Dropshipping Business 8 Month Review. Using The Power Of Arbitrage To Learn Financial Independence.
A post similar to the ones on dropshipping on Ebay and Amazon but wanted to share my experience on Amazon after 8 months.
Over the past 8 months I've been using a dropshipping technique that I wanted to share and also promote to others to join me. Below is a step by step process what I've done to help others benefit from the tools I've used and hopefully to make extra money on the side. I started in March and have had over $400K in sales.
Sales image: http://imgur.com/vzMYvmX
Last 30 Days Sales: http://imgur.com/RSS3Unh
First, I educated myself on how to dropship. I used a platform called DSD which was introduced by a friend of mine. www.saleswithbryan.com is the landing page of the introduction. I do subscribe and paid for the service. $20/mo to learn to sell on eBay and $499/one time payment to learn to sell on Amazon. I've been asked many times if it is worth it. For me it was as I've gained back my purchase in profit within a month. The opportunity cost for not purchasing must be much more because the training and access gives you detailed answered to selling on Amazon. The price you pay for having Amazon holding your funds or cancelling your account because you don't know what fulfillment latency and order defect rates are when you start out are not worth learning on your own, which most people do.
Month to Month breakdown:
March -April: Started off small by listing 5-10 products each week, finding items from Walmart, Academy.com, Home Depot, Wayfair, Toy's R Us, ect.... March and April I had $19K in sales. Orders totaled 70 and I handled the entire account, from sales, inventory checks, returns and customer service.
May - Used same listing tactics to have around 70 products. Yielded $50K in sales.
- Hired a Virtual Assistant for $4.95/hr to handle all inventory checks which involved 30 min/work per day.
- Started recording vidoes of ordering items from websites/handling customer service/processing returns.
( I did this to train another Virtual Assistant)
- Use Cash Back services such as Upromise.com/EBates/CoinRebates to receive additional cash back to make my profits increase.
June - Capped product listings at 100. Sales at $60K for June.
- Hired VA #2 to start training and learning Amazon account process at $6/hr. from Elance.com
- Increased credit card limits to fund more orders so I can sell more. THIS IS IMPORTANT IF YOU WANT TO ADD SALES. I have access to $50K in credit which allows for more orders to be placed.
July - Sales at $50K
- Account gets "pending locked" because of higher than normal cancellation rates. Amazon holds my funds for 2 weeks but I appealed and the account was unlocked and I had access to may payments.
- Started training videos for Virtual Assistant to place orders
August - Sales at $72K
- Hired VA #3 for $9.75/hr to process orders. She worked for about 1-2hrs/day. I decided to pay more because she was located in the US and had access to my credit card information.
September - Sales at $30K
- Sales slow down because VA#2's could not work for a month. Had to delist many products and handle customer service myself.
October - Sales at $0
- VA #2 still could not work. Put account on vacation as I was traveling for 3 weeks.
- Contacted Accountant to review accounting procedures for Tax Return. Used his advice and did bookkeeping.
- Used Godaddy.com Bookkeeping to import all sales and expenses for Tax Return.
November - Sales at $36.
- VA#2 was back online and started training another VA to handle customer service as well.
- last two weeks of sales increased for Thanksgiving sales
- VA #4 trained and started using the account for customer service.
December 1st-12th- Sales at $99K
- Large increase in sales
- Cash flow issues as credit cards have been currently maxed out.
- Largest profit per month
So here is my overall sales: $400K, profits of about $20K which is about 5% gross profit per item. Profit margins were small to start as my account was new and had to learn how to price items effectively. Some items I lost money. Now profit margin is 8-11% for November and December.
I hope this helps to give others a blueprint and advice on how to approach dropshipping. Message me for any questions as I'm willing to train people on how to do this.