Can you really get started with $500?

Will comes to talk to us about can you really get started with $500 on Amazon

Will Tjernlund started selling in 2013 importing from Ali-baba following his brother’s lead from 2006. Went 1 inch deep and 1,000 miles wide. Got upto $10m / year run rate. Now runs Go-Consulting helping brands on Amazon.

Can you really get started with $500 so you can eventually replace your annual wage.

Two Roads to replace your annual income

  • Ali-baba route, you get higher profit margins but takes longer
  • You buy $500 off Ali-baba and sell as fast as possible
  • Then buy more stock with the money you made
  • Then a month later you sell again and multiply your pot
  • Maybe you have $12,000 by year’s end
  • Then using this you buy more stock with better buying power and larger orders
  • Buy $12k, sell for $24k pay $7k in fees and net $5k
  • You might do the same for another year to give yourself more security and start replacing your income

Second Road – the route Will went

  • Work with people on faster lead times and faster shipping times
  • Local businesses and local inventory
  • Order a week supply, flip it next week
  • Flip your cash 20 times a year as opposed to 6 times a year with the China Alibaba route
  • This is more difficult in execution to make it succeed
  • This is great if everything is perfect and works well and no breakages etc
  • Do this math and deduct 25% for roadblocks etc and costs you’ve not thought of
  • This is the Brock Johnson model – selling eclipse glasses – the only one selling them on Amazon as he had the only certified ones that he had done the Homework before hand – he turned over $6m
  • His product was like 5-20 cents per unit doing it locally

The Eclipse Glasses

  • Brock Johnson bought his units for cents  (usually a dolar upwards for goods from China landed costs)
  • Will says Amazon courses take you 80% of the way there but the other 20% you need to have creativity and work out for yourself
  • Brock is a fine example of working this out himself
  • He worked out the Eclipse is coming and it was going to be a trend
  • He also guessed that the market would be flooded by cheap knock-offs and he so he went and got his certifications ahead of time to differentiate himself
  • 2. This seemed like an easy niche – the price is unknown as no-one has really bought ‘eclipse glasses’ before and as Brock could buy for 3 cents a unit, he could not lose money on these
  • Brock connected the dots:
    • This is a limited time thing
    • Most people are not likely to get the  right certifications for their products
    • Brock could buy a lot of them for a cheap cost
    • Didn’t know the retail price but figured he would get $5 – $10 for it
    • On top of knowing:
      • Setup PPC
      • Knowing how to get inventory into Amazon
      • Optimise a listing correctly
      • How to take the right photos

What works today to start as Private Label

  • You need $10k to get it started
  • You can spend $6k on inventory and have money for other costs to cover it
  • Don’t over extend yourself and keep a little bit of a nest-egg
  • And not have to sell out all your inventory to re-order

 

  • If you’re turning over $100k / month on a 20% margin you have a lot of money tied-up
  • Brock had a good cashflow business
    • Bought a lot of stock for not much money
    • High profit margin
    • Low % of earnings each month cost to re-stock his full inventory
  • As opposed to a wholesale catalogue business
    • Needs lot of money to buy many items
    • Low profit margin 3% per item
    • High % earnings each month cost to re-stock full inventory

Embracing Vendor Central and Payment Terms

  • Will and his Brother did well with embracing Vendor Central
  • Negotiating payment terms with lots of suppliers
  • Being able to sell suppliers 60 days after getting the stock
  • And having Amazon reimburse your profits quickly
  • This lets you float a lot of cash without having to go to the bank to get a big loan for cashflow

Realistically you can’t get started on $500 unless…

  • Get going on Odesk or Upwork and post yourself on there and get side-cash
  • Learn how Amazon works
  • Learn what you like and don’t like
  • Run other people’s Amazon accounts on Amazon
  • Save up the money
  • You’ve been running 5 different accounts and know a LOT about Amazon
  • You know what you like and don’t like and have earned a load of cash to get you started

Last Final Thing

  • Contacting domestic suppliers they are really good with payment terms – 30/60 days
  • You can get paid every two weeks by Amazon
  • Find a supplier with a big catalogue
  • Prove the product on Amazon using Jungle Scout to know it sells well, like $10,000 a month
  • If you buy 1,000 units and sell on Amazon you’ll probably be able to sell them pretty quickly and not get burned
  • Do small bets like that over and over again, extending your payment terms with the supplier
  • Over time you can build up a war chest
  • If you can be more creative and hustle you can get into the game to start

Realistically – starting with $500 and replacing your income is a tall order

If you’re in high-school 16yr old and $500 bucks and have 4 years to build up your learning and war chest – this would be interesting

If you’re in your 30s-40s and looking to replace your income but need cash now to pay bills and expenses, then this is probably going to be a lot tougher

Contact Will

  • Facebook Will Tjernlund
  • Instagram / Twitter WTJERN
  • Gmail williamtjernlund@gmail.com

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