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In this second episode, Luke has shared his current status with his business and we’re going to create a massive action plan for him to take his business to the next level! Here is a summary of the information he has provided me:
“So as of last month I was able to get 4K in extra capital for Q4 and pushed hard for this Quarter from last month so I purchased £10,215.98 of stock last month and about £3029 this month, I’ve been focusing on toys and games, 80% ish. 20% beauty and personal care appliances mainly.
I’ve been averaging 12K sales for a few months, which has been annoying because I wanted growth but I did get a little complacent but now I’ve refocused. I’m already up 46% on this time last month as of today and have doubled my inventory from this time last month to around 1000 units.
My last months figures show I’m averaging 60.77% average ROI. Figures this month show 126 units ordered in the U.K. Average sales/order at £21.22 this month last month as a whole was average total £21.94. I am buying mostly 2-6 units now to maximise exposure.
My sourcing comprises of TA, which I do myself to check for new sales on websites maybe, an hour or two a day. I also am testing the VA you provided me with which is still a working progress as I’m tweaking for my requirements. I also have access to a sourcing sheet. I will need to register for VAT at the end of the month so need to plan that over the next few weeks.
To push through the VAT impact I want to push hard so I am doing closer to 20K in November £25k in December is my goal! In January I was planning of reviewing everything as it would be a year since I started FBA and as long as I can see consistent 20-25k a month in sales I want to outsource a large chunk of it so I can have time to look at other revenue streams as I don’t want all my eggs in the Amazon basket, but until January I’m happy to do anything and everything and get stuck in to maximise Q4.
I don’t have an exact daily plan for what I do, as in I write down all the things that need doing each evening and complete and add as the days go. Rather than a set schedule, which is something I want to implement.”
To anybody else who is in the trenches right now, it’s just a case of pushing on to the next level, getting to the 25K level and keeping it sustainable over the next year!
Massive Action Plan
1.What are you rejecting in your sourcing?
Everybody has their own criteria of what is an acceptable return on investment, what is an acceptable profit margin, what is an acceptable sell for price. Some people say they won’t sell anything less than £10, some people won’t sell anything for less than £20.
Whatever it is, I’d be interested to know yours because just to put into perspective, my average sales per order is hovering around £16 to £17, which tells me that you are doing fantastic. You are selling more on average per order, but what you may be doing is you may be rejecting some products that you could be selling.
The more products you can source to sell at a higher price, that is the ideal situation. But it’s Q4, and if you want to maximise and expand your net going into Q1, I would recommend that you look into doing that.
- Categories sourcing
After stating your main focus in terms of product type, I would ask how you get on with other product categories. Are you unlocked in groceries? DVDs? Games? Kitchen and home ware?
Expanding your sourcing options will help you find more products to sell!
- Replenishing frequency
Focusing on two to six units will allow you to spread your net wider, which is great, and secondly, it’s a good idea so you don’t get stuck with stock leftover in case anything happens.
Having said that, I would ask you to look at your current capital. Are you more than healthy? If you are cash rich and can pump more money in, can you potentially go a little bit deeper when suited?
I would be interested in knowing what your replenishing is like. Do you feel like you’re replenishing often?
There is a formula to set in your spreadsheet that will allow you to highlight if that ASIN has been purchased within that same month. That will give you a good indication of how often you’re replenishing.
- Maximising productivity
The way I operate in my own life is I am always conscious of working at my maximum productivity. There are a number of things I think about when I consider that, one is which is:
What are the highest leverage tasks that I have to do that gets my maximum return?
You could spend all day talking to a virtual assistant, but is that going to maximise your return? At the same time, you could be on your computer all day waiting for customer messages to come in, but is that really going to maximise your return? No.
- Operations structure
In terms of planning for your January review, I would recommend for you to start to design your operations structure. I’ve shared a lot about what mine looks like, so I’ve got a sourcing team, a reviewing team, a purchasing team. You need to decide what you want in your business so you can free up your time!
- What is your current criteria for winners?
There is potential to lower it to expand your net even wider.
- Planning/Bottlenecks
You’re most likely going to have a bottleneck of time as you try to outsource and scale your business. Money and space may not be an issue for you, and the problem of products can be resolved by expanding to more categories.
I definitely recommend you start planning. Start planning the outcomes you want to achieve in the week. Start putting into place some management tools for you to track the performance of your virtual assistants, to track the performance of tactical arbitrage.
If you have any questions, please let me know and please leave me some feedback! I love doing these and providing as much value as I can! This has been Luke’s Online Arbitrage Business Consultation and Massive Action Plan!
Have a fantastic Q4 and I hope your online arbitrage business takes you to where you want to go!
