Amazon FBA Storage Optimization: a Beginner’s Guide to Inventory Management in 2025

Amazon FBA Storage Optimization: a Beginner’s Guide to Inventory Management in 2025 Speaker 2: Well, I appreciate everybody joining us. Uh, my name's Todd, Todd Welch, and then Jackson Trigg is here with me as well. And today we're going to be diving into how to optimize your AWD storage like a pro. So some of you who are new may be asking yourself, you know, what is AWD, which we're going to be diving into. But essentially, it's, you know, the storage of your product, how to manage the storage of your product in Amazon. Not one of the sexy things, right? Everybody likes to focus on creating an awesome product, creating an awesome listing, honing in your ads, maximizing sales and all that. But if you don't have your inventory ready to go in the right places, You're either going to be paying too much or you're going to be running out of stock and not being able to sell the products you want to sell. So today we're going to be diving into the AWD specifically and how to manage your inventory and really avoid a lot of the fees and such that Amazon's been tacking on lately. They've really gotten in the habit of jacking up the fees on people so hopefully with the information that you get today that can help you decrease those fees a little bit or a lot potentially. So, who are we, I guess, and why should you pay attention to anything that we are saying? So, first off, Amazon Storage Pros is the company that Jackson and I have started. And we were specifically founded to help Amazon private label sellers and brands in general We're here to help you navigate the complexities of logistics on Amazon, right? Because it used to be super easy. Just send all your inventory into FBA and you are good to go. And over the last several years, Amazon has increasingly slapped people for taking that route. So now you've got to have your inventory in multiple different places or you're going to be paying way too much on fees, maybe running out of stock and running into lots of other headaches. Jackson, he's been selling on Amazon and Shopify since about 2016. So nine years this year. And he's definitely an I'm an elite expert when it comes to running everything to do with Amazon. But really to do with logistics, he is amazing at it. Even better than myself, I'm going to be humble. Jackson is awesome at logistics and has worked wonders with clients that we've worked with now and in the past as well. Myself, I'm the CIO of Amazon Storage Pros. I've been selling since 2014. I have a multi-million dollar business that I'm running currently selling products, mostly for other brands. I like to help brands that are selling on Amazon sell more products and really optimize their logistics on the platform. And I've also been mentoring and teaching Amazon sellers since 2018 through my platform, Amazon Seller School, which is a lot of fun. I've always enjoyed teaching people and helping people out there to be successful selling on Amazon as well. So what does Amazon Storage Pros do? Like I said, we handle all of the boring stuff for you, all of the non-sexy stuff. So once you have your product and your listing beautiful, your PPC all laid out, you still got to manage all of those backend functions. We like to equate it kind of like doing your accounting and your books. Nobody likes to do that side of their business for the most part. There's probably some people out there that do, but it has to get done, right, for your business to run efficiently, for you to make sure you're doing things correctly. And so that's what we do at Amazon Storage Pros. Anything related to managing your inventory and managing your logistics, our inventory managers can take care of that for you completely. Or we can be advisors to you and direct you in the proper routes to do things. Or we can also do consulting calls and answer individual questions, help you with different things like that. But all of the back-end stuff is what we do at Amazon Storage Pros. So Amazon warehousing distribution. So what is it actually good for? So essentially, you can think of AWD as a 3PL. So most people are going to know what a 3PL is, or a warehouse that you're storing your bulk products. So you're going to have a whole bunch of your products, you're going to store them in some kind of warehouse. You're either going to store them in your own warehouse, you're going to store them in a 3PL, which is a third-party logistics provider or warehouse that does the warehousing for you, or you're going to be storing them in AWD, which is Amazon's version of a 3PL. And so what they do really well is bulk storage of your products. They have very competitive rates for storing your products in their warehouses. Compared to FBA, if you're storing everything in FBA, it's not even comparable. It's much more cheaper than FBA is. It's really designed to drip feed your products from AWD into FBA. You're going to have your products in FBA when you're selling. Those are the products you're actively selling and Amazon is shipping out to your customers. The next step back is AWD is where you're going to have your products, the bulk products stored and Amazon is going to send those into the FBA warehouses automatically for you as you need them. And so it makes it very easy to manage your FBA replenishments. And it has a very straightforward interface for creating those shipments and sending those shipments to FBA, but also to multi-channel. So if you have other locations that you need to send a product to, so for example, let's say you wanted to pull a case of product And send it to your house for inspection. You could do that. If you needed to send product to a 3PL for some reason, maybe you're fulfilling your Shopify orders from your 3PL and you need to get extra product, you can do that. If you want to send it over to Walmart Fulfillment Services, surprisingly, right? Or Target. Perhaps if you want to send it into their fulfillment systems, you can actually do that through AWD by uploading those labels and sending and Amazon will slap those labels on your case packs and send them over to your third party wherever it is that you want it to go. So what is AWD not good for? So unlike if you had your own warehouse, or most 3PLs, AWD does not do any kind of kidding or refurbishing of your products. They're not going to receive returns from that, you know, customers returned in grade those returns or anything like that. And they're not going to do any individual picking and packing of products. AWD is a case pack only. So if your product comes from your factory in a case of 24, let's say, You're going to be sending that entire box of 24 into AWD. They're not going to handle individual products. And Amazon's going to send those case packs to FBA where FBA handles those individual products for you. Or you could send it to even a retailer, right? Let's say you have your product in retail stores. And you sell them a case of your product or 10 cases of your product, Amazon is going to send those cases out to that retailer if that's where you want them to send it to. So if you are doing kitting, refurbishing, relabeling of products, things like that, you'd still have to do that yourself or utilize a 3PL that can do that stuff in addition to the bulk storage of your products. So, not everyone is a perfect fit for AWD. There's some products that I sell myself that I don't use AWD for because either they sell a low quantity or I need to do some kind of custom bubble wrapping or something like that that the brand is not doing. And so those kind of products, I don't send in the AWD. But who is really good for is if you have large production orders with long lead times. So let's say you're ordering product from China and it takes you three months from the time you put in the order to get it in and you're ordering a full container load or a half container load of those products. AWD can be a perfect option For that, because you're going to be ordering a large value, because if it takes you three months from ordering to get the order into the United States, you need to order large bulk amounts. So you're gonna have to store that somewhere. So AWD can be perfect for that. If you're already using a 3PL or have your own warehouse for bulk storage, AWD potentially could be a great option to save you on the prices of the storage and also for that dripping into FBA. It makes it much easier to replenish FBA without paying the crazy inbound placement fees that Amazon has added on. And if you're routinely shipping bulk inventory, like LTL or FTL, you know, a bunch of pallets or a full truckload multiple times a month or once a month, every couple months, three months, instead of sending those bulk shipments into FBA, You're going to want to be sending those into AWD, again, to really save on those fees and such, which we're going to be diving into a lot more later. But it can really help decrease those fees that you're paying, especially the crazy inbound placement fee as we've got there in that last bullet point, which Amazon, of course, introduced that in the early 2024s, which drove everyone insane with the inbound placement fee. Essentially, that was their attempt to try to push people to use AWD more because Amazon wants multiple levels to their warehouse so that they can better move product around the country and get that one-day shipping, two-day shipping, same-day shipping for their customers. And so which products are eligible for AWD? So this is another thing you're going to want to really pay attention to and make sure your products are eligible. So right now it's available for products that are small or large standard size. And possibly oversized, although you're going to have to really run the numbers on oversized products because the case pack has to be less than 25 inches squared and less than 49 pounds. So it's the same requirements as sending into FBA, but this is the requirement for your case pack. So small and large standard sized products are going to be ideal for this. But oversized could potentially work if you can get enough of them into a case pack of this size and for it to make sense with the fees that we're going to be diving into with AWD. Because of course, AWD has fees just like FBA, but they're much lower than what FBA is. But in not all cases do they make sense depending on your product. And also right now, no dangerous goods. And all of this is subject to change. I'll point out because not too long ago, you could not send expiration dated products in there. So if your product expired, you couldn't send them in. But recently, they changed that requirement to now allow expiration dated products. So at some point, they may allow dangerous goods, they may allow larger products and things like that. But right now, as of the recording of this, which is in February of 2025, These are the product eligibility requirements. All right. So with that, I'm going to go ahead and pass it over to Jackson to really start diving into some of the details and break down the pricing with AWD and go over some examples of how you can actually really save using AWD. So, Jackson, I'll let you go ahead and take it away. Speaker 1: Thanks, Todd. Cool. Yeah. So basically, AWD, it's a 3PL. It's Amazon's version of a 3PL. So it's got a cost structure just like any other warehouse. But the difference between AWD and a normal 3PL is, as Todd explained, the services are more limited, but the pricing system is quite simple. It's much more simplified than your typical 3PL. And because of that, you have a lot more control over what your expected costs are going to be. Because everything is very easily calculated, predictable. There isn't the risk of all of a sudden getting a giant charge because a full container load showed up your warehouse and it happened to take three people to unload at this time and you pay extra labor, stuff like this. Anyway, it's a MasterCard and cubic footage based system. So it's how many boxes, how big are the boxes, Doesn't matter if they're palletized this way, if they come in floor loaded, it doesn't matter. Whatever the amount of boxes and the size of those boxes, that's all that's going to matter with how they bill you. What this boils down to is three fundamental fees. There's their storage fees, there's their processing fees and there's the transportation fees. Processing fees are essentially their handling fees. So receiving and prepping to go out. And transportation fees are essentially their postage cost or carrier costs of moving stuff out of AWD to wherever you're sending it, whether it's FBA or to some other destination. So, and then of course, aside from these three costs, if you're sending something into AWD as opposed to sending it to your 3PL or sending it direct to FBA, there's the cost of whatever that carrier is, whether it's Freight over the ocean or whether it's a truck from your. You're 3PL to AWD or if you're just sending a carton from your house, whatever it is. So to break this down, currently Amazon's about to change the price structure and that's why if you can take advantage of AWD, if after listening to this presentation you realize, okay, this is a fit for me, this makes sense for me, the price for AWD is about to change. They expanded the program. At about March of last year and now the deal, they realize it's too good of a deal. And so they're raising the prices come April 1st and it's not an April Fool's sadly, I don't expect. So right now though, you can take advantage of really competitive pricing where Amazon's only charging 36 cents per cubic foot per month. So that's about, it's less than half what the FBA rate is at 78 cents per cubic foot. And all you have to do to qualify for that lower rate is use a partnered carrier shipment carrier, you know what I mean? And that's usually the best price anyway, so there's not really any reason not to. So you're always typically going to get this lowest rate if you're shipping stuff domestically into AWD. So you can get that lower storage fee and essentially cut your storage costs in half or more when you're storing a bulk of your inventory at AWD and letting it drip feed into FBA. Rather than sending three, four or five months of inventory to FBA and all that inventory that's not selling for several months, you're paying twice or more on your storage costs. Then it comes to the processing fees. Again, this is It's your receiving and your pick and pack built in, right? Now, this is where the major benefit and the major change is happening is Amazon realized, okay, if we don't charge a fee when we receive the boxes, then we're doing all this work at no charge and then we're only charging them when they remove it out of here. But what if someone sends in like one year, two years worth of inventory and we charge them nothing to house it other than storage? We don't, you know, charge any labor costs to handle this stuff. And then for a year, you get nothing for having done all that work until they pull it out. So they're changing this. I'll talk about that in a little bit. And then the transportation fees, it is a cubic foot size-based charge. It doesn't have anything to do with the weight. So that's one of the really strong benefits of this is that you could have a really heavy small product And whereas shipping that from your house or from your supplier direct into FBA might cost a fortune, if it's just going from AWD to FBA through their automated replenishment, it's just getting bundled in with all these other truckloads that are constantly moving between distribution centers and you're getting the benefit of Amazon scale and they're only going to charge you by the size of the package, which is $0.85 per cubic foot if you're getting the discounted rate that's good for the next six weeks. All right. So what's happening though is the prices are going up and they're going up about 20% on the storage cost and about 35% on everything else. So it's a significant increase. Now, even though this is going to run about an average of 30% increase on the costs of using AWD, It was such a good deal currently and still is right now that even with this price increase, it's still cheaper and better for most FBA sellers to incorporate it into their supply chain. But right now, it's the cheapest it's ever going to be. And so anything you can get into AWD right now, you're locking in the best rates. And to get the best rates in the upcoming price structure that's changing too is going to be more difficult to qualify for. So this new price structure, as I mentioned before, they're changing the processing fee. That's the biggest change. And they're changing the processing fee where instead of it being, we take in your stuff for free, and then when it moves out, we charge you a processing fee, they realized that's not working for us. We're gonna charge a fee when it comes in, and we're gonna charge another fee when it comes out. It's gonna be a smaller fee on each side, but in total, it's a higher amount. So it's a price increase. And it is a cash flow hit for sellers where before you could just send stuff in, house it there, pay really minimal storage fees. And until you needed it, you didn't have to pay this processing fee, but now you're gonna have to pay a little bit upfront, a little bit on the end. Amazon's got their cash flow in better shape and we're taking the hit as we typically do on Amazon does a price hike. Storage fees are going up slightly. That's really negligible, not a big deal. But the transportation costs are going up by approximately, what is that? 30 cents on 85. We're looking at, you know, in the 40% range. That's the big pickup there as well. So things are getting more expensive, but like I said, it's still going to be cheaper than Paying placement fees on every shipment you send in to FBA. So I'm not going to go in big detail here because we don't even know how Amazon is going to shake this out. The managed rate, Amazon managed rate is going to be the equivalent to getting the integrated rates, the discounted priority rates. And I'm going to talk to you about a couple of things that you can get with AWD right now if you just send in with a partnered carrier every few months. But what they're going to start doing is requiring that you are using AWD for a majority of your inventory. And they're going to regulate that and have benchmarks you need to hit in order to qualify. So Amazon is saying we want more control over your inventory so that we can optimize our systems for max efficiency. We'll give you a discount if you can play the game and manage your inventory in such a way that helps us to manage inventory better. So I'll leave it at that. We'll find out how this actually plays out in April 1st when the change happens because it's not super clear how they're going to do some of these calculations. We will find out. So, giving a breakdown of how this pricing system works. These are three real products in the account I've managed for years. And on the top, you can see a case pack that it's a bigger product, you know, about this size and only 12 fit in a master case. So the next one down below it is a smaller version of a similar product, fits 20 in a master case and then on the bottom is a very small product compact, fits 150 units in a master case and still stays under the 50 pound limit. So the general rule here is that If you have a high-volume, small-size product, you could be saving tons and tons of money if you start using AWD. But if you have a high-volume product, even if it's a bigger, bulkier product that you can't fit many units in a master case, you can still be saving quite a bit of money. But if it's a slow-moving, large product, Kind of like what Todd was saying, some of the products in his catalog don't work. There are going to be some situations where it won't be a fit for a certain product line, but for many product lines with good volume, it just makes sense. So, how this breaks down is I'm using the updated pricing to give you an idea of how this looks starting in April. But if you include the processing fees in and out, it's $2.70 per box. You do the calculations, this box is 3.09 cubic feet. So, that works out to a $3.55 transportation fee. I'm looking at this top 12-unit master case right now. So that adds up to $6.25 total, which divided by 12 units works out to $0.52 per unit. That is what the price is going to become, whereas currently on this product, I'm only paying $0.40 a unit when I'm shipping this in between AWD into FBA. Products that I've already sent in to AWD This is the price that I would be paying in April. Right now I'm paying 40 cents a unit. So we're looking at the price increase here, a full palette of this product. To facilitate transport between bulk storage at AWD into FBA right now, it's costing $96 a pallet, 240 units a pallet, that's going to go up to 125. Significant increase, not going to break the bank, but it's coming, right? The same process applies to these other ones, but as you can see, The cost per unit, the more units there are per box, the cheaper that cost per unit. When I go up to 20 units in a master case, it's going from $0.52 to $0.32. When I go up to 150 units in a master case, that drops down to under $0.04 a unit transporting from AWD to FBA. And on the right here, my current pricing, $0.40, $0.24, $0.03. These are going up pretty significantly and that's kind of the situation that's going to happen with pricing. All right. So one other aspect that is sort of overlooked because it's not something that every seller needs, but it is something that needs to exist for AWD system to be functional for any seller, which is Multi-Channel Distribution. This is the AWD case pack cousin of the Multi-Channel Fulfillment Program with FBA, which many, many sellers, myself included, use Multi-Channel Fulfillment To simplify their supply chain by storing all their products primarily at FBA, but then if they have their own website as a good sales channel or other shopping websites like eBay, for instance, you can fulfill those orders for your website or FBA by using your website or say eBay by using your FBA inventory to fulfill those orders. And you don't have to manage keeping stock in all these different locations because you can just pool a lot of your inventory in Amazon's networks and still distribute it to all these different channels. So it's a very useful tool, MCF. And then MCD, Multi-Channel Distribution, is AWD's case pack version of that, where you can pull out shipments in case pack size at will from AWD to send them wherever you like. So you can do this both by small parcel shipments or you can palletize up to full truckloads. So it just depends on what you need, where you're sending it to, what makes the most sense. And as Todd mentioned earlier, you can do custom labeling now through AWD. So if you are using AWD as your primary hub of bulk storage, and then that being a distribution channel for all your other networks, like if you are selling So if you're a retailer and certain partners and you send in a couple pallets to them every couple months and they sell your stuff retail or you're using Walmart or whatever it is, you can distribute your stuff from AWD in a very simple, clean, easy to manage way. And it's usually about 12 to 14 days to deliver. But I've had times where sometimes it's delivered three or four days. It just depends, right? So Multi-Channel Distribution, for those of you that don't know anything about it, you know, now's your first hearing. It's obviously not ruined, but if you were like me when they introduced this a year ago and me going, holy crap, this is an amazing, amazing service because it's so ridiculously cheap. Amazon also got wise to that as well. Multi-Channel Distribution was so absurdly cheap to ship packages that I was like, oh my gosh, anytime we can use this, we have to use it because we do a lot of wholesale shipments for retail buyers. And anytime we're fulfilling a large wholesale order, if we could send the inventory from MCD rather than our 3PL, we would because you'd pay like a third of the price in the shipping cost and you could get a ton more profit on your wholesale orders. Now, there's a lot of different ways you could use this. That's just one example. So in this example here, we've got a pallet. This is that first product in the top of the other slide. 720 pounds, 20 cases, 12 units each, so 240 in total, blah, blah, blah, 62 cubic feet for the whole pallet. Now, with the current pricing, I can ship this either SPD or LTL, no difference in pricing, it's all the same price. And that same per box fee is going to apply, but then there's a slightly higher cubic footage transportation fee for MCD. In this case, it was $1.65, which is still the current price. $2.13 a box. So again, 20 cases and 62 cubic feet. So we're talking $2.13 times 20, you know, 40 and change. And then 62 times $1.65, so somewhere around 90 bucks, right? So adding all this up together to send a single pallet or to send 20 boxes as just UPS shipments, it was going to cost $145. Now these are like 35 pound cases that are sizable boxes, right? If you're shipping these like Zone 1, say California to California or like Zone 7, 8, California to Maine, New York, stuff like that, you're looking at like $28, $25, $28 to like $50 and that's not even including shipping to like Hawaii or Alaska or something like that. So we're talking what would normally cost somewhere between like $500 and $1,000 was only $145. So anytime I could use this service for a sale, I did because it made massive profits. We're talking like, you know, an extra $350 in your pocket, right? Anyway, that's going to be changing as well. So they're going to bifurcate the small parcel rates and the LTL rates. It makes sense. And what's happening is, instead of being ridiculously underpriced where Amazon is losing money and you're making money on their expense, on their behalf, which whenever you can, please do, right? Now it's going to be more fair, right? More fair to Amazon, fine for us. So as I've said at this subtitle here, MCD's quick journey from amazing to adequate. It's still good. It's still fine. It's just not mind-blowingly, you're taking money out of Amazon's pockets. So how it's going to work is there's going to become a distance and weight tiered system. So if your stuff is going further, Amazon is going to charge you more because distance creates an increased cost. And if it's heavier, it's going to cost more just like things normally do. But without getting into the details here, LTL is priced fine. If you're going to do a full truckload, it's not going to be a great deal compared to if you could book your own freight forwarder, but it's not unacceptably expensive. For short trips, short LTL trips nearby, it's fine. It's a great deal. If you're filling up a truckload, not so much. It's a little bit more expensive than If you are booking directly with another freight forwarder. SPD though is still going to be 25% below market retail rates on package shipments. So it's still great for SPD. No doubt about that. Okay. So here is the magic of why I think one of the reasons why every seller that can use AWD absolutely needs to use AWD. Because especially now this is for all you newer sellers, zero to one year in that poll from beginning, this is where you need to listen up, okay? You've probably heard the horror stories. If you haven't, well, here's how it works. If you have an issue with your inventory, you've got a production run and say like, You've got a packing mistake and your product is getting broken in shipment and you need to fix it or say your product has a defect and it's getting terrible reviews and you've got to deal with this issue. If you have all your inventory at FBA, that could be a crippling blow that actually destroys your business because it's so expensive and so disruptive to have to deal with an inventory problem when all your stuff is at FBA. Doing removals from FBA completely pause your sales. They take weeks to conduct. You're going to get a bazillion boxes shipped to either your 3PL or yourself, wherever you're going with it, and they cost so much money. Now, if you're using AWD and you have the benefit of multi-channel distribution that I just described, This is how this whole equation plays out. Let's say the same product that I just gave an example of one pallet cost shipping out of AWD using MCD, Multi-Channel Distribution. If I had five pallets of this product and It was discovered to have some critical defect where I cannot sell this on Amazon. It'll just destroy the listing and Amazon will probably pull the product before it even gets that far because it's such a serious problem. If I have those five pallets worth 1,200 units at FBA, you can see here their removal price chart, but this product is in the two to four pound weight tier. It's going to be $6.36 per unit to pull it out of Amazon. So pulling out 1,200 units of this product if there was a defect issue would cost me $7,600. But let's say I've sent all that inventory to AWD and I just need to pull an MCD order out because this got discovered with whatever little units I have at FBA. It's going to cost a fraction of it, right? Currently, it'll only cost $723 regardless of how I ship it, which is 90% less. And then after the April 1 pricing change, if my warehouse or where I'm shipping it to is actually close to me, it's even going to be cheaper, $3.96. Or if it's the furthest possible distance away in the contiguous US, it's still only going to be $1,300 compared to $7,600, right? Just imagine you're dealing with an inventory problem that's going to cripple your business to some degree because you have to pause sales and deal with these extra overheads when you were hoping to sell product and make profit. How much of a difference would saving between $7,200 and $6,400 do for your company when you're dealing with a problem that challenging, right? It's massive. But not only just the cost savings, if you have this type of problem and you have to do a removal from Amazon, you get a bazillion boxes, Amazon style retail customer buyer boxes full of anywhere from like 12 to 2 units. You get hundreds of them. Every day, the UPS man will be unloading a dolly of packages at your front door for months potentially to get this product back. And then you are going to have the expense and the labor cost of if this is a problem you can fix by refurbishing these products, you're going to have to repack them all, buy new case pack boxes, Seal everything back up again and restore them into case packs to get them back into FBA. Whereas if you're pulling from AWD, none of that disruption takes place. It's still in the case pack, still all labeled, still all nice and organized. It comes to your house in an orderly fashion or wherever you're sending it to, a 3PL, and you can refurbish, fix or whatever you need to in a dignified way, right? So there's major benefits to using AWD just as an insurance policy on your inventory for these types of problems. So here's the issue, right? Amazon in 2024 introduced the placement fees, introduced the low inventory fee, all sorts of stuff. Now they're raising the prices on AWD. There's always going to be price hikes. It's just what to expect. But what happens whenever this goes on is people on the social media and the seller space are like, oh my gosh, Amazon's doing this again. They're evil. Speaker 2: We need rules, right? Speaker 1: We need to go after them. Class action lawsuit, blah, blah, blah. How could they do this to us? This type of thinking, while it maybe helps you feel better in the moment and helps with your emotions, doesn't really help the situation you're finding yourself in if these types of fee increases are hurting your business. Instead, We need to figure out how do we navigate around this. And in my opinion, the name of the game for Amazon in 2025 is you need to become a master of your inventory management because every extra penny you're spending through mismanagement of your inventory, sending stuff to the wrong place, in the wrong amounts, at the wrong times, This is eating up profit that you could be keeping in your business. So you need to learn how to organize your inventory properly so you can stay competitive, keep your business nimble. And the quote that I prefer over the social media whining This is from a great guy, he's dead now, named Jim Rohn. But if you're new in business, he's got a lot of great motivational talks. I recommend him. But one of his sayings was, don't wish it were easier, wish you were better. And it's just the truth. You got to wish things weren't that easy, but wish you were better because that's how you succeed when others are unwilling and give up, right? Here's where we get into some nitty-gritty on the details of how we optimize our logistics and our packaging and everything so that we can best take advantage of systems like AWD. Liz, you had questions earlier about your case packs and this is where we're getting into the details on this. Just as an example, Right here, we're going to talk about how do we make case packs better, not just for the sake of, we can say that they're better, but so they cost us less money, right? Right now we have an example at the top. This is an OK case back. It's a small product and it sells pretty well. It's got 32 units in a case pack that's measuring 12 by 12 by 6 inches. So doing all the number crunching with how AWD's fee structure works that I talked about earlier, you're going to pay about $3.85, which works out to about 10 cents a unit on this And then going further, if I increase this case pack by nearly double, if I make the box twice the size and how much volume it has, and I can fit twice the amount of units in there, all of a sudden that drops my unit cost by 40% to ship this from AWD to FBA because that per case fee of $2.70 percent of my sales isn't getting duplicated twice because I have to send in two boxes to get the same amount of units in. But we can go even further than that and we can go from 1812 by 8 to 20 by 16 by 6, get another 10, 11 percent of Get six more units in there and drop it down another 5% lower than that previous drop, right? Doesn't make that big of a difference when you look at the numbers here, but then we'll see what happens when you palletize. If this is a high volume product and you're selling hundreds or even thousands a month, saving, you know, like half a cent a unit is a lot of money, right? Okay. So then what happens with this same product? is when we're going to palletize it, we've got to think about palletizing too, right? If we go with that original case pack, 12x12x6, that only holds 32 units, it's fine. 48x40x72 is the limitations for palletizing when you're sending into Amazon. Maxing that pallet out, we can fit 4,224 units per pallet, okay? But what happens is if we go up to this better case pack for Amazon AWD pricing, we're going to save that 40% from $0.10 a unit to $0.06 a unit. There's a cost incurred here because even though we can fit more units per box, this case pack isn't as optimal for putting on a pallet because look, we can only get 4,096 units per pallet. That's like about 130 less or something, right? Now, that's still going to save you money in the big scheme of things because you're only losing like 5% capacity on the pallet, but you're saving 40% per unit on your shipping costs. But we go to this excellent case pack, right? The best of the best, the 20 by 16 by 6. And if you can fit those 70 units in that case pack, that case pack works even better than the other case pack at the beginning for palletizing. And you can actually get 46, 20 units per pallet. So you're increasing how much capacity per pallet by almost 10% and you're going to pay the same price, right? That extra, you know, the extra 10% in weight is not going to increase your freight costs at all if you're palletizing really ever, maybe the tiniest bit, but it's not going to go up by 10%. That's for sure. Okay, so let's get into how you take advantage of AWD right now before this price change. This is the opportunity. There's these windows of opportunity whenever Amazon makes a change. In how their fee structure is, whatever their incentives are, there's an opportunity to get in early with what is the optimal strategy and capture an advantage for your business that not many sellers are going to capture. And that's going to give you competitive advantage so that you can better compete with your competitors and get an edge, right? Be more hardy as a business, more able to thrive and outpace the competition. What's happening with this price change that I talked about before, the processing fee on a box going from AWD into FBA through their replenishment program is going from $2.13 a box on the tail end when they pull it to $1.35 on the way in and $1.35 on the way out. So what is happening is Amazon is effectively instigating or incorporating receiving fees with their AWD warehousing. But until April 1st, so now through March 31st, the receiving fees are still zero. So if they're zero now, And the outbound is going down after April 1, then that means instead of paying $213 for stuff that you send now and then ship into FBA before April 1, if you ship stuff in now that you don't need to ship into FBA until April 1, that $213 actually goes down to $135. So you can capture an extra 78 cents per box in savings if you ship stuff in now rather than waiting till after the price hike. So if you have large amounts of inventory that you are trying to destined to Amazon before March 31st, I highly recommend you send it to AWD and take advantage of these savings. Here's an example of the same situation with the pricing, but if you take advantage of these savings, right? So you remember before, right now, I was paying 40 cents a unit on this type of product at the top, the 12 unit case, but that's going up to 52 cents a unit when the price change happens. If I take advantage of this window of time where I can get it into Amazon at AWD with zero receiving, But then it actually ships into FBA after the price change and the outbound goes down in price, I can actually get my costs down 5% lower than they currently are with AWD. So yes, this is a technical, very convoluted, You know, you got to be in the space to understand all this stuff. I know it's a lot of math. I apologize, but just understand this takeaway. If you can load up AWD right now with as much of your inventory as possible, you set yourself up for as far into Q2, maybe even Q3, depending on how much inventory you have to lock in the lowest shipping costs of getting your inventory throughout Amazon's network. Right now, I'm already preparing clients for this, loading up AWD as much as possible so that all through April, May, June, any inventory that I've already prepared into Amazon's warehousing network, that inventory is locked in at the lowest possible logistics rates so that profits stay high, costs stay low as long as possible. So the big picture here is that to really do an Amazon business well, you need to have your logistics dialed in, your supply chain figured out, and the game is changing a little bit. In 2020, when COVID hit and Amazon set all sorts of restrictions on how much inventory you could send in for new products and 30-day shipment delays on non-essential items, blah, blah, blah, all this sort of stuff, it forced Amazon sellers to incorporate 3PLs into their business almost entirely across the board. If you didn't, you were storing it at your house and your garage and shipping into FBA that way. So what's happened is now there's this natural standard of you get your stuff produced in mass in China or wherever, you ship it to your 3PL where they can bulk receive it and there's not all these fees and stuff from Amazon with long-term storage fees and blah, blah, blah. And then you drip feed it into FBA from your 3PL. But in 2024, when they introduced the placement fees, for a lot of people that tripled their inbound shipping costs to get into FBA. So if it costs you $100 to do a standard shipment that you're always doing, regularly topping up your FBA, all of a sudden that became $300. And that hurt the bottom line of a lot of companies. So now with AWD, this is the main way you can circumvent these extreme shipping costs. And one of the things that I'm even recommending to people depending on their business is you can actually skip doing a 3PL and send your stuff straight to AWD from your supplier. And then even if you have a 3PL that you do need for certain things, as Todd mentioned in the beginning, you could actually send all your stuff to AWD and then just send what you need, small amount from AWD to your 3PL so they have stuff to manage for you that you need. But then the rest of it is going into this low cost, easy to manage, you know, structure warehouse that's already set to feed into your FBA without overloading FBA and everything looks good. So this is kind of the new logistics of the 2020s in my mind when it comes to Amazon and the better you understand it and the better you optimize for it, the better you can thrive on Amazon, make more profit and be able to get a step ahead of your competition. The other thing to mention is that with AWD, you're not dealing with the complications of a typical 3PL. I mentioned this in the beginning that their pricing model is very predictable and very controllable. One of the issues with 3PLs is sometimes they have different standards that are hard to navigate around. Because for instance, I mentioned earlier, a max pallet to go into FBA can be 72 inches high. But some 3PLs, they have to normalize all of their pallet storage to 60 inches because that's how it fits on their shelves. So if you were to send 72 inch high Palettes, say from your supplier to their warehouse, they're actually going to have to deconstruct all your palettes and then reconstruct them to 60 inches high. And guess what? They're going to charge you for that. They're going to charge you whatever it is, 20 bucks an hour, 18 bucks an hour for the labor for that. And that's just an added expense that brings your company no value. It's just to fit in their system. Amazon doesn't have those requirements. They're just going to charge you based on how many boxes, What's the size of the boxes? Very consistent. Also, Amazon, for all of its issues, it has much less human error than normal small businesses, right? So when you're sending stuff to Amazon, it's pretty safe bet that you're going to be able to predict your storage costs just by looking at how much cubic footage you have stored at Amazon. Whereas with a 3PL, I've had issues where You get a bill one time because you sent in a thousand units in say 10 case packs to FBA from the 3PL and instead of them charging a pick and pack fee for 10 cases, AKA like maybe 20 bucks. They charged a pick and pack fee for 1,000 units, which ended up being like 500 bucks. And you have to catch these things. You have to look at the bills and be like, okay, you guys overcharged us for this. Can you fix that? You get a refund or a credit. You have to hassle them to get the credit applied because a month later, they forget to put it on the next bill. You don't have to deal with that when you're doing your bulk storage in Amazon. For all of Amazon's failings, these are the areas where Amazon does things well. So, let's get into a case study here. This is the type of work that we do for people that I'm teaching you how to do right now. And if you implement these things, you can see some major benefits to your company. So, let's take a look. Right now, we still work with this client. They started up in September. They're averaging about 150K a month in their sales and they had a lot of issues. A lot of stuff was overstocked with long-term storage fees. Man, they were paying way too much to send their stuff into Amazon because they weren't doing it in an optimal way. They weren't organizing well and they weren't using AWD. They were just sending straight into FBA, paying a ton of placement fees. I'm sure many people can relate. So, what happened is we started working with them. I know this chart is hard to read, but this is the best data I can give you. Basically, to give you the overview of this, the before situation is in the yellow portion of the year, January through April of 2024, they were paying about 58 cents a unit to send their stuff into FBA and they shipped in About 29,000 units over that course of four months and it cost them $16,725. This is before placement fees have kicked in. But then when placement fees started charging in the orange section, they started paying thousands and thousands of dollars more. During that period of time, May through September, they shipped in 51,600 units and it cost them $38,000. 74 cents a unit that works out to. So the first thing that we started doing is fixing their shipping strategy. We were like, guys, you're doing so many products, you're doing so many units, you just need to be doing FTLs into AWD as often as possible. And get those shipping costs down. So this is what happened after we got them organized properly. October through January, so just this past month completed, we shipped in almost 76,000 units. Now Q4 was involved, so higher volumes. This is a longer period too. It only cost $22,500. So we got them from $0.74 a unit inbound to FBA down to $0.30 a unit on average. So you just do the math, 76,000 units times almost $0.50, it was $33,000 we saved this company over four months just by stopping wasting money and shipping things the wrong way, right? By managing your logistics and your inventory correctly, you can make money, right? So think of it this way. If you have a supplier and you're like, oh man, I know some of these competitors, Chinese sellers out there, their costs are not as high as mine, right? And you're like, how can I negotiate? And the tariffs came in, prices are going up. What if instead of going through ways to lower your costs that have no guarantee of working, you just find ways to lower your costs that you can fully control by optimizing how you operate better, right? If you're able to ship in your product to Amazon for five cents less a unit, Whatever your selling price is, that five cents is pure profit you have recaptured and gained in your business just by doing things differently in a better way. So what could you do with an extra 4% profit in your business if you're doing quite a bit of sales, right? I think that could be another employee, could be a vacation every year, could be a lot of things, right? So that's what we encourage everybody to do. And now I'm going to have Todd jump back on because he's going to show a demo of some AMZScout software which you can also use to help your business figure out how to grow. One of the things that when you're dealing with an inventory business, an Amazon business, you cannot just stay a single hero product company if you want to survive, if you want to thrive and grow. You get that one hero product, your business gets off the ground, your inventory management is pretty straightforward. But once you need to grow and compete, your logistics gets much more complicated, multiple suppliers, multiple shipments, multiple destinations. And you need to find the next new product that actually works for your brand that isn't a conflict. You're not just doing random stuff that's trending. You want to find stuff that fits with your audience and build your audience. Expand your product line in a way where you can upsell and upsell and upsell to the same people over and over that already trust and like you. And so, yeah, Todd, take it away. Show us how we can use the software to do that. Speaker 2: Yeah, for sure. And 100% on that, Jackson, that's one of the things that the client that Jackson was just talking about, that's one of the things they were able to do. We were able to reduce their costs significantly on their logistics side and fees, and therefore they had more profit available to expand their catalog. And that's one of the things that they're doing. AMZScout is rapidly expanding their catalog now that a lot of their logistics and everything is laid out. So I just wanted to show you guys some cool features in the AMZScout plugins that they have available to help you find different products in your niche. And so I already pulled up a potential niche here that you, let's say I'm going at this in a way that you're already selling products in a niche and you're building a brand, right? And you're looking for new products to add to your brand. If you're new to selling on Amazon and you don't already have a brand or a product even that you want to sell, That's definitely something you wanna put front and center is building a brand. If you're gonna be successful on Amazon these days, you need to build a brand. You can't be jumping around all over the place and sell some shoes and then some reptile terrariums and then we're selling some teddy bears or something like that because it's not cohesive. You really wanna try to build a brand. So to show you guys some of the cool things in the AMZScout tools, I pulled up this category here for reptile terrariums, which is a pretty specific niche and I recommend that you go into a specific niche if you haven't started already. The more specific the better. As they say, the riches are in the niches. So go into a niche and then you can expand out from there as you build your brand if necessary. But this one I thought was pretty cool with the data that I found using the AMZScout tools. So I essentially just went to the best sellers for reptile terrariums. So Amazon lists you a hundred of their top products, 50 on each page here of products that you could potentially look at selling and you know are already selling well on Amazon. Now, what you'd want to do on a page like this is click on the AMZScout Pro AI extension tool, which if you don't already have that, you can download that from AMZScout and install it into your Chrome browser and be able to get this screen that I'm going to show you, which I've already loaded on this next page here. Nope, did I close it? Let me, I closed the screen, so let me load it here. So when you click on the tool, it's gonna bring up a bunch of information about the products that are on the screen. That's gonna tell you, you know, a lot of information about it, how many they're selling, how many sellers are in each one, what their listing quality score is, which is right here. The product score for private label and I've got a filter here. So I got to turn that off to get those back. So a lot of really cool information. I like the product score for private label because it gives you some good information about that product, which we're going to dive into in a little bit. But right now I just wanted to show you what it's showing me here is that The first 50 results have an average monthly revenue. So that's an average monthly revenue of $17,970 per month. And an average price of $66. That average price I really like. More expensive products, you know, preferably over $20. Even better over $30 is going to be your kind of ideal target range. If you're in, you know, the United States, Canada, the UK, You're going to want those more expensive products so you can have more margin available to be competing with the sellers that are selling direct from places like China, who are going to have lower overhead than what you're going to have in the USA or Canada or the UK or something like that. The average number of reviews it tells you here right away as well. All of this is really cool, a lot of good information. But if I jump to this next tab, what I'm going to do is enter some filters here. So I entered these filters and I should mention too that I clicked this load more button. You've got this load more button so you can load the next page and keep loading more products. But it takes a little bit of time to pull that for the interest of time. I already had it loaded up in this other window here and set some filters here. Now you can play with these filters depending on what you're looking for. But I said show me products that are at least $30 or more. I have a bad star rating, so a maximum of 3.9 stars. So I can look for potentially bad products that are selling well that I can improve on. And so I also said, show me only products that have at least $4,000 in sales per month and get rid of the sponsored products for me. So I'm only looking at actual products that are on the page. And when I applied that, It came back with only two different products out of those 100 best sellers that we could potentially look at improving and then selling. So if we open each one of those up, basically what it's coming back as are both of these Our reptile, a huge terrarium humidifiers, I should say. So they're humidifiers for a terrarium, which if you're not familiar with what a terrarium is, it's basically you create an environment for like reptiles, like frogs, chameleons and things like that to live in. As pets in your house, right? So it's a relatively big niche. A lot of people like to do this and have fun with their pets essentially. But these misters will make the humidity right for them. But it looks like there's at least two of them in the top 100 best selling products on Amazon that have really bad reviews. So then you can dive into those reviews and figure out what's wrong with these products. What could I potentially fix on them, improve on them to make a product that I can add to my brand that I have for reptiles? So perhaps I have a reptile brand. Maybe I sell some terrariums for them. I sell the food for them. I sell various other products for them and I'm looking for other products to add in. And so these potentially would be very good products that you could sell. And what's really cool in the software is they do have some new AI tools that can actually give you a little bit of insights on these products to help you determine what perhaps you can improve on them or what's already good about the market and things like that. So if you click on the product that you want to look at, so let's look at this top one here. You've got this AI product analysis that we can click on. And in just a few seconds here, it analyzes that product and looks at all the information of the product to give you insights and then also product improvements. So as we mentioned already, this is a higher priced product. And so it's saying this likely has high net margins, which is good. We definitely want high net margins. It's got an established presence doing 7,000 a month, estimated 190 sales. It's in the pet supply category, which is a growing market. It has product flexibility with adjustable spray nozzles. Its weaknesses, it has relatively low customer rating, which we know we already looked at that. That's what we're targeting. It has no variations, so potentially we could add variations. There's opportunity to improve the product, obviously. And the presence of competitive products in the market could challenge price competitiveness and conversion rates. So these are threats to the current product. So it's a potentially a competitive product and has a lot of fluctuations in demand. So this is really cool. The product insights, you can get an idea of the product. But what I like even better is this AI product improvement. If you click up here at the top. So this will give you ideas on ways to actually improve this product when we're going to go ahead and make our own version of it. So tips for improving. Enhance the product's durability and material quality. So it's analyzing the current comments and reviews of the product and the information on the product to determine what people are complaining about. So what they're mostly complaining about is the durability of the product and the material quality. So, considering the product is used for terrariums, durability is crucial for maintaining consistent performance in humid environments. The current rating of 3.6 suggests that customers may have concerns about durability or build quality. Invest in higher quality, water-resistant materials can improve the product's longevity and customer satisfaction. And then some different information about the metrics and how to make the product better. So it gives you kind of a high-level overview of ways to potentially improve this product. So what I would do next is My goal is really dive into this product and look at in more depth the reviews, look at the complaints of the reviews and talk with my supplier in how I could potentially make this product better. Maybe we use a better material. Maybe we can use some, you know, Rust resistant stainless steel that doesn't leak, doesn't crack, doesn't break or maybe we could use better sealant in the product to make sure it's not leaking. Things like that but you'd really want to dive into the product to determine exactly how you can improve it. The other thing that's really cool here too to keep digging deeper is you can get the keywords of these products. So this is something that I do frequently to determine exactly what keywords this product is using and ranking for in its product. I'm actually gonna do that for the second one I wanted to dive into. Alright, so for example, let's go with reptile terrarium stands. If you wanted to potentially look at that market closer, you can actually click on that keyword, it opens up a search for you. And what I want to show you for that is right up here on top. And actually, you know, I don't want to dive into that one. I'm going to dive into this one I already have open so we don't have to wait for it to load. So this is a niche terrarium water mister, which is what we're looking at here, right? These are both terrarium water misters. And right up at the top here, they've got a couple of cool scores called Visibility Score and Niche Score. So if you put your mouse over this, it says 0% of our users have found this niche. So that is telling me that not a lot of people are looking at this niche to potentially start selling. So there's a possibility that you're going to have lower competition on this product for when you start selling it because there's not a lot of people out there that are diving into this niche currently. And then the other really cool thing up top here is called the niche score, which if we click on that, this is a seven out of 10. So it's good, but not great, but it's telling you exactly why it's good. So higher prices in this niche, which is a good thing, as we already mentioned. Potential for high profit margin. It has high sales, which is good. Not great, really high sales, but good high sales. And the niche is quite old, which gives it a little bit of a downgrade from being high for the overall score instead of good. And then it tells you about the competition here as well. It's not a very saturated niche, which is awesome. That's exactly what we're looking for. Not a lot of Amazon sellers, a very low top brand competition. This is something that you really want to look for. So there's some niches that you go into that Maybe the top 1, 2 or 3 products dominate all of the sales for that niche. Those kind of niches are going to be extremely hard to break into and get a foothold in versus niches like this one where the people who are in those top 10 to 20 slots are not getting a super high large percentage of the sales so it's a lot more spread out which means you can take a good percentage of those sales a lot easier. They've also got very low listing quality so if you can make a perfect listing you can stand out from the crowd. Low average rating, so overall the products, you know, they're not great ratings overall. Not monopolistic, so you won't be competing with a lot of very strong sellers with super high seller feedback. But they do have some products that have a lot of reviews. So that was a down vote on this niche. So overall, they give it a 7 out of 10. But I like this niche because of the, you know, the desired price is high, potential for a good margin, and a really low brand competition. So, you know, if you were building a brand around reptiles as pets, this is potentially something that would be really good for you to add to your brand and add it into your catalog of products. So, That's why I really like these tools for analyzing that and looking at the information in the niche. So if you're not doing these things already and you're just starting out selling on Amazon, definitely take advantage of these tools to find niches that you can sell in and analyze them. Now, one thing that I do tell a lot of people who are just starting out You want to find a niche that you know something about ideally, something that gives you an advantage over me. You know, I don't know a lot about reptiles. So personally, I wouldn't be selling reptile products probably. I'm more of an outdoors person. I like hiking for example. So I might sell products in hiking because I know a lot about hiking. I know what makes good hiking products and what doesn't. And that gives me a leg up over people who don't know anything about it. So keep that in mind as well when you're looking at niches to sell in. Find a niche that you know something about. All right, so I could keep going into these tools and showing you a lot more, but I just wanted to give you an overview of some of the cool features that they have in there that you can use their tools to help you find products that you can potentially sell on Amazon and niches that you could potentially go into as well.