so when it sells on seller central my team can go in, they can review the SKU that soldier. They can say A1. They go to the A1 box. Yes, the box is not individually labeled. All 25 products aren't like in these little cubbies. But there's only 25 products in there. So it's very easy to go and grab it and pull out the one you need with your eyes. You just kind of, you look around and so that has really worked for us I think. You know, we also do. We have the 3PL which we handle Shopify sellers through 3PL and for that we're doing case counts and inners and masters and we have to organize slightly differently. And I think, you know, if I was buying a full master case all the time for Amazon, I would not do it this way because I wouldn't need to. But since sometimes only ordering two or three of something, it doesn't make sense to keep just those two and three in an individual box. So instead I just go on the shelf and the shelf is then labeled day one. What you can do if you're running a larger operation, you can barcode things, which is awesome and honestly something we might end up doing next year. And there's lots of software out there, essentially warehouse management software. I talked about one in a previous video called Prep Ship Hub. Again, not sponsored by them or anything, just we kind of do it all. There's a couple others as well where you can create individual barcodes and individual places in your warehouse. You kind of like map out your warehouse and you can just scan.

When you, when something gets ordered, you can scan the, the printout and it'll tell you where to go. And you can then scan the barcode on the shelf and it'll confirm that you picked the right product. I don't think that's necessary for me. I don't think it's necessary for most of you unless you know you're running a very large FBM operation with in the pipe being hundreds of hundreds of SKUs. That's where it becomes more of a problem if you're not tracking it correctly. Something I Will say some caveats and notes that we've, we've learned by failing. I much prefer to label the shelves in the boxes. Make it way easier to swap boxes in and out. Because what will happen if you label the box? At least what happened with us label a box is sometimes the boxes get moved around and you go up to the corner where it should be like, you know, 1, 2, 3, 4, 5, 6, and the bottom one is 5. And that's just kind of poor organization on me and the team's fault. When you pull out something and you dig through it and it gets. You kind of leave it out maybe for a bit longer. And so the next person comes and they have to pull a different box. Well, you know, unless you're actively aware of the boxes and putting them back every time, it can get messy. So try to dummy proof it as best you can. I don't recommend stacking boxes. You get. Just get multiple shelves. You can actually build your own kind of shelving unit. We just buy two by fours. We don't, we don't do that. But there's a ton of people that do that for ebay. You can go on YouTube and you can see all the specs for that. And you can just build these racks that have like the plastic bins that can pull in and out of. So you can label them that way. And I really like labeling the shelf space as well. Because if the bin gets damaged or dirty or gets empty or you need to swap it out, it's just like, you don't have to worry. You just swap out the bin as opposed to having to mess with the label on the bin itself. But there's really no, like perfect answer to that. I'm trying to think if there's anything else that falls into this category of how I manage and not mess up. Because mess up still happened, right? We still like occasionally do misplace something and that tends to be. Because when it gets inventoried, it doesn't immediately go in a box. That's the problem that occurs. And so that's something that you really need to button up. It's like if you open a box. So if a box arrives at your house, if you open, is your responsibility to get that product where it needs to go. You know, you should have an inbound place for unopened boxes. It stays in the unopened box inbound place. If it's opened, then whatever is inside the box needs to be put wherever it needs to go. It cannot open a box and look at it. Be like, oh, I forgot I ordered that. Close it up and then put it somewhere. Because it doesn't technically belong in inbound anymore. You could argue it does, but inbound is really for unopened boxes. If I saw an open box and inbound, you don't know if someone opened it. Inventory did. Hasn't gotten around to putting it away. You don't know why it was opened. And that slows things down because now you're trying to figure out what someone else was doing or what you were previously doing if you don't remember what you did. So have, like, clear, defined rules, and you only want to touch your. You want to touch your products as little as possible. So I'm not the best at that. Perry Coughlin and Perry C on Twitter is awesome. I think it's essentially lean, right? It's like, how do you.

And he. He did. We talked about spaghetti maps at one point together. Like, you know, essentially design your warehouse so you move the least amount possible and you touch the product the fewest times. And if you want to, like, map this out, what he had me do and I'll have you guys do is, you know, have your space wherever it is, warehouse, basement, garage, whatever. Like, don't touch anything. Get a product in. Like, go through the process of receiving a product, opening it, doing everything, and then having it be done. So that's done for you. It could be an FBA done. It could be, like, prepped and ready for fba, or it could be on the shelf organized for fbm. Then take a map. Like, as you're going, essentially draw out the floor plan and draw every move you make. So you walked left, you go up. Like, draw the exact motion that you went throughout your space. And that's why it's called. It just looks like a giant spaghetti. Like, it's just. You're going to be, like, walking over here and over here. They go around.

You don't want that, right? Like, ideally, perfect world, it shows up here and it ends up here. And it's a straight line or it's like a L, but it doesn't do this.

And sometimes it's not even the product that's moved like this. It's you. Because maybe you need a piece of equipment to open a box that you put the box. You put, like the scissors or like the. I just call this the red thing, but, like the Scotty Peeler, right? Put the Scotty Peeler over here, but your product arrives over here. So you got to go walk and get the Scotty Pillar and then you open the product, you put the Scotty pillar back and now you've doubled back. Or you like misplace things because you don't know, like they don't have a set place. So you end up walking all around.

So do a spaghetti map and ideally touch the product as low as possible, which goes back to yes. Again, opening the box. Box is open, you've opened it. It's your responsibility to get that product where it needs to go. And ideally that product goes someplace that isn't too complicated and isn't like again, under boxes you have to move too many things to get to it. I'm going to stop moving this around, poke myself.

That is going to minimize the amount of work and time you have to do in the future. Right, like how can I help? Obviously I'm time for me. But like how can I help future solve? Right? Like I'm salt today. How can I bet? How can future salt benefit from today's Saul's actions? And future Saul is the one that's going to have to find this product when it arrives, when the order comes in. And if I don't do the right thing today, that Saul is going to have a problem and he's, he's going to take way too long to find it. And also the one of the worst things that happens, if it was mismanaged, it can get crushed or damaged. I've had that occur. You put a box of shoes down and then you're like, oh, that's a good place for it. I'm going to put it there. And then something else comes in the next day and you don't know where to put it. And so you put it on top of the shoes and you sell the shoes two weeks later. And then the shoes are crushed because the box got crushed under the weight of what was on top of it. Super, super easy for that to happen. Has happened to me, may have happened to some of you guys. Same thing happens with toys. Like plastic can break. So again, the product should be touched essentially one time between when it arrives and when it goes in the box. And then when it sells, it gets touched again. You pull out of the box and you ship it.

For really big stuff or like awkward stuff. I'll keep it in boxes that arrived in because like, for example, just the other day I sold a top of an oven. So like, you know the glass tops that heat up and that was a weird shape, you know, it was 20 something inches long. So it arrived in the box and I kept in that Box because I knew I wasn't going to have a box on hand to fit it. So for that reason.

The box itself becomes the product and that box then needs to go in a separate place. I have a place in the warehouse so designed for items that stay in box. So I'm not mixing it with like the A's and the B's. Instead, it's going into a separate place. That's everything in that spot. Every box in that spot has inventory in it. And in that case, that is the case. I will label the box that that box gets labeled, and then that label is what goes into my sku. So kind of walk through all the scenarios, the type of products you're buying, and understand again, any notes you can take at the time of buying. If it's a fast mover, it's a slow mover, the size of it to give. If it's not you doing the prepping, giving your team an idea of what's arriving and what's coming is super, super helpful. But yeah, we, we're good. I, I think, you know, like our, our account health on fbm, you know, is all green. We did have one late shipment recently, but that was Amazon's fault. I will blame Amazon. Um, that was a weird glitch on their side for like the ship time. But otherwise all of her stuff arrives in time for the most part, you know, as long as the carrier is behaving. And it's been a long time since I've had to cancel an order, so I'm really, really proud of that. And then. Oh, I guess the final thing was if you do grocery anything with expirations, vitamins, you, you 100% need to have a, A column in your buy sheet for that because, you know, unlike fba, where everything has to label the same expiration fbm, you know, you can do last in, first out, or first in, last out, first in, first out. Sorry. So, like, if someone, you know, if you have 20 of something and they kind of expire at all different times, you want to know that because you want to ship the thing that expires earlier. So that goes back to like keeping some on the top shelf and keeping the ones that expire sooner where you're going to actually grab them, and then having those expiration dates handy because you need to start either lowering your price or pushing stuff out to donate or trash if it's past its expiration. Last thing you want to do is, you know, have 20 on hand and you go to sell, you know, 10. That you're going to ship 10 that sold, and you realize that, you know, 12 of them have expired. So now you're. You're down two. So small things like that FBM are more important. FBA, you don't have to worry about as much because Amazon kind of handles that with the listing process. That was. That was today's. I don't want to call it me, just kind of talking. Hopefully it was helpful. We talked about FPM Prep. We also kind of talked about I'm trying not to sneeze again.

Warehousing and spaghetti maps and kind of organization in general, which is a really hard thing. And it'll save you a ton of time, headaches and stress. If you get organized today, you know, help your future self, help your employees, help your spouse, help whoever. Especially if you're living in a shared living space and doing this out of that space. My wife wanted to leave me multiple times. You know, your living room, your side bedroom, your basement, it can be organized. And if something looks organized, it looks like you're in control. People who don't know what you're up to, if they see a massively disorganized space, they will assume you don't know what you're doing. So it helps you. It helps paint the picture, especially if you have a spouse that isn't fully on board yet. Like, no one wants to see, like, a total disaster of a tornado. Like, what's behind me here.

Like, everywhere, though, with all the inventory you're supposed to sell. So that's it for today. Thanks for hanging out, and I'll see you next time.