Today’s post will be the 8th month in an ongoing series of guest financial results posts from selling on Amazon. If you missed any of the first ones, you can find them HERE.
Take it away Dana:
It’s Q4 in full swing – and being that this was my first – all I can say is WOW! I know everyone said this period would be crazy – but I don’t think I really grasped how much. I didn’t think I was well prepared – but I’m happy with how my November went.
I headed into the month knowing I was going to be light on inventory. Early in November I made a retail arbitrage (RA) trip to Denver for a couple of days to buy what I could find. I worked to get that shipment out and then we headed to Arkansas for Thanksgiving week. While we were in Arkansas I spent a few more days doing some RA and recruited the family to help prep and ship it out before Thanksgiving Day. One lucky thing I discovered is shipments hit the warehouse a lot faster shipping from Little Rock than shipping from Steamboat Springs. It arrived and was being checked in at the Dallas FBA warehouse in 2 days. It sometimes would take that long for shipments to leave Steamboat back in Colorado. So while it’s awesome this type of job allows flexibility to live anywhere – and I’m proving it CAN be done – there are tradeoffs.
We definitely hit a record for our November sales. We grossed over $12k for November – and was our best month yet. This was our Amazon and eBay sales combined. We did just over $10k in Amazon alone. Our gross profit margin was nearly 60%.
My sales really spiked the Saturday before Thanksgiving and then again for Black Friday and Cyber Monday. I ran low on just about all my inventory. Not having enough confidence on what was going to sell (or the prices they were going to sell at) – I ended up leaving a lot of product on the shelf that I didn’t buy because I didn’t want to go too deep. And I sold some things too early at a cheaper price that now are going for much more. I definitely learned a few things for next year’s Q4! (click to enlarge, same goes for the rest of the images in this post)
Here’s a look at my Amazon sales for November:
Heading into November I didn’t have a lot of time for RA, other than that one RA trip to Denver. So pretty much most of my inventory came from that 1 trip. I think I did 1 or 2 small online arbitrage (OA) buys as well I can only dream of what sales would have looked like if I had better access to RA or had devoted more time to sourcing. To be honest – I can’t say that I really put a bunch of time into this over the weeks leading up to Black Friday so I’m extremely pleased with the sales. We were trying to put the finishing touches on our condo remodel and took time off for the Thanksgiving Holiday – so I probably spent less than 30 hrs the entire month of November on FBA.
Here is a breakdown by category – and as expected grocery and toys were at the top.
Net profit after expenses was 25%. Prices seem to be holding steady for most of our items and with the increased traffic we’ve been able to offload a few items that have been hanging around for way too long. Of course I expect a few items to lower in price – but am holding out until the last minute in December before dropping my prices.
The services that are used that show up in the subscription fees section are Tactical Arbitrage for help with online arbitrage, InventoryLab for listing and accounting, TaxJar for managing sales taxes, and JoeLister for selling products on eBay that are currently listed on Amazon.
I didn’t lay out any specific goals for Nov – because I was just really waiting to see how Q4 was going to go. We’ve relocated back to Arkansas for the winter now – so RA will be much easier. I’ve already been able to make 1-2 shipments a week since Thanksgiving to try and keep some inventory in stock – but I’m finding that everything is selling out as soon as it hits the warehouse. I sent my last big shipment in last week that had a few Christmas specific items in it – so we’ll see if they hit the warehouse in time. But so far December looks to be record breaking as well – assuming I have enough inventory.
This was definitely a learning experience and I’m already excited thinking about next year and how I can use some of the things I learned.
First, I need to trust myself more. As I found inventory – the Keepa charts were screaming Buy…All…The…Stuff – yet I didn’t trust it. I should have. Once I saw the inventory really was selling – I couldn’t find the items anymore to replenish. But this was very good experience at reading Keepa charts and trusting your analysis.
Second, I’ll set an inventory budget and SPEND IT. I didn’t spend all the money I had allocated for inventory. This goes back to just not trusting what I was seeing or hearing.
Third, now that I have more confidence in what exactly sells (which is just about everything) – I’ve made a list of products that I’m hoping to be able to get wholesale accounts for. It would be awesome to be able to focus on a smaller niche selection of items for the Christmas season that are home runs – and then sit back and watch them sell. Rather than running all over town trying to do RA during Christmas.
And finally, next year I’ll create a Black Friday plan and really execute. I actually didn’t do any shopping on Black Friday; either RA or OA. I was sort of burned out by the time Black Friday came around and I was dealing with some personal issues. I do much better when I have a plan – and I didn’t take time to create one so I just didn’t participate. Which is sort of odd – giving that Black Friday use to be a family affair for us way before we’d even heard of FBA – lol.
As for December – I’m going back to setting some specific goals. I find that setting goals helps me stay a bit more focused – even if I don’t meet all of them that specific month. So here we go:
Goal 1 – Beat November Gross Sales number. I’m not putting a number on it because I haven’t really crunched the numbers related to the inventory I have on hand – but I believe I can at least meet or slightly break my November sales record.
Goal 2 – Update all my end-of-year inventory. I use InventoryLab for my FBA inventory, and that has worked well but I really need to get a system in place for tracking inventory and COGS for my eBay inventory. I’ve really lacked in that area so I plan to spend December updating my eBay inventory and using Xero to track my COGS. I couldn’t for the life of me tell you how much inventory I have sitting on shelves or in boxes.
Goal 3 – Get my books in order. This goes along with Goal 2 – but being the end of the year I’d like to get a jump on getting things ready for taxes. I’ve started a short list of local accountants that I hope to be able to turn things over to in January. I don’t like waiting till the last minute on that sort of stuff.
Goal 4 – So my final goal for December is getting started with a new venture I’m working on. I’m planning on launching a new Facebook Marketplace in a specific niche and the latter part of December will be spent working through the details of that. I hope to have more details to share shortly but the first order of business will be attending the Dallas Market in January. I’ll update you guys next month on how that goes.
I’ll admit that my excitement for this whole FBA thing was waning a bit as we heading into November, but seeing the Q4 sales has renewed my excitement. So…Bring on 2017 – because I’ll be ready for ya!!
Hoping everyone else is having a wonderful Q4 selling season!
Ryan’s last words: Thank you Dana for putting this post together and sharing this update on your business!