I’m super thrilled to announce I’ll be participating in a new Private Label challenge dubbed Jungle Quest: The Journey to a Million Dollars ! 🙂
Jungle Quest is a challenge Greg and I laid out to make a Million Dollars in sales on Amazon within a year of the first product being delivered to Amazon’s Warehouse.
After graduating in 2010 I quickly joined the Entrepreneurial journey both offline and online. My first online venture was in 2011 when I set up a plumbing supplies drop shipping business on Amazon.com. It was a great feeling making a few sales a day, but I knew it was a constant battle to compete with other sellers not only selling the same product, but listing it below the MAP (Minimum Advertised Price). I made my exit and started a successful Liquidation Export venture that was a little more hands on.
It involved purchasing wholesale secondhand and customer return items from major retailers in the U.S. and exporting it to the Free Trade Port of Jebel Ali, located in Dubai. From there it was sold to traders in Central Africa and parts of the Middle East. While I absolutely loved the International Arbitrage side of the business, scaling the operation would have been directly dependent on the size of the warehouses, number of employees, and equipment such as heavy duty forklifts.
Enter Private Labeling and selling on Amazon. The upfront work is not a walk in the park. One must dedicate careful analysis towards product research, selecting suppliers, negotiating rates and importing, however once this part is done, It is incredibly friendly to scale and grow. With this business model, the Seller is not limited by warehouse space, equipment, employees, etc. Amazon handles all of this 🙂
So for the incredibly ambitious reader and myself, what really is holding us back? Yes, more private label sellers are coming on board, but so are product ideas and opportunities, so are millions of more Amazon prime customers. Amazon continues to grow. In fact Amazon added 10,000 new jobs in Europe in 2015, and the interesting thing is that the U.S. marketplace is still growing at a faster rate than the International Marketplaces.
So when I met Greg in Hong Kong and Guangzhou during the Canton Fair exhibition this past October, our optimism and positive outlook with private labeling on Amazon led us to choose an ambitious but totally achievable number in $1,000,000.
Background on Amazon Today
Impossible is nothing! I don’t think $1 Million in sales is impossible. Here’s why: Amazon’s customer base is growing quickly! Consider the following:
- During the third week of December, Amazon added 3 million new Prime members and set a new record of 200 million products shipped as part of the Prime Shipping program.
- To improve shipping, Amazon experimented with a program named “Aerosmith” in which Amazon operated 4 cargo planes out of highly sophisticated facility in Wilmington, Ohio. The experiment has gone so well, Amazon is mulling the option to lease 20 Boeing 767 jets as reported by the Seattle Times.
- PrimeNOW, a service that offers thousands of Amazon products to customers in a one-hour to two-hour delivery period, has plans to expand past the current 20 cities, and the catalogue eligible for Prime now deliveries is ever growing.
What these numbers mean to us is that our sales goal is not as daunting as it initially sounded. Although it will be challenging, we are confident in our business plan and the popularity of Amazon to help us succeed. Over the next year, we plan on documenting our Jungle Quest journey, and are asking you to come along for the ride.
Our Strategic Plan and Schedule
For future reference, here are the details of our plan:
Our goal is to generate a million dollars in sales within 12 months of the first product arriving in Amazon’s Warehouse (May 15th 2016-May 15th 2017).
We will be initially offering a minimum of five products whose selling price is in the $30+ range at expected 30% margin (or roughly 75-125% ROI). In order to better gauge sales, we have broken the year up into three distinct periods:
- Period One: Months 1-5 (May 2016-October 2016)
- Period Two: Months 6-8 (October 2016-January 2016)
- Period Three: Months 9-12 (February 2017-May 2017)
We are expecting a huge boost in Period Two due to holiday sales. We are hopeful the age of the listing and the rank boost from the holiday sales will translate to a successful Period 3.
Our initial five products will be manufactured in China and shipped to the FBA Warehouse designated by Amazon. In order to hit our target delivery date of May 15th, we will need to get the prospective factories lined up as soon as possible. Why? The Chinese New Year.
Our First Challenge: Chinese New Year
Despite its name, the Chinese New Year is actually a holiday that is celebrated over the course of several weeks. It celebrates not only the turn of the lunisolar of the Chinese Calendar, but is also a spring festival. Chinese New Year is a very important holiday in China and if you are Importing and selling on Amazon I am sure you already see its impact!
So how does this affect the Journey to a Million?
In order to celebrate the New Year, most Chinese factories close for several weeks. This year, the Chinese New Year begins on February 8th, which means the first several weeks of our 2016 Quest will be quite hectic to say the least! Factories are already backlogged with orders, and many of the workers will not return till the first week of March.
With a 30-45 day lead time and 30 day period to ship by sea, we have our work cut out for us 🙂 If we are to meet our May 15th delivery date, we need Chinese factories to begin production of our products immediately after they return from their holiday. This means that we will have to order and inspect sample products created by various factories in China as quickly as possible.
Your Role (The Reader) In The Journey
During this Journey, you will learn the logistical and organizational side of importing and profiting while Private Labeling on Amazon. You will get a front row view into the tactics, tips and strategic decisions we encounter on a day to day basis so that you can grow and build your empire into an incredibly prosperous venture 🙂
For example, to work around the perceived challenges and limitations imposed to us by the Chinese New Year, we will incorporate a few fun hacks:
We will be enlisting the help of some contacts in China with the goal of minimizing the impact CNY will have on our goals. These people are going to be responsible for receiving and inspecting each sample in China. This saves us around the average 5-7 business days it takes to import and inspect a sample. This tactic also lowers shipping costs by shipping domestically within China instead of to the U.S.
The same people will also at times be used for payment. When a sample fee is paid in the USD, the receiver (supplier) is responsible for filing paperwork then waiting 3-5 days to receive payment in the local currency (RMB). By converting our currency to RMB before paying our supplier, we hope to eliminate this 3-5 day waiting period.
Stay tuned for more information as we document updates, challenges and successes Jungle Quest has over the course of the next year.
Wish us luck!