Creating an Amazon business model

In the video below I bring up the topic of creating a business model when selling on amazon because I believe it’s crucial to your success.

What’s up YouTube, it’s Lenny from Simon Says Resell. I wanted to make a quick video about a very important topic that I wanted to give a little more explanation about, and at least some tips and tricks on kind of how to approach it, and just stress again, you know it’s extremely important, at least that’s what I believe to be successful when you try to sell on Amazon specifically. And you know if you haven’t thought about this yet, what I’m talking about is a business plan or a business model making sure that you have some sort of guidelines, some sort of process, some sort of you know boundaries that you’ve kind of come up with to be successful.

Now you will make mistakes, you will run into roadblocks, you will have issues with your business plan, it just happens, it’s just kind of how it is, but one of the key takeaways from that is not only learn from your mistakes and everything like that, but also learn and take note of your successes. All of the you know positives, all of the you know high fives, all the wins that you gain during this process, keep those in mind too because one, its motivation, it only kind of keeps you going more, but two, it kind of gives you may be another look into what to focus on more. You know if you’re successful in one area maybe try to expand on that success, and be even more successful. So it’s not just all about failures when you’re trying to adapt and learn something, you know keep in mind those successes because those can help you along the way.

So yeah, so business plan, business model, process model, whatever you want to call it, I’m just going to call it a business model for now because you know it’s kind of the term that’s been used a lot here in these videos, but when you think business, don’t get too scared, you know don’t think about Oh I will have to create an LLC or company name or do taxes and everything, that can come later, but don’t worry about it right now.

If you’re thinking about selling on Amazon, or if you already selling on Amazon, and you haven’t thought about this yet, definitely do. You know get a piece of paper, you know type it on the computer, a couple steps. I’m gonna go through very high level, it’s not all of them, I’m gonna make a separate video, maybe breaking this up a little bit to kind of go more in depth for you, but I ultimately wanted to start you off with a very high level kind of checklist on one side of the equation. What I mean by one side of the equation is the point where you decide what you’re going to do, and to the point where you have the book in hand or the item in hand that you bought, that you want to resell.

So after that comes the fulfillment part, and sending it to Amazon, but we’re not going to get into that in this video. I want to kind of focus on one side of the equation, and I say books because that’s what I’ve experience in, if you look at my recent posts on Twitter, on Simon Says Resell, on Facebook you’ll see I put a snapshot of my recent sales for January, and right now it’s January 25th and I’ve done over $3,000 in sales, mainly with books, ninety-something percent with books, and I think that’s huge, that’s awesome, I know it’s working. As far as profit goes, you know I make, I probably take home like sixty percent of that. So you do the math, that’s kind of what I’ve done, but in my opinion in order to be successful in any business really, but you know specifically with this because that’s what we’re talking about here is you have to come up with a plan, you have to come up with some sort of vision on what to focus on, you know create targets, create goals, whatever it is, it’s extremely important.

So let me get into this really quick, and I don’t want this to be too long of a video, my first couple of videos have been over 30 minutes long, and I apologize for those that seem that that’s too long, but I guess I’m so excited I have a lot to talk about, and I’ll be kind shortening them you know when appropriate. So this one’s more of a hey guys, I thought of this while I was driving and I really wanted to kind of plant the seed in your minds so you can start thinking about it as well. So the very first thing that you need to do is ask yourself and answer yourself is this something you want to do? Do you want to sell on Amazon? Yes, or no. I’m guessing yes because that’s maybe one of the reasons why you are watching this video, but that’s something you got to ask yourself, is this something you want to do? Whether it’s just extremely extremely part-time, like almost like a hobby, to part-time, or even full-time, whichever one you think you want to do, just kind of decide on that you know for now, it may change, it may start off a part time and may go to full time, you may start off full time, you may go to part time, who knows. But ultimately I want you guys to kind of motivate ourselves, and just logically think that I’m gonna be doing this, set yourself a goal, this is what I decided to do, tell your friends, tell your family what you’re doing because another side of this is the support system that you will hopefully get, and is really helpful when making a decision like this. You know whether it’s going to school for a degree, studying for a certification, doing something amazing you know, some sort of accomplishment, having the support of your friends and family is you know extremely beneficial, that’s priceless.

So that’s one of things I did. For me, for myself kind of awareness I said, you know what I’m gonna do this, I’m gonna do it until I know for sure that it’s not gonna work out or until I fail, whatever, or fail miserably, but you know failure is not an option for me most of the time, so I try to go above and beyond when I can.

Anyway, support system is extremely important, tell your friends and family, so that’s kind of number one is self-awareness and a support system, not only yourself but your friends and family.

The second thing is that’s kind of when we start diving into more of the Amazon world, so the second step I would probably look into is what type of Amazon seller account you’re going to be creating? So Amazon, to make all this happen, to sell all your items, to look at how much you’re reselling them for, to list them, that all happens in a portal, you know called the Amazon Seller Central. With that type of portal, that account there’s two types of accounts you can do, there’s a regular account and there’s a pro account, professional account. The professional account is about forty dollars a month, it has a bunch of benefits and perks to it as opposed to the standard one, you know it doesn’t cost as much, but they take a bit more out on your fees and stuff like that. I’ll try to dive into little more about that later, but I just want to kind of bring that to your attention. Create a seller account, whether it’s pro or not, look at the details and I’ll try to do another quick video soon to kind of explain it more, but if you just Google Amazon seller account benefits or highlights, whatever, you’ll find some information. So get a seller account, get it signed up, you know get this ball rolling.

Once you get a seller account, you then have to ask yourself before you do anything else, what type of fulfillment or shipping do you want to do? There’s two types, there’s merchant fulfilled, and there’s amazon fulfilled, which is also known as FBA, Fulfillment by Amazon. So merchant or FBA, which one do you choose? I don’t know, maybe you don’t know, and that’s fine but I’m here to explain it more to you and other videos that I’ll be creating I’ll explain even further, and I did mention in a few other videos that I’ve done already, merchant fulfilled in a nutshell is you keep inventory in your own house or your own warehouse, you pick it, you pack it, you ship it when it sells. You handle the customer service, and the fees, yeah the fees may not be as much, and its kind of negotiable as far as comparing it to, I have my own opinion and other peoples have their own, but that’s kind of mainly merchant.

Merchant is you are the merchant; you handle everything basically. Yeah, so that could work for some people, and some people might not. I started off as merchant, because that was the, you know the least expensive you know minimal risk way of trying this whole Amazon selling thing with books mainly out. So if you want to follow the same steps I did, I’ll be more than happy to guide you, if you don’t, I’ll be more than happy to guide you to kind of give you other suggestions because I read a lot, researched a lot, so I have some ideas myself. But Fulfillment by Amazon or Merchant Fulfillment, those are the two things you kind of got to choose. You can do one or the other or both actually the same time but I would kind of make it as simple as possible, and the least amount of expenses in the beginning is go for one, maybe merchant, maybe an FBA, whatever.

So you choose a fulfillment type, ok so you thought to yourself I’m going to do this, you signed up a seller account, you decided what fulfillment method you’re going to choose ok, what are you going to resell? What do you want to put on Amazon to resell, and make money off of? Tons of categories on Amazon to choose from, which one do you want to choose? Really depends on kind of location where you live, what your interests are, what are you familiar with, some of your experiences with some of those categories, I chose books, and most people choose books, and I highly recommend starting off with books because they are low-risk, you now very few returns, pretty decent profit margins for the most part, and they’re easy to ship. So that’s kind of a no-brainer, why wouldn’t you do that? So my suggestion is, if you’re wondering what to resell, start with books. Now, it may depend on where you live, you may live in a place that doesn’t have access to many books, and that could be a problem. So maybe you shift to another category, that’s kind of my approach here to kind of help you out as best as I can.

Ok, so now you decided books, what books are you gonna resell? What books you are going to search for, and resell? Let’s start with the very top, nonfiction or fiction? You can ultimately do both, based on my experience and based on other people’s videos, and watching them, nonfiction does better meaning there’s more profit to be made, there’s more of an opportunity there ultimately, because with fiction books you can kind of consider the mass market, you know like the Twilights and the Harry Potters and the romance novels, you kind of want to stay away from those unless you get them dirt cheap, but even then people are selling them for a penny plus shipping, and I’ll get into that another video, how they’re able to sell them that low or that cheap.

So what type of books ultimately you want to choose, I would start with nonfiction, text books are huge, they can have some potentially large profit margins, cookbooks are pretty good, but you know anything really, self-help books, how-to books, career books, business books, financial books, stock market stuff, how to handle your teenager, stuff like that. Those are great books. Some do better than others, and you know from experience you just kind of learn that, and I will go through that myself in another video.

So you chose books, you chose nonfiction to focus on mainly, now if you come across the deal where you can get your hands on some really cheap fiction books, go forward, what you got to lose? Some money but hey, a couple books and that whole of books you get cheap may pay for the whole thing you may be able to make money on. For example, I went to a book sale the other day and I have a little snapshot of my hall after the fact in one of my other videos, I got 450 books for sixty dollars. So that was pretty good, what else could we go for non-fiction books, and those are nonfiction books by the way. Would I go for them ultimately? No. I wouldn’t, but I got a really good deal on it, and I was like what the hell? Sixty bucks, 450 books, about thirteen cents a book or so you know, I can sell a couple books and I kind of make up the money, so I’m not too worried about that. So if you come across an opportunity like that, go for it, if not, focus on the nonfiction.

All right, so you’ve decided nonfiction mainly, where do you go? Where you go to get these books? You go to a friend’s house, you to Target, where do you go? Many people have their own favorites, my favorite is Good Will. I live around 12 different Good Wills, the closest one is about two miles away, they at least have 400 books at any given time, yeah at least 400 books at any given time, and it’s a pretty good opportunity for me. The next one from there will be Salvation Army, there’s only a few of them around me, the books are ok, they don’t have as many, but they do have like half off days and stuff. So it really depends on location. So if you live somewhere where there’s more Salvation Armies than Good Wills, then maybe Salvation Armies are your number one. I try to mix and match the best I can, so other than that you know you have garage sales, thrift stores, things like that, so those can be other opportunities for you as well.

So let’s say you pick Good Will, just in this little flow we’re going to right now, ok. So we are going to look for non-fiction books at Good Will. Once you get there, what do you do? You’re standing in front of a bookshelf, 400-500 books, what do you do? How do you know which books to pick? Well, the cheapest thing to do is if you have a smartphone like an iPhone or Android, you download the Amazon Seller Central App, which is free, I think with the pro account, it may be free with the other one, but don’t quote me there, you may have to, I’ll double-check on that as well. You download the app, it’s syncs up to your…  you know it’s an app that uses your camera, you flip the book around to the bar code on the back, you scan it with the app, it comes up with some information about the book to let you know how popular it is, you know how much you can sell it for, or how much it’s selling for, so information like that. There’s different variables and attributes involved when making a decision. So after you scan the book, you have to make a decision, is this the book I want to buy, to resell? Or am I going to pass this book completely? So some of the attributes that are very important are sales rank. Sales rank is like a snapshot in time, it kind of tells you when the last time the book sold, whether it was an hour ago or two years ago. So lower the sales rank number, the better. So if I have a book for 600,000, and if I have a book for 5 million, the 600,000 may have sold in the last week or two, the five million one may not have sold for a year or more. So based on your business model you may choose the 600,000 one as opposed to the 5 million one, but there is other attributes you’ve got to look at is the competition, also the profit.

You know maybe this 5 million rank book may not be your first choice, but you can sell it for 80 bucks, and you bought it for a dollar at Good Will, so there you go, there’s some decent profit. It may not sell right away, but it may be worth just keeping on the shelves, and selling, and listing. But the 600,000 rank book may be better for a shorter sale, and may not be as much of a profit, so it maybe only make five, ten, fifteen dollars, but it’s still a decent book. So there’s sales rank, there’s competition, how many other people, how many offers are out there, there’s cost of the book itself, did you pay a dollar or two or more, I tend to usually don’t pay more than a dollar or two for a book, but have another business, part of my business model that I’m doing now is I hire Book Sorcerer’s in my areas to go to those many Good Wills and Salvation Army’s so I don’t have to, and I pay them per book based on the app and stuff, but I’ll get into that, that’s one huge piece of my business model, that’s been really really good for me, less time that I have to spend at Good Wills, I get really good books a week, I’m averaging maybe 200 books a week, without going to a Good Will myself, so pretty good.

And then there’s the shipping cost, you know if you buy a textbook it’s heavy, that costs more to ship, so you got to keep these things in mind. So those are the different kind of attributes you are going to think about. So this is kind of where I want to stop, as far as you know the business model from here. So this is the first side of the equation, you know to the point where you decide you want to do this to the point you have the book in your hand, either deciding to sell it or buy it or not.

The other half of the equation is the fulfillment part, it really depends on what method you choose, whether it’s merchant or FBA, and I’ll create another video to separate those two to help you out.

So I really hope this helped out a bit to kind of give you an idea of what the process flow is, you know the mindset and things like that, I really hope you guys have some questions, you know add some questions in the comments, definitely like this video if you enjoyed it, please subscribe so you can kind of keep up with the videos as I make them. I really appreciate you guys tuning in and watching this.

Again, this is Lenny from Simon Says Resell, and talk to you next time. Bye!