May Recap – Making Money and Jumping Ahead

The Money Keeps Rolling In

After months of endless work, I can finally start complaining: "Another day, another dollar." Well, maybe not a dollar, but at least a dime. And I guess my days aren't really that boring, but they can have their moments. Anyhow, the point is that I made money! Which is pretty great news. 

swimming in goldGranted, I had imagined that I'd be rolling around in a vault full of precious gold coins bearing the outline of my empire-building face by now, but hey, I'll also gladly take that $100 check with a smile! 

Now that I'm well on my way to being a multi-hundredaire, optimism should reign supreme! Well, almost.

storms on the horizonReality isn't always so kind. Like so many other times during this learning experience, things haven't always gone as I'd expected. For starters, I made incorrect pricing assumptions on my first products (incorrect AMAZON FEES!!), which ultimately caused me to lose a little bit of money on each sale. On a positive note, I can completely accept that my first foray into e-commerce resulted in a mere $40 loss. After all, exchanging $40 for learning how to import, build a website, manage inventory, market products, and build up a customer base isn't a bad deal. 

E-commerce disaster strikes

But that was last month's problem. This month things become a whole lot rockier. Amazon, without warning, changed a boatload of rules that govern the way sellers can use their platform. Titles like "Is this the end of retail arbitrage?" don't exactly inspire confidence. Plenty of articles out there discuss the pros and cons of these new restrictions, as well as potential ways to deal with them. 

The summary is this: a TON of sellers are going to be negatively impacted by these rules, but they're not doomed (so long as they are willing to adapt). The upside is that customers will (hopefully) benefit in the end. 

So, after spending weeks (if not months), building up a list of products to sell, in one fell swoop my future armamentarium of goods was cut by 85%. And most of my products with the highest profit margins were part of that cut. Crap.

mental gymnasticsFacing the winter storm

In response, I did what I always do: immediately calmed my worry through incredible feats of mental gymnastics. "That's ok," I told myself. "I never really wanted to do this anyway." "I was only curious, but I'm glad to quit now." Of course! And just to make sure to add some positivity, "Oh well, it was fun while it lasted! Good thing I'm ready for something new." Mr. Positivity never misses a beat!

Then, 5 minutes later, I tumbled my way right back to the original path. Forgetting everything I just thought for the last few minutes, I told myself, "Naawww, just kidding. I can totally work with this. Heck, this is probably an advantage! Now back away from the Doritos (GREAT comfort food by the way), sit back down, and figure out what it is..."

Looking at the 6-step plan of action I blogged about previously, I realized that I still had a (relatively) easy way to overcome this: jump directly from step 2 to step 6! Easy squeezy lemon peasy (or so I'm hoping). Amazon's new rule changes directly affect steps 1 through 5, but step 6 is mostly excluded from these new restrictions. While I was hoping to dip myself in more slowly, learn the ropes a bit better, and maybe build up some money along the way, I've decided to just go all-in and see what happens!

It's not that Amazon has made it impossible for people selling via steps 1-5, but that: 1) it has become more difficult and 2) it has become even more burdensome and time-consuming to learn the ropes as a beginner. 

crepuscular rays

Staying positive

There's a silver lining to all of this. Namely, that I was never really interested in steps 1-5 anyway...and that isn't a lingering fragment from my mental gymnastics. The truth is that I only wanted to take baby steps on the way to my final destination. Throwing those extra months of work (and learning) out of the window is a bit worrisome, but I'm already loving step six 20 times more than the first 2 steps. I'm remembering why I got into this in the first place, discovering a clearer plan for future business development, and feeling re-energized by the possibility of opening my own e-commerce store full of my own line of products. 

Check back at the end of next month for a recap of how I defeated Amazon's restrictions and came out ahead!  

 

 

 

April Recap – First FBA Success, Second Phase

Part 1 of 2: First Success

January and March were full of planning. I built this blog, ordered my first round of samples, and learned about the FBA process from start to finish. April was a month of action. My first round of products arrived at Amazon's warehouses, I started tracking inventory, and made my first sales on FBA! Although I had a decent stream of revenue, my profit was less than expected due to incorrect assumptions in my calculations. Nevertheless, my first sales validated the plausibility of my idea. For that, I'm calling it a "success"!

Some quick info:

 

  • 74%

    Inventory Sold

  • 85%

    Actual Revenue vs Projection

  • 16%

    Class Completion

  • My product was live on FBA for two 24-hour periods. I sold the same amount (37% of my total original inventory) during each period. 
  • Unfortunately, the gap between my calculated and actual revenues is what caused me to miss my profit goal 
  • I'm taking business-related classes throughout this year-long project (since April 1st)

 

 

Part 2 of 2: Second Phase

FBA product bundles alibaba

As my understanding of the FBA and sourcing processes increase, so too does my willingness to tackle harder tasks. In essence, I've broken down my tasks into a list of 6 phases

 

 

Thanks for keeping up with the latest developments!

 

March Recap – First FBA Product and New Strategy

time is of the essenceSomehow another month has come and gone. Unfortunately, if you read the post from February you will already know that not much was accomplished in March. However, I'm back home and cracking down!

So, let's jump into the successes and setbacks of the last month.

Problem: FBA Shipment Pricing

First, the setback. After the delay from staying in Colorado, I found out some things about Amazon's shipping policy that made my last change of plan untenable. While Amazon's revenue calculator leads you to believe that you have total freedom in setting the price of your goods and shipping, it turns out that is only partially true. My first product is small and I was able to find very affordable shipping for it. However, Amazon requires you to set the price of your shipping to a minimum of $4.99 no matter how cheaply you can actually ship it. You can offset this by lowering your price, but a super cheap product isn't always the best way to attract customers. So, I dropped that plan.

Shipping out the goods

Which leads to, second, the (very small) success. I boxed up, labeled, and sent my first product to Amazon's warehouse...and I didn't mess up on any of their requirements! My products were successful scanned in and added to their inventory.

One big note to FBA sellers

But one more fly in the ointment. One of the main reasons I decided to pay the sky-high commissions of FBA is because your product receives free shipping for Amazon Prime customers. What I didn't know is that different sellers' products--even when they're identical--can get very different treatment. An FBA seller selling almost exactly the same product gets Prime Shipping, but mine was only given "Add-On Prime Shipping". What this means is that my product gets free Prime shipping if the person who is buying my product has $35 or more worth of Prime-eligible products in their shopping cart at the time of check out. Needless to say, that's a far worse deal.

Future plans

So, what's next? I need to:

  • do more research about how to move from "Add-On" free shipping to full Prime shipping
  • try out my next plan: creating "gift boxes" of similar items in order to distinguish myself on Amazon
  • figure out if FBA is still worth the cost with only "Add-On" shipping
  • continue tweaking my spreadsheets for tracking finances, inventory, and sales data
  • learn more about how to use marketing tools to better my products' visibility and increase sales volume
  • learn how to utilize dropshipping companies in order to send products from the manufacturer directly to Amazon's warehouses

Blog goals:

  • Decrease the time gap between posts
  • Increase specificity of problems and strategies
  • Diversify the content provided
  • Include ideas about how I'd overcome problems if they had occurred while traveling

That's about all I've got to share for the time being. I ordered 10 new products which are on their way to my house as we speak. Hopefully this will keep me busy and provide lots of new insight for my future posts.

Thanks for stopping by!

February Recap – Projects and Ideas

antique photo travel photographyWorking on the go

I grab every opportunity to travel. I usually don't go to the same place twice, but family in Denver, beautiful mountains, and $70 round-trip flights on Frontier conspire to get me out to Colorado a few times a year. However, my aunt broke her ankle in 3 places during this trip. I decided to extend my stay by a few weeks to help out. 

But no problem, right? I mean, the whole point of getting into this business was for the freedom to travel!

Wrong. Well, sort of. It's not that the idea is wrong, but that my business hasn't developed to that level yet.

Where things stand

At this point, my main task is still to look for the best products to sell and test how everything works. There are 2 main problems confronting me while in Colorado:

  1. All the samples I purchased have been mailed to my house
  2. Because I will sell directly from my home for the first few months (before switching to FBA), I can't move any products while I'm away  

But not one to waste time, I've been busy brainstorming about how I can meld my work and travel lives closer together. My latest idea can be summarized in 1 word: projects.

Along with travel, I LOVE projects! Projects:

  • have pre-defined goals (like: learn how to establish a passive income stream for when you're traveling)
  • have start and stop dates (I set the dates of travel)
  • have progress that can be easily tracked (example: am I making money?)
  • can change as frequently as I can finish them

A big goal with this blog is to show that frequent and long-term travel is possible with a business like this. Blogging will help me share the experience and keep a record of my progress. So, what kinds of projects am I thinking of?

Future projects

  1. The most basic and obvious project: automate work, then travel
    • Goal: show what I have to do before a trip so that I don't have to work while traveling
      • Pro: care-free travel
      • Con: a lot of work beforehand + might not be enough
  2. Next most basic and obvious: work while traveling
    • Goal: show how just an hour of work in the morning is enough to keep me on track
      • Pro: isn't a big part of the vacation (especially when traveling for months at a time)
      • Con: you still have to work while on the trip
  3.  Couchsurfing + Uber road trip
    • Travel for free by using 1 - Couchsurfing for free accommodation and 2 - Uber for gas money, all while keeping up with my company's needs
      • Pro: meet lots of new people
      • Con: restrictions on ridesharing based on driver's license and the state you're in
  4. Language study abroad
    • Spend a semester abroad studying a foreign language while operating my American business
      • Pros: learning new languages is one of my favorite things to do!
      • Cons: costs more than traveling (can't easily use Couchsurfing for 3 months)

Ok, so those are less like projects than just challenges to see how far I can push this idea, but you get the picture. Inaccurate nomenclature notwithstanding, I'm excited to see how it all plays out! Feel free to add more ideas in the comments section below.

As always, thanks for tuning in for the monthly update!

January Recap – Plans and Sampling 

Change of business plan

Initially, I wanted to start by selling all my products using Amazon FBA. However, I decided that I want to keep my price exceptionally low in the beginning so that I can attract some reviews. So, for the time being, I’ll be handling the products myself. In the future (around Stage 3), I will switch to FBA for convenience and efficiency.

Stages of Development

Throughout the last month, I’ve decided on a structure for my business development.

  • Stage 1: Sell a wide assortment of pre-made products under Trading Company X
  • Stage 2: Refine assortment - sell a smaller number of similar products under Trading Company X
  • Stage 3: Customize, improve, and sell the best products (white-label marketing) under Brand A
  • Stage 4: Repeat for a new type of products to be sold under Brand B
  • Stage 5: Learn how to export

So, the business structure would look something like

company structure

Primary Goals

I’m still in Stage 1. Here were the primary goals:

  • 1A - familiarize myself with AliExpress
  • 1B - sort through an incredible variety of products
  • 1C - make a list of potential products
  • 1D - narrow down that list to 10 products
  • 1E - order samples to be sent to me in America
  • 1F - place first small test order (more than 30) of each desired item
  • 1G - sell on Amazon

Where things stand

I have currently finished Goal 1E. I chose 8 product samples of all different types and had them sent to America. Now I’m waiting for everything to arrive.

Pro: the shipping was free! - no money spent

Con: the shipping is slow - only 1 product has arrived in 2 weeks

After the products will arrive, I will evaluate them on 2 main, simple points:

  1. Is it durable?
  2. Is it as small, convenient, and lightweight as I thought?

I have already answered the following questions:

  1. Can it be sold for a reasonable profit?
    • Including Amazon fees, shipping to America, shipping to customers, purchase price, etc.
  2. Do you think there’s a market for this product?
    • Is anyone selling it? Are there too many sellers? Does this kind of product have lots of reviews?
  3. Does this product usually have more than 4-star ratings?

Well, that's a basic summary of January! This part of the process is pretty basic, so I decided to skimp on the details. As the process gets more complicated, I hope to include more information in my future posts. Thanks for stopping by!