With the turn of the new year, I figured it would be a good time to give you some insight into my future plans that I have for my Amazon FBA business for 2016 and beyond. All the way back in the second update in my Amazon FBA case study(around 9 months ago) I talked about my goals for the business and discussed some tentative deadlines as well.
In this post I will cross check the goals I set in the 2nd update to how my business has performed since setting those goals. I will also be setting new goals and I will explain how I now have a different vision for this business then I did 9 months ago when I first started.
Progress on the Goals I Set 9 Months Ago
Below is a screenshot of the goals I set for my Amazon business 9 months ago when I was first starting out:
If you have been following along my journey and reading all of the updates, you will have noticed that I have pretty much accomplished all of the goals I set for the first 0 – 6 months. However, I am going to break down each one of the goals below:
0-3 Month Goals
The main thing that I wanted to accomplish within the first 3 months was to get my product onto Amazon and begin selling. I also wanted to get some initial reviews.
Goal #1: Get my product onto Amazon and selling – Completed
I started selling on Amazon in the early part of September, which was around 5 months after I set these goals. It took a little longer than expected to start selling on Amazon due to the long shipping times but, nonetheless I was still able to complete my goal of getting my product live on Amazon.
Goal #2: Have the product be profitable after all expenses – Completed
I was also able to accomplish this goal. If you check out my most recent update, you will see that I was able to turn a $1,500 profit in the first 3 months of selling on Amazon. These numbers aren’t amazing but, I was able to turn a profit which was good to see!
Goal #3: Get 25 Reviews – Completed
I was able to easily complete this goal after doing my launch which occurred a couple of weeks after my product went live on Amazon. I know currently have 100+ reviews for my product. You can read more about my launch strategy here.
3-6 Month Goals
By this time, I was hoping I would have a successful product that was making consistent sales on Amazon.
Goal #1: Successfully completed multiple orders with my supplier – Completed
I have placed a total of two total orders with my supplier thus far. Even though the second order was placed past the 3-6 month timeline I would still consider this a success.
Goal #2: Get my product on the first page for my main keyword – Completed
I had my product ranking on the first page for my main keyword for a good chunk of time but, due to being close to running out of stock I had to raise my price. This ended up lowering most of my rankings but, I 100% think I can regain these rankings once my second shipment arrives at Amazon.
I would still consider this a success since I was able to accomplish reaching the first page for my main keyword for a good chunk of time.
Goal #3: Reach $2,000 in revenue – Completed
I was able to easily surpass this goal. In my last case study update, I had total revenue that was over $10,000 in the first 3 months of selling.
6-24 Month Goals
I am currently within this time period right now but, let’s still take a look at what goals I was able to accomplish so far.
Goal #1: Add a couple related products to my brand – Not Completed
Failure so far. However, I am in the process of getting my second product ready and I am hoping to start selling a second product within a month or so.
Goal #2: Have the related products making money and be profitable – Not Completed
Also a failure since I currently have only one product selling on Amazon.
Goal #3: Be making $3,000 in profit per month – Not Completed
I have not reached this either yet but, I am getting close 🙂
Goal #4: Sell the company for $100,000 – Not Completed
This is the most important goal I wanted to highlight.
Initially, the plan was to build up this business for 1-2 years and then sell it off for $100,000+. After selling on Amazon and seeing the potential of this business model, this is no longer my goal. I will dive into why I changed my mind below and what my new plan is for the business.
I’m No Longer Planning on Selling my Business…
…at least for the foreseeable future.
My long term plan of selling the business remains the same, but for a lot more than $100,000. That will require me owning the business for longer than 1-2 years like I had initially planned.
I know I have only been selling live on Amazon for 4 months and the business is still very young, however, I see a ton of potential to really grow this into something big.
I think that in 5 years this business could be valued at $10+ million
Yes, I know this is a huge number and a LONG way off of where I am now but, that is the point of goals. I really see the potential to grow my current business into something substantial and I will doing everything in my power to make this happen in the upcoming years.
How am I Going to Accomplish this Goal?
The best way to complete a big goal like this is to reverse engineer it. This way you can break a huge goal down into smaller, easier to accomplish parts.
First, we need to reverse engineer the numbers.
Reverse Engineering the $10 Million Dollar Valuation
Most Amazon businesses are valued at 3x yearly profits. This means for an Amazon/Eccomerce business to be valued at $10 million dollars it will need to be making around $275,000 per month in profit.
Wow, that is a lot of money to make in PROFIT per month.
Yes, this number is huge and almost unthinkable at this point. That’s okay! Setting your goals high is a good thing to do because even if you fall short, you will still have accomplished a lot. For example, my goal is to to have the business valued at $10 million in 5 years but, if it’s only valued at $1 million by then it is still VERY good. That is my logic with setting this goal.
Below I will get into some specific things that I am planning to do in the future to help me accomplish this goal.
Expand the Product Line
Expanding my product line is going to the the key to growing my business and allowing me to reach my goals. This is where I will be spending a lot of my time as I see this as the most important part to growing an Amazon business.
How Many Products?
In 5 years, I want to have 50 different products under my brand. This would come out to be 10 new products per year for 5 years to reach the 50 product goal.
The hardest part about reaching this goal is having the capital needed to launch a new product. It is going to be practically impossible for me to launch 10 new products within the next year because I don’t have enough capital to do so, unless I really start raking in the profits here soon.
So my thinking is this, in 2-3 years when I have a lot of free capital to work with, assuming my business is bringing in a good chunk of profit, that I will be able to launch a couple of new products per month. Doing this will make up for the slow product growth in the first year or two due to the low amount of free capital.
Running Some Numbers
If I had 50 products and wanted to be making $275,000 per month in profit then each product would need to be making $5,500/month in profit. Obviously, some products will make more than others but, if on average each product makes $5,500 per month in profit my business would be close to the $10 million valuation.
Move Away from Being 100% Dependent Amazon
Amazon is a fantastic place to launch your products and get some initial money rolling in. I will be using Amazon for as long as I can but, at some point it is not going to be a viable marketplace anymore. Also, I to reach my goals I will need to start selling in other marketplaces to expand my product reach.
These are some of my ideas for other marketplaces I could sell in down the road:
My Own Website
This is a major emphasis for me right now and for the future. I want to start making sales through my own website ASAP so I don’t have to rely on Amazon for all of my sales. This could be a huge money maker if I am able to use my own website building skills to grow this website into an authority within my niche.
If I am able to do this, I could have thousands of people visiting my website per day which then could translate into customers. I will dive deeper into this topic later on in this post but, I wanted to mention it here as well.
Selling on Ebay could prove to be a solid source of income at some point. However, to do so I would need to fulfill and ship all of my products myself selling on Ebay. This would mean I would need to keep inventory on hand for all of my products which could be a real pain in the butt.
Selling on Ebay and fulfilling/shipping my own products is something that I want to do but probably won’t happen for a while. Nonetheless, Ebay is still a marketplace where I plan to start selling at some point.
Sell in Niche Websites/Stores
I have mentioned before that my brand’s niche is in the pet niche so I could try to sell my products in an online store such as PetCo. I am not sure if this would be a viable marketplace but it is an idea that I will eventually look into!
This will be down the road a bit, but at some point I could move into selling in retail stores. I have NO IDEA how I would go about this or how to make this a possibility but if my brand grows big enough it could be something that I will look into. Not to mention, selling in retail stores would make my brand/business a lot more valuable when I go to sell.
In 5 years who knows what new marketplaces will have been created! The next Amazon may be invented and that is where I would move my products to. Who knows?
All of these are potential places for me to sale in the future and I will need to move away from being 100% dependent on Amazon if I want to reach my goals. The Amazon marketplace is only so big and at some point I will need to start selling in other sources to increase and diversify my income
Fulfill and Ship my Own Products
This is something that I really want to do but I will probably have to wait a while. Doing something like this will depend on a lot of factors such as how many products I am selling, where I am selling them, where I would be able to store my inventory and a whole lot more. Also, I would need to have enough capital to make this happen.
However, at some point I want to be able to fulfill my own inventory. This would give me complete control over the entire business and I wouldn’t have to rely on Amazon for all of my sales. I have not worked out any of the details yet because as of right now, this option isn’t a possibility.
I wanted to touch on this point because I know that I will need to fulfill and ship my own products at some point to take my business to the next level. This is a longer term goal for my business but it is something that I will be planning for the future.
Am I Setting my Goals too High?
I know you are probably thinking that the goal of reaching the $10 million valuation in 5 years for my business is ridiculous and I can 100% understand where you are coming from. But here are my thoughts in it:
- Goals are supposed to be hard to reach!
- Goals act as a way to guide my effort so I know what I am working towards. It doesn’t mean I have to accomplish this exact goal. Maybe I only reach a $5 million valuation? It still gets me closer to where I want to be.
- 5 years is a LONG time. So many things can happen within 5 years. Who knows where I will be in 5 years? I will be 25 years old and I can be doing just about anything with my life at that point! Who knows, I may completely scrap this business in a year or two and move onto something else by the time 5 years rolls around. What I am trying to say is that anything can happen in 5 years.
- This is a business model that can scale very easily. It may take a year or two to gain traction and momentum but once you have enough capital to reinvest, the business will grow rapidly.
- Why not? Why not set this goal? What’s the worst that can happen, I don’t have a business that is valued at $10 million? Big whoop… might as well set my sights high and see what happens!
Those are some of my thoughts behind setting my goals and I hope they clear some things up. I think setting hard to achieve goals is good because it makes you have to work even harder and doing that will pay off in the long run.
Setting extremely high goals, such as a $10 million valuation, requires you to achieve a TON of smaller goals that will lead you to accomplishing the big goal. That is what I will be talking about in the next section, my 2016 goals.
2016 Goals for my Amazon FBA Business
To reach my 5 year goal of having my business valued at $10 million it is going to take a lot of work to get it to that point. However, it will start with my goals for 2016.
I have only been selling on Amazon for 4 months and even though I have seen some success, I am looking to do a whole lot better next year! Below is the list of my goals I have set for my Amazon business and some of my thoughts behind each one.
- Add 4 new products to my product line (5 total)
- Reach $10,000/month in profit
- Grow my brand’s website to 250 visitors per day
- Grow the email list to 1,000 subscribers
- Create an LLC S-Corp behind my business
- Master PPC
I tried to add specific goals so that I can easily determine if I was able to complete my goal for the year.
Alright, now let’s dive a little bit deeper into each one of the goals so I can explain my thoughts behind them!
Goal #1: Add 4 new products to my product line (5 total)
I think that this is a very doable goal!
I am in talks with suppliers right now for my second product and I think by the end of 2016 I will be able to have 5 total products selling under my brand. I feel as if having 5 different products selling under one brand turns the brand into a legit business.
No longer am I just selling one or two products, but 5. This will take my business to the next level and hopefully each one of these 5 different products will be a success.
I will talk more about the ideas for my future products in upcoming case study updates, but I want to sell products that are different and unique to the marketplace. I want to move away from selling generic items and really start establishing myself as a high quality brand. I also want to try selling a product in a higher price range such as $50-$100 to see what types of results that will bring me.
The only downside about going after higher priced items is that they take a lot more upfront capital to get started.
Goal #2: Reach $10,000/month in profit
At some point throughout the year, I want to have at least one month where I reach $10,000 in profit. I feel that I’m still at least a couple months away from this being possible but I am doing everything I can to grow.
If I am able to reach the $10k/month mark I will be able to really start growing my business at a rapid pace.
Because that $10k in profit is going to go right back into the business so I can grow as fast as possible. The quickest way to grow anything, not just an Amazon business, is to reinvest all(or most) of the profits to keep it growing. Doing so will have a snowball effect on your business, the more money you reinvest the faster it will grow.
I will go into more detail about how my business did during December in a minute but, as a reference to this goal, I made around $1-2k in profit last month. I’m currently making good progress but the $10k mark is still a ways off.
Goal #3: Grow website to 250 visitors per day
This is something that I REALLY want to pursue hard this year. I see a lot of potential in having a website that is popular within a niche and is able to sell their own products. I think it will be a huge money maker down the road.
I already have a lot of experience with building and growing websites and I think I will be able to translate these skills to growing this website. Right now, the only thing I’m doing is adding new content about one time a week. It has only been ~2 months so far but, at some point the content I am writing will start to rank in Google for keywords related to my brand/niche and then I will have targeted visitors coming to my site that can be turned into customers.
There is a ton of info that I want to discuss about building a website for Amazon FBA business’s and this isn’t the article to do it. However, I am planning on having a whole article dedicated to outlining and explaining my strategy for building out my website.
I think having a website to go along with your Amazon business is going to be huge. If you are already selling or planning on selling and you don’t have a website started, do it now, trust me. 6 months down the road you are going to wish you had started today. I wish I would have started my website 9 months ago when I first started my own Amazon business. If I would have started building and growing my website 9 months ago I would probably already be at my current goal 250 visitors per day!
My advice, start now!
Goal #4: Grow email list to 1,000 subscribers
This goal goes hand in hand with growing my website.
The best place to get email subscribers is through my website and without traffic, there will be nobody to sign up for my email list. That is a huge reason why I am trying to grow my website’s traffic.
As people always say “The money is in the list” and even though they have been saying this for years, it still remains true. If you have your own email list of people that are interested in what you have to say and offer, then you will always have people willing to buy from you.
By building out an email list for your Amazon brand you are doing a couple of things:
- You are becoming less reliant on Amazon to drive all of your sales
- You have your own list to launch products to. You will no longer need to use any sort of launch services.
- You will build up a fan base for your brand that will buy, share and spread awareness for your brand.
- You have the power to generate sales whenever you want, just send out an email telling your subs about your new product or that there is 25% off one of your products for 24 hours.
And a whole lot more!
The main thing with building an email list is that you now have the ability to reach out to people that you KNOW are interested in your brand and products. This is huge.
My goal is to reach 1,000 email subscribers by the end of 2016. Why 1,000? Because I feel at 1,000 email subs that I would be able to run a profitable and successful business with ONLY my email list. No amazon. No Ebay. Not anything else needed. I am not saying I will stop selling on Amazon but I am just saying that by having 1,000 subscribers I am 100% independent.
Obviously, I would love more than 1,000 email subscribers but I feel like this is the minimum. The best part is that I will be able to utilize these email subscribers and use Amazon at the same time, which will be a very good combo!
I’m a person that has no problem taking calculated risks but, at the same time I am also very risk averse. This is especially true when it comes to relying 100% on Amazon. I don’t know when it is going to happen, but at some point Amazon will not be as useful as it is now and I will have to move away from the platform.
I don’t want to be left out to dry with nothing to show if this happens. That is why building a website and an email list is so important. It makes your business safer and sustainable for the long run because you are not relying on anyone or anything other than your yourself.
I know this kinda turned into a rant but that’s because I feel strongly about this topic and I don’t want to see mine, or any of your Amazon businesses destroyed because Amazon goes away(for whatever reason). That is why I will be hustling all year to try and build up my email list and diversify away from Amazon.
Goal #5: Create an LLC S-corp for my business
I have previously mentioned throughout my case study updates that I DO have an LLC behind my Amazon business but, this LLC was formed a couple of years ago for another business venture.
This year, I want to create an LLC solely for the purpose of my Amazon business so I can keep everything under one specific LLC entity.
Aside from just creating an LLC for my business, I also want to become an S-corp. I was listening to one of Scott Voelker’s recent podcasts where he was talking about different business structures for Amazon businesses. Before listening to this podcast, I didn’t know a whole lot about the differences between an LLC, S-corp or a C-corp.
However, after listening to his very useful podcast I was able to understand the pros and cons of each business structure. I learned that if your Amazon business is doing $40k/year in profit or more that you should become an LLC S-corp because you will save thousands of dollars on taxes.
I am not making $40k/year right now but I am guessing that I will make more than that in 2016. I would like to become registered now so I am ahead of the curve. If this is a topic you are interested in learning more about, I would highly suggest checking out this podcast that I am referring to in this post.
You can listen to this podcast here – TAS 143 : KILLER TAX TIPS AND WHAT BUSINESS TYPE TO FORM
Goal #6: Master PPC
I have been dabbling with PPC the last month or two but I haven’t been able to fully explore it due to trying to preserve inventory until my second shipment arrives. However, even with the little I have done with PPC I have been able to see some nice results.
In my last case study update, I highlighted my results from my first PPC campaign and I was able to turn a decent profit from an auto campaign. This is promising and I am really excited to be able to fully explore this angle once my second shipment arrives at Amazon.
I feel like Amazon PPC is one of the most important aspects of being successful on Amazon because it involves on all of the vital statistics that Amazon uses in their algorithm. For example, running PPC helps increase sales, reviews and conversion rates (if optimized properly) which are all VERY important to ranking well in Amazon. This will then lead to more organic sales.
Running PPC creates a snowball effect for your product and can help you in all aspects of selling successfully. I can’t wait until I can be able to fully utilize this and get some results from it!
Since I feel like Amazon PPC is so important but, also so underutilized by most sellers, I will be doing a cool little experiment with it. This experiment will consist of me trying to optimize and find profitable PPC campaigns. I will outline my whole process of how I go about doing this. Starting with an auto campaign and optimizing it fully until I have campaigns running for only the most profitable keywords.
It will be an experiment that I will keep updating as I continue to make progress. For example, the first week or so will be the results from me running an auto campaign. Then I will make another campaign based on those results and come back in 1-2 weeks with an update on how that turned out. I will continue to do this until I am able to fully optimize my campaigns and you can follow the exact process that I use for my own campaigns.
I am in no way an expert with Amazon PPC but it will be learning experience for both you and me! It should be fun and like I said, I will have an update soon for this experiment with all of the details. I just wanted to let you know about some of the plans for the future 🙂
Those are my 2016 Goals
Those are my 6 goals I have set for my Amazon FBA business for 2016 and I am excited to pursue them. I am truly pumped about this business model and I see a lot of potential in it. 2016 will be the year that I transform this business from “someone selling one product on Amazon” into a “true business and brand that has a product line”. Bottom line, I will turning this into a real business in 2016. That’s the goal.
Sales Update for December
The last sales update was only through the month of November, so I figured I would let you know how December went. I didn’t have a spectacular month by any means and I didn’t really see a noticeable uptick in sales like most people were reporting in December. I would assume this would be mainly because I had to raise my price and try to limit sales all month long so I wouldn’t run out of stock.
I wasn’t able to fully maximize the holiday shopping season this year but that’s okay and I am looking forward to next year 🙂
Below are my sales stats from December:
In the month of December I was able to sell a total of 175 units and bring in right around $3,500 in revenue. This isn’t where I would like to be but, there isn’t a whole lot I can do until my second shipment comes in. I have my hands tied at the moment and I have to just sit back and wait this out. It’s really frustrating not being able to test different things out since I’m always worried about selling out my inventory.
With that being said, I was able to turn a decent profit this month since I didn’t do any giveaways and only a small amount of PPC. Let’s take a look at the summary report for the month:
For some reason, the sales dashboard stats and the summary report stats don’t match up. According to the summary report I had $3,559.75 in revenue and sold 180 units but, then according to the sales dashboard I had $3,498.25 in revenue and sold 175 units?
I am not sure why there is a difference between the two but, I will go with the summary report since it also includes my expenses for the month which will help me calculate my profit.
Since I kept my sale price at $19.99 all month long, I know that I made a $8.50 profit on each unit I sold. This makes it very easy to get an accurate estimate on the profit I made for the month. Obviously, this isn’t 100% accurate because some people buy 2 units in one order and I make more profit per unit. So if anything my estimate will be lower than the actual profit.
Units Sold: 180
Profit per Unit: $8.50
December’s Profit: 180 * $8.50 = $1,530
In the month of December I was able to make $1,530 in profit! Not bad! If you recall in the last case study update where I detailed my first 3 months of selling on Amazon, I made around $1,500 in profit during those 3 months COMBINED.
So in just one month, December, I was able to match the profit I made in the first 3 months of me selling on Amazon. Even though the sales were down compared to the first 3 months I was still able to make more profits in just one month.
Like I said, this is due to my sale price being at $19.99 all month long and not having any outstanding expenses.
Making $1,500 in one month is a good start but I am setting my goals a lot higher for the upcoming year. I am still a ways off of my $10,000/month profit goal I set for 2016. I will have to see some growth in the upcoming months to be able to accomplish that. Nonetheless, I am happy with how December turned out given the circumstances and I am excited to see how the sales fare in the new year and once my second shipment arrives!
Update on my Second Shipment
I placed my 2nd 1008 unit order way back at the end of October and the good news is that it is very close to arriving at Amazon. My freight forwarder informed me that they have received the shipment and they are now in the process of delivering it to Amazon.
That means the shipment should arrive at Amazon within a week! This is is awesome to hear since I have been trying to limit sales these last 2 months trying to prevent my original 1008 units from running out of stock.
Being forced to ship via freight due to the weight of my shipments is very unfortunate. I have extremely long wait times between the time I place a new order and the time that it actually arrives at Amazon. It usually takes around 2 months for this shipping process to be fully completed.
This KILLS my ability to grow my business at a rapid pace because I am always trying to slow sales and not run out of stock. The next product that I sell is going to be small and lightweight enough for it to be shipped via air.
Doing so will make the time waiting for a shipment only around 1-2 weeks depending on the product. This is so much faster than shipping via freight and I will be able to get new shipments in way quicker.
Nonetheless, I have a fresh 1008 units coming to Amazon very soon and I am so excited!
It feels good laying out all of my 2016 goals for my Amazon business so that I can be held accountable for them. I will be documenting all of my progress along the way and you can see every step that I take to achieve my goals.
I was able to accomplish a lot in 2015, one of those accomplishments being starting my Amazon FBA business. 2016 is going to be a big year for my business and it will be the time that I hopefully take the business to the next level.
I know asked this question in our PiP Amazon FBA Facebook group the other day but, in the comments below tell me 3 of your goals you have for your Amazon FBA business in 2016! I look forward to reading all of your guy’s goals 🙂
Let’s all make this an awesome year and accomplish our goals! See you in the comment section below