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TIE #015: Why People Fail at Building an Amazon FBA Business
Avoid these pitfalls so you can create an efficient money-making machine.
Apparently you hate money. If you didn’t, you’d be using Rakuten every time you shop on websites like Walmart and Target to save money.
They have paid me over $8,000 for things I was already going to buy for my one-person business (click here for proof).
They are also the reason this post is free to read. Sign up here and get $30 for free after your first use.
For every successful Amazon business that someone creates, there are a multitude of others that fail.
Given that they are such a helpful tool for increasing your income and building your dream life, it’s important to know why.
In this post, I will break down:
The 3 most common mistakes I see people making
What I recommend people do instead
Mistake #1: Lack of Action and Consistency
This is the ultimate killer. Most people fail because they don’t even start or take one step before giving up.
There is never a “perfect” time to start. You will never feel fully confident. You just have to start and never stop.
You must also have a deep-rooted reason for starting a business.
My reason was straight-forward. I wanted to be my own boss and operate on my own schedule, for the rest of my life.
Without something like that driving you, you’re toast.
Find your reason and never let go of it, no matter how hard things get.
Mistake #2: Using Debt to Buy Inventory
Good Amazon businesses don’t need debt to make money and grow.
Using a credit card can be tempting, but should only be done if you can pay your statement balance in full every month.
I’ve seen way too many people put a ton of inventory on a credit card, have most of it not sell fast enough, and then get eaten alive by a 30% interest rate.
If you must, use a credit card that has 0% interest for the first year. Even then, I would not recommend this if you aren’t experienced with e-commerce.
Even if you’re starting with only $500, compound that as fast as possible and you’ll be at $10,000 in no time.
Mistake #3: Scaling Vertically instead of Horizontally
On your Amazon journey, you will come across a product to sell that prints money.
The highest margins you’ve ever seen
The highest sales velocity you’ve ever seen
The lowest competition you’ve ever seen
Common sense would say to buy as much of this product as possible right, but that’s a huge mistake.
All it takes is one IP or counterfeit claim and you’ll be sitting on a ton of inventory you can’t sell.
I remember hearing about a seller who had to close up shop because they spent $15,000 on a single kitchen utensil…
Don’t be that person.
Instead of trying to grow your business by going all-in on one product, spread your risk evenly by increasing the number of product SKUs you sell.
With all of these in mind, do not overlook the importance of Mistake #1.
If you do not take action and progress towards your goal, there will be no one-person business to make mistakes with.
Without that business, your chances of escaping the rat race are minimal.
Like always, the choice is yours.
When you are ready, there are two different ways I can help you:
If you are interested in starting an efficient one-person online business, I recommend starting with one of the following:
Textbook Flipping Mastery - My in-depth guide on how to start a high-margin Amazon e-commerce business.
LEGO Investing Mastery - My in-depth guide on how to start a long-term “buy, hold, and sell” LEGO investing business.
The Conference Room - My private mentorship community that includes the two guides above, for free. Pay once and stay a member for life.
If you are interested following along with my personal LEGO investment portfolio and unlocking access to 4 additional posts each month:
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