This is the first of my income reports and want to explain the reason I am posting about the money I am investing and making.
My income reports are not created to brag about the amount of inventory I have sold or how much profit I am bringing in each month. They are created to show the progression through the selling process and to motivate the readers that they can also produce the same results (note: I do not guarantee any results and all of my recommendations and examples are my own personal opinions). You will notice that I started off with very little in terms of investment dollars and you will also see when certain new ideas worked and when others did not. I am always open for questions and I will try to be as transparent as possible (but I am not an accountant, nor do I ever want to be one).
Here we go for month #1:
March 2014 was my first attempt in the world of FBA selling (I have previously bought and sold textbooks to buy myself a set of golf clubs during college). I decided to buy a few items and give it a try.
My total investment into inventory for the month of March was $530.96. As you can tell from the charts above, I did not break even for the month. There are two reasons this happened:
1. This was my first time selling FBA. There is a bit of a learning curve and I learned a few different things about shipping, sourcing, and the fee structure.
2. I actually sold all of my initial batch of products towards the end of the month and I took my money to reinvest it into new inventory (with the hopes it would sell in April).
As for the places I purchased products, I primarily shopped at Walgreens and at Goodwill for toys and some beauty items. I also sold some products in Pet, Grocery, and Health during my first month of selling.
Side note: I never actually invested any money from my checking or savings account into purchasing inventory. I strategically used credit cards to essentially loan myself money for the initial investment. If I was not able to cover my costs, I would then dip into my savings to pay off the remaining balance before the credit card bill was due (I will never pay interest on a credit card – I always pay off the entire card each month). This gives me about two months to turn my inventory and get paid by Amazon.
I would go into more detail about the services I used or other expenses that I had, but I really didn’t have any. I paid around $20 for the two shipments to a fulfillment center and I had about $10 in mileage (as the Walgreens was about a mile away from my house). I dropped my boxes at the UPS store for the free pickup service and I used some old boxes from around the house to ship items into Amazon.
Even though my results for March netted me a loss of money, I was able to do one thing that was extremely important: I was able to validate that the business model worked. I could actually walk into a store, buy something at a low price, and sell it at a higher price online. Finding out this information allowed me to realize that processes needed to be created to make sure I was profitable, but the idea worked.