Editor’s Note: Jake L Jordan posted a really popular guest post in the past, so we brought him back for more. This time he delves deep into what he’s been trying, what’s been working, what hasn’t, and where to go from here.
My name is Jake and I like to create income streams. I’ve been entrepreneurial my whole life. I traded baseball cards when I was 11 as a way to make money. Sure I loved baseball, but that’s why it was a fun way to discover supply and demand.
The reason FBA is appealing to me is:
- Somebody else does a lot of heavy lifting for you (Amazon)
- There is lots of opportunity to get data and feedback quickly
- It’s based on basic supply and demand
- There are good leverage points on the work required on my side
- There is more than one way to have a successful portfolio
These things are a HUGE advantage that many other business models do not have built in.
So I want to show you how I spent $4,000 on product in 30 days, and the decisions I made to improve my business. Hopefully a couple things I show you about my business will give you an idea or spark to improve something in yours.
My Goals for first 30 days after sending product:
Sell $1000 worth of product
Find 2-3 Categories to focus on moving forward
Connect with 2-3 people in the group to stay accountable
Re-invest 100% of my profit (If I had any!)
So let’s see what unfolded…
Days 1-7 (November 1-7)
I know the title says 30 days, but it took a little ramp up time to get things setup and items actually purchased and sent off to Amazon for sale. However, I did learn some things in the first 7 days as an Amazon seller that contributed to the next 30 days. Feel free to read about that to see how I started.
Too early to really say I screwed something up. I bought a BOLO list on day two and bought items from that list to kick-start my brain and my store. For me it was more about what can I learn from someone else.
I did find my first replinishable item the first week by blind luck while sourcing in Target at lunch. (The popcorn)
Found at garage sale for $2.25
Days 8-14 (November 8-14)
Money spent – $500.00
Amazon Payments – -29.73
I only sold a couple items and all my shipping charges for first boxes had been deducted. I hear that’s what most people end up with the first time
Men’s skin care products
Re-bought Popcorn (replinishable)
Also bought another BOLO list to expand into toys for the first time.
At this point in the first 14 days I still stayed really close to the groups advice and bought mostly no brainer items. I did however make my first purchase off of Ebay of the above mentioned phone charger.
I bought a lot of 3 chargers that connects to your phone as a case and has a built in charger as well. They were $65 a piece, and were selling for $120 each on Amazon. What I did not pay attention to was that the spike in price was due to a low stock issue, and not a true pricing difference. As soon as my product hit, the listing tanked back to what the manufacturer was selling them for on Ebay.
This was my first loss on an item and a valuable lesson. I lost $12 per item but gained a good education in WHY items are selling for a higher price.
Just a few reasons items are more on Amazon than where you bought them at:
- Amazon is out of stock (permanently or temporarialy)
- Amazon does not stock the item, only 3rd party sellers do, and the demand is high
- There are more available in stores than online, so they go on sale offline
- Regular churn of product in stores allows you to get a good price
- Big Box store buys such a great volume that they can sell it cheaper than most other stores (Walmart is a great example)
I experienced first hand how well books sell. By shopping some garage sales I was able to get quick wins and confidence in selling.
How how to lower my buy cost (link to another blog) Link to Jason Wilkey’s mega course on gumroad (https://gumroad.com/l/jiAhJ)
Decrease sourcing time (focus on one product/niche)
Tools to measure process
Categories I like/supported goals
Days 15-21 (November 15-21)
Money spent – $1,500.00
Amazon Payments – None (I’m on a 2 week schedule)
Discovery Kids Toys
Star Wars Toys
Monster High Toys
Littlest Pet Shops Toys
Collectible Barbie Dolls (From local buy sell group on FB)
There were a few items I purchased that were on Facebook groups as good buys. The problem is at my local stores, they weren’t as cheap as others had purchased them. Wanting to keep moving I bought items at process that were not great profit once they sold.
Another great lesson to be patient and know what you are looking for. There are plenty of items if you stay diliegent.
This week I purchased OAXray and started to get extremely serious about stocking up on toys. I mentions that as a win because the tool saved me a ton of time right away. I found a large amount of toys on my own that turned out to be very profitable.
By paying more attention to my emails I was able to purchase items that I knew were selling well at 20-30% discounts before I even started scanning. This meant when I found deals that were 20-40% off in my scanning, they were actually 40-80% deals.
At this point I had already applied and received a target debit card to get additional 5% my purchases from Target (which I source a lot)
I also make pretty good use of gift cards to make purchases with an additional 2-6% in most cases.
Add the cashback sites that add 2-10% in most cases and you literally can start 35-55% off your purchases. I’m convinced this is how the professionals stay ahead of the game!
Another interesting finding was the subscribe option from stores like Walmart and Target. If you are willing to go on an auto shipping list that sends you product on a schedule, you can get an additional 5-15% off the purchase everytime. I did this for a set of vitamins at target because I already felt like they would sell 4-6 bottle a month.
Days 22-28 (November 22-28)
Partially because of my goals and partially due to interests I decided to stick to 3 categories moving forward in Q4 – Toys, Toys and more Toys.
Money spent – $1,500.00
Amazon payments – $669.38
Lots and lots of toys.
Nerf, Lego, Shopkins, My little Pony, Transformers, Mr potato head, Minecraft, Star Wars, Monster High, Mickey Mouse.
Video Games – this became a great test category for me. More on that in the updated section.
The Shopkins item pictured above is by far my best purchase. I did a set of periscope videos where I talked about ideas to find new product ideas, and one of the best spots is my kids youtube habits. Shopkins is MEGA huge in veiweship and popularity.
I took that info and looked for non-standard packaging, special edition, or limited supply items. This “myster” bix fit the bill perfectly. I cleared the shelf at 3 of my Target locations 3 different times, and every instance the boxes sold out nearly the moment they hit my amazon store.
I should have looked harder for more Shopkins mystery boxes. I also bought a large 4 foot Darth Vader at Walmart that I decided to sell on Ebay instead of Amazon. Don’t ask me why…. I basically broke even on that transaction.
Like many other buyers this time of year the deals at Kohl’s were killer. Outside of garage sales, there has been no better ROI source for me. Since so many people buy the deals though, I’ve learned you have to jump on them early and get them shipped quickly.
While Kohl’s will stay a part of my sourcing list, I prefer to find deals with less buyers and less timing required.
Days 30-60 (November 29- December 25th)
Video Games 50%, toys 40%, Grocery/Health 10%
Money spent – $2000.00
Amazon payments – $1,252.88 + 1,809.28
Grocery items (cookies, crackers, baking items)
Health (vitamins, supplements, pain killers)
Lots of toys
I went a wek without shipping items and definitely saw the difference in sales one particular week. That mistake mostly likely kept me from doubling my payout a 4th cycle in a row. FEED THE BEAST.
I spent some time learning about video games. They really are the perfect size, weight, and sale velocity item. With help from the FB group I was able to very quickly turn 30+ games in a week and even MF some games that were in high demand.
The experience was so good that I plan to not only sell a lot more video games next year, I plan to dive into the collectible and vintage video game market as well. Once again spending time in a category that in interesting makes it a lot easier to stick with it!
My Goals for 2016:
I want to work 10 hours a week or less and make 50k in profit
I prefer to do this 90% in Online Arbitrage and 10% Retail Arbitrage
Add Wholesale/PL wildcard(s) for more profit and balanced portfolio
Find 100 replinishable items in grocery and health and wellness that rank under 50,000 and have a higher than 30% ROI
Purchase and send 100 video game SKUs that rank under 25,000 and have an ROI over 50%
I also ran into a buddy who sells grilling spice to local supermarkets and restaurants, but does not sell it on Amazon. I’ve worked a deal to trade my Amazon “expertise” for the privilege to not pay anything for initial product purchase. My friend will just be sending product to me and we will split profits in Q1.
The FBA market is a great place to be in Q4 and allows for even the biggest newbies to learn with some good forgiveness. I will be sure to take the lessons learned above and make Q1 a great success as well!