Dillon Carter

Entrepreneur, Hacker and Future Mad Scientist 🚀☕

Category: Entrepreneurship Page 2 of 8

Readjusting My Amazon FBA Goals and Struggling With Wholesale

Man that came to a halt quicker than I had anticipated. I became so good at sourcing products locally that I ran out of money and had to stop! If you read my last post on 6 months to 6 figures, one of my goals was to source product five days a week no matter what.

 

Unfortunately that’s kind of hard to do if you have no capital to spend on product.

 

So I have to adjust a few things and move forward with the my current situation. Most people, including my previous self would just accept this fate and let sales slowly die out, but not this time. I’m making the necessary changes that reflect reality of make it happen.

 

The struggle is definitely real in an Amazon FBA business. Don’t get me wrong, once I ship product to Amazon, sales just magically appear and all is right in the world. At some point though, you have to stop buying product which puts you on hold.

 

I’m currently doing a little more than $100 a day in sales, but I know this will come to a fast halt once I run out of inventory. The issue is that I have to wait for the sales revenue to come through before I can buy more product. This is very typically in any resell based business model, but the major issue is the growth rate of the business.

 

This is very typically in any resell based business model, but the major issue is the growth rate of the business.

 

Amazon FBA Sales Total
Sales for the first 8 days of the August

Unfortunately, I can’t spend $5,000 a month on the awesome product inventory that is around me because I don’t have the liquid capital. So I’ll need to build that capital over time, which also means no profits for a decent amount of time.

 

I planned on living off this income within the near future, but as my runway dwindles I’m forced to look elsewhere for income. I’ve been playing with the idea of getting my real estate license and going full force on that front during the week and running my Amazon business as lean and automated as possible.

 

With such a large amount of successful real estate agents in my network of family and friends and built in mentors, it makes sense to pair my sales and customer service skills learned from working in a grocery store and as a personal trainer into something with a larger commission payout.

 

We shall see what the near future holds.

 

In the meantime, I need to reformat my business strategy with Amazon. If I’m going to be able to juggle so many things, I need to use the 4 Hour Work Week methodology.

 

Although there are great products locally for me to source, it takes too much time. Instead, focusing on building wholesale accounts which allows me to do everything from a laptop keeps me flexible with time and also lends to outsourcing the ordering process over time to a virtual assistant.

 

I’ve been trying to build wholesale accounts and find products, but haven’t found anything yet. Instead of figuring this out on my own, I think I’ll jump into the Proven Wholesale Course which is only $97 and gives a straightforward strategy of acquiring wholesale accounts.

 

I’ll source locally as much as I possibly can, but depending on my class schedule this next semester and if I go full force with real estate I may only have a few hours each week.

 

It’s always important to know when you need to make a change and do it before you put yourself too far into a trench that gets deeper and deeper each month.

The 6 Months to 6 Figures Strategy For Building a Successful Amazon Business

So I’m really in this now. I lost my job, am living off my savings and attempting to build this Amazon FBA business full time and I couldn’t be more happier!

 

I am a little worried though… After all, I only have a certain amount of runway until I’ll need to get a job to cover my bills.

IMG_4626

One of my recent scanning trips

 

Instead of freaking out I glanced over at my bookshelf for some reassurance. The book that quickly grabbed my attention was 6 Months to 6 figures by Peter Voogd. Although this book isn’t the best when it comes to formatting, it is a great illustration for reverse engineering your life and business.

 

The Strategy

 

The strategy is quite simple and it starts with a question – Where do you want to be in 6 months?

 

I’ve recently become a massive fan of doing 30 day sprints. This allows you to go full force and then pull back a bit to recover, analyze and reproach your strategy. The book is also great at forcing you to become hyper focused on a finite amount of goals and then breaking them down even further each month.

 

Here is what that breakdown looks like for my Amazon FBA business:

 

5 Goals For The Next 6 Months:

  • Maintain 3,000 units of inventory
  • Produce $5,000 a month of profit  
  • Have 10 wholesale accounts
  • Have clear systems of growth in place
  • Have enough capital ($5,000) to strategically grow wholesale accounts

 

So this is the 6 month plan of attack. The author takes it a step further by making you focus in on what your 3 month goals are.

 

Top 3 Goals For Next 90 Days:

  • Send in 2,000 units
  • Bring in $2,000 in profit each month
  • Have 3 wholesale accounts

 

Now let’s break it down month by month to become hyper-focused.

 

Top 3 Goals For Month 1:

  • Source product 5 days a week no matter what
  • Find replenishable products to consistently purchase
  • Send shipments every Monday

 

Top 3 Goals For Month 2:

  • Increase purchased units per day
  • Find and secure 1 wholesale account
  • Increase average shipment from 3 boxes to 7 boxes every Monday

 

Top 3 Goals For Month 3:

  • Add 2 new wholesale accounts
  • Raise inventory from 2,000 units to 3,500 units
  • Increase efficiency of labeling, packing and shipping product.

 

By the end of the 3 months I should have a very profitable and vastly growing business with minor systems to lend to scalability. At the end of the 6 months I hope to reach my total laid of goals for this business – 10 wholesale accounts, $5,000 per month in profit and maintain a minimum of 3,000 units of available inventory.

 

This isn’t going to be easy at all, but I have the time and resources to make it happen. I even drug my girlfriend along after class earlier today to scan at Toys ‘R Us which I was able to come out with another $100 in profitable products.

 

I believe the real key to having a large-scale Amazon business is wholesaling and private labeling and for now I’ll grow as quickly as I can into securing wholesale accounts. Instead of me going from store to store, scanning every item I lay my eyes on, I can scan an email and have 1,000 units delivered directly to me.

 

This will greatly reduce the amount of time required to maintain and even build this business over the next year.

 

If you have any questions about starting an Amazon FBA business I’d love to hear from you in the comments. I’m not a pro, but I’m putting this thing into hyperdrive!   

Starting An Amazon FBA Business For Fun and Profit

Over the course of this year I realized that I needed to make some changes. I’d already automated my personal finances and begun traveling for free, but going back to college full-time required me to take a job to sustain myself rather quickly.

 

I soon realized this was not what I was meant to do and lost interest. You’ll notice in my monthly reports that I still set goals for this job, but it’s time to extract myself from it and achieve true freedom.

 

I searched for various new business models to focus in on and then landed on Amazon FBA. I listen to a decent amount of podcasts and the same thing kept popping up; I needed to give this a try!

 

After giving it a bit of thought I decided to jump into an FBA course to give me a better understanding of how to go about doing this. Instead of doing my usual information overload, I decided to take action the very next day and bought roughly $200 worth of product.

 

I know this doesn’t seem like a large investment, but I’m currently doing Retail Arbitrage which is going to local stores to find deeply discounted products to resell on Amazon for a profit.

 

Project Extraction – The Plan

 

I’m going to lay it all out here for you. I currently need to generate a profit of $2,000 /month from this business to go full-time. I’ve been getting 50% ROI on products, but let’s assume a 25% ROI to be conservative.

 

This means that I need to be purchasing roughly $8,000 a month to yield $2,000 profit. At first, I didn’t realize how much volume I would need to do each month, but the numbers don’t lie.

 

So now my weekly goal is to somehow spend $2,000 on product either at local stores or using online sourcing as well…. Now that’s a massive goal.

 

In truth, this is only a minor step towards a much larger goal with this business model. That’s right, this is only phase one.

 

Where I’m Currently At With This Business

 

So far I’ve only spent $992.39 in total. This includes cost of goods, supplies and education.

 

In sales, I’ve done $239.61 with actual profit being $143.63. I still have a lot of inventory waiting for sell. A rather slow start as I really get the hang of sourcing locally and online.

 

I’m not profitable yet by any means, but the rule of thumb is that it should take roughly three months to turn a real profit and until I reach the volume needed to go full-time, all profit will be put back into the business.

 

This should vastly decrease the timeframe needed to reach my goal.

 

Here is a snapshot of what I did in June.

 

starting an amazon fba business from scratch

 

June was all about getting set up and learning the process. Now that I’ve done that, It’s time to really throw down some capital on inventory and scale up to the volume needed.

 

How To Never Run Out of Ideas Again

Coming up with an idea seems to be one of the biggest problems new entrepreneurs seem to have. Even worse is those who deal with having too many ideas. I wanted to write this post to help you understand a framework for not only creating an endless amount of profitable ideas, but how to filter out the bad ones so you can become laser focused on validating the ones actually worth your time.

My first business idea was literally handed to me, so coming up with ideas was never a problem until I sold that business and decided I wanted to start something new. The “normal” advice was to think of something great that could change the world, slave over building the product and try to get venture funding and then release that idea into the world. That exact process is why 99% of people fail when starting a business. They completely miss the foundational steps required to negate any waste of time, resources and failure.

I’ll help you go through each of these steps in this post and show you how to validate the ideas you’re left with in a future post.

 

Dealing With Excuses

I mentioned this above, but I really want to drive home how big of an excuse it is to say you can’t think of any “good” ideas. The entrepreneurs who start life changing companies are simply outliers. You really need to understand what I just said. In most cases, especially if you look at the average millionaire, they made their money from “non-sexy” businesses. That is, businesses that you would most likely overlook and move past, when in reality it could have been the quickest route to your financial freedom.

Knowing this, we are able to know open our minds to more possibilities and ideas that we previously would have thrown in the trash.

If you are on the other side of the spectrum and have too many ideas you’re very lucky as you’ve moulded your creative muscle to continuously generate amazing ideas. You’re biggest problem is being able to filter those ideas by using a few systems into a very small, but highly successfull ideas that you can then go out and validate with paying customers.

To sum it up, you are either one of two people: You can’t think of any good ideas and you need to build your idea generation machine or, you have too many ideas and you need to learn how to filter those ideas into a list that is worth your time and effort.

 

Creating Your Idea Machine

 

Creating your idea machine is very simple. You just need to learn how to turn it on. Most people will pre-filter and judge all of their ideas, but you aren’t going to be most people and you are not going to do that. I want you to take out a piece of paper or fire up Evernote. I then want you to write out no less than 50 ideas you have. Do not pre-judge them, just write them all down. No matter how dumb they may sound. Our goal is to have a simple starting point.

 

Don’t move forward until you’ve done this!

 

Did you struggle? I did the first time I went through this system and it’s ok if you did to. If you still need some help reaching that 50 mark, here is what you can do: List out all of the things you think people want help with, things you do regardless if you get paid and things you’ve always wanted to learn how to do. How would these things benefit your potential customers? For instance, I really enjoy working on my WordPress blog. Perhaps I could help new bloggers set up their blogs and tweak them to their liking for $100? Simple enough right?

Remember, we’re not trying to change the world right now, we’re simply trying to create a product that can generate at least $1,000 a month for us.

Now, I want you to batch these ideas into categories like Marketing, Writing, SEO etc… This will help you be more organized and perhaps even create more ideas.

 

The Simple Filtering Process

 

Before we attempt to validate 50+ business ideas in a short sprint for the next 6 months, we need to filter our ideas so we can focus on the ones that make the most sense. In order to do that we need to ask ourselves a few questions about each idea: “Am I willing and able to provide this service?”, and “Is my potential customer willing and able to pay for it?”

If one of your answers is no, you should probably move on to your next idea. Do this for every idea and only keep the ideas that passed this test.

You should have filtered most of your ideas out by now, but it’s still not enough for us to have a viable list to work with. Now we need to pick no more than 3 ideas that you are most excited to work on. Out of those three you need to pick just one we will focus on validating.

If you have trouble picking three you can filter them even more using a three table system where each idea is rated on three different things from 1-5 (5 being the highest obviously) on: Fun, Profitable, Ease of Starting. choose the three that rate the highest overall.

 

This Is How You Make Business 0% Risky

 

So at this point we have three awesome ideas we want to validate and the best out of those three is where we will focus our validation efforts. We successfully validate an idea by having at least three paying customers/clients. This can be done with digital products, physical products and services. Our goal here is to completely prove that our idea is worth pursuing and profitable without spending any money or wasting our time.

By the end of this process one of two things will happen: We negate any risk by learning that an idea is a failure early on without losing anything or we start a profitable business with $0 startup cost and all upside.

ps. I’ll be delving more in-depth on how to validate your ideas later this week so we can do this together.

 

How Anyone Can Go From Nothing to The Top 5%

I believe anyone, from any situation or circumstance can rise to the top of the social class using a framework. We no longer have excuses, but it does take time and it isn’t easy. I know what I’m saying is a bit controversial, but stick with me for a bit and open your mind to new potential. In this post I will detail a few key frameworks and ideas that shows how anyone can join the higher class given time.

 

Knowing The Outcome

 

Before we dive into the “how to” stuff we need to do some simple math. If you don’t understand what your ideal outcome is, how do you know if you’re there?

 

First, think about retirement and what lifestyle you want. For me, I want $100,000 a year after I retire, but for this post we will stick with $400,000. Now we need to calculate how much money we need in a retirement account to yield $400,000 every single year based on interest. We assume a conservative 5% and multiply our yearly income goal by 20 (our 5%) which gives $8,000,000 in total.

 

So we need $8,000,000 to bring in $400,000 every single year and to be considered one of the wealthy elite… This is a great start as it gives us a goal.

 

Side note: I’m utilizing retirement accounts because you don’t want to worry about earning $400,000 every single year. Instead you want to protect your assets and have more freedom.

 

Take your target annual income after retirement and multiply it by 20. This is how much you need in a retirement account to live off the interest and to maintain your wealth.

 

Income Is Based On Value

 

How much you make is directly tied to the value you provide to the market. This is why a CEO of a company makes more than the Intern. Overall the solutions they provide in their roles are more valuable to the company/market through experience, knowledge, action and responsibility versus an intern or someone new to the company. This is not to say that an intern or anyone below the CEO is non valuable or lacks similar work ethics as this is simply not the case.

 

Ever notice how the guy at work who stays late and “kisses ass” gets promoted faster? He’s providing more value than everyone else.

 

From a logical standpoint, if we want to increase our income, we increase our value. This is done through going to college, personal/professional development and many more growth opportunities. The downside to working for someone else is that there is always a ceiling that stops your growth. The only step you can take at this level is to start your own company, which you will be providing more value to the market.

 

For entrepreneurs, skipping the 10+ years it takes to reach this ceiling is commonplace. Why go through all of that when you could start your own company?

 

A business is the single fastest growth vehicle for building income and wealth (there is a vast difference between the two!).

 

Starting A Business Without Money or An Idea

 

No, seriously..

 

Successful entrepreneurs understand how to minimize risk and how to effectively find (NOT create) profitable ideas.

 

You don’t need the next Facebook or Google. You need a solution to a problem that people are willing to pay you to provide. This is done using a framework called Idea Extraction.

 

Here is how it works:

 

Target a specific group of people, for this example I’ll choose Real Estate agents. I talk with 50-100 agents and ask about their most painful tasks each day, week etc… I keep diving deeper, often coming up with multiple problems to solve. I don’t want just any problem, I want their most painful problem, the problem they will beg me to solve.

 

After talking to 50-100 agents I find a common painful problem I can solve. My business idea came from people wanting a solution, NOT from myself.

 

I can solve this problem through the various business models such as; a service, physical product, informational product, software etc…

 

Side Note: I focus on software as people will pay every single month for access to the solution which gives me recurring revenue.

 

So I started with no ideas, picked a market, talked to them and find a painful problem they are willing to pay for? Yes… But the idea isn’t completely validated yet. I want them to actually prove it’s painful enough to pay for. So I ask them to.

 

If a problem is painful enough, a potential customer will pre-pay for a solution. They will actually pay for a product that doesn’t exist yet. I know this seems crazy, but I’ve done this before and it’s how risk in business is practically eliminated.

 

So instead of thinking of an idea, finding investors, wasting my savings and wasting 6+ months of my time building a product like most people do, I’ve gone directly to the market to provide more value and can start a business WITH paying customers. Most companies spend well over a year to find ONE paying customer.

 

I now have an idea (let’s assume it’s software). For some reason we assume it takes money to make money, but that simply isn’t the case. I still need a developer to build the software that solves my customers problem, but I can’t code.

 

Remember how we validated our idea by getting people to actually pay for it? This funds our development costs. This is called pre-sales or pre-selling and is done more than you realize. Just look at Kickstarter for an idea of how common this practice is.

 

So at this point I’ve extracted a painful problem for real estate agents that 50+ agents have in common, validated the idea through them actually paying for it upfront and used that money to fund the building of my product.

 

Do you think everyone has the opportunity to reach out to a group of people and find their most painful problems?

 

Achieving $400,000 and Elite Status

 

Let’s get back to our $8,000,000. This seems like a TON of money and it is, but we can’t expect to knock this out in one blow. This may take 2, 5 or even more companies to achieve and that’s ok.

 

Companies are sold every single day to investors willing to pay a multiple of either its monthly or yearly earnings. For most internet based businesses, the multiple is 20-22 times it’s monthly earnings. So if I have a small business that generates $1,000 a month, It’s value if sold is $20,000.

 

At this point we’ve already started a company WITH paying customers who pay us every single month for access to our solution. What they pay can range from $50-$5,000 a month depending on how painful the problem is, the value of your solution and the marketplace. Pricing is also determined while asking the customers what they would be willing to pay and then asking them to do so.

 

Now obviously you would want to build your business even higher in revenue than when you started and eventually you would get to a point where you would either sell the business, higher a staff (virtual assistants in the Philippines for $5/hour) to run and grow your business while you repeat this whole process talking to a brand new industry and finding more painful problems to solve.

 

Conclusion

 

This is essentially a roadmap or a framework for someone with nothing to determine what they need, find REAL problems to solve, fund their business with paying customers, automate or sell and repeat until they reach their end goal.

 

For some, they may only need $50,000 a year to travel the world and so they would need much less than our elite character needing $400,000 a year in income. I’m not saying this is easy, otherwise I wouldn’t be in this class. I would be spending my time how I saw fit, but I am saying it’s possible and is my life’s passion to accomplish.

 

I hope in this post I’ve opened your eyes to the possibilities of finance, business and being conscious about the world around you and what you can achieve.

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