TIE #036: What I've Learned From Over $5 Million in Online Revenue
Lesson #4 is the most important, don't let it elude you.
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 $9,400 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.
After over a decade in the online business world, I’ve learned some of the most valuable lessons there are to learn.
When I started out, there was a lot less free and available information available.
I didn’t have anyone to learn from and any success I did have came from blind trial and error until something worked.
Many readers know my first big success was the same Amazon business I still run to this day.
It started as a random side hustle idea and blossomed into an efficient powerhouse of a business.
It is responsible for a significant portion of the online revenue I have made to date.
(30-40% of the $5 million mentioned in the title at 25-35% profit margin over several years)
In this post, I’m going to share with you four lessons I’ve learned along the way.
I would have killed to read something like this back in the day.
Lesson #1: Seasonal trends are your friend
My Amazon business makes money all year round (you know this if you are a regular reader here).
However, it makes a majority of it’s money during a few specific periods on the calendar:
Back to school season (right now)
Holiday season (November - December)
The second back to school season (January)
In June, buy the type of products that exploded in value the previous August.
In September, buy the type of products that exploded in value last holiday season.
In November, buy the type of products that exploded in value the previous January.
When I started out, I was only focusing on the Summer back to school season and missed out on a lot of money.
Lesson #2: Scale horizontally, not vertically
You can grow an Amazon business in one of two ways:
Vertically (by buying more quantity of one product)
Horizontally (by increasing the number of products you sell)
Scaling vertically is a great way to lose money.
The last thing you want is for something to happen to the product listing and to get stuck with 1,000 units of an unprofitable product in your dining room.
Every Amazon business that does not sell it’s own product should keep product quantity light but always seek to increase the number of items it sells.
The only caveat to this is if you are running a LEGO investing business.
Should something bad happen there are plenty of other marketplaces to sell them.
Lesson #3: Don’t use debt (unless you are a 1% maniac)
I can proudly say I did not learn this lesson the hard way.
I’ve never used debt to build any of my businesses, despite knowing it can be a valuable tool in certain situations.
There are a million horror stories on the internet though and I’ve read enough to know this is a lesson worth acknowledging.
I’m a firm believer that the best businesses don’t need debt.
However, I believe that you can get away with using it so long as you:
Only do it if the interest rate is favorable
Have diversified your business in a way that reduces risk dramatically
Can pay the amount in full should something bad happen, like Amazon banning your seller account
For 99% of you, those won’t apply so don’t use debt.
For the 1% of you that are absolute lunatics (in a good way) and crush it at everything you do, there might be a use case there.
Lesson #4: Be in the minority, as soon as possible
Most entry-level Amazon sellers follow the same business model:
Buy product X on website A
Sell product X on Amazon for a small profit as soon as possible
Repeat
There is nothing wrong with this business model.
That said, the easier it is for other sellers to copy what you do, the less profit there is for the taking.
It is in your best interest to mold your business into one that has an ever increasing barrier to entry.
Now you know why my own business is primarily buy-and-hold type transactions that require you to wait before being able to collect profit.
While I am not compounding my capital as often as many other sellers, I make up for it with profit margins that are magnitudes higher.
It requires a lot of capital, so getting there requires dedication without deviation.
In short: do what others are too impatient to do.
Conclusion
I might think of something better to say in the future, but these are my best pieces of advice for anyone looking to start an efficient Amazon business.
Take advantage of seasonal trends
Scale horizontally, not vertically
Don’t use debt
Be in the minority
None of these matter though unless you do one thing: START
That choice is yours and I can’t make it for you.
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 getting exclusive alerts when I add a new set to that portfolio:
Become a paid subscriber here (7-day free trial available)
Great read