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April 10, 2018

239 10 Lessons from a Freight Forwarder C***-up

We’ve all made our share of mistakes. I know I have. I’ve recently run into some troubles with Amazon freight forwarder. That’s why today I’m stepping away from the customary formal interview format of the show to try to show you examples of problems that can be solved in our mastermind groups. Other people’s experience can be immensely valuable, especially if you can apply it to your business and avoid making some of the same mistakes.

The Background

The ramifications of these mistakes I’ve made are still playing out. It started in China in summer 2017 and has been slowly grinding it’s way to a resolution with Amazon’s (not so) slick communication in seller central.

In May 2017 I ordered 1800 units of a product I’ve been making for ages. The standard version is black. I wanted some variations, so I ordered 100 of a few other colors. As soon as you do variations you multiply the possibility of things going wrong. We talked about this recently in the 10k Collective Mastermind Group. For more information on our mastermind groups check out amazingfba.com/mastermind.

Mistake #1 – Unclear Communication

Whilst the products were being manufactured I was using a new Amazon freight forwarder as I wanted to have the products shipped by sea to keep my costs low… standard stuff. I created the inbound shipping plan on Amazon Seller Central, and as you may know. If you’ve done this before, I had no control over where the products were to end up. Long story short, I gave the freight forwarders two addresses for the purpose of getting a quote, one was my manufacturer’s address in China, and the other was for the Amazon Fulfillment Center in Texas. My mistake, the one that set this whole thing in motion, was not specifically stated to the freight forwarder that these addresses were only for the purpose of obtaining a quote.

Get the Checklist

If you want a cheat sheet for dealing with freight forwarders, here’s the one I use. It’s free. All you have to do is sign up for the Amazing FBA email list.

Mistake #2 – Unclear about what Information to Use

After I obtained the quote, I did my usual due diligence. I did my profit and loss spreadsheet,  chose my Amazon freight forwarder, renegotiated the price with my manufacturer, and placed the order. The freight forwarder took over from there, and I thought that was that. I created a new inbound shipping plan, downloaded the PDFs for the shipping labels, and sent them off to the freight forwarder–it turns out the shipment was to go to Pennsylvania, not Texas. Here’s where the next mistake happened. I didn’t explicitly tell the freight forwarder to disregard all previous shipping addresses.

Mistake #3- Only Sent Information Once to my Amazon Freight Forwarder

I only sent the shipping label one time in one format. There’s a good chance that the freighter never even saw the new label to begin with. It emerged that the freight was going to Texas instead of Pennsylvania. The freighter took responsibility. Dealt with the mistake, and paid to get it fixed. The shipment arrived. I moved on to another project put this whole thing behind me and started managing another company’s Amazon account. I took my eye off the ball.

Mistake #4 – I Lost Focus on my Business

Fast forward to November. I get a complaint that someone ordered a black version of my product and received a pink one. These things happen from time to time, so instead of viewing this as a problem that needed to be addressed, I ignored it. I should have looked at this as a warning sign. More messages and a negative review rolled in, so I asked a customer to send me a photograph of the product. Sure enough, there’s a nice little label that says “Pink” on the box. Behind it, there’s an FNSKU–Amazon’s internal labeling system–that says the word “Pink” on it. Over top of that one, there’s a smaller FNSKU label that says “Black”.

Mistake #5 – Jumped to Conclusions

Now we’ve made it to the final mistake I made before consulting with the mastermind group. I blamed my supplier. I sent him the photograph, he sent me the dimensions of the label, and after consulting with the mastermind group, it became clear that the freight forwarder–and to a lesser degree Amazon–had messed up.

Value of a Mastermind

Throughout this process, I think maybe the biggest mistake I made was not consulting with my mastermind group sooner. It can’t be overstated the value of having a sounding board of your peers over a group of strangers. If you’d like to reach out to me for more information about our 10k Collective or Zero to Hero Mastermind groups, just go to AmazingFBA.com/mastermind.

Resolution with Amazon!!

So finally, after consulting with my mastermind group, I went to Seller Central, Manage Inventory, Manage FBA Shipments, and I checked the reconcile tab. I’ve been extraordinarily lax about this in the past, and I guess that’s because I’ve had so few mistakes thus far in my three years selling on Amazon. Sure enough, the inventory was off. There were too many black units, too few pink units, and too few white units. I opened an investigation and Amazon quickly gave me $1699 for 100 missing units.

What hasn’t happened yet is something I’ve requested that Amazon calls a “bin check”. It’s just what it sounds like. They literally go in and check all the plastic bins where the units are stored to check that the units are black and not pink, white or blue.  

Overall Outcome

The silver lining is that Amazon gave me a settlement that was more than what the products were selling for in the first place. Unfortunately, I had to suspend the product due to the suspect status of the color labeling on the units within the Amazon fulfillment warehouse. That’s cost me a lot of sales. When things are all said and done I will have to go back to my freight forwarder and ask for compensation.

Lessons Learned:            

  1. Getting it Right the First Time is Way Cheaper than Fixing Things Later
  2. Clear Communication; Tell People What to Do and What Not to Do
  3. Send Consistent Messages Through Multiple Channels
  4. Check Everything; Assumption is the Mother of all F-Ups
  5. Delegate don’t Abdicate
  6. Pay Attention to Warning Signs
  7. Don’t Get Distracted by the New Thing
  8. Don’t Assume You Know Who is at Fault
  9. Join a Peer Group and Use It – AmazingFBA.com/mastermind
  10. Keep Taking Action and Learn From Mistakes

Watch 10 Lessons from a Freight Forwarder C***-up

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Michael Veazey

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