Last year was a total let down starting this Amazon business. The learning curve seemed bigger for me than most, but I suffered through that curve and made some very key changes going into 2017.
One of those key changes was shifting to 100% wholesale based sourcing for inventory. It allowed me to make larger purchases in a fraction of the time and also allowed me to work/run my business from anywhere in the world, which I tested in Paris and Oregon earlier this year.
I went from struggling to spend $5,000 a month on decent inventory to spending $25,000+ each month on inventory that is consistently selling month after month with stable margins and profits.
Although the margins aren’t the best compared to another business model like Private Label, It’s super scalable and easy to get started with minimal risk involved. In case one is running under loss, you can get a guide to exit your business or even find out where your business stands financially.
Last year I did roughly $40,000 in sales, netting only a few thousand in profit. I basically made a dollar an hour. This year on the other hand, I find it a waste of time to work more than 20 hours a week on the business, mainly due to spending restraints that I am addressing actively, routinely do $25,000+ in sales each month and make enough to easily live off of and save while completing my Finance degree.
Don’t mind the MASSIVE drop in sales this past month. You can thank hurricane Irma, Chinese factories shutting down and backorders…. Such is the life of an Amazon seller.
So what does six-figures look like with a wholesale based Amazon account? Not that exciting actually. Sure you can make enough to live off of and you technically have the freedom to travel and live wherever, but It’s not enough to really do some financial damage.
Getting passed the $500,000 a year level in sales would allow you to easily live off your business’ earnings, save a great deal each month and live just about anywhere. Not to mention, if you’re reinvesting say 30% of your profits back into the business each month, you’re able to grow quite a bit month over month.
This is my next goal, although I’m actually aiming for $1MM in annual sales for 2018, which is a massive jump from where I intend on ending 2017 ($200k in sales).
Either way, I’ve accomplished a massive personal goal: starting and owning a company that does six-figures. It’s obviously not as fruitful as I would have hoped, but many companies fail a lot sooner. I’m proven the business model, now I just need to scale it ever higher, each and every month moving forward.
Moving forward I plan on routinely spending $100,000 a month on inventory, mainly restock rather than new, untested inventory. I’m currently able to spend $32,000 moving into Q4 with the addition and scale of some newer, high-volume inventory. Again, a massive jump, but totally doable over the next year.