In 2003, Christa Watson considered herself an avid quilter looking for a way to fund her hobby. A woman at her church had introduced her to quilting and, as Watson’s quilting hobby grew, so did her quilting-related expenses. That’s when Watson decided to start selling fabric on eBay and her own online shop, ChristaQuilts.com.
Less than three years later, ChristaQuilts.com had grown from a means of supporting Watson’s quilting hobby into a thriving business. By 2006, Watson realized that her site had the potential to support her family. Her husband, Jason, quit his job as a certified professional accountant, and the couple decided to grow the business enough to provide two full-time incomes.
“At that time we were getting a bunch of emails from Amazon asking if we wanted to sell there,” Watson recalls. “Jason said we should try it for six months, just to test the waters.”
According to Amazon, there are two million third-party sellers on the site. The Watsons decided to become one of them. Thinking like the CPA that he was, Jason thought precut fabric bundles, rather than yardage, might do best on Amazon. He set aside some new stock to experiment with and the couple’s Amazon business took off.
After just a few months, the couple saw that their Amazon sales were strong, but discovered a flaw in the new business — fulfilling orders had become an all-consuming process. After doing some research, the Watsons decided to step things up and try the Fulfillment By Amazon (FBA) program.
FBA allows Amazon sellers to use Amazon’s fulfillment services instead of trying to fill orders on their own. Sellers send as much inventory to Amazon as they’d like, and Amazon scans and stores it at their fulfillment warehouses. When a customer places an order, Amazon packs and ships the items and manages customer service.
“Once we decided to use Fulfillment by Amazon, it just went through the roof,” Watson says of the couple’s fabric business on Amazon.
The Watsons closed down their eBay and website shops and focused their efforts on selling precuts on Amazon.
“Precuts were the ticket. It’s just so much less labor. Before Amazon, I was cutting fabric eight hours a day,” Watson says.
Today, the ChristaQuilts Amazon shop supports the family of five and allows Watson time for designing patterns, writing her third craft book, and teaching quilting classes around the country.
What it takes to succeed
According to Watson, there are a few tricks to making Amazon work for your business. For instance, realizing that commodities do best on Amazon will save you some effort, Watson says.
“Think of something you can order a lot of and restock easily. I tried selling yardage bundles for a while, but it just bombed,” she says. “Independent stand-alone units do best.”
Watson says other examples of craft supplies that might succeed on Amazon are things like skeins of yarn or rolls of ribbon.
Photo by Christa Watson
“To make Amazon work you’ve got to sell a lot and you’ve got to sell it fast,” Watson explains.
Take Watson’s Moda Jelly Roll, for example. This precut roll of premium quilting cotton retails on Amazon for $39. The Watsons pay a 15 percent fee to Amazon ($5.85) plus an order handling fee ($1), a pick and pack fee ($1.04), a weight-handling fee ($1.59), and a storage fee (3 cents), which brings the total fees charged by Amazon to $9.51. Watson pays $20 to purchase the Jelly Roll at a wholesale cost, plus $1.13 for her own packaging and shipping costs. Her net profit on each Jelly Roll unit is $8.36.
Listing and selling as much as possible is the key to being successful on Amazon, Watson says. At any given time, Watson’s ChristaQuilts Amazon shop has about 1,600 items listed.
“In order to make a profit, you’ve got to make it up in volume,” Watson says.
Amazon’s FBA program encourages sellers to sell inventory quickly. After six months in the fulfillment warehouse, Amazon charges a storage fee of $11.25 per cubic foot. If that inventory is still in the warehouse 12 months later, the storage fee doubles.
“It’s hard to envision what that storage space size really looks like, but it’s small,” Watson says. “It can cost us thousands of dollars. We try to never let it wait that long. We either ship the inventory back to ourselves or we (sell) it at a deep discount just to turn it over.”
The seller culture
Participating in the Amazon marketplace is a very different experience than selling on other ecommerce platforms like Etsy or eBay, Watson says. On Amazon there can only be one listing per item site-wide. If a listing already exists, you have to use it.
“You can’t make the listing better. You can’t change it. If the wording is weird or it doesn’t list some important features, you still have to use it,” Watson says. “And you can’t tell your story.”
Sometimes, she says, listings have serious errors, like an incorrect UPC code. To get the error corrected means wading through Amazon’s bureaucracy.
“It’s a headache and a hassle when something is wrong. Sometimes sellers cheat,” Watson says. “They try to create their own listings and we have to report that. That’s what Jason does. He spends a lot of his week on the phone with Amazon clearing things up.”
Having a single listing with many different sellers behind it encourages a particular type of behavior among sellers. When a customer searches for an item, Amazon chooses which of the many available will come up first in search results. Other sellers’ items also are listed, but they appear lower on the page and require extra clicks to sort through.
“Most customers are going to purchase that one that pops up in the ‘buy box’,” Watson explains.
Customers have the option of using Amazon Prime or Super Saver Shipping on FBA products. The formula behind Amazon’s search results is proprietary, so Amazon won’t disclose how they choose the items that pop up on top of the list, but Watson says using Amazon’s FBA program seems to help.
Still, even with the FBA edge, Watson says sellers are “all competing with each other and end up lowering our prices to get into the ‘buy box.’”
Photo by Christa Watson
Once an item has been purchased, it must be packaged the same as any of the other items available for that listing. This means sellers can’t include any of their own branding.
“We can’t add our business card or a postcard to say ‘thank you,’ or even a sticker,” Watson says. “There’s no commingling of brands allowed. The brand loyalty for customers is to Amazon, not to you. You can’t feel precious about your own brand.”
Fulfillment By Amazon sets the schedule
These days, much of the Watsons’ workweek is spent preparing and shipping inventory to Amazon’s fulfillment centers. On Mondays, they report to Amazon how many of each item they’ll be shipping that week. Amazon sends back a manifest telling them where to send each product.
“Typically, we have to split things up and ship them to three or four fulfillment centers,” Watson says. “So we might have 400 items in 15 different boxes with some going to California, some to Texas, and some to Pennsylvania.”
Each item is bagged individually and gets a UPC code sticker, a seller barcode, and a suffocation hazard sticker.
“It’s a ton of labor and it’s boring,” Watson says.
During the week, several local friends plus the Watsons’ older children help out with listing, packing, and shipping. The Watsons track their inventory on a database created by Jason.
Is selling on Amazon shameful?
When she first started selling on Amazon, Watson realized that many small business owners view the online giant as a ruthless predator, not a partner. For a while, she wasn’t sure that she should tell people in the quilting industry about her Amazon site.
“At first, I didn’t want people to know about it,” Watson says. “I worried that the shops where I teach would see me as a competitor who is undercutting them.”
But Watson sees herself as a colleague, not a competitor. Christa Quilts is a family business run out of the Watsons’ two-car garage. And, Watson says, being intimately involved in selling so much fabric provides her with valuable insights on what works in the marketplace.
“I’m hoping to one day design fabric,” Watson says. “Selling fabric on Amazon allows me to see what types of fabric people are drawn to and what is appealing from a design sense. I know which company I’d love to work for since their fabric sells the best and it helps guide what I’ll write about and design patterns around.”
Watson has come to feel proud of her Amazon fabric shop. “We see Amazon as a means to an end. It’s a way to earn money for our family,” she says. “It’s the day job.”