Massive Scale Cross-Border Amazon Arbitrage

[GoldFibre]

Current SaaS MRR: $303

Daily Routine​

• FAIL Wake up early and get some fastlane work done
• DONE Listen to my motivational audiobooks when I walk my dog or do chores
• DONE Record and play back self-talk on my morning commute
• N/A Stay late at the office to get more fastlane work done
• DONE Listen to my motivational audiobooks on the evening commute
• DONE No YouTube
• DONE No chess or mobile games

Weekly Goal​

• Complete 2023 financial audit

I did some rough calculations on my escape number and compared my daily orders and profit to where I need to be. Then I added in a few milestones:


Ok, so I want to actually double my daily business by the end of the month, which sounds outrageous. My plan for immediate expansion is primarily via FBA, which means I need to buy and sell enough inventory to hit 20 orders per day if I stay at the $25 profit per order.

So far I've bought 30 items of inventory for FBA across 2 SKUs. I ran some calculations on what the profit should be:


So assuming I can sell these at the same speed on FBA, Product 1 is clearly the winner. The main reason is that I got a steep discount by buying them in bulk, but for Product 2 it was the same price per unit for 10 as it was for 1.

I would buy more of Product 1, but I already bought out all of the Amazon US stock!

I need to make incremental sales of 10 orders per day to hit my target. I doubt that either of these products will sell 10 per day even if I have the stock. So I need to buy a wider variety of items, while trying to maximize my per-unit profit.

For now I have to take an assumption about how fast everything will sell. I have sold about 7 of each of these two over the past month, and that was with 14 days shipping time. They should move faster under FBA, but I don't know how fast. I'm going to assume that I will sell about one per day for now.

So in order to hit my target I need to find and order 8 more products to stock with FBA.

Before I order anything, I'm going to calculate the per-unit profit. I will try to keep my profit above $20 per order on everything and above 20% gross margin, to limit the working capital intensity. The last condition is to avoid products that have many variations, such as clothing, since this will also increase capital intensity.

And so I started my research and here is what I came up with:


It turned out to be not so easy to find the ideal product. I will keep looking tomorrow and also focus on looking for bulk discounts.

This afternoon I went to the warehouse with my intern and showed him how to start processing the return orders for FBA. He will do this early next week. While there I also discussed a few operations points with the warehouse staff.

 

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[GoldFibre]

Weekly Update​

Weekly Goal​

• NOT DONE Complete 2023 financial audit

I submitted my financials for auditing but that was on Friday, so the auditors haven't had time to come back to me.

I also have set in motion a few expansions of my main Amazon business:

1. Started purchasing inventory at retail prices to list on the local Amazon FBA
2. Am running a trial for helping eCommerce brands expand here, using my brother's store
3. Set up a process for reselling returns on FBA

And I have a goal for the end of the month to roughly double my sales using FBA sales.

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

This is only going to happen if I can discover good products to purchase. I started this work and have profiled 6 products, purchasing two of them. I want to purchase at least ten different SKUs, so I will set a goal to help me get there next week:

Next Week's Goal​

• Profile 100 products for the retail FBA revenue stream

Separately I will continue to run the trial with my brother's store, and will put my intern on lead-gen for this, as well as on listing the returns on FBA.

 

[GoldFibre]

​

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

Weekly Goal​

• Profile 100 products for the retail FBA revenue stream (15 / 100)

After doing my transactional work I went through my recent orders to check if the products might be good candidates for FBA.

I initially just checked the profit level to see if it was decent. If it was, then I put it in a spreadsheet and checked other things. If everything looked good and it was in stock, then I ordered it. In all I ordered 5 more SKUs. I ordered 10 each, unless there were less than 10 available in the US.

I profiled 15 products since that's roughly rate I need to meet my goal for the week. If I stay late at work tomorrow I will do a lot more.

 

[GoldFibre]

​

Current SaaS MRR: $303

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

Weekly Goal​

• Profile 100 products for the retail FBA revenue stream (32 / 100)

I made a bone-headed mistake and didn't double check that all my risky listings were deleted, so I got reported for another 'Counterfeit without a test buy'. It's only one so hopefully not the start of another account ban. My account manager is trying to work on it for me.

I profiled more products and whenever I found a big discount I ordered some. In a few cases I got a 40-50% discount coupon, but only on a single item. In other cases I got a discount on up to 5 items.

My account manager gave me a list of late shipments and asked for a explanation for each one. Amazon is cracking down on bad behavior and so I imagine every drop-shipper got a similar list. I think that my compliance is much better than average, so hopefully they don't come down hard on me. I filled out the explanations and sent it back to him.

Spoke to my brother and he got the shipping up on his store and will start running ads this week. Asked the intern to also prepare pitch emails for at least 10 brands, so we can start the conversation.

 

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[GoldFibre]

Current SaaS MRR: $303

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

Weekly Goal​

• Profile 100 products for the retail FBA revenue stream (32 / 100)

I got a list of FBA suggestions from my account manager. In all there were 56 of them, but after checking there were many duplicates and only 5 unique ASINs. I had started working on a script to automate the profiling of these ASINs to see what the profit would look like, but when I realized it was only 5 I just did it manually. And then I quickly realized that all the products contain batteries, which means airlines consider them hazmat. So no way I can list them.

I got my draft audited financials and signed and stamped them. I tried to complete some tax registration, but am unable to because my license is expired.

At the advice of my account manager I submitted a POA for my counterfeit violation. The workflow doesn't actually give you this option and is another one of the Amazon catch-22 situations. He said we will keep submitting like this and he will try to push from his side to get it removed.

I had several cancelations of orders already shipped to my US warehouse. This turned the profit from two days ago to negative. But my plan now is to ship it all anyway and then throw it up on FBA when this happens. I plan to write an extension to my bot to keep track of FBA inventory and the relative profit, competition and reordering. But to start with I need to see how to get the inventory there in the first place.

 

[Subsonic]

You are the single most consistent person I've seen here in regards to posting.

As I like to say, consistency is the only way to guarantee success.

I am super curious to see where this thread is going and when you are going to reach 200k a month.

 

[GoldFibre]

You are the single most consistent person I've seen here in regards to posting.

As I like to say, consistency is the only way to guarantee success.

I am super curious to see where this thread is going and when you are going to reach 200k a month.

Thank you for your kind words!

 

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[Andy Black]

You are the single most consistent person I've seen here in regards to posting.

As I like to say, consistency is the only way to guarantee success.

I am super curious to see where this thread is going and when you are going to reach 200k a month.

Agreed. Head down, doing the work, writing up what he's doing and the results.

 

[GoldFibre]

Current SaaS MRR: $303

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

Weekly Goal​

• Profile 100 products for the retail FBA revenue stream (60 / 100)

I got my complete audited financials back, signed and stamped those as well, then submitted them for license renewal.

I got a few scary account health emails and asked my account manager about it. I got on the phone with account health support and didn't get much information. Then called my account manager back and he said he would look into it.

My intern went to the warehouse today to work on processing my returns into FBA inventory. He made a spreadsheet of all the items he could find and put in the ASINs when he could figure it out. I showed him how to find the original selling price, so now he will fill that in and probably tomorrow arrange the pickup to send those as my first FBA inventory.

I'm a bit nervous that my account will get shut down just as I'm bringing in FBA inventory, because if that happens then not only can I not sell it, but Amazon will actually destroy it after some period of time.

I thought a bit more about my metric for profit, and I feel like a better metric will consider only the money I've put in to stocking the items. I never actually put any money in for Amazon fees or tax because they are only taken out at the time of sale, so this was never my invested capital. But I do put money in for buying and shipping inventory. So if I calculate like this I can roughly see how long it would take to double my money, or how many items I would have to sell from a bulk purchase before I've covered my costs.

I profiled more ASINs until I hit 60. This is boring work and should be automated. Truth be told, I'm not actually sure what I'm looking for except for high margin products. I already know which of my products move fast, which is also important.

Had several more calls with my account manager to try to avoid getting shut down.

Had a call with my vendor in the US because they are struggling to ship some oversize packages - 8ft long balance beams and so on. I modified my code to exclude anything over 120cm in any dimension or over 10kgs, because this has been a persistent headache.

I also think I should start sending my own consols, as the way my international freight costs are calculated now are costing me extra money. I'm not sure how much extra money it is, so I will try to do a bit of analysis on it.

 

[GoldFibre]

Current SaaS MRR: $303

May Goal​

• Reach 20 orders per day, while maintaining or improving profit per order ($20, 15%)

Weekly Goal​

• Profile 100 products for the retail FBA revenue stream (60 / 100)

I had to work quite late for my full time job today, so I didn't make any material progress on the business.

I did speak with my account manager once, who said he had a call set up with someone internal from account health to try to get my account to safety.

 

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