I’m hoping to get started on some changes pretty quick and to have some new functionality added to the apps in the next month or two.

Thanks,
Brandon Checketts
BookSocuter.com

The site is fairly complicated, so there is a chance that I missed something. I’ll be keeping a close eye on some log files over the next couple days, but if you see anything strange, please let me know about it so that I can make sure that it is running correctly.

For anybody that is interested in the technical details, the new servers run CentOS 6 which includes updates to many applications. I was specifically looking for some of the latest MySQL and PHP features that weren’t available in the CentOS 5 standard repository. The physical servers are also much more powerful and have more memory and faster/bigger disks as well. They are hosted with RimuHosting.com in a very well-connected data center in Dallas TX.

After the upgrades have been completed, I’ll be able to optimize a few more processes. It may take me another day or two to get that completed, so hopefully everything is running perfectly on Monday. I’ve specifically chosen to make the changes on a Friday night and over the weekend to try and minimize the possible disruption.

Thanks,
Brandon Checketts

Integrity Staffing Solutions is contracted by Amazon to provide much of the labor in their warehouses. They seem to be paying around $11 to $13 per hour based on numbers mentioned in the article. It sounds like they also have managers at the location to handle coordination between their employees and Amazon management. For my math in this article, I’m going to figure that it costs Amazon about $15.00 per hour for each of the workers. I believe this is a conservative figure and should include the direct cost that ISS pays the workers, as well as their overhead for management, accounting and similar expenses. Additionally, Amazon employs a sizable number of workers as well, and will have additional payroll costs associated with their full-time employees.

I’m interested to see how the fees that I pay as an FBA seller are allocated and used. FBA Sellers pay four different fees when they utilize Amazon’s Fulfillment Services. The storage fee and weight-based fee are closely tied to the value of the space and the postage respectively, so the “Order Handling” and “Pick and Pack” fees are what are seen in action in the warehouse.

The Leigh Valley article that this article is based upon is for the ABE2 and ABE3 facilities which are currently being used primarily for books and media products, so that is probably what most of their rates are based on.

It seems there are four basic tasks done in the warehouse:

Receiving – “Unloading inventory from boxes, scanning bar codes and loading products into totes”. A worker mentioned that their quota increased from 250 to 500 items per hour. That is 4-8 items per minute. At $15.00 per hour, it costs $0.03 to $0.06 for Amazon to “Receive” each item

Stowing – “putting products in bins in the warehouse”. No productivity rate was mentioned in the article. It seems to me that this would be the opposite of “picking” which has a rate of about 120 items per hour, so I’ll use that for my math. 120 items per hour at $15.00 per hour costs $0.12 per item.

Picking – This would involve finding items in the warehouse and sending them to the packaging people. Specific rates were mentioned in the article: “It started with 75 pieces an hour. Then 100 pieces an hour. Then 125 pieces an hour.” and “He said he was expected to pick 1,200 items in a 10-hour shift, or one item every 30 seconds.” Again, $15.00 per hour for 120 items is $0.12 per item

Packaging – This wasn’t mentioned much in the article, but I’ve seen the process in videos of the FC. Quotas also weren’t mentioned in this news article. The process would involve picking the correct box for an item, placing the item in the box, and then putting any packing slips and filling into the box, sealing it, and applying a label to the box. Since, I don’t have any more specific numbers to use, I think the 120 items per hour rate is reasonable, again at $0.12 per item.

So if we add up those four tasks, it costs Amazon roughly $0.40 in labor for each item that they fulfill. Amazon also has other significant costs in providing this service, such as the building, power, specialized equipment, management, HR, and computer systems to name a few. FBA Media sellers currently pay either $0.60 (for items sold for under $25) or $1.00 for these fulfillment services.

And I should briefly talk about the working conditions described in the article. It was clearly written to tell only one side of the story. FBA has been growing and changing significantly in the past year and I think there would have to be some learning and “growing pains” as that occurred. I can think of several things that I know about as an FBA Seller that have occurred over the same time period:

• Amazon change these facilities to be used for all books. This may account for the change in workers quotas as having fairly uniform items should make the work easier
• Amazon increased the Pick and Pack fee from $0.50 to $0.60. They may have done this to account for an increase in the amount of labor required from their initial expectations
• FBA Fulfillment centers run out of space! . I believe this is fairly widely known, and one of the FBA executives at SCOE acknowledged it.
• 2011 had an unusually long and hot heat wave (who wasn’t complaining about the heat?)

Overall, I think that Amazon is well positioned and is actively dealing with these issues. The negative press will likely cause them to be a little more proactive about this type of potential problem in the future as well.

I’ve had the chance to introduce some significant new features to BookScouter recently and am pretty happy with how things are working. Now I need to figure out what the next step is With so many BookScouter users, I want to make sure that we are working on features that will be useful to people so that BookScouter will continue to be the most comprehensive, accurate, and easy to use tool for comparing prices on selling used books.

We’ve put together a short survey that I’m hoping will help us learn and quantify how and why people use the website. We’re interested in learning a bit about your book-selling ventures and what other tools you are using that we might be able to integrate with.

Please take a few minutes to complete the survey. Most users should be able to finish it in about five minutes. We’ll send you a free BookScouter.com t-shirt for your time, and you’ll be helping to make sure that BookScouter.com has the best tools for you to use.

Take the survey

I first met Janelle at the Amazon Sellers Conference (SCOE) in Seattle in July. She is a popular and well respected radio host, and runs a bunch of classes and training programs to help sellers optimize their online sales through eBay, Amazon, and on the Internet in general. She is also behind the OSI Rock Stars program and training material.

I’ve just put together a tool that will allow users to search for books by Author, Title, and the published year. This should allow casual users to find the ISBN and hopefully find a good place to sell their books to somewhere. In the event, that nobody is buying the book, it will also display prices from Amazon marketplace and an estimate of how long it may take to sell.

The tool is now available at http://bookscouter.com/pre-isbn

Thanks,
Brandon Checketts
BookScouter.com