Should your Amazon business just be a faceless one?

 

This is a question that I’ve been thinking about for a while now. Many of us when getting started quickly realize that any Amazon based business model is quite different from many others. We never really work on building a brand or a front-facing company for that matter.

 

This makes it rather hard to acquire new inventory or accounts. Over time we get better recognition, but that really only applies to startup companies that build their brands.

 

The issue we deal with is never turning the tables on suppliers, especially for the wholesale model, and constantly have to spend a great deal of effort to acquire new accounts. What if, instead, those suppliers came to us? Rather than spending a great deal of our time each week convincing suppliers the benefits of working with us, what if they already knew that and when we talked for the first time they were excited to give us a wholesale account?

 

Although, rather than creating an account with the supplies, they would essentially be creating an account with us….. An interesting concept for sure.

 

This leads into another great situation many Amazon business owners never consider; sellability. Many of the business created are not actually businesses, but jobs we create for ourselves. What I mean is that it’s not something that truly operates outside of ourselves and our actions. A true business operates whether we get out of bed in the morning or not.

 

By building your business in this way, you create a situation where you own an asset that provides consistent income for you each month, but could also be sold for a rather large multiple of the annual earnings. This is how you can from “shutting down” your business to exiting your business. Trust me, one is much better than the other financially.

 

So what would a sellable Amazon business actually look like. It’s rather hard to show as most owners aren’t very open to showing the inner workings of their businesses and for good reason, but one thing we can do is at least get an outside perspective.

 

That’s why we wanted to introduce you to Supply Kick. Their a wholesale based Amazon business that differs from most. Rather than sourcing products themselves internally, they’ve seemingly flipped the model around so brands come to them instead.

You can check out Supply Kick here.

 

Just by being on their site for less than a minute you can begin to see the extra value the company is earning in terms of valuation. They have an extra system that is valuable when sold. A sourcing process is valuable, but easily replicated, but an external system that contains good will and is vastly different from others, especially when it contains much less effort, is valued much higher than the first process.

 

Instead of positioning Supply Kick as another Amazon business, Supply Kick positioned itself as offering a service of sorts. Although we all do the exact same thing, they’ve change suppliers perspective of the relationship. Rather than the supplier being the one holding all the value that we crave, Supply Kick holds the value that a supplier may crave. Although Supply Kick is clearly going to attract a specific type of supplier or brand that may not fit 100% with our personal buying criteria, imagine what kind of positive benefit this position-shift could have on your Amazon business?

Hitting the six-figure level with your Amazon wholesale business is much easier than you would think. Initially, hitting this level seems far out into the future. Like next year far, but in reality you could be on track to hit this first major milestone within 45 days. I’m not being anecdotal either, we have members in your provide Facebook group and Vendrive users who are currently doing this.

Breaking down how many profitable accounts you’ll need can seem like a daunting idea, mainly because you will be faced with the reality of what it will take to reach your goal. Luckily in this case, it’s a positive outcome.

Truth be told, to sell $10,000 a month of inventory, you’ll need between 4-8 profitable wholesale accounts (click here if you don’t know what we mean by profitable as we have a distinct definition).

Not what you expected to here? Were your assumptions higher or lower than what I just told you?

Wholesale is this lovely balance, across many topics of an Amazon based business between Retail Arbitrage and Private Label. It’s the perfect mixture of the good from each end of the business model spectrum. It doesn’t cost as much as Private Label (to do it effectively of course!), but it does cost more than to get started with Retail Arbitrage (although, not by much). The perfect mixture of automation and systemization, where Retail Arbitrage leads to a complete pain in the a*s and Private Label is the ultimate, hands-off business model.

I’m of course generalizing here, but the point stands true. Wholesale is the ultimate model in our opinions. Whether you agree or don’t…

I make this point because you need both a healthy dose of reality when starting this business but also a nice dose of optimism and motivation. If you only get ten wholesale accounts other the course of the next three months, you’d still be selling $100,000 worth of inventory annually. But, what If you could at 10 new and profitable accounts each month?

Can you see the scalability there? Is that even doable? yea, I personally do it each month and it doesn’t show signs of slowing down and time soon. What to know the secret to getting from zero accounts to ten accounts and then to one-hundred accounts? How many accounts you have in total. That’s it and it’s really that simple. You start with zero, you add your first ten. Then, you keep adding in batches of ten. If you can add ten new suppliers each month (again, perfectly doable) then by the end of the year, you would easily be at the seven-figure mark.

I’m talking a million dollar a year business…. Just by yourself. No employees, no crazy large expenses or warehouse, other than buying inventory each month of course.

Hopefully this will help you understand your business from a higher vantage point and break things down a bit better for you to visualize the process as a whole. All we’re really doing is working backwards and that’s all you need to do in the first place. Create your goal, break it down and work backwards, making sure each step is accounted for and implement a system to ensure you stay on track without a crazy amount of effort.

After placing the order it finally ships. You get excited knowing somewhere in the US your inventory, the inventory that YOU only hold claim to is moving through a logistical maze with the elegance of a royal family member on parade.

 

You decide to double check on things while your order is getting prepped at your warehouse in a completely different state. While checking, you realize the price went down. Like, WAY down (probably because you didn’t research the product we teach).

 

So what now?

 

Well, at some point you have to take the L and find a way to make it work. That’s where some more advanced ideas come into place. Can you make unprofitable inventory profitable? Yes, but not in the way you’re thinking.

 

Cash Back Cards

 

If you’ve placed your first order by now you’ve probably realized that 98% of suppliers require a credit card as payment. This works to our benefit in multiple ways. Regardless of the basic benefits of spending on a credit card (while using good financial practices of course!), credit cards allow you to make an immediate profit, even if inventory breaks even.

 

Let’s say you have a card that offers 5% cash back (look around, they exist!) and your order total is $1,000 (which is quite low for our industry). If the inventory goes bad and you end up breaking even you would at least make $50. I know, not much but better than spending $1,000 and getting nothing out of it. Luckily, this scales with your spending and ensuring you get 5% cash back on all spending could add a great deal of revenue to your business.  

 

Even getting cash back on at least $10,000 of spending every single month would be an extra (tax-free) payday.

 

Using even better cards to get something more valuable…….

 

I’m talking cold hard travel points. The great benefit of getting travel points instead of cash back is the scale of it all. With the right cards and the right sign up bonuses, you could be sitting on a cool 1MM travel points across multiple programs with incredible ease.

 

Trust me, I’ve done it a few times 😉

 

You also (again, with proper financial practices) can consistently increase your spending levels of each month. Remember, the only way to grow a wholesale Amazon business is to either put more money into it or take much less out.

 

So what could 1MM travel points get you? Multiple round-the-world trips, taking your entire family on vacation for pennies on the dollar, I’m talking only paying the taxes on the flights and even covering a rental car with points and monthly trips abroad at a whim.

 

Hopefully, this post has broadened your perspective on how creative you need to be to turn bad inventory around and understand how to “stack” benefits within your Amazon business. If these simple strategies work with break-even inventory, they work even better on profitable inventory.