Wednesday, January 4, 2017

Turnover Tuesdays - 2017 Goals

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

The previous posts in the series can be found at the bottom of this post.

2017 Goals

All the cool bloggers were putting in their 2017 predictions.  I have no clue how other companies are going to react in 2017 other than Amazon likely increasing storage fees again, doing something more to combat counterfeits (it's a big problem - just look at all the one star reviews on Speak Out game of Chinese fakes).  I do, however, have some idea on what I would like to do in 2017 so here it goes.

More Distributors/Wholesalers/Manufacturers

I've been slowly increasing the number of distributors I use throughout 2016 but that was mostly on hold from September on in 2016 as I was mostly preparing for Q4 and didn't have much extra time to dedicate towards that end.

I plan to spend a lot more time this year focused on cold calling companies, going to shows to get contacts and other activities to move towards the wholesale business.

There are a few reasons for this but the main one for me is protection.  As Amazon starts cracking down on counterfeiters, they are asking for more invoices from distributors and/or manufacturers to prove that you are an authorized reseller.  It's not crazy to think that Amazon may decide to continue increasing brand gating even for old sellers.  If you don't have the distributor pipeline, your business may go kaput.

In addition, usually you can get better prices when you buy wholesale or direct from manufacturers and you can undercut the competition and they can't compete with you.

I also would like to have more replenishables in general so that my business has a greater autopilot aspect to it.  If you are always chasing the next sale, you really don't know what your next month is going to look like.  You still don't know with replenishables but you have a much better idea.     There are other ways to get replenishables, but distributors/manufacturers is probably the best way.

I would like at least 10% of my sales this year to come from distributor deals.  I don't think that's unrealistic.

Decreased Storage Fees

Last year was not a banner year for me in terms of paying storage.  If you include Long Term Storage Fees, I had about $7,800 in storage fees, $2,500 of which came from November storage which means I have a big bill coming up from December storage as well.  That really affects your profitability and it's just too much.  I wish I had that extra $7,800 in my pocket.

My goal for this year is to lower my storage fees for 2017 below my rate from 2016.  I don't think it's terribly realistic since I will have the December storage fee hit in January and Amazon added Q4 storage to October but I will do my best to get it down.  I also will have two chances at Long Term Storage Fees, in February and August so again, not terribly realistic.

I've already decreased the number of units I have by 25% since the beginning of December and the drop is continuing daily.

I've already outlined my strategy for decreasing fees.  I am selling out my larger items more quickly, focusing on smaller items and I've begun to rent space so that I can buy items when they are on sale and send them in as they sell.  This should lower my monthly storage fees and significantly decrease Long Term Storage Fees since most of my units will not have been at Amazon for too long.  In addition, it will decrease my October and November storage (hopefully) if I store for a few months and send everything in mid to late November.

Increased Sales but Not by Much

In 2015, I had $316,000 in sales but I only started selling in April and that month was only $1.5k in sales.  2016 I was able to increase my sales to $594,000.  Considering the extra months of selling, it's not such a tremendous difference, less than 200% increase with many more months.  That being said, I went from 2,560 units sold to 15,828 units sold.  That's a more than 600% increase in units.  I'm proud of those numbers.  I'm selling a lot more items that are inexpensive.  Those trends will likely continue.  I hope to sell 1.5x more units with sales prices increasing slightly to $650k (random guess).  We'll see

Decreased Returns

As I've chronicled here, I'm on a crusade to decrease my returns and so far it is working.  Last year I had $8k in returns in December on $113k of sales.  This year, I have $5,600 in returns on $136k of sales in December between this month and the first three days of January.  Many of those returns include items I shouldn't have bought since they were pricey or items from old inventory that I would never have bought again.   I also had $3,500 in returns in October and November 2016 combined compared to close to $7,000 last year during those months so I'm on the right track but it's got to go down more.  I hate dealing with returns, such a pain.

I want my returns to go down to an average of $2,500 a month compared to last year $4k a month, that includes my prediction of increased sales.

Selling on Walmart 

My latest venture has been to sell on Walmart.  My goal to start has been to earn a profit of $500 after all expenses monthly so that I can breakeven on my storage facility and decrease storage on Amazon without costing me more in rent.

I'm looking to have 12-24 consistent items that I sell on Walmart monthly by the end of next year.  An increase of 1-2 items per month.  We'll see.

Private Labeling?  My own eCommerce site?  Probably not for 2017 but who knows!?

What are your 2017 goals?

Week 64 - The Buy Box
Week 65 - Amazon Restrictions and the Future of Selling on Amazon
Week 66 - Fun with Inventory Reimbursements
Week 67 - Q4 Storage Fees
Week 68 - Start Your Own Listings
Week 69 - A Long Tail Sale and Calculating Storage Fees
Week 70  - Prices Always Come Back Except When They Don't
Week 71 - Past Performance is No Guarantee of Future Results
Week 72 - Automation Beyond Amazon
Week 73 - Some Quick Holiday Tips
Week 74 - Update on Miles vs. Cashback Opportunity Costs
Week 75 - Pricing for the 4th Quarter Madness
Week 76 - Returns, Returns, Returns
Week 77 - Reimbursement
Week 78 - Q4 for Accelerated Inventory Turnover