Today’s post will be the 7th month in an ongoing series of guest financial results posts. If you missed any of the first six, you can find them HERE.
Take it away Dana:
Well, October is a wrap and we’re gearing up for the infamous Q4 but before we get heads down it’s time to review how last month went.
Before we get into the numbers I wanted to respond to a couple of questions I got last month.
Someone asked how I lined up a local prep center for my retail arbitrage (RA) buyers. This is a typical online arbitrage (OA) prep center that I’m lucky enough to have located close to me. I contacted them to see if they would do RA drop offs and they said sure. So if you’re lucky enough to find a prep center close to you – give them a ring. I’m not sure how to find prep centers – other than just networking with folks. Feel free to post in the Facebook group your state and see if anyone knows of one available.
Someone also asked about the Q4 buying group I joined. I heard about it during the CES conference earlier this year and joined. However, after about 2 weeks I decided to drop out. Not because there wasn’t some great information, but because there were lots of newbie questions that I felt were taking away from deal sharing. Also, given my location I wasn’t sure I was going to be able to contribute to finding deals as much as I would have liked. It probably got better as time went on – and I’m sure I’m missing out on some deals – but that’s ok. From it several of us formed our own mastermind group that has turned out pretty well. So – for those interested in doing something like this – it’s a great way to build your network. Even if it doesn’t work out like you had expected, the relationships you make can be even more beneficial.
So on to the numbers. I’ll be honest, I expected more. But, I’m happy to say that for the first time since starting this little adventure I paid myself a small ‘salary’ – so that is progress. But my sales for October were much lower than I expected. I attribute it to two things:
1. I stopped using my repricer. I was using Bqool – and you may have heard of some changes they made recently that folks weren’t too happy about. I stopped using it before the changes so I can’t comment on those. I mainly stopped because I was trying to cut expenses, but also because over the last few weeks of my subscription I noticed things didn’t seem to be repricing correctly. Others complained about the same issues – so I decided to cancel and started repricing manually. However over last couple of weeks I simply don’t have the time. I am now looking for alternatives. I’ll report on those next month.
2. Inventory – yep I say it pretty much every month. Not enough inventory. I’m really struggling to get the quantity of inventory I need to really grow. My OA game has really taken a decline. We’ve switched from OAXray to using Tactical Arbitrage and had a learning curve there. I’m really hoping that picks back up this month. My OA buyer (my husband) hasn’t had as much time to devote to it – and to be honest I think I’m going to have to put him on a Performance Improvement Plan. I’ve already given him a warning that his annual review isn’t looking good – lol.
I do have a couple of RA buyers now, which has been slow to get going. Training and getting everything ready to go for a team is a little more difficult when you’re remote. But I have hopes that will start paying off soon. So let’s get started.
Goal 1 – Gross Sales of $7,000
Our goal for Oct was $7,000 in gross sales. We missed pretty significantly. While our eBay sales were up nearly $200 – our Amazon sales dropped a bit. Since we’ve slacked on OA our Cash Back and savings as a result of using Discounted Gift Cards were down as well. (click to enlarge this image, same goes for the remainder of the images in this post).
Now I have no idea if this is true – and I’m sure you’ll hear lots of theories on what is involved in Amazon’s Buy Box algorithm. But something I have noticed is when my sales slow – if I go in and do some repricing, sales for OTHER non-repriced items pick up. I don’t know if it’s coincidence or if Amazon takes into consideration that you don’t change your pricing much and thus adversely affects your Buy Box percentage overall. It’s just an observation I’ve had. But I might go a day or two with only a few sales and once I tweak just one or two prices on a couple of products, suddenly sales across all my products increase. It is strange.
Here is a breakdown of our expenses. InventoryLab changed the layout of their reporting – so you’ll see that format change here compared to previous months.
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.
Goal 2 – Complete hiring and training process for buyers
I’ve hired 3 RA buyers and 1 Merch Account Manager in the past month and I have potentially 1 additional RA buyer coming on board in a different metropolitan area soon. I’ve completed training for 2 of the buyers and will complete the 3rd this week. As many of you know RA is more of an art than a science – so it’s really about getting folks out in the stores and letting them practice. I’m heading back to Arkansas next week to do some joint shopping trips with folks and hopefully get them up and going full speed. But overall – I’m really pleased and I have high hopes that this is really going to help me grow my business.
My one piece of advice for those thinking about building a team: make sure you cover yourself with the proper non-disclosure and non-compete agreements that make sense to you and your business.
Goal 3 – Ramp-up sourcing for Q4
Giving that this is my first Q4, I’m already seeing where I can do things better for next year. I was able to get in a rather large RA sourcing trip to Denver in last week and spent a good part of last week getting that shipment together. While I thought I was pretty prepared – I quickly learned the importance of having enough supplies on hand. I ran out of polybags and labels which put me back a few days as I had to wait on my Amazon shipment. No running down to Staples where I live – Staples here closed last year.
Most of my shopping was focused around Holiday items that showed good sales history from Black Friday through Christmas, however I wish I had time to focus more on some items that I could count on selling now because my inventory is limited until true Christmas sales start picking up. But I shopped until I just could shop no more. There are certainly more stores and deals than I have time, energy or money for.
It’s probably not a good thing that I’m already feeling a bit burned out and the rush of Q4 hasn’t even really started yet. Certainly a note I’ll make for next year – and that’s to take some time before Q4 to recharge so I can be ready to go full steam ahead.
So if you haven’t gotten out there to grab some Q4 deals – Just Do It!
Goal 4 – Complete Ungate in Health and Beauty
I’ve put this on hold until after the Holiday rush. I’ve started thinking about my 2017 goals and this is top on that list to focus on next year.
(Ryan’s note: this post was written prior to Black Friday, it just took me a few days to get it posted, so keep that in mind with this paragraph) So that’s it. I feel like we’re holding steady going into Q4. I made the deadline for getting Black Friday inventory into FBA. Next week will be devoted to finishing packing up stuff to take back to Arkansas in preparation for renting and eventually selling our condo here in Colorado. We plan to head out on Wednesday. I’ll also be making out my Black Friday shopping plan. I can tell you though my BF strategy is probably a bit different from others – as I do not get into crowds or craziness. Even before FBA my Black Friday was spent in my PJs on my couch at 3am hitting the refresh button on my computer. My husband and I (and our daughter when she was here) generally had 4 PC’s going and stayed up all night to grab the deals. I don’t expect my strategy to be any different this year. Crowds are for other people.
Until next month!
Ryan’s last words: Thank you Dana for putting this post together and sharing this update on your business!