This fourth quarter was amazing, to say the least and my first experiencing it. I’ve been told by other sellers how you can make 50-75% of your annual sales within this quarter alone. Now I see why.
I was able to hit $10,000 in sales in November and will exceed that amount by the end of December. As we come to the end of Q4 I’d like to start planning my strategy for 2017 and growing towards my actual monthly goal of $50,000 in sales.
This will be a bit tough, mainly due to capital restrictions. I’m currently 100% wholesale based and able to add 4+ new suppliers each month, but I don’t have the capital to sustain such large inventory levels yet. This will be the main focus of my strategy for 2017.
Let’s deep dive into what my strategy looks like starting now.
The Roadmap to $50,000 a Month
Making your goals actionable and simple
I’ve gone from averaging $100 a day to $600 a day in sales with a pretty small margin as I move some older inventory from the early RA/OA months. I expect this number to drop going into Q1 and away from the holidays. This means that my average purchase order per supplier will also go down, meaning I’ll need to add more suppliers and product lines than anticipated before.
My average sell price is $27.77 and doing $50,000 a month would mean $600,000 a year in sales needed.
$600,000 / $27.77 = 21,606 units annually or 1,800 a month.
That’s a ton of inventory to move each month. I’m currently moving roughly 360 units a month. That’s an 80% increase in volume. That’s also a massive increase in spending each month which I cannot currently sustain.
Given a year timeframe, I have no doubts in being able to acquire enough suppliers and inventory to reach this goal. The main issue is the cost each month so, this will be my main focus of growth for 2017. More capital to invest into inventory.
I’ve been focusing on increasing my spending limit by $5,000 each month and have so far been able to do so, but I’m stuck right at $10,000 a month. Not all inventory will move exactly within 30 days, so I cannot spend that total amount each month, but pretty close to it.
So far, I’ve found that if I spend $8,000 I will do $10,000 in sales. I’ll use this to better estimate how much I should need to spend each month.
For this, I get a total of $40,000 a month in spending. That’s quite a bit more than I’m currently spending. Not by much, though.
Once I’m close to reaching this goal, I’ll need to outsource or automate some of the added administrative time. My time increase will mainly be used for reordering inventory each month which can really add up.
Instead, I’ve already begun to use a restocking tool called ReStockPro.com which does the majority of the math and calculations for me, but I’ll still need someone to actually place the orders and ensure their accuracy. I’ll most likely need to make my first important hire for this business. Once completed, this business should essentially run itself in maintenance mode.
Here are the major milestones for me to hit in 2017 as quickly as possible:
- Spend $40,000 a month on inventory
- Sell 1,800 units each month
In order to hit these goals, I’ll break them down even further to make them easier to accomplish. Instead of focusing on spending $40,000 each month, I’ll focus on Increasing my spending limit by a minimum of $5,000 each month. Doing this, starting with $10,000, would allow me to spend $70,000 each month by the end of the year. That sounds great to me!
Next, instead of focusing on selling 1,800 units each month, I won’t focus on it at all. It’s really not something I can control, to be honest and it’s simply the outcome of the first milestone above. If I’m sourcing great inventory that moves well and has great profit margins, the volume will happen as an outcome.
This is how you easily break down your goals into something much easier to track and take action on. Now my only focus is to spend the capital that I have each month, increase spending limit by $5,000 each month and ensure that I have enough suppliers to purchase that amount of inventory from each month.
Here’s to 2017 and growing an awesome business!