I’ll show you the exact amount on how much can you make selling on amazon
Recently, I hit that £1M in 1 year on my Amazon Online Arbitrage Business. If you want to know how much can you make selling on Amazon, I’m going to break down the following steps I made to achieve this goal.
To give you a brief backstory, I began selling on Amazon Arbitrage. I started a little differently in the previous business that I created because I have done the wholesale model- buying from wholesale distributors and reselling those products to Amazon.
I didn’t have an enjoyable experience with it because of the small margin I was getting. Although, I’ve learned a lot from that experience. I always thought about Amazon. How much can you make selling on Amazon? And that led me to online arbitrage, which is what I’m currently doing.
With the opportunities I’ve been seeing from this model; higher profit and margin, plus having an amazing team who are smashing my business. I’ve set a goal with them and that is the £1M Challenge.
How much can you make selling on Amazon?
Before anything else, we set a target that will help us guide our focus to reach our goal. We can’t manage what we don’t measure and we can’t improve upon something that we don’t manage properly. So, setting a target plays an important role in sustaining our goal.
What we planned on doing is to hit £1M in 1 year in my Amazon Arbitrage. The question is, how did we divide the £1M challenge?
Again, the original goal was to do £1M in 18 months, but we said that we could also do it in 1 year. Hypothetically speaking, we divided £1M into 12 months and we arrived at £83,333 a month. Roughly £100,000 a month in 12 months, including the good months and the bad months.
But based on how well our sales performed, we achieved that earlier than 18 months. Impressive, right?
How I achieved £1M in 1 year in my Amazon Arbitrage
Now, after setting a target. The next thing that we do is break these down into problems. First, we have the spending metrics. That’s the question of how we divide our spending to hit the target and manage them.
How to find deals
To solve this issue, we did some testing of sourcing methods that will work for the team because they have unique skills every Amazon Virtual Assistant has its ability in each sourcing method. That being the case, the sourcing method depends on the specialty of the Amazon Virtual Assistant.
Other than finding more deals, we also consider our replenishments.
We contact the suppliers of good-selling items or fast-selling items to buy a lot of products at a discounted buy price. The lower the buy price, the higher the profit, which makes us more money.
Now, the good thing about replenishments is that we don’t have to put much of our time into analyzing the deal because we already have an idea as to how it performs.
Although, not all product prices are consistent so we also encountered items where their buy price increased. What we did is that we used the reserve sourcing method to find another supplier which offered a lower price and replenish that item.
If you want to learn more about replenishments, I created a video with Luke Dugan who is a master of replenishments.
Build a team
As we continue planning to do the £1M challenge, I asked my purchasing manager what else can we do to achieve and support the goal. He told me that adding a Sourcing Virtual Assistant will help us achieve that.
When we started, we had 2 Product Sourcers and then 1 Purchasing Manager. To achieve this goal, we decided to expand the team because we have a big goal. We added 1 Sourcing VA, which will help us in finding more deals, then slowly increased until we reached 4 Sourcing VAs.
Then one Amazon Virtual Assistant was promoted to become Purchasing Assistant to support the Purchasing Manager since there are a lot of deals submitted since there are more Sourcing VAs now.
If you want to learn more about Amazon Virtual Assistants and how they can help you grow your Amazon business. You can read an article we created named Amazon Virtual Assistant: When is the right time to Hire?
Get a Virtual Assistant from us
Since Amazon understands how e-commerce seller achieves their sales and profits. Amazon offered what is known as an Amazon loan.
You might be asking what an Amazon loan is. Simply, Amazon lends you money to help you grow your business. For us Amazon sellers, this program will help us to buy more stock that we can sell to drive more revenue.
What I did is that I took advantage of that opportunity because I needed to look for ways how I can grow my Amazon business and Amazon’s offer for a loan is an enormous opportunity to take my Amazon business to the next level. For us to expand our business we will need a big capital to buy more products and resell them on Amazon.
Now, to share with you our experience regarding Amazon loans. In May 2021, Amazon offered me a loan amounting to £121,000, which I am paying for 12 months. After we got this loan, we worked out to increase our stock purchases using the loan. Then months later, I have now increased my debt on Amazon to £130,000!
And so far, we learned that as we reduced the price it increased our sales velocity. So, we’re making less profit per item but selling more units.
Now with the amount of money I have from the Amazon loan, I have more stock to buy and sell more items but interesting enough, I’m going to make the same amount of profit but less competition because other sellers are not joining.
Measure results weekly
This is important for us to look out at what areas we need to make improvements based on the results we’re getting. Also, this led us to change our business model, and one of the reasons is due to the loan offered by Amazon.
Since we have more money to spend, we did was change our business strategy from looking for deals that are 30% ROI to 20% with consideration of the velocity of sales of that deal. So as long as it is a fast-selling deal, we will purchase that item.
- First is to copy what I did, and learn from my experience and other Amazon sellers as well who have been in the industry. If you want to achieve £1M like me, you can check out my journey and incorporate what we’ve learned into your business. Don’t reinvent the wheel.
- You are the biggest problem in your business. So, what you do is hire a team and get out of the business! Because they can save you time and help you focus more on steps to grow your business.
- Measure what’s going on, because this is one of the most important things you can do. And to give you the things we pay close attention to what we spent on and percentage spent on replenishable.
- Work with your team to drive efficiency. Understand how efficient your team is to improve. Just like what I did is my business. I asked my Purchasing Manager and Purchasing Assistant to work fewer hours and start working smarter.
Why? Because they used to work 12 to 14 hours a day buying the deals that the team provided. But for the week 7 of June, they spent 8 hours a day purchasing and then 4 hours on Friday purchasing. They went from working 60 hours per week to 36 hours per week, a reduction of 40% in working hours, but managed to increase spending by 36% over the previous record.
With that, we work for 8 hours and manage the target spend.
It's your time to earn that £1 Million yourself
What I will say is that after understanding how much can you make selling on Amazon, you can watch the playlist we created called Amazon arbitrage for beginners, which is a series of videos that will guide you in starting your own Amazon business.
You can also check our other article in which you can know How to Succeed on Amazon? 5 Top Must-have Skills to Succeed on Amazon to know the skills an Amazon seller should possess.
I'll return the question to you, how much can you make selling on Amazon?