So, April and the first month of the second quarter are a wrap. While my sales were up by about 85% overall from March, I didn’t hit the $10,000.00 figure I’d hoped for. But hey, that’s why I started this blog ~ to document and share what works and what does not!
One thing I’ve concluded is that Amazon Canada is not where I want to invest my time and resources. I wrote a separate post on Amazon Canada here if you’d like more details, but in short I find the costs are too high, the market is tiny, and that items just don’t sell quickly enough for my business model of rotating cash in and out monthly. I’m not giving up Canada, but I’m going to limit it to about 25% of my business.
I went into April with most of inventory hitting the warehouses at Amazon Canada(bad move!). While my products showed great ranks when I listed them, they just didn’t sell all that quickly. As a result, I began pulling items from .ca and shipping them over to .com. So far, this has worked out well, albeit taken a toll on my profits. The items I moved over to .com sold quickly, which for me was proof of concept. Amazon Canada has its place, but I need the velocity of .com to scale this business the way I need to.
One of the downsides to .com is that there’s a lot more competition and Americans have a lot of other choices to buy products from at amazing prices. Unless it’s Q4, I think most big box advertised clearance sales will be crowded on Amazon.com and it’ll be hard to make a profit. For this reason, I’m focussed on the lesser known stores and also on bundling and creating multi-packs to separate my listings from the herd.
Here are the sales numbers for April:
Total Sales: $1,597.02 (Up 39% from March)
Net Profit (After FBA Fees, subscription fees, Inbound Shipping Fees): $297.28
Total Sales: $2,897.42 USD (Up 125% from March)
Net Profit (After FBA Fees, COGS, subscription fees, Inbound Shipping Fees): $525.24
Total Combined Sales (converted all into CDN): $5,102.90 (Up 86% from March)
Total Net Profit April (CDN): $932.53 (Up 24% from March)
My goal is still to invest around $5,000.00 – $7,000.00 into inventory each month, but I’m finding it difficult to find enough profitable products to purchase in larger amounts. I’m not willing to go too deep into any one SKU, and my rule of thumb is to keep the investment in any one item to about $300 (US) maximum, unless it’s an amazing deal others would have a hard time competing against.
I’m doing a mix of OA and wholesale at the moment, and am looking into adding new wholesale lines for .com. I also plan to spend 2 weeks in the US this summer doing a lot of RA (retail Arbitrage) and stock up on toys for Q4.
One challenge I’m finding is that I can only do about 2 hours at a time of OA (online arbitrage) before I get sick of it! As a result, I’m paying someone to share a VA who brings in about 10 leads per day. So far, I’ve found several items using this method, so off to a good start. Outsourcing OA is something that makes a lot of sense. It’s very monotonous and a poor use of my own resources (time) to do it myself.
The next step is to further automate my business. Because I’m based in Canada, I need to start shipping my purchases to prep and ship companies within the US since I can’t be involved in the packaging/receiving/labeling/re-shipping process. While there’s a cost associated with this, it’s less than the cost of my own time. Furthermore, I can choose to have RA sourced products shipped to tax free states to avoid paying sales taxes on my purchases (saving me anywhere from 8% – 10%). Another strategy is to have products shipped to a prep and ship in Tennessee which is close to the FBA warehouse where 99% of my inventory is sent, minimizing my inbound shipping costs.
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