Podcast Episode 086 : Big Lessons from an Amazon Fulfillment Center Tour

On today’s episode of The Full-time FBA Show, Rebecca and Stephen reflect on their tour of an Amazon Fulfillment center before the COVID pandemic. In their conversation, they discuss what they learned and how it has impacted the way they do business. One of their major takeaways was the phrase ‘customer obsession.’ Since then they have adapted the standards of their business to be more oriented to client satisfaction. They discuss how customer obsession is not an altruistic instinct, but rather an effective way for Amazon to gain customer trust.

Tune in to gain precious insight into how Amazon runs its business, from conveyor belts to Amazon Robotics. Join us today for an informative peek into the inner machinations of Amazon fulfillment centers along with all the lessons that we learned!

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Key points from Episode 86:

• Going on a tour of an Amazon fulfillment center, had a significant impact on our hosts and their business.
• Stephen and Rebecca share what they learned from their tour of an Amazon fulfillment center.
• The phrase ‘customer obsession’ was repeated on signs throughout the fulfillment center; how these words form the core of Amazon’s approach to business.
• Why you shouldn’t round up the condition of your product to ‘new’ condition; it’s better, in the long run, to round down to ensure customer satisfaction.
• The importance of packaging and protecting your inventory, due to the drops that happen on conveyor belts at high speeds.
• Other mindset lessons from different sayings posted all across the warehouse.
• The importance of a “day one” mentality and taking ownership of your mistakes.
• How to apply the advice of ‘invent and simplify.’
• The invention of Amazon Robotics and how it has simplified warehouse processes.
• And so much more!

Links and resources mentioned in this episode:

• Mindset: The Psychology of Success
• Videos About FBA Warehouses:
  • Behind the Scenes of an Amazon Warehouse (2015)
    
  • Life Inside a FBA Fulfillment Center (2018)
  • An 11-minute Amazon Robotics Fulfillment Center Tour (2021)
  • A 10-minute Virtual Amazon Warehouse Tour (2021)
• Outsourcing Ideas
  
• In Person Amazon Fulfillment Center Tours
• Live and Interactive Virtual Amazon Fulfillment Center Tours

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Episode 86 Transcript:

[WELCOME]

[0:00:01.8] ANNOUNCER: Welcome to The Full-Time FBA Show. In each episode, it’s our goal to help you turn part time hours into a full-time income, selling almost anything on Amazon. Now, your hosts of the show, Stephen and Rebecca Smotherman.

[INTRODUCTION]

[0:00:21.7] REBECCA: Hello everyone, welcome to this episode of The Full-Time FBA Show, we are so glad you are here with us today and we’re going to be talking about Amazon fulfillment centers. A while back, Stephen and I took a tour of an Amazon fulfillment center and it truly impacted how we sell on Amazon. We’re going to get into that. Today, Stephen, how are you doing?

[0:00:41.3] STEPHEN: I’m doing good, this was a fun tour to go through and yeah, we learned a lot. It was a good experience, I recommend it to everybody. In fact, at the end of the episode, we’ll show you how you can experience a fulfillment center on your own.

[INTERVIEW]

[0:00:55.9] REBECCA: Clearly, this tour that we went on was pre-COVID because we were able to go in person and before we get into more details about what the tour was and how it impacted our business, why don’t you give us some details about the warehouse, which warehouse did we go to, some details about what the size and scope of it was, some of that kind of information about the tour.

[0:01:17.8] STEPHEN: Yeah, well, we live in the Dallas, Fort Worth area and there’s a warehouse really close to us, again, about an hour away maybe.

[0:01:24.1] REBECCA: That’s not really close but in DFW terms, that’s like just a little hop, skip and a jump over here.

[0:01:29.4] STEPHEN: Very true. The warehouse that we went to was DFW7, it was in North Fort Worth. The warehouse is over 1.2 million square feet and man, that’s huge and it’s basically, you can fit 28 football fields inside of this one warehouse that we went to. It has over 12 miles of conveyor belts just moving inventory all over the place, it basically holds over 20 million inventory items. That’s why Amazon is continuing to put more warehouses out there because they can put 20 million inventory items in there, they want more inventory items in these warehouses to be ready all over the nation, all over the world to get to their customers.

It was pretty awesome, it was a lot of fun to go through and see and experience and we’ll tell you a little bit more about that as we go through the things that we’ve learned.

[0:02:17.4] REBECCA: Yeah, that’s mind-blowing to think of that many items just in one fulfillment center and then how many fulfillment centers are in the DFW area alone, much less in the state of Texas, much less in the entire US and they’re building new ones all the time, including supposedly one closer to the south part of Fort Worth.

All right. Now, let’s talk about, we’re going to get into some of the things that we learned that really helped our Amazon business as a result of going through this tour. We took copious notes as we went through the tour, we’re… just our brains were – the wheels were turning as we went through, thinking about so many things that we could tweak in our business or that we just learned about how the warehouses work and how that makes things in our – that we’re expected to do for FBA make more sense but what was one of the first things that you noticed when we were on the tour that really helped us to kind of clarify some things about our FBA business?

[0:03:14.8] STEPHEN: One of the first things I noticed was two words, just plastered everywhere, the two words were “customer obsession” and so it was painted on the walls that they were put on billboards and bulletin boards and maybe not billboards, bulletin boards and just everywhere in the warehouse, was the words, “Customer obsession”.

Just a reminder to the people who are working there, just how much Amazon focuses on the customer and how much they want the workers to make sure that the customer is super happy. Rebecca and I know from meeting at Amazon Selling Partners Summit up in Seattle that the number one thing Amazon wants to do is to earn the customer trust, that customer obsession is how they are in the customer trust.

The more the customer trusts Amazon, the more they come and buy from Amazon. Just seeing that and thinking for ourselves, “Okay, how can we become more customer obsessed with the way we sell our items?” I mean, one of the ways we can do that is to make sure we are grading the condition of our items well. We don’t want to round up to new condition if it’s not really new condition like Amazon says it should be. We know we want to round down our condition when it comes to an item we’re wanting to sell.

Even if it’s going to cost us a little bit of profit, we don’t want to waste our Amazon account away by lying to a customer and saying it’s a new condition when it’s not. That might hurt our Amazon business and one of the worst things we can get flagged on our account is an item that is used sold as new. We don’t want to do that, we want to be customer obsessed, doing everything that we can to make the customer happy and that includes our customer service when it comes to giving refunds, even when it doesn’t make sense to us, just for the customer to be happy.

Overall, that type of stuff, while it hurts or stings in the short-term, might have long-term rewards as more people continue to come back and buy from Amazon so being customer obsessed is something that we want to focus on.

[0:05:05.3] REBECCA: Yeah, that’s absolutely right and I think sometimes people get really frustrated as sellers, when they think about how obsessed Amazon is with customers and we hear comments sometimes online about how Amazon is against third-party sellers and everything always goes in favor of the customers.

The reality is, Amazon is not customer obsessed out of the goodness of their heart because they’re so benevolent towards customers. It’s because it helps their bottom line and if that is the case, then we can learn from that and see, “Okay, how can I have more customer obsession in order to help the customer but also improve my bottom-line?”

[0:05:46.0] STEPHEN: Yeah, if it helps Amazon’s bottom-line, it can help your bottom-line as well. What about you Rebecca, what was one of the first things that you noticed about the FBA warehouse and how it helped us with our – how we run our own Amazon business?

[0:05:58.4] REBECCA: We’ve seen the videos before we had gone to the warehouse. I have seen videos about how the process works of moving the inventory within the warehouse and I just can’t overstate how amazing it is to see the conveyor belts and different things that move the inventory from one place to another within the warehouse, just how amazing it is to see how they work.

But within that amazement, these – we’re talking super tall conveyor belts that move at a really fast pace and there, when you see in the guidelines that you need to be able to – if your inventory needs to be able to survive a drop of several feet, you need to have it wrapped appropriately. It’s because these items do get dropped and they’re on conveyor belts that the items will drop down. I mean, not like drop through the air but they will go down a conveyor belt where gravity is pulling them down and they will hit at a higher impact than you would imagine other items.

It just really brought home to us that yeah, you really need to protect your inventory, not just breakable items too, of course you need to have fragile items wrapped up in bubble wrap and protected in boxes so that they don’t get shattered. Also with other items, you want to make sure that things are poly-bagged correctly and that anything that could get torn up in the warehouse like that, that it is sealed off in some way so that – because things are just moving at such a fast pace, it really did hit home that you are responsible for making sure that those items reach a customer in pristine condition.

If you are boxing up shoes, make sure that you’ve got the lid secured, that you’ve got any flaps on the boxes tapped down so that things don’t get caught on something as a moving pass and get ripped off, those kinds of things really – it just helped us understand that prepping your items appropriately is again, another way that you can protect your account to make sure that customers are getting items that are taken care off.

[0:08:05.7] STEPHEN: Yeah, we’ll put some links to some of the videos in the show notes, us showing you some of these conveyor belts in action.

[0:08:12.3] REBECCA: As you were saying, when you’re walking around the warehouse, they do have a lot of things painted on the walls or on bulletin boards and just little reminders here or there and everywhere about things that they want the warehouse associates to remember and there’s a lot of mindset type phrases that you see in different places and this is something I know that you love, we talk about mindset all the time, you talk about Carol Dweck’s book, Mindset.

What were some of the phrases that stood out to you? I know you were taking notes on these as we were going through the tour.

[0:08:44.8] STEPHEN: Absolutely. It is one of my favorite ones, learn and be curious. Take ownership, insist on higher standards, deliver results and have a day one mentality and all of those can have an impact on our Amazon business, learn and be curious, continue to have a desire to learn more, be curious about selling on Amazon and find ways to help us grow.

Take ownership, you know if something happens and something goes wrong, take ownership and find out what kind of mistake that you made and how you can learn from that mistake and don’t just blame everything on somebody else. I know a lot of people blame Amazon for mistakes and blame competitors for some things that go wrong. We need to take ownership and find out what we can learn to overcome those mistakes.

Also, insisting on higher standards, that’s a big deal. Making sure that we’re not just kind of skating by but we have high standards in everything that we do. Deliver results, I think that’s pretty cool that in that warehouse that is focused on delivering inventory to customers, they’re not delivering inventory, they’re delivering results. That’s what we’re wanting to do too. We want to find inventory items that solve a need for the customer, that help the customer get to what they’re wanting.

Whether it is something they want to learn in a book that they’re reading or a movie that they’re wanting to watch or if there’s some type of problem that they have that they’re buying something as the solution, we want to deliver results and make sure that that whole process is seamless with how we are serving our customers and then having a day one mentality was the big one.

That is a pretty cool one, I know that on the very first day that you started your Amazon business, you’re excited. You’re really wanting to learn and you’re wanting to do really well and you are focused on being able to grow and do really well and having that day one mentality everyday can be hard but having a reminder about that is a good idea to have that day one mentality in every single day of working on your Amazon business.

Those are some of the mindsets that really stood out to me. I like these.

[0:10:34.8] REBECCA: Yeah, definitely a good mindset. It just helps to improve everything, it helps you to improve your attitude. It improves the way that you’re able to move forward in difficult situations, which you are able to solve problems and one of the phrases that I remember seeing was invent and simplify and that has really made an impact and helped us to think through ways in our Amazon business that we can develop systems and continue to develop systems that we already have but also, invent new systems or not even invent new systems but implement new systems.

I’m all about not having to reinvent the wheel if somebody else has a system and we can tap into that, I would like to do that instead of inventing it myself but I’m talking about systems within all of the different processes we use in our Amazon business. Everything from prepping and shipping your inventory, improving the systems of how you are getting the inventory ready. You know, we were talking about poly-bagging and protecting your items, putting the labels on, those types of systems but even going back further from that, how do improve the systems of your sourcing.

You know, taking a look at your sourcing processes and seeing where you can simplify, were you can streamline, where you’re adding in extra steps that are just not necessary and are slowing you down. Maybe they were necessary at one point but you don’t need that anymore and so don’t do that anymore.

[0:11:58.8] STEPHEN: Yep.

[0:11:59.3] REBECCA: Those kind of things that can really help you simplify, invent and simplify, that can lead to growth in your business and you can see that definitely in full-force in an FBA warehouse because they are running such tight systems there and they are always looking for ways to improve and become more efficient.

All right, so let’s get this wrapped up. Give us one last way that the FBA tour helped impact our Amazon business.

[0:12:25.0] STEPHEN: Well, I thought it was kind of cool, you know, talking about being more efficient. Amazon found a way to make the warehouses even more efficient. In the past, Amazon warehouse is rested up with huge hallways of inventory on shelves and Amazon workers would have a cart and they would go up and down these elevators and down these hallways to find the inventory items and they would pick them and scan them and then take the cart to the conveyor belt and it was a big long process.

Well, Amazon found a way to make things even more efficient by creating Amazon robotics and Amazon robotics is this really cool small little robot that basically goes on a path to a shelving system, picks up the shelving system and brings it to the Amazon worker who then places it on the correct conveyor belt and so they are cutting out all the steps of going to get the inventory person –

[0:13:19.2] REBECCA: Like the literal steps.

[0:13:20.2] STEPHEN: At the literal step, yeah literal steps absolutely, and having the inventory come to them and so we should always also be thinking of ways that we can outsource things. If you are using Amazon FBA, you’re already outsourcing. You’re outsourcing your storage, your shipping, even some of your customer service activities with Amazon FBA, we can always find other ways to outsource as well and so, the Amazon robotics really found a way to cut out a lot of time away from the process of getting those shipments ready and helped them fulfill even more shipments than ever before.

What can you be doing to find more inventory or what can you be doing to take steps out of your processes so that things can be done a lot faster thinking of ways to outsource? We’ll put some links on outsourcing ideas in the show notes but it’s a really good opportunity for you to do less while someone else is taking care of things that pretty much anybody can do. That was one of the ways that I thought was pretty cool seeing those Amazon robots going around, moving the shelving systems around not running over people or other robots. It was a really cool system.

If you’re interested in going to an Amazon warehouse and seeking out a tour, as of recording right now, there are no live tours going on in person but I’m sure as things get better with COVID that they will probably open up again but there are virtual tours and you have two options when it comes to virtual tours. There is a one hour virtual tour that you’ll actually have a tour guide with a live video feed of the warehouse and you can ask questions and see all the process right there at the comfort of your own home or you can just take a 10 minute video and have a virtual tour where they will walk you through a lot and of course, there is no interaction with that but you can do that anytime.

The live tours, you need to set up a time and a schedule for but you can go to www.amazonfctours.com to be able to see when and where there are, the live video walkthroughs and then also to check out just the type of virtual tour that you can see at any time but it’s cool just seeing it in action and I highly recommend it to help your own Amazon business and for you just to kind of see what’s going on with your inventory after you ship it off to Amazon.

[0:15:24.9] REBECCA: Yeah, that was I think one really neat part about it too is to think, you know, I wonder if any of my items are here, you know? If any of these orders that are being fulfilled are any of our inventory items. I’m sure it wasn’t because like you said, there’s 20-plus million items in that fulfillment center that would be very low probability that one of them would be ours.

[0:15:43.6] STEPHEN: But you never know.

[0:15:44.5] REBECCA: You never know.

[0:15:45.1] STEPHEN: You never know, so all the links that we’ve talked about in this episode it will be at our shownotes at fulltimefba.com/86 because this is episode number 86.

[CLOSING CONVERSATION]

[0:15:58.4] REBECCA: Next week, we’re going to be talking about the three wrong questions that Amazon sellers ask and what you should be asking instead. I’m not sure who we’re asking, we’ll we find out?

[0:16:07.3] STEPHEN: Yeah, we’ll find out the answers. I get lots of emails from Amazon sellers asking me certain questions.

[0:16:13.1] REBECCA: Okay.

[0:16:13.7] STEPHEN: There is some, I can just tell they are asking the wrong questions. There is a better question to be asked and I will show you exactly what that is next week on The Full-Time FBA Show.

[OUTRO]

[0:16:26.5] ANNOUNCER: That is all for this episode of The Full-Time FBA Show. So head over to fulltimefba.com/podcast, where you will find the shownotes and links from this episode. While you’re there, subscribe to our newsletter where you’ll get several free downloads of our popular and helpful Amazon FBA resources. Now, take action on what you have learned today so you can find success at turning part-time hours into a full-time income with Amazon FBA.

[END]