Are You Taking Your Online Arbitrage Business Seriously? Do You Know Your Online Arbitrage Key Performance Indicators
Hello, this is Kev from LifeSuccessEngineer.com! Today, I want to ask you if you are taking your business seriously and also talk about how you can use Key Performance Indicators to really predict, foresee and anticipate the future!
Watch the video below:
We all know business and the marketplace is volatile. There are going to be crashes and there are going to be businesses going bankrupt and there are businesses that succeed and grow. We’ve always been told that the likelihood of you being successful in your business is something like 0.001%.
The world is changing all the time. There are businesses that have now gone bust that once upon a time you thought was not possible. Even businesses like Amazon, eBay or Shopify need to consistently anticipate the future.
Key Performance Indicators
If you’re just starting your online arbitrage business, you really need to keep your finger on the pulse. Especially as you starting growing your business, you need to start anticipating what could happen to your business. You’re going to be on top of all the obvious things like sales and expenses but I want to highlight some really important Key Performance Indicators or KPIs that you can introduce into your business so you can really anticipate and react quicker.
The last thing you want to happen is come across a situation where it is too late to take action. If you are still in the middle of your business sourcing, reviewing, purchasing and prepping, it’s in some way even more important to do this, but if you are now a business owner and you’re overseeing things, this is where it’s really key because KPIs are specific figures in your business that are going to show you everything you need to know about your business.
The KPIs show you things you can do to anticipate a drop in sales before it even occurs and this is what allows you to stay on top of your business and intervene before it happens.
KPIs are vital to your business and I have a lot from every aspect of my business and the reason I’m able to do so many things is because I’m fully aware of the state of my business and that’s because of these KPIs.
Things to consider…
Obviously, you’ve got to think about sales, but you need to go further back than that. What impacts sales and influences the performance of your business?
As I extracted myself more and more out of my business and bring in more employees, I needed to be crystal clear on what was happening.
Here are some KPIs are can start implement straight away:
- Shipping units per day
For me, knowing how many units are being shipped out everyday tell me a lot. That anticipates the future because if you are not sending a certain volume of product, you can anticipate that you are going to drop in sales. This is a key process.
Create lower limits so you know your business is healthy at this line. So if you see a selection of figures above the line, you know everything is going well.
If some start to drop below these lower limits and more and more start to drop, you can pinpoint straight away what is going on and why.
If you have a lower limit of 100 units for day, for example, and you get alerted and have a reporting mechanism which could be Asana or a weekly report, straight away you know there is an issue.
This is where KPIs are very valuable.
- Number of products sourced per day
Depending on what your layout and involvement is in the business, you might still be the sourcer, which is okay. You’ve got to go through the phases of a successful business. But if you are now on the other side and you have virtual assistants, how many products are each of those virtual assistants finding you?
Are you above or below 50% winners, for example? Let’s say you have a virtual assistant who is sending you a list of ten products per day, what if those products drop below ten?
This is a KPI. These are really vital KPIs you need to implement into your business as soon as you can to tell you what is going on with your business.
- Inventory Health
By this, I mean inventory age. If the life of your products are getting older and older, basically, you’re not selling them and you need to be aware of that. You need to ensure you take care of your inventory health.
If you have 10,000 units in stock, you need to set a percentage of them going over the 90 or 180 days. So in my business, I don’t want any more than 15% of my products going 90 days old. That tells me everything I need to know.
What do you want your sales to be? Whatever value of sales you want, what is your KPI throughout the weeks?
If you set yourself a target of £50,000 sales in one month, how are you going to achieve that? You’re not going to achieve that by purchasing £2000 worth of products, so what is your KPI everyday so you can have a mechanism of notifications coming to you telling you how much you’ve purchased? KPIs allow you to investigate issues in every step of your business to ensure your success.
Replenishing is such a valuable asset for your business. You should be very effective with replenishing your products, especially with online arbitrage, where the aim of the game is wide – the wider you go the more sales you’ve got. Remember, inch deep, a mile wide.
So if you’re trying to send more and more stock, what is happening with your tail end? You need to continuously replenish those stocks as you grow.
If you are replenishing the same products over and over again, why is that happening? It’s just a figure. This is all about systems improvement. It’s so, so important.
- Number of winners purchased
If you are finding ten winning products per day and you’re only purchasing eight products per day because of the size of your team or different circumstances, why?
Have an indication in there to tell you where the bottleneck is and what is going on.
Seasons of business
This is game-changing. It allows you to really put a finger on the pulse of your business. It allows you to anticipate and react before it becomes a catastrophe.
The last thing you want when you start a business is the seasons of business. Whether you like it or not, Christmas only comes at a selected time in the year. After Christmas, you’re going to have a dip in sales. Winter always comes, summer always comes.
Christmas time is our summer. We love Christmas because it means sales go up, but we know winter is coming. We can anticipate that already but more so, when you start implementing these KPIs, it tells you everything you need to know.
If you want to go down my route in virtual and warehouse, you need to have KPIs virtually and warehouse.
So I have a weekly report virtually and warehouse, where I specifically note our inbound performance, customer response time, customer feedback, purchasing amount, if we’re on track to our target, all these things.
You can manage and measure numbers, so if you know your figures and indicators, you can really manage your business. Everything is so vitally important and you as the business owner, it is your responsibility to implement this and take action.
If you want to know anymore, go to OnlineArbitrageMastery.com where I really get into this in a step-by-step course and show you on-screen exactly how to implement all this into your business, which is going to allow you to have the freedom to do the things you want to do!
Are you taking your online arbitrage business seriously? Comment below and let me know if this helps 🙂
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