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EXECUTION Matt's Progress Thread

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Matt Hugh

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Nov 26, 2017
15
38
25
Brisbane, Australia
What I am doing? What value am I offering?
Helping physical product businesses increase net profit by bringing their products to a wider market and new sales channels via ecommerce.

Initial Process
- Researching small businesses in Australia, US and Canada who might have physical products and inventory they are trying to sell in greater quantities - plan to outreach to 5 wholesalers per day over the next 30 days.
- Contacting these businesses about helping them list their products on Amazon
- Either resell their products on Amazon (US, Canada and Aust) directly myself or help them create and manage their own Amazon store as a consultant.
- Selling products on Amazon myself to perfect and test systems and develop processes.
- Researching product opportunities on Amazon.

Day One: 19/2/18
I've created my Amazon Professional Selling Account and have chatted with a small prep service in Oregon who also do product bundles. This may be quick way to get some products up on Amazon to get started. I need to set up an federal EIN and get a reseller certificate for US wholesalers. Not sure how to get a resale certificate yet as a non-resident alien and whether or not I'll need a US LLC for this.

Also need a better way to receive and pay money in US dollars without a US bank account or LLC. Am looking at OFX, Payoneer and World First as options for this. This is to avoid burning through any profits with currency exchange to and from my Australian bank account.
 

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Matt Hugh

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Nov 26, 2017
15
38
25
Brisbane, Australia
4th March 2018 Update

Here's what I've been doing since my first post.
  • Researched several Amazon courses, forums and strategies.
  • Got set up with a US debit card to make purchases online.
  • Established an US receiving account for Amazon US payouts.
  • Established a FX facility for cheaper transfers (0.5% rather than the normal bank rates)
  • Investigated the pros and cons of establishing an LLC in the US for setting up a bank account and asset protection.
  • Investigating the sales tax laws in the US and nexus and what, why and how I might have to deal with that.
  • Researched options for prep and ship within the US.
All of that was good and stuff that needed to be done but could very easily be construed (especially in this forum) as 'just having' or action faking vs doing. Especially the sales tax stuff. The US really has made sales tax complicated and profitable for people in the tax profession. But who cares about sales tax if I not actually making $100 worth of sales? Who cares about US sales tax and nexus if you have no single product or wholesale supplier to get going? So in the last 7 days I've:
  • Decided on using online arbitrage to get started.
  • Found myself some Amazon seller mentors who are already doing this successfully.
  • Subscribed to a closed daily list of good buys.
  • I have ordered my first $500 batch of inventory for my Amazon store in the last 2 days.
At first I plan on going very wide with my product line at first to let the market show me where there might be opportunities before going deep into a specific niche or product line. And with the list of deals I'm getting I know there are at least 100 others with the same exact deals in front of them so I am using this as a learning process.

Yes I know that selling on Amazon is sacrificing control and the barrier for competitors to entry is low but my strategy goes beyond just Amazon.

Now that the ball is in play and I'm getting on the field rather than just watching from the sidelines it feels great. Let the games begin!
 

Matt Hugh

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Nov 26, 2017
15
38
25
Brisbane, Australia
28th March update

After starting this thread on the 19th of February a lot has taken place.

From having no Amazon store or inventory I now have a store with over 200 SKUs and I have made my first sales! Today my total gross sales passed $250. A long way from $1000 in profit but the timing is not so important as the fact that over the last week I sold product to customers in the US.

I continue to purchase inventory as this and sales velocity what will determine my possible income. I’m working on a rule of thumb of $1000 of inventory sells for $2000 which after paying Amazon and suppliers nets $500 in profit. It’s how I am assessing whether a deal makes sense or not.

I’ve learned a lot from just doing over the last 5 weeks. Most of my time has been devoted to the first part of my strategy of finding good deals online and reselling them on Amazon. Wholesale sourcing and product partnering are yet to come. Getting experience with selling my own products is a big part of building my skills and experience to offer to others with products to sell.

Warning: If you are not an Amazon seller this might sound a little confusing and detailed. If you want you can skip to What's next? below.

Some of the unexpected obstacles included:
  1. Buying from US online stores from outside the US in not as simple as you might think. You would imagine that a store wouldn’t knock back sales just because you happen to reside outside of the country but they can and do. Workarounds for this included getting a US address using Viabox, a US debit card, a VPN service to overcome geo-restrictions and a US buyer.
  2. Cancellations of purchases from vendors after order confirmation for various reasons related to restrictions of purchases to overseas buyers.
  3. The cost of international conversion fees, fees for adding cash onto my US debit card and a sub-prime rate of currency exchange are greater than I had anticipated. At the moment my favoured solution is flying to the US to open a US bank account. Over the last 5 weeks my fees for foreign currency conversion and charging a US debit card would have paid for a return ticket from Australia to US. Currently planning on a trip to the US to do just that!
  4. How to optimise the process for receiving money from Amazon and repurchase new inventory and minimise the costs involved.
  5. I created a US LLC so that I can open a US bank account but am still working out the ongoing responsibilities of doing this. I think it will make sense after a certain scale is achieved
  6. I spent way too long thinking about state sales tax and nexus when I didn’t even have inventory in my store to sell. It’s on my radar going forward as I start to sell more.
  7. Many brands are restricted from my selling account. For instance I can’t sell any Nike or Adidas products. This is important to know before you purchase stock. Fortunately I have only made one error so far and was able to return the stock for a store credit.
  8. I initially started with my default Amazon seller account settings and was using manufacturer barcodes for identification. What this means for your stock is that it is commingled with everyone else’s and if you make a sale someone else’s product might get sent to your customer. This could lead to poor reviews if someone has sent in some used or damaged goods for which you get the blame for. The solution was to use Amazon barcodes for labeling product by default so that when you make a sale it is your product that gets sent to the customer.
  9. The turnaround time between ordering the goods to getting them into FBA is a significant factor to consider. I am using 3 different prep services. One is is Oregon to eliminate having to pay sales tax on retail purchases but turnaround time for product having to be sent to Oregon and then to FBA may be a factor to consider going forward.

Some learnings have included:
  1. Developing a process and criteria for finding deals for new stock. This includes using a specialised software application that does a lot of the searching and comparing with Amazon for you. There is a lot to this that I won’t go into here but without it I wouldn’t be finding enough inventory to purchase quickly enough.
  2. Finding a way to automate the way I collect information about store sales and special offers from suppliers.
  3. Accessing a source of buying opportunities through subscription lists.
  4. Finding a service that allows me to use a US phone mobile number that can accept SMS and voice calls from suppliers to my mobile here in Australia.
  5. Acting decisively when a deal is available as the good deals tend to sell out quickly.
  6. Setting up my Amazon professional seller account it had to be linked with a business that is registered for GST in Australia or else Amazon would subtract 10% from each payout.
  7. The dangers of product variations and how buying the wrong size or style of an item can lead to a slow moving purchase that you thought would sell more quickly. And how to pick the most popular size and variety using information from reviews on the product.
  8. Integrating Amazon with Xero for keeping track of the numbers is relatively easy. It is the regular reconciliations that take quite a bit of time. I found an accountant who is familiar with the Amazon FBA model and this is critical.
  9. You can learn a lot by researching successful Amazon sellers
  10. Understanding my KPI’s. Average sale price, sales velocity, inventory turnover, cashflow etc

What’s next?
  • Continue building up inventory.
  • Track performance of inventory and restock if available for a decent price.
  • Learn how to use repricing to maximise buy box percentage.
  • Adding my own listings for bundled products.
  • Getting unlocked on Amazon to sell grocery and gourmet products.
  • Establish links and accounts with wholesale suppliers of unique products.
  • Continue to build on my processes and systems.
  • Tracking performance of deals and measuring profitability.

Far more than now getting the first sales over the last 5 weeks the biggest change for me has been taking action and claiming ownership of the direction I am heading. There are countless alternative pathways I could have chosen. This happens to be the path I have chosen and each day I go all in with my focus and time to make progress.

Each day is day of intentional success. Once the car is in motion, turning the steering wheel gets easier...
 

Matt Hugh

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Nov 26, 2017
15
38
25
Brisbane, Australia
18th May update

OK it's time for a little recap on this progress thread.

Back on the 19th of February I posted a goal to make a profit of $1000 from selling on Amazon within 30 days starting from zero. Zero inventory, no Amazon account, no systems or experience. While I can say I fell short of that pretty aggressive goal I am happy to say that today I confirmed in my accounting software that I have made a $2000 profit from selling on Amazon. It took me 90 days to make that $2000 in profit so I wasn't too far off the mark really


That's profit mind you. Not total sales. To make that profit I had to sell quite a bit more in total revenue (about $14k in sales). It's the number that people usually post about their Amazon businesses but the dirty little secret with that number is that it can be $100k/month but means little if you are selling at a net loss.

I've been working at this now for exactly 3 months now and working pretty much full-time 5 days a week. There have been plenty of setbacks, frustrations and lessons along the way. Most of the drawback related to areas where I had relinquished some control. For example, reselling other people's brands.

Some might say that a job might have been a better use of my time but the nice thing about this now is that I wake up in the morning and there are more sales in my account, and if I do nothing else for the next month, I expect there would continue to be sales, and profit each day. I am working on building a business that will allow me and my family to travel wherever we like, whenever we like and still be making money.

Now I have a little business on Amazon up off the ground but it is still far from perfect. I have a system for continuing to earn a little money on Amazon for a few hours of effort a week but it won't quite pay the bills yet. I now need to reinvest the profit in new inventory and new strategies to grow my business further.

The first brick in my Amazon business is simple retail, online arbitrage and some wholesale. Now I am starting on something that brings me full circle to creating real value and something unique. That is creating my own exclusive products and brands.

My goal is to create and launch a private label product in the next 60 days. To do this I won't be sourcing from China or anywhere like that but just mainland USA.
 

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