Should I Spend £8500 On Stock?

Hey, how's it going? It's Ollie here. Welcome to the Ecommerce Freedom Podcast. Before we dive in with today's episode, I've got two cool resources for you. The first one is my new E Commerce Q and A group on Facebook. So in this group, the point is, you ask questions in the Facebook group and I answer them with daily videos, okay? So you can get your questions answered really, really, really quick. It's a great resource. If you go to ecommercefreedom.com and look at the top of the page, you'll see a button for the Q and A group. Click on that, it will take you to the Facebook group. Second resource I got for you is an Amazon accelerator call. So what I'd love to do with you is talk about your goals, talk about where you are now and talk about the stuff that could prevent you from hitting your goals right together. On a strategy session, we will come up with a plan for you to replace your income with an Amazon business. If you'd like to book a call where we can do this, go to ecommercefreedom.com, look at the top of the page and click Amazon Accelerator Call. You'll be taken to a very short application page. You can fill that in on the next page. You should be able to book your call. Alright, hope you really enjoy the episode. Hey, how's it going? It's Ollie here. So today we've got a question from Andy and Andy asks, do I reorder a private label product which is making £200 per month minimum order £8,500 or do I find new products to launch making possibly 2 to 300 pounds per month each for a lot less outlay goal is to have 4 products giving 1k profit per month. So first of all, Andy, welcome to the group. Thank you very much for this question. I was quite excited when I saw it, so I thought I could really help you here, give you a decent answer and it will probably help out a lot of the other members in the group as well. So first of all, let me just get clear on your figures. Okay? She got a product right now which is doing £200 profit per month, assuming. Right. Because if it was £200 sales, probably wouldn't be considering reordering. I'm going to make that assumption. If I'm wrong, let me know and we can tweak the answer. But let's go ahead with that assumption. Okay? So first of all, whenever I'm launching a product, I aim on average to get thousand pounds profit per month. And there are a lot of niches in the UK where this is entirely possible. Right. So your products relatively low on the profit level we would aim for. Now there's actually nothing wrong with this because at the end of the day, profit is profit. I mean, you might have a goal you want to hit with your business, whether it's to replace your income, whether it's to grow something you can sell, whatever it is you have a goal. And that goal includes a certain level of profit that you want to hit per month. In total, whatever that number is. We all have a number. It's 5k a month profit or whatever. So whether you have to launch five products that do a grand a month each, or 20 products that do less amount each. Right. Can't figure that in my head this quickly on a video. But no matter how many products you have to launch, as long as you hit your profit levels, it's fine. So it's not necessarily a bad thing. However, if you have to spend £8,500 on a reorder to get more stock for this product, then we have to think very carefully before doing that because it's going to take you a long time to get £8,500 back if the products only making you £200amonth. I believe that, number one, there is a cheaper way you could reorder. I think you should try to find a cheaper way to reorder that product. Right. £8,500 is a lot of money for a reorder for a product that doesn't do too well in the grand scheme of things. So there's a few things you can try. Number one, negotiating with the supplier. Now I know sometimes this can be a non starter if the supplier just will not budge. But it's always worth trying. If you haven't work, haven't tried yet, negotiating a smaller minimum order, that might be worth a shot. Another option you could have is find another supplier. I'm assuming the product that you have is a private label product. And in order to make the product, a lot of these manufacturers have a set of templates that they use to create products. Whether it's molds, whether it's, you know, designs for the way the fabric is shaped or, you know, depending on what the product is, they'll have a template for how to build it. Right. So loads of factories will probably have the same template and they have like a pool of templates and they can pull any one of them out and make a run of your product. And so what I'M saying is you can get the same thing from another supplier. The chances are that that other supplier will be able to give you much smaller quantities of this product and pretty much give you the exact same result. So I would do that before placing an eight grand order. I would do that, you know, contact another 20 suppliers out there, really do your due diligence, contact as many factories as you possibly can and just get quotes from all of them. What you might find is someone can make the exact same product for cheaper with a minimum order quantity that's lower, and they may even have, you know, better shipping, better communication, they might be nicer, like, who knows? If you're only speaking with one supplier, then you only know one person's version of how to produce this product. And you might not be seeing the big picture. Now, I don't know how many suppliers you contacted to find this product, but if you haven't contacted many, then there's probably an opportunity here to, to restock cheaper. So I would look at that and yeah, if you're gonna restock, I would probably order a smaller amount with this product. So that's what I propose you do. And with your goal, right, you want to get to a thousand pounds profit per month. I would start looking in niches where the demand is a little bit higher because you could launch a product that does a thousand pounds profit per month on its own. In fact, if you look at Suja's interview, this is 100% proof that this stuff is possible, right? Because she has four products on her account and on average each one does a grand a month, even on a slow month. So this is entirely possible. But you have to look in niches where there is a possibility to get that many sales. In other words, we want evidence that other sellers are doing a grand a month profit with their products. Usually this means there's at least three sellers in the niche who are doing three grand a month in revenue, right? And we can assume that a third of that revenue is profit, not always the case, but as an average. And therefore they'll be making a grand a month profit each. And if three sellers are doing this, then you can come along and be the fourth. As long as you add value to the marketplace. Separate yourself, establish yourself well, create a great listing and, you know, do everything right. So I would re establish this goal. And look, you don't just want to have one product, obviously you want to have several because then it's safer. Just in case one product tanks or the supplier doesn't want to work with you anymore or the competition comes in or whatever it is. It's good to have several products on the go, but aim to make a grand a month with each one. Then maybe launch two or three and get to say two or three grand a month profit. And then it makes a lot more sense to spend eight and a half thousand pounds on a reorder because it takes you much less time to get your money back and you get a much bigger roi. Okay, awesome. Alright, hope this helped you Andy. Hope this gave you a few ideas of what to do next and a few things to try. If you found it helpful, make sure you let me know in a comment below. And by the way, if you watch this video outside of my Facebook group, then click the link above or below this video, depending on where you're watching it, and you can join in the group. You can ask a question just like Andy did, you can get your answer directly on a video like this and you can join a community of really cool Amazon sellers. All right, have an amazing day and we'll speak very soon.