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GOLD! Don't let money be your excuse! (How I turned $400 into $18K fast)

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maxendio

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This is a quick story to tell you why the reasons blocking your success aren't actually the ticket to success. It's all a choice.

Last year I began researching a product to experiment with selling on Amazon through FBA. I had money to invest but didn't want to risk it since I had no clue how to sell on Amazon. I found a product that ticked the boxes and started my research on suppliers. One I was sure had a quality product but also a terrible website. My day "job" is running a marketing company, so I contacted the supplier in China to build a relationship with the goal of a contra deal - a nicely designed, SEO'd website in exchange for his product.

This was a mutually beneficial situation - I knew I could knock out a quality website in a short period of time, bringing the "cost" of the product down, while the supplier was getting a quality website in exchange for product, which surely cost them significantly less than their "best price".

To keep this short, I'll get to the numbers.

Costs:

WordPress theme: $49
Label Printer: $99
Labels: $28.75
Packaging: $82
Freight: $165
TOTAL: $423.75

It's worth also factoring in my time spend building the website, packaging the items, then labelling them.

Income:

$12,311.22

The following is after Amazon fees, so profit to date is ~ $11,887.47. I have sold 2/3 of the product to date, so in theory it will be ~$18000 by the time it's sold out.

Side Benefits:


I have continually built my relationship with this supplier, providing plenty of other work for him since on a consulting basis. They are a good client - paying high rates in USD and quickly, though some patience is required in English.

I have already renegotiated the purchase price on my next order - of course I will be reinvesting the profits made here to repeat again. Anything left over will be spent on a different SKU.


Hoping this is helpful to someone. Don't let excuses get in your way! Provide value to someone and results will come your way.

First of all, really nice story and thank you for sharing it!

I got a question, you said you were researching a product to sell on Amazon through FBA and then you found one that ticked the boxes.
What were these boxes ?

PS. Sorry if its inappropriate to ask that if its the case just ignore me.
 

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illmasterj

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I got a question, you said you were researching a product to sell on Amazon through FBA and then you found one that ticked the boxes.
What were these boxes ?

My personal set of criteria, which went something like this:
  • Small and light
  • Research told me I could sell the item for 3x the "best price" from the manufacturer (I was wrong)
  • Sales volume means I shouldn't keep the stock for over a year (I was wrong)
  • High product quality (I still don't know what to believe - I have physically touched every product but there have been complaints of issues)
  • Added value over the existing #1 product in that category
All fairly subjective, but that's kind of the point. From what I've seen with these FBA "gurus", they try and push a checklist for people to use in order to find the perfect product... A product that I might pass on because the sales volume isn't high enough someone else may jump at because they have the capital to justify the slightly higher profit margin. Others will take on larger and heavier items because the profit margin makes sense. Etc.

There's a point where analysis just doesn't work anymore and you have to jump in with an educated guess. Let the market tell you if your research is correct.

By doing with in exchange for a manufacturer as I did, this research was risk free. Worst case I sold the products at the quoted price rather than my projected 3x sale price - I would have still been paid my standard market rates for my work and I would have also learned the Amazon system in the process!
 

samsara

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I got a question, you said you were researching a product to sell on Amazon through FBA and then you found one that ticked the boxes.
What were these boxes ?

"to tick the boxes on the check list" mean - in general sense - it's like you have a shopping list and when you add something to your cart in the shop, you make a tick beside that item on your list.

Via: Wordreference
 

illmasterj

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A question to experienced sellers (not only FBA, but eCommerce and even retail): what is more important to you? Volume/cashflow or profit margin?

Do you purchase smaller quantities and sacrifice the margins? Or prefer to hold more inventory in the search for profits?
 

MotiveInMotion

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Personally I am learning now that steady cashflow is king in capital intensive business like importing.

With drop-shipping, if you can add value through some creative means, you can hold out for those bigger profit margins. But if your supplier uses MAP pricing then it's pretty much the same profit for everyone, just a matter of driving traffic.

Also sometimes the market will fluctuate and determine the margin you can get. Usually I go for premium priced and valued items but for some reason one of my markets seemed to have been too small to sustain that, because sales have dropped off for it. They still move at a lower price so it all depends
 

Hyrum

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I own my own retail business (Which I found out after reading TMF is still Slowlane, sigh) and cash flow is king. One of the primary analysis I use is called "turns", which is how many times I would turn over my inventory in a year (the calculation is Annual Sales / Inventory on Hand). So over the last 12 months I've had 1.6m in sales and carry about 180k in inventory, so my "turns" are a little under 9, which is ok, although 10-12 would be better.

The reasoning behind this is the product on my shelf is dollars I can't spend. If half of my inventory is sitting there not moving, thats 90k that I can't spend on product that is moving, adding new SKUs, or otherwise improving my business. Granted, if i can double my margins while only decreasing my turns by 15% then I'd do it, but otherwise I would choose cash flow over margins every time.
 

illmasterj

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I own my own retail business (Which I found out after reading TMF is still Slowlane, sigh) and cash flow is king. One of the primary analysis I use is called "turns", which is how many times I would turn over my inventory in a year (the calculation is Annual Sales / Inventory on Hand). So over the last 12 months I've had 1.6m in sales and carry about 180k in inventory, so my "turns" are a little under 9, which is ok, although 10-12 would be better.

The reasoning behind this is the product on my shelf is dollars I can't spend. If half of my inventory is sitting there not moving, thats 90k that I can't spend on product that is moving, adding new SKUs, or otherwise improving my business. Granted, if i can double my margins while only decreasing my turns by 15% then I'd do it, but otherwise I would choose cash flow over margins every time.

Awesome first post. Thanks for the great info and welcome @Hyrum!
 

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Hyrum

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Awesome first post. Thanks for the great info and welcome @Hyrum!

Thanks! I don't have a whole lot of Fastlane advice to give yet, but I'm working on it. I'll put up an introduction post so people can get to know me and see if there is anything I can help them with.
 

Brissy

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Hi
I am probably missing something.When you bought the product initially they gave it to you for free?If not how much did it cost you?Is it small price large volume kind of product?

thanks!

This is a quick story to tell you why the reasons blocking your success aren't actually the ticket to success. It's all a choice.

Last year I began researching a product to experiment with selling on Amazon through FBA. I had money to invest but didn't want to risk it since I had no clue how to sell on Amazon. I found a product that ticked the boxes and started my research on suppliers. One I was sure had a quality product but also a terrible website. My day "job" is running a marketing company, so I contacted the supplier in China to build a relationship with the goal of a contra deal - a nicely designed, SEO'd website in exchange for his product.

This was a mutually beneficial situation - I knew I could knock out a quality website in a short period of time, bringing the "cost" of the product down, while the supplier was getting a quality website in exchange for product, which surely cost them significantly less than their "best price".

To keep this short, I'll get to the numbers.

Costs:

WordPress theme: $49
Label Printer: $99
Labels: $28.75
Packaging: $82
Freight: $165
TOTAL: $423.75

It's worth also factoring in my time spend building the website, packaging the items, then labelling them.

Income:

$12,311.22

The following is after Amazon fees, so profit to date is ~ $11,887.47. I have sold 2/3 of the product to date, so in theory it will be ~$18000 by the time it's sold out.

Side Benefits:


I have continually built my relationship with this supplier, providing plenty of other work for him since on a consulting basis. They are a good client - paying high rates in USD and quickly, though some patience is required in English.

I have already renegotiated the purchase price on my next order - of course I will be reinvesting the profits made here to repeat again. Anything left over will be spent on a different SKU.


Hoping this is helpful to someone. Don't let excuses get in your way! Provide value to someone and results will come your way.
 

illmasterj

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Hi
I am probably missing something.When you bought the product initially they gave it to you for free?If not how much did it cost you?Is it small price large volume kind of product?

thanks!

They didn't give me product for free. I provided them value in the form of a very optimized website in exchange for their product.

Costs are laid out in the first post.
 

pickeringmt

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Many came here with limiting beliefs not knowing that they held them.
There is so much in this one sentence.

I spent the first 30 years of my life unconsciously building my own barriers - and looking for ways around them.

I am only now (at 31) beginning to see this.

It is a mistake to think that limiting beliefs are "negative self-talk". It is easy to catch yourself saying "I can't/don't want to/don't know how" and call yourself on it. To change those words to "I CAN!"

It is much, much harder to see the people YOU put in your own life. The choices YOU MAKE that you pretend are made for you.

And, most of all, the assumptions about yourself and the reality you are creating that you unconsciously accept without question.

I am finally starting to untie this knot myself, and as absolutely overwhelming and painful as this is I can tell you that NOTHING can be as painful as living a life within the confines of this self-imposed hell. The walls of your own mind.

I always thought I knew this, but never understood it until now.
 

ExcelGuy

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Definitely a great thread. I don't understand the business, but a great thread.

Sent from my SM-A500W using Tapatalk
 

illmasterj

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@Walter Hay do you have any feedback on partnering with manufacturers in China? This business has since been sold and the manufacturer wants to go 50/50 with me in a B2C company - they provide the product/shipping/support and I provide the digital marketing. I'd only consider this for equity but I'm still trying to think of all the ways I can cover my a$$ in this arrangement. Thanks in advance for any thoughts/advice.
 

Walter Hay

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@Walter Hay do you have any feedback on partnering with manufacturers in China? This business has since been sold and the manufacturer wants to go 50/50 with me in a B2C company - they provide the product/shipping/support and I provide the digital marketing. I'd only consider this for equity but I'm still trying to think of all the ways I can cover my a$$ in this arrangement. Thanks in advance for any thoughts/advice.
There are all kinds of legal maneuvers you can consider, but ultimately when dealing with Chinese business people it all comes down to trust.

Operating under a legally binding Joint Venture contract is not easy in China. This article http://www.chinalawblog.com/2016/02/china-joint-ventures-the-tide-is-out.html explains the need for expensive legal assistance to set up a truly enforceable agreement. A notable aspect of it is that contrary to what many westerners think, it is more secure to include for dispute resolution to take place in China than to require it to be in their home country.

In your circumstances I would prefer to rely on a handshake with someone in China with whom I had built a relationship of trust.

However, you might be able to get around a major concern by arranging the digital side of the B2C project so that all payments go to you, and you then have the obligation to regularly send your partner company's share to them.

Walter
NOTE: I am not providing legal advice.
 

illmasterj

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In your circumstances I would prefer to rely on a handshake with someone in China with whom I had built a relationship of trust.

However, you might be able to get around a major concern by arranging the digital side of the B2C project so that all payments go to you, and you then have the obligation to regularly send your partner company's share to them.

Thank you @Walter Hay . I have not yet met my contact, but it is clear to me that it's time to jump on a plane to meet in person. Handling payments is a good idea too, as it is more likely that I will handle set up of these types of accounts anyway.
 

illmasterj

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Nothing major. Still planning a visit in 2017 (combining with a conference). Not sure if the partnership will work out, still have some points to iron out. I'm beginning to feel as though the "partnership" is more along the lines of a "Westerner to sell our products". Ecommerce is my strength, not face to face OEM branding sales. We'll see.
 

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adiakritos

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May 30, 2011
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This is a quick story to tell you why the reasons blocking your success aren't actually the ticket to success. It's all a choice.

Last year I began researching a product to experiment with selling on Amazon through FBA. I had money to invest but didn't want to risk it since I had no clue how to sell on Amazon. I found a product that ticked the boxes and started my research on suppliers. One I was sure had a quality product but also a terrible website. My day "job" is running a marketing company, so I contacted the supplier in China to build a relationship with the goal of a contra deal - a nicely designed, SEO'd website in exchange for his product.

This was a mutually beneficial situation - I knew I could knock out a quality website in a short period of time, bringing the "cost" of the product down, while the supplier was getting a quality website in exchange for product, which surely cost them significantly less than their "best price".

To keep this short, I'll get to the numbers.

Costs:

WordPress theme: $49
Label Printer: $99
Labels: $28.75
Packaging: $82
Freight: $165
TOTAL: $423.75

It's worth also factoring in my time spend building the website, packaging the items, then labelling them.

Income:

$12,311.22

The following is after Amazon fees, so profit to date is ~ $11,887.47. I have sold 2/3 of the product to date, so in theory it will be ~$18000 by the time it's sold out.

Side Benefits:


I have continually built my relationship with this supplier, providing plenty of other work for him since on a consulting basis. They are a good client - paying high rates in USD and quickly, though some patience is required in English.

I have already renegotiated the purchase price on my next order - of course I will be reinvesting the profits made here to repeat again. Anything left over will be spent on a different SKU.


Hoping this is helpful to someone. Don't let excuses get in your way! Provide value to someone and results will come your way.


What I learned the most from this is how you used your skill set to negotiate better rates, where I would have initially imagined the prices is set. Thanks for sharing, definitely opened my eyes to the power of simply remembering that everything is negotiable.
 

johnnyfriendly

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But wait, I thought the system was rigged!!!!

LOL.

Great story -- short -- but littered with value exchanges.

Congratulations and thank you for sharing. I marked it GOLD as it truly exemplifies how brain-power, work, and a value focus can make money, even when you don't have any.



Seems so obvious and yet too many people are still wandering this forum looking for secret shortcuts and secret products that "will make money fast."

I would have a number of followup questions for the poster because while I congratulate his edge I don't really understand. I mean all I got from the post was "I bought stuff at a discount and sold it a profit". Everyone knows that one of the basic fundamentals of commerce is to buy something (or manufacture it) for a certain price and sell it at a higher price. That he did web work for the supplier in lieu of full payment is nothing new. Am I missing something here. The thread title was "How I turned $400 into $18,000" but then he just gives a vague overview of buying and selling.

What was the product or at least what kind of product was it?
Did you market it?
Did you just buy a bulk order from china and stick it up on amazon?

I'm not asking to be spoonfed and I'm not looking for some magic get rich quick advice because I'm not willing to put in the effort. I can assure you I am willing.

I'm just asking for a more indepth synopsis of the whole process.
Am I doing this right?
 

Waspy

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Am I doing this right?

No.

You completely missed the point of the post. One of the main excuses that we see here is "I can't start yet, I don't have any money"

This is (for the most part) a BS attitude. OP had $400, started, and made $18k.

The story doesn't need any more details. The lessons to be learn are right there in the post. Read it again. What product he was selling and how he marketed it is completely outside the scope of required information.
 

DifficultTruth

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Maybe a bit irrelevant but in my consulting company I deliberately work with medium sized businesses for this reason. Most small businesses don't have the budget I ask to do great work, while large businesses are typically too hard to talk to the people that count, not to mention the politics/road blocks.

Let me know if I missed anything.

Not only is the first post GOLD this little nugget is also GOLDEN. I have found it almost impossible to talk to a decision maker at a large company, and small business usually want to pinch pennies and not invest in themselves, but medium sized have the money and recognize spending in order to get value added. Amazing post, thanks for sharing! Ultimate example of thinking outside the box, adding value and making things happen.
 

Drew D

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No.

You completely missed the point of the post. One of the main excuses that we see here is "I can't start yet, I don't have any money"

This is (for the most part) a BS attitude. OP had $400, started, and made $18k.

The story doesn't need any more details. The lessons to be learn are right there in the post. Read it again. What product he was selling and how he marketed it is completely outside the scope of required information.
Pretty much. I don't think some of these people are understanding that he's not giving a step by step guide so we can just go copy his exact method. He's proving that you don't need much money to start off using one of his experiences, and it's all because he provided value.

I'm going to do something like this considering I have very little money myself.
 

Young-Gun

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I would have a number of followup questions for the poster because while I congratulate his edge I don't really understand. I mean all I got from the post was "I bought stuff at a discount and sold it a profit". Everyone knows that one of the basic fundamentals of commerce is to buy something (or manufacture it) for a certain price and sell it at a higher price. That he did web work for the supplier in lieu of full payment is nothing new. Am I missing something here. The thread title was "How I turned $400 into $18,000" but then he just gives a vague overview of buying and selling.

What was the product or at least what kind of product was it?
Did you market it?
Did you just buy a bulk order from china and stick it up on amazon?

I'm not asking to be spoonfed and I'm not looking for some magic get rich quick advice because I'm not willing to put in the effort. I can assure you I am willing.

I'm just asking for a more indepth synopsis of the whole process.
Am I doing this right?

LOL I couldn't help laughing at this post. Alright man, if a bunch of people on the forum see this post, they're gonna come down on you hard for it.

I'll try to be nice here and break down why everyone is going to rip on you for this post.

First of all, you essentially have no reputation points here, which means you haven't contributed a whole lot (yet).
Not trying to make this a "cool kids club," but it's definitely a forum based on contributing BEFORE you ask for stuff.

Second of all, if you spend any time in this forum, you realize the long-term folks here HATE when people come begging for more details.
You don't realize it, but your post is basically the perfect echo of about 10,000x other posters that have come to this forum asking similar things.
"Tell me the steps, I'm willing to work hard if you just tell me exactly what your system is. I'll copy it and have my own, great!"
Except ask yourself - WHY would anyone share that information with you?
It doesn't help them *at all*. It only benefits YOU.

Third, and here's what I'm working up to:
Part of the WHOLE POINT of this forum, book, etc...
It's to train YOU to find value.
To find problems in the world, opportunities.
To identify how YOU can help.
Not just COPY SOMEONE ELSE LIKE A MONKEY

I'm not trying to be rude, REALLY I'm not.

I just want to explain why you're probably about to be jumped on by a bunch of long-term posters.

It's because it looks like you're coming here...
missing the point of the forum...
contributing nothing, but ASKING for a lot..
and wrapping it all up with a bit of attitude ("This guy hasn't taught me anything, he needs to teach me more")

Overall it doesn't come off so red-hot.

That said, welcome to the forum.
In my short time here, I've learned that if you PROVIDE VALUE FIRST...
You're much more likely to get your specific questions answered.
Good luck and welcome!
 

Chazmania

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What was the product or at least what kind of product was it?
Did you market it?
Did you just buy a bulk order from china and stick it up on amazon?

None of that matters. His point was that he created an opportunity by using value instead of money to create an income stream.
 

illmasterj

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I don't think some of these people are understanding that he's not giving a step by step guide so we can just go copy his exact method. He's proving that you don't need much money to start off using one of his experiences, and it's all because he provided value.

I'm going to do something like this considering I have very little money myself.

Correct. I'm not concerned about anyone stealing the idea, this post was intentionally less specific because - if you need deep detail, you're missing the message. The details don't matter. Value matters. I remember reading this post about 5 years ago and none of it made sense. I was dumb to value. Now, I feel I have a much better understanding of it.

The step by step approach of optimizing a listing for Amazon doesn't actually help anyone. If I told you what I did 18 months ago, it won't work today. Making money on Amazon was HOT back then, any fool could do it. As competition heats up, the fools are getting kicked out because they can't think for themselves - they need a guide, and the guides don't tell you how to adapt.

What is more important is the fundamental ideas behind it. Here's a step by step approach.
  1. "I have no cash but I want more cash"
  2. Find a mutually beneficial business situation so you can help someone in contra - effort for goods
  3. Improve the value of those goods (get them in bulk and split them into individual units, take high quality photos and reduce the risk of the purchaser, brand them under a cool brand name, etc)
  4. Access a pre-existing marketplace which adds convenience (more value)
I look at it as a multiplier situation. You can help someone in contra and get money = $1000 worth of work. Then, if you improve the value by doubling them of those goods, you can turn that $1000 into $2000. If you can use a system/marketplace to add more value that doubles it again, you now have $4000.
 

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