My mission is to really help people get past their false perceptions about the Amazon or e-commerce business with regard to how the numbers play out over time. I really feel that if the information I’m publishing can help one person keep from failing then I’ve accomplished my goal.
Most sellers source product, send it to Amazon fulfillment centers, end of story…
My goal is to show you how much more there is to the story and to show you how much money you’re losing right now because you’re not doing this:
When I first learned about the mechanics of the numbers I was shocked. For many years I operated with the “set it and forget it” mentality. I would buy a bunch of product, send it in, sell it, wait to get paid and then I would do it again. I never put much more thought into it until I started noticing that I’m not really making as much or growing as much as I thought.
Actually it was more like a form of denial. There’s no way that my Amazon business could be doing that poorly, could it?
I’m fairly certain that calculators don’t lie so the cold hard truth smacked me across the face. I know how you may be feeling at this exact moment. This is not a small meaningless discovery! It’s not about individual SKU ROIs; the calculator reveals that it’s about how many times you can flip your capital in a 30 day period.
Here’s the trick…
When you invest in SKUs where you (considering competition) can sell at least 4 units per month (for example) then it doesn’t matter what SKUs you roll your capital onto, you can expect to flip your capital at least 4 times in 30 days provided that you invest all your revenue from the period prior (or as much as possible). This is key!
Most sellers focus on individual SKU ROI and completely ignore CTF (Capital Turnover Frequency). You have to invest with both of these numbers in mind.
From now on when you source product make sure you’re investing in a unit where you can sell one a week as a starting point (or a base minimum CTF of 4). Then make sure you invest at or above your minimum tolerable per SKU ROI (like 25% as shown in the video). After that make sure that you reinvest all capital at least once per week.
Te ensure you sell through at least 85% of your units each week (as shown in the video) you must invest “minimally” in any single SKU. Don’t worry about missing sales because you’ll roll your capital onto another SKU with similar characteristics (missing sales is an illusion). When all SKUs in your portfolio meet and exceed your minimum CTF and ROI and you reinvest all your capital the same number of times as your CTF (in a 30 day period) then you will begin to see growth at an unusually fast pace.
I would love to know your thoughts and questions on this matter in the comments below…