I am hesitant to open up only because I personally have a hard time discerning the difference between sharing and bragging. When I joined Scanner Society I realized that by choosing one this group and this community, I could speak up from a place of being helpful. As I began helping people, I realized that it makes me accountable. If you ask me to help you with your 1st shipment to Amazon I will be there until Fedex hands you a receipt. If you ask me if I will show you how to R/A in the store I will personally walk the isles with you. I haven’t helped you until we accomplish what you needed help with. So I offer my experience in the spirit of helping and sharing…
The state of my company
I originally went to China to buy pizza boxes for my chain of restaurants in Atlanta (DaVinci’s). When at The Canton Fair, I met people who were selling on Amazon. It was a business model that I didn’t even know existed. I instantly saw the potential for a much more scalable business than restaurants. While I love running successful restaurant chain, it’s very labor and cash intensive and difficult to grow. After finding Amazon in China, I set a goal to sell at least $10K per month on Amazon so that I could justify a return trip to China. Now mind you I didn’t even have an Amazon account! I wanted to justify the expense of coming back and have a benchmark that meant I took action. I got to work learning retail arbitrage with the sole purpose of learning Amazon. I started with clearance but quickly grew to see the time wasted in removing labels and buying one offs. I built an arbitrage business within one year that is entirely replens and bundles. I accomplished my mission and returned in 2017. My next goal was to have at least 3 PL products and to break 6 figures in revenue to justify coming back in 2018. Mission accomplished AGAIN!! Not only did I return to buy, but I was also able to lead a group there and help others dig into the China opportunity.
Balancing R/A with developing the brand
I am a big believer in numbers justifying the next step. I promised myself I would train myself for private label by becoming proficient in arbitrage. After all if I couldn’t sell someone else’s known brand how in the world could I market my own unknown PL brand? I also set a personal boundary of I could only pay for the PL out of the profits from RA, I wanted to make myself “earn the promotion to PL.” So the challenge this coming year is to slowly shift my focus to developing and marketing my brand and putting warehouse systems in place.
Putting warehouse systems in place
I quickly saw the limits of being a one-man show because I still am a partner running my restaurants, and I became part of the Scanner Society team! So I hired my 1st employee to replace me at the warehouse. She have to wear a lot of hats too (buy stock, send shipments, prep, etc) until we scale enough to bring more help. So now I am in the process of systemizing everything instead of it “being in my head.”
Mastering my inventory
I learned with my restaurants in particular that it’s better to refine your inefficiencies before you scale because your inefficiencies will scale right along with you and you can be trapped on a hamster wheel because now you’re forced into continuing the bad habits you have because you have to keep the lights on and it takes an exponential effort to fix inefficiencies of scale, wow. So for example, I make sure I am running a gross profit of 25%+ at all times, meaning before fixed costs. So my fixed costs are about $1600 per month(rent, utilities, etc). So if I sell $10,000 Sales $2500 in profit $2,500 minus $1600 equals $900 in profit or 9% NET. So that sounds low, but watch what scale does with fixed costs. $20,000 Sales $5K in profit
$5K minus $1600 equals $3400 in profit or 17% NET. This is after ALL EXPENSES and running completely without me. And this is a base, meaning I can always work to grow margins and taking no debt.
I hope this is helpful to the community. I’ve really enjoyed meeting you and look forward to seeing all the things we can create together!
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