Monthly Amazon Update: January 2017
Just as I mentioned in my last post, I have not been very timely when it comes to publishing content. Ultimately, that has come down to my struggles with my Amazon business this month (Jan).
As I had laid out in my 2016 wrap-up, I had a lot of goals that I wanted to get through in January. They were:
- Spend $5k in January on inventory, stretch for $10k
- Get up and running with a repricer
- pick out private label item in January, have on shelves by march
- Get set up on Ebay and try out Joelister
- list stupid Red Sox lamp (probably on Craigslist)
- begin sourcing grocery
- Get ungated in health and beauty, health and wellness
For the most part, I didn’t get any of those done.
There were some bright spots such as getting set up with ebay and joelister but otherwise it was a tough month. I started the new year out pretty lazy, only getting to my first purchases on the 7th. It was a big purchase though and over the course of the next week I would spend about $1,604.70 on inventory. Definitely not on pace to hit my goal but it was something, I even found a new site where I think I’m going to be able to get some really good buys from in the future.
Unfortunately, I struggled to find more items and got disheartened. I tried to pull it together at the end of the month with a spending spree at Target. It went great. I found a bunch of good stuff and was getting my momentum back. Then I got the email, “Your order has been canceled.”
Your order has been canceled.
It was time for me to learn that Target does not appreciate people buying there stuff and selling it on Amazon. In fact, they were going out of there way to identify resellers.
You would think, having been doing this for 8 months, I would have known this but I don’t really pay attention to the news. It now looks like I have lost my biggest supplier. In fact, according to my Inventory Lab report, target accounts for 70% of my revenue since I started.
The news doesn’t get much better from there. I was still working my way through gift cards which I now have to figure out something to do with.
In total, I have $447.14 in gift cards on Target. I haven’t quite figured out what I’m going to do with it yet but I have a couple options. Since I’m not going to just leave them there I have two options: sell them or try to use them anyway. I think I’m going to end up trying both.
First, I am going to try and approach Target differently now to see if I can still source from there. While it’s possible my account has been flagged I think it is more likely that certain types of purchases are triggering alerts which cause a manual account review. So I’ll just have to purchase things very slowly from now on.
I will forgo cashback coupons and just stick to current promotions in order not to possibly trigger an alert from a purchase where they lose money. In addition to that I will also buy fewer of any one item so the purchase actually looks reasonable. Spacing out purchases will also be important. This is a situation where I will probably move through the gift cards after a couple of months unless I find an expensive item.
Mixing up my items will be crucial if I’m going to find good buys while . I just hope they’re not identifying my shipping address as a prep center. Otherwise I’d have to ship and pack them at home which I’m probably not going to do. Or I could diversify my prep centers, which I should do anyway given what happened in December (they stopped accepting shipments).
Gift Card Problems
Target is not the only site I’ve managed to strand cash at. I have $200 at Belk and $75 at Home Depot. The Home Depot card shouldn’t be a problem as long as I can find something to buy but the Belk card is what I’m worried about.
Finding items to buy on Belk hasn’t been difficult but actually getting the gift card to work has been. It shows my card as having a balance that covers the purchase but won’t actually go through when I try to buy something.
Overall, I have just under $1000 in gift cards if I include a $241.44 on a vanilla visa that I got through my health insurance.
February So Far
Since we’re here I might as well update you on how February is going.
It’s going great. I’ve moved to other sites and hit my $5k in inventory, made over $2k in sales, sold a bunch of shoes and identified a replenishable item.
I also talked to an accountant and found out some very interesting things. Like how I do not report cashback, gift card savings and points as income. I love free money :D. Most importantly I learned that I can just do a simple personal filing and include my business in the return. It’ll be a loss so hopefully that will give me some extra cash for sourcing.
The one thing I have not settled with myself is if I should form an LLC or do it in another state. The main problem comes from deciding where I do the majority of my business. Since I will be traveling around from spot to spot I would prefer to just have a company provide services for setup and management of my office location. I’ll be waiting a bit longer before I make a decision.
What I’m doing now
So what is my focus now until the end of the month? A lot of things. I want to focus on sourcing non-discount related items from Walmart that I can replenish, spend the gift cards, get my inventory into Amazon and continue taking a course on Tactical Arbitrage.
I’ve also just applied and been accepted for a AMEX Open Business Platinum Cared (with 150k bonus) so I’ll be holding off on a bunch of purchases until I get my card. Those purchases will include: more inventory; private label order; getting orders to get ungated in other categories; a trip to portugal for DNX; and any LLC filing fees.
Well that’s it for now, wish me luck!
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