Hello Everyone, it’s been a little longer than usual since my last post. I will quickly catch you up on what I have been up to for about the past 2 weeks. From September 3rd through the 7th I was in Dallas, TX attending CES II, which was a conference put on by Jim Cockrum and his team. Selling online, and via FBA in particular, was one of the primary focuses of the conference. I was able to learn a decent amount from the presentations that were given at the conference, but the real value for me was in meeting and connecting with many people who are selling online as well. In talking with other attendees it was great to have a mutual understanding of what selling online entails, as many people we encounter outside of conferences like this do not understand what being a full time online seller means. In addition to this many ideas and strategies were discussed and shared. If you have the opportunity to attend a conference similar to this in the future, I would definitely encourage you to attend as I am confident I will make the investment of time and money that was spent going to the conference many times over in the future.
In addition to the conference on September 8th I started a lease on an office/warehouse space (pictured above). More on this later, but it’s great to start getting all of the inventory out of my house.
Now, for today’s content. I want you to consider for a moment whether your activities selling on amazon and/or eBay are a business or a job?
If you were removed from the equation, would income continue to be produced?
In answering this question, we’ll make a distinction between being self-employed and owning a business. To truly own a business you need to be able to remove yourself from the equation and have the business continue to produce income, and ideally continue to grow without your immediate presence. Being self-employed basically means that you are working for yourself, acting as both boss and employee, and if you were removed from the process income would cease to flow.
So with that said, I am self-employed and thus far my activities selling online are not a business. So basically I have a job, and my boss is me. If I was removed from the process of selling online income would continue for a few months with my FBA inventory, but it would quickly decline, and would eventually dry up. Now, don’t get me wrong, for me personally being self-employed is a MASSIVE step up from being employed in the traditional sense. Being self-employed allows for a great deal of freedom and flexibility, but if you remove yourself from the process for too long, you will not have any income. So being self-employed is good, and this leads us to the next set of questions.
What are your goals related to selling online?
Are you happy with being self-employed?
Would you be happier if you created a true business?
I will answer these questions first, before digging in a little deeper. My initial goal when I quit my job about a year ago was to replace the income that I was making completely, but did not focus immediately on creating a true business. I am happy being self-employed, and enjoy what I am doing now significantly more that my previous accounting job. My goals are continually evolving, but a major goal that I am working on now is to create a true business out of selling on amazon. There was a quote that I have heard several times recently that has stuck with me, it is “Do what only you can do.” This is fairly intuitive but boils down to if you are spending time doing something that could be easily done by others, maybe what you are doing isn’t the best possible use of your time. This really makes sense for me, and is the direction I have been starting to head the past few months. This began by starting to have people sourcing product for me, as has been seen in the past 2 monthly results posts. Signing the lease on the warehouse/office space fits into this plan as well, as I am planning to continue to move in this direction by hiring some part time help to pack and process items. Long term, my goal is to turn selling on amazon into a true business, that I can remove myself from (if I want to), and have income continue to flow. I do enjoy selling on amazon, so I am not looking to step away from it anytime soon, but I want to begin building a structure for if one day it’s no longer how I wish to spend my time, I have a business that can provide a steady income.
Now, just because the above is my goal, doesn’t mean that it will be a fit for you. For some of you reading the goal might be to make $250 profit per month for some extra spending money. Others might want to work full time and never have to deal with the potential hassle of having employees, and just work around 40 hours per week and have a very stable income. Still others might want to create a business that generates millions of dollars per year in profits and can operate without them. The beauty of selling online is that any of these options are possible, and none is necessarily better than the others if it aligns with your personal goals.
So although the title of this post is “Are you creating a job or a business?” The real question is “Are you creating something that aligns with your personal and financial goals?”
Some of you have likely considered the above questions that I have posed throughout this post, and I am betting that there are a decent number that have not. I think these are very important question to seriously think about. My primary goal with this post is for you to think about what you want to get out of selling online, as well as what you need to do to make it happen. If you are already on the right track, great. If not, what are the steps that you need to take to achieve your goals selling on amazon?
I would love to hear your thoughts on what you are hoping to get out of selling online, if you would like to share your goals for selling online, or any questions/comments you may have in the comments below!
28 thoughts on “Are you creating a job or a business?”
I have recently learned about FBA over the last few days and I’m intrigued. I have sold books on Amazon here and there and phones on eBay but was ignorant to the FBA program.
You may have the answer to my question on here somewhere…but is it possible to get started with a low investment of a couple of hundred dollars?
It’s absolutely possible! This video I made awhile back would likely be helpful for you: https://www.youtube.com/watch?v=qfByRTVVrhI
Great post! Honestly, I do enjoy working the FBA business and at this point, I can’t even fathom hiring any employees. It’s not that I don’t believe it will get that big…I don’t want the stress of having to deal with and manage others. I could see myself having VAs however.
For other passive income, I definitely want to start writing some Kindle books in the new year as Q4 and FBA will keep me very busy!
Thanks for sharing Kelli! I can definitely see not wanting to get anyone else involved, and that’s awesome that you are looking into writing kindle books as well.
Great post. You hit the nail on the head.
People don’t think of these types of
things before they start a part-time
business because they think it will
always be “part time.” It’s hard to
think in the long term and not get
This business model can be replicated
by anyone with enough time and patience
to see it through to their end goal. I
think you’re proving that point with
I look forward to some more posts. 🙂
Thanks for the comment, and you are right on point. There is huge potential with this business when putting a plan in place and sticking to it.
I’m probably in the same situation as you were. I have been employed in management with the same company for 15 years. I make a safe 80-90k a year. I used to love my job, but it has gotten kinda stale and I look forward to my FBA side gig. I absolutely want to be self employed and not run a business. I have no interest in employees or virtual assistants, but I would consider letting some family members help. I would be totally happy just replacing my income and having flexible hours instead of being locked into the 8-5 gig. I like working hard and it is nice to know that when I work harder at FBA, I can earn more money instead of just getting the same steady paycheck regardless of how hard I work. Thanks for the great blogs!
Thanks for sharing! Definitely sounds like I was in a similar situation, but you have a more comfortable salary than I had at my job. I think that’s great that you have a specific goal for what you hope to get out of the FBA business. Best of luck to you in making it a full time thing if that’s the route you are heading!
This is an interesting way to describe the different ways to become independent. I do have one quibble. When people talk about renting warehouses, hiring employees, and making relationships with manufacturers in China, I often hear the term “passive income”.
Am I missing something? Managing a business, employees, and a supply chain is simply a different kind of work. There might be a day or two when you can step away and let the business run itself, but I’d be very suspect of anyone who thinks he/she can set up a business and then just walk away to count piles of money on a beach.
Self-employed vs creating a company? It’s all work. We each must choose the level of work and responsibility that excites us. I personally am not interested in being responsible for employees who depend of a paycheck from me. I don’t need the stress of wondering if a Chinese manufacturer is going to ship the promised quality items on time. Others sellers may love these challenges and think they’re fun.
I really enjoy your blog because you are so open with your numbers. This is where the truth is. Creating a layered business as you’re doing will likely generate more gross profit than someone working out of their house selling items from a flea market. But your layered business also requires an exponentially higher set of costs. Seeing the net profit at the end of the year is the most important number in this conversation.
I definitely wouldn’t consider this passive income at this point, and counting piles of money while sitting on the beach isn’t necessarily the end goal (although it does sound nice). The only way that this truly becomes passive is if you hire on enough employees and then have a “manager” or someone performing tasks similar to what you are doing yourself on a day to day basis. Now, this would be quite a ways down the road, but I would like to see if this would make sense for my “business” at some point. The goal isn’t just to get rich and sit on a beach, but to have the financial means to spend time how I find fulfilling and working on and for things that matter to me. By first hiring out individual tasks, such as packing and shipping, and then eventually buying, I believe it is possible to create an infrastructure that would allow for a manager to basically replace what I am doing now. I don’t know definitively if it will be a great option or not, but I want to move in that direction and find out for myself.
I can understand your perspective on not wanting employees or working with Chinese manufacturers. For me personally, I see these things as challenges that would be “fun” to try to work towards. I enjoy trying new things and seeing what is possible.
I completely agree with your last paragraph that it all comes down to the net profits. Adding employees and a lease are sure to add to the overhead, but are likely to increase the total net profit as well. I plan to continue to document the financial results, so time will tell how all of the numbers end up working out.
I love your transparent experiment and numbers. We also post our weekly numbers on our blog: https://tinyw.in/NANH This would be the from the perspective as a simple self-employed seller.
Doing back of the envelope calculations, let’s imagine you hired two full-time buyers/packers at $10/hr. Then you hired a manager at $15/hr (need to pay more or there’d be no loyalty). Plus warehouse costs, shipping supplies, taxes, unemployment insurance, book keeper, etc. You have at least $100k/yr in costs before you have a dollar in your pocket. And this is before all your inventory costs.
I love that you’re so ambitious. This is better than any TV show.
Glad to hear you find it better than any TV show!
I agree it is going to add some serious overhead in terms of hiring people, but my thought is that it will provide some additional freedom in the long run. It’s definitely possible that I could be mistaken in this, but time will tell, and the beauty is that I can always correct course if having employees is not the right path for me.
I have been following your blog for sometime now as am very excited of your progress. First of congrats on your new warehouse lease, you are sticking to your goals and it is materializing as planned. Thats really encouraging.
Ryan you mentioned that you plan to hire some helpers to do the packing for you. Can you share how are you going to go about executing it? Because i am an international seller and from where i live, shipping cost are high that eats into my margin.
So im thinking of doing online arbitrage and send the shipments to a 3rd party packer (apart from MIT) to do the packing for me. This way it will help me make some profit.
Yup so any insights or tips from you will be great. Thanks.
Thank you for the kind words. As far as hiring people to pack and ship for me, I am going to have them work out of my warehouse/office to prepare the items for shipment. I should have some more insights to share on this once I have had some employees working for a few months.
Great post here. I had a discussion about this earlier this morning, right before I saw the feed come in about this article.
When you discuss the different types of businesses, it fits into the Rich Dad Poor Dad Cashflow Quadrant: https://www.millionaireacts.com/wp-content/uploads/2008/11/Kiyosaki-Cashflow-Quadrant.jpg
When starting an FBA business, most people are moonlighting as a Self employee. Eventually, once you quit your job, you are now fully self employed. When you start building systems, and hiring employees / contractors to do the work for you, that’s when you move into the B quadrant of “passive income”.
There’s no way around it – when you are starting out, unless you have a ton of seed capital, you are self employed. If your ultimate goal is to have a lifestyle business, and have financial freedom, you have to move into the B / I areas of the quadrant.
Great insights Chris. I completely agree that it is a process, and further that the B and especially the I quadrant are the ones to aim for.
Great post, Ryan. I only started FBA in August, but this really gets me thinking about my future/ultimate goals. Thank you!
Glad to hear it Bruce!
Great post Ryan! Also congrats on the new space. My first shipment from China, of 600 units, of my first PL product should be arriving at Amazon warehouses next month sometime. One thing I’ve been able to do to get myself “out of the way” is to leverage my supplier and freight forwarder to make sure all of the labeling and packaging is done correctly so I won’t even have to see or touch the inventory. My freight forwarder will take it directly from the port to the Amazon warehouses.
Sounds like an awesome setup Brent! Please keep me updated on how that goes for you, as I want to get into PL in early 2015.
I was considering importing yesterday. Is it a huge hassle to deal with customs? Or do you have a third party that handles importing for a fee?
Congrats Ryan on getting your office space. Your success is so inspiring. Good luck with your future plans. I look forward to reading about your journey.
Just been following your site for a few months now and have learned a lot. In the last 18 months I’ve gone from FBA being a fun side project to pay for a few lattes, to now a critical part of our income with two kids and only one full time earner. Right now it’s my wife and I working at night sourcing, creating, packing, and shipping. I eagerly await the results of your new space and employees because I would like to go that route in a few years as I continue to make bigger and bigger monthly investments in inventory.
Thanks for sharing Paul! I will definitely post the results of how adding the warehouse and employees end up going.
Great post, Ryan. Congrats on obtaining an office/warehouse space.
When I was looking to do the same thing last January, I had a difficult time finding a place that would suit my needs at a reasonable cost. Everything I was finding was either too big and expensive, or too small and inaccessible for hauling loads of inventory in and out.
I ended up renting a 20×10 climate controlled storage unit for around $100/month and it has been working out great. I installed freestanding steel shelving so I can maximize the space and stack inventory all the way to the ceiling.
Obviously working out of a storage unit is not very glamorous, but for those wanting to minimize monthly overhead and dump as much money as you can back into your business, this is a very affordable option.
Just wanted to throw that out there. Thanks.
Thanks for sharing, this is a great option as well, and I think it makes sense to consider when renting out a space.
I worked out of a storage unit for about 2 months. There was a light bulb in the storage unit, so I used one of those converters to turn it into an outlet. Then, I used a hotspot with my phone for internet. I packed and shipped everything out of there. Not glamorous at all, but it got the job done.