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A detailed account of a Fastlane process...

MJ DeMarco

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Bump. (Due to convo on the inside.)
 
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tafy

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Great story and thanks for sharing. I love to hear about success
 

MJ DeMarco

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dabelge

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I know a person that engaged in "Retail Arbitrage" at Costco (before there were Costco's all over the Country) she was selling comforters on Ebay that she bought from Costco marking them up about a $100ea. Lot's of customers where happy but there where also plenty that were pissed when they found out what they purchased. When that business (more like a hustle) dried up she ventured into sporting goods buying from traditional channels(wholesalers) and selling on ebay and brick and mortar. Since she never really learned good process she ended up going BK after a couple of years.

The biggest problem I see with Retail Arbitrage is that you have NO CONTROL. It could be a nice hustle while it lasts but probably not the best way to build a Fastlane business.
 
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Flyleaf

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I know a person that engaged in "Retail Arbitrage" at Costco (before there were Costco's all over the Country) she was selling comforters on Ebay that she bought from Costco marking them up about a $100ea. Lot's of customers where happy but there where also plenty that were pissed when they found out what they purchased. When that business (more like a hustle) dried up she ventured into sporting goods buying from traditional channels(wholesalers) and selling on ebay and brick and mortar. Since she never really learned good process she ended up going BK after a couple of years.

The biggest problem I see with Retail Arbitrage is that you have NO CONTROL. It could be a nice hustle while it lasts but probably not the best way to build a Fastlane business.

I agree its not a way to build a Fastlane business, you have to make the switch to actually establishing relationships with the companies and manufacturers themselves to have make it work for the long term. I do however tell people that Retail Arbitrage is great way to get started in selling online. If you try to approach a company by telling them that you have no online experience, but want to sell their products its not going to look good. On the other hand if you can show that you've already been selling their products with success and want to buy directly from them for better pricing then you'll find a lot more people willing to listen. Arbitrage is a starting point, and a good one for most people, but its not the end all be all.
 

Flyleaf

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As a side note, I wanted to say thanks for posting this. I listened to it and decided to open another FBA Amazon account solely for trying out this model. My wife and I spent about 12 hours last week shopping clearance racks in our local area and spent about $4,500 on deals that we found that we'd make a profit on. Honestly, I was floored at some of the things I found at local stores. Some items I spent $10 on and will make $30 when it sells. If it all goes as planned then we should double our money. The idea is that if it works we'll hire a shopper and packer for about 4 hours each day and try to automate this. Loved the idea though and so far its working. Sales are already coming in off of what little we have sent to Amazon. :tiphat:
 
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Simon Ashari

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As a side note, I wanted to say thanks for posting this. I listened to it and decided to open another FBA Amazon account solely for trying out this model. My wife and I spent about 12 hours last week shopping clearance racks in our local area and spent about $4,500 on deals that we found that we'd make a profit on. Honestly, I was floored at some of the things I found at local stores. Some items I spent $10 on and will make $30 when it sells. If it all goes as planned then we should double our money. The idea is that if it works we'll hire a shopper and packer for about 4 hours each day and try to automate this. Loved the idea though and so far its working. Sales are already coming in off of what little we have sent to Amazon. :tiphat:

Love these examples of people taking quick action. This entire thread has been extremely valuable.


Keep us posted on how the deals went through.
 

pisco

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Nov 26, 2012
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Wow great thread!

Just some questions regarding your business:

How much money do you usually spend on marketing? Did this actually scale with your profits or is it a constant in your business? Do you use the same channels again and again or do you vary to something free, like creating a cool viral video.

I appreciate your answer!

Best regards!
 

Reynolds

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Jul 24, 2014
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Well for me I outsource all of my programming.

@Flyleaf thank you so much for sharing some really great information here! I was wondering if you wouldn't mind expanding on the subject of outsourcing your programming. My current business is in the luxury service industry (my slowlane business that is funding my fastlane venture). I use these funds to hire the web developer and outsource other things that I cannot do (or at least not well).
The problem is my current developer is expensive, slow and limited as far as customizing certain features that I need on my new e-commerce site that I am having built. She is getting it to a good starting point for testing and tweaking but I know I will need someone else to take over and truly customize needed features.
My question is how much trust and information do you hand over to someone at elance.com that you have never worked with. Do they get full access to all of your passwords, servers, hosting, etc. My current developer has access to my PayPal account etc. because she is setting everything up. I have worked with her before and there is some trust in handing over this information to her.
I guess, what I'm trying to ask is.....how much information do you hand over for the programmer to work on your website?
Thank you so much!!
 
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Flyleaf

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Wow great thread!

Just some questions regarding your business:

How much money do you usually spend on marketing? Did this actually scale with your profits or is it a constant in your business? Do you use the same channels again and again or do you vary to something free, like creating a cool viral video.

I appreciate your answer!

Best regards!

Hey Pisco,

Sorry for such a delayed response. I actually do almost no marketing whatsoever as the traffic is built in on most sites such as eBay and others. Essentially that is what you are paying fees for. Websites outside of those types of sales channels you would definitley have to market more but at this time its not really my focus.

@Flyleaf thank you so much for sharing some really great information here! I was wondering if you wouldn't mind expanding on the subject of outsourcing your programming. My current business is in the luxury service industry (my slowlane business that is funding my fastlane venture). I use these funds to hire the web developer and outsource other things that I cannot do (or at least not well).
The problem is my current developer is expensive, slow and limited as far as customizing certain features that I need on my new e-commerce site that I am having built. She is getting it to a good starting point for testing and tweaking but I know I will need someone else to take over and truly customize needed features.
My question is how much trust and information do you hand over to someone at elance.com that you have never worked with. Do they get full access to all of your passwords, servers, hosting, etc. My current developer has access to my PayPal account etc. because she is setting everything up. I have worked with her before and there is some trust in handing over this information to her.
I guess, what I'm trying to ask is.....how much information do you hand over for the programmer to work on your website?
Thank you so much!!

Hey Reynolds,

I suppose to some degree it depends on how much you trust your programmer. I've worked with mine for years and have met him in real life now so I trust mine a lot. Obviously certain things they doesn't have access to such as credit card accounts but even on Paypal I have let them go in and work with things they might need. I changed my password after he was in just to be safe but I've never worried about it. Other then that they have full access to just about everything else as it pertains to their job. At some point I decided that I had to take the risk in letting my programmers have full access to my sites and accounts simply because they genuinely need it to do their job. If you see something sketchy going on you can always change your passwords but unless you know how to do all the programming yourself then you have to trust other people. Often times the programmers will actually protect you against things that you may not even be aware are going on. For example my programmer discovered that an old site I had, had been hacked into and had a page setup to try and steal people's credit card information. I had no idea it had even happened! Fortunately it had only been up a couple of days when he caught it but he was able to patch it and fix it right away. A good programmer to me is worth their weight in gold.
 

crownbjj

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Feb 18, 2014
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Thanks you so much for this awesome thread@flyleaf:) whenever my sales are down on ebay,I alwayse read this thread to stay motivated and focus. Thanksyou so much for all the excellent information!!
 

1milclub

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Can I ask an honest opinion to some of you who manufacture your own products? What do you think about this - http://www.tabberone.com/Trademarks/CopyrightLaw/ImageTextTheft/ImageTextTheft.shtml I feel it shows another point of view on the law from an eBay sellers standpoint.


Didn't see much attention to this part, but I read the article and it looks like eBay is trying to play safe rather than 'fair' game with the small scale sellers. With the details and examples it seems eBay is taking sellers for a ride and can just terminate the account in a snap based on this copyright clause when it does not seem to have any ground. Anyway, I am not a lawyer, and there could be another side to it, but it is interesting that you are not affected by this. Thanks for sharing your post by the way.
 
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1milclub

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The idea is that if it works we'll hire a shopper and packer for about 4 hours each day and try to automate this. Loved the idea though and so far its working.

Wow! Kudos on taking action, and that's what sets you apart. How is going since then (Apr '14)? A quick update will be helpful. Thanks for sharing again.
 

Flyleaf

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Wow! Kudos on taking action, and that's what sets you apart. How is going since then (Apr '14)? A quick update will be helpful. Thanks for sharing again.
So far it's going pretty descent, it hasn't been as fast as I had hoped but right now we're pulling in about $1,500 - $2,000 a month from it with little to no effort so I certainly can't complain about that. We were able to automate it with 4 employees - 3 shoppers and 1 regional manager. We're paying an hourly wage plus 10% of potential profits found. The regional manager gets hourly plus 5% of all potential profits that come in. Her job is to pack everything up and get it to Amazon.

Our first month in April it was just my wife and I testing it by going to local stores and purchasing items we found. That was by far our best month with it. We made about $6,200 with it but we were very aggressive with it. Honestly it was pretty fun though, kind of like a treasure hunt or something. :) Right now our one region is in the suburbs of Chicago but if we can make it more efficient then we'll try and open more regions in other areas.

Here's a snapshot from inventorylab.com showing progress thus far....
P9Zfwui.png
 

1milclub

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... about $1,500 - $2,000 a month from it with little to no effort ...... automate it with 4 employees - 3 shoppers and 1 regional manager.

Another home run! You are such an inspiration - you took the idea and ran with it. Thank you for encouraging.

Would you mind sharing-:

- what type of items and stores do you (your staff) go to?
- Do you follow the same model described in the podcast (such as Target, Walgreens, etc.) or you changed the strategy?
- With the staff and Amazon fees, what kind of profit margin do you expect?
- do you use any software such profit bandit to evaluate the purchase?

Sorry for so many questions, but thought this will help larger audience too. Thanks in advance.
 
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Flyleaf

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Another home run! You are such an inspiration - you took the idea and ran with it. Thank you for encouraging.

Would you mind sharing-:

- what type of items and stores do you (your staff) go to?
- Do you follow the same model described in the podcast (such as Target, Walgreens, etc.) or you changed the strategy?
- With the staff and Amazon fees, what kind of profit margin do you expect?
- do you use any software such profit bandit to evaluate the purchase?

Sorry for so many questions, but thought this will help larger audience too. Thanks in advance.

No problem. We use pretty much everything described in the podcast. We use Profit Bandit on our iPhones - this is the main piece. I honestly don't see how any of it would be possible without it. Most of our stuff we are finding at just the same places most people shop - Target, Walgreens, Menards, Home Depot, Sam's Club, Costco, Toys R Us, Babies R Us, K-Mart, etc. We scan almost anything that we see on clearance that is pretty heavily marked down. You would be surprised at some of the stuff you will find. Also not everything is always on the clearance rack. We've found products heavily marked down by themselves in the middle of other full priced retail.

Average profit currently stands at $9.07. This is after all fees except for pay roll. So after paying employees the real profit is probably more like 30 - 35% of that. Employees are definitely the biggest chunk but also the most necessary (obviously) for automation.

I probably don't need to say this but the biggest difference between this and any kind of dropshipping model is that you have to pay for the inventory up front by doing this. That is more of a risk and we do get a fair amount of returns as Amazon is very lenient with their return policy. The profits stated are still after returns are taken into account but it is something to be aware of.

Software we are currently using is:
AppEagle.com for automatically adjusting pricing and keeping items competitive.
InventoryLab.com for all bookkeeping and monitor numbers.
Profit Bandit app on iPhone for scanning items.
Not all of this is necessary to start but it just makes things easier. All you really need to start is just a selling account on Amazon and the Profit Bandit app.

I don't think I would qualify this type of business as "Fastlane" really at all but it's at least a way to get your feet wet if you're just starting. For me I look at it as:
N - Doesn't really solve a need. There are already lots of sellers on Amazon.
E - Barriers to entry are very low so there is more competition.
C - You don't have control, Amazon does.
S - Scalability is really only possible by expansion into other areas and hiring people.
T - Time can only be detached by hiring other people to run it for you.

I'm glad that we've tried it and it seems to be working okay, but in all honesty it hasn't been my main focus as much as some of my other projects. If I can keep doing what we are doing now with little to no effort then I will do it for as long as it will last, but I certainly would not want this to be my main or only business based on the criteria MJ laid out in his book.
 
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1milclub

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Agreed with the excellent CENTS analysis. In fact, has intrigued me is not so much of the buying/selling because of the same reason you mentioned, but the use of the app. I have observed that profit bandit is kind of ruling this area, and I see there an opportunity. I am going to dig more to see if there is any viable alternative. Do you see any issues with it? Have any suggestion if I have to offer a better functionality with a better pricing plan?
 
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NaPal

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Great thread that turned into golden flakes!

I am going to give profit bandit a shot. It's a great concept but a lot more manual than importing, dropshipping; since you're constantly on the hunt for product.

UNLESS.... you assemble the team!
 

exclusives88

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Just wanted to get clarification on this

If you are selling the same products on Amazon, you will not need a UPC code because you are using someone else listing. You will just price it very competitive so you have the lowest price. Is this correct?
 

Flyleaf

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Just wanted to get clarification on this

If you are selling the same products on Amazon, you will not need a UPC code because you are using someone else listing. You will just price it very competitive so you have the lowest price. Is this correct?
I'm not sure what you mean by needing a UPC code exactly. You just scan the barcode on the item and see if its profitable or not. Once you scan the barcode then Amazon will direct you to the proper listing on their site for that item. Sometimes there are items not listed on Amazon's site but its more rare. In that case you would need to make your own listing on Amazons site but we always skip those types of items because you have no way of knowing if the item will sell or not. But yes you want to be one of the cheapest prices so that the item sells quickly.
 
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exclusives88

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I'm not sure what you mean by needing a UPC code exactly. You just scan the barcode on the item and see if its profitable or not. Once you scan the barcode then Amazon will direct you to the proper listing on their site for that item. Sometimes there are items not listed on Amazon's site but its more rare. In that case you would need to make your own listing on Amazons site but we always skip those types of items because you have no way of knowing if the item will sell or not. But yes you want to be one of the cheapest prices so that the item sells quickly.

Thanks for the clarification. From my understanding, you need a UPC code if you are making a new product to list on Amazon. Since you are listing existing products, you will not need one. Looks like I am going to make my way to walmart/target/home depot this weekend :)
 

debitandcredit

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Thanks for sharing this story. The part I found the most inspiring is that you stayed on it for about 7,8 years till you saw it grow exponentially. I have been facing pretty much what you wrote there in the past 12 month almost, stocking, packing and dropshipping etc. while I don't see the light in the tunnel yet, I am still standing here and working toward. I hope you the continued success cheers!
 

Argie

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Great story, motivational and inspirational, thanks for sharing it!.
 

BrianPM

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Great thread. Very interesting and creative concepts. I think this is an excellent template for anyone looking to get themselves exploring different avenues and taking action. I also think a very important and underrated part of your story was the previous experience in the industry -- failure -- and 3 yr hiatus that caused you to create an insatiable desire and focus to fix the problems. Keep it up man and don't ever go back.
 

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