I’ve had several people reach out to me asking the same questions related to the Low Baller math.
How can I reinvest all of my working capital more than 3 or 4 times in 30 days when it takes a week or more to receive merchandise?
In addition to that, what about lead times and the time it takes to ship to Amazon?
Don’t these factors kill the idea that you can turn your working capital more than 3 or 4 times in 30 days?
These are all great questions and concerns and if you’ve put any thought into this strategy then you’ll run into this conceptual issue yourself. I’ve created this quick video to answer these concerns and put them to rest.
Take me back a few years and my strategy was to stock up whenever I got paid from Amazon which was twice a month. Then I made a case with Amazon to increase my payments to weekly so I was able to at least flip my capital 4 times in 30 days. If you’ve been selling with Amazon for more than a year then you may be able to convince them to increase your payouts to weekly.
Here’s the exact letter that I used to successfully get bumped up to weekly payments:
My name is ________________ with Amazon seller account _______________ I have been instructed by Amazon support staff to make contact with you to plead my case for changing our disbursements from every 2 weeks to weekly.
Thanks to Amazon, our business is growing but due to the fact that disbursements happen only every 2 weeks, our growth has been limited. We are not able to re-invest funds back into our business fast enough to keep up with the demand from customers. If we were to be moved to weekly disbursements we would be able to re-stock faster which would make more money for both Amazon and us while also ensuring that our mutual customers have their desired products in stock.
I do hope that you will strongly consider our case for seeking weekly disbursements. By our assessment this would be greatly beneficial to all parties involved.
Thank you for your consideration and I look forward to hearing from you.
Amazon Seller Account: __________________
Getting paid weekly and then reinvesting all your working capital weekly is a great start. This will allow you to turn your capital at least 2, 3 or 4 times in a 30 day period. Let’s take a look at the growth simulator to see how this plays out:
As you can see from the math, you want to AT LEAST flip your working capital 3 times in 30 days in order to outpace your average per SKU ROI. If you’re not doing this then you’re losing money and it’s easy to calculate how much you’re losing:
I know those numbers look dramatic and that’s the point! Compounding of capital is a dramatic way to grow your money. On the flip side, not reinvesting at least 3 times in 30 days is an easy way for compounding to work backwards through Compounded Loss of Potential. From the calculator it’s easy to see how much money you’re throwing away by not playing by the law of the numbers.
I would love your feedback and questions in the comments below…