It is generally accepted that in order to maximize the growth of your Amazon FBA business you need to concentrate on these two things:
(1) By getting better at product sourcing, at selling and at increasing turnover
(2) By spending more money on inventory and stock
That sounds about right, doesn’t it? But what if that wasn’t the full story; what if there were other pillars that support your Amazon store that if you get right can grow Amazon business and ensure that your account remains strong and healthy.
Well, there aren’t.
Don’t be silly, of course, there are. Otherwise, this would be a very short blog post.
By establishing and maintaining these additional pillars you are giving yourself the biggest possible advantage over your competition – many people will just concentrate on product sourcing and selling as much as they can.
This blog post, which is really focusing on Amazon sellers who use online and retail arbitrage methods (although they key takeaways can work for any business) will walk you through the foundations of running a real Amazon business successfully. Next month’s blog post will run through the remaining two pillars to ensure that you have everything in place.
Understand Your Processes
Before you can understand your processes you need to take a step further back than that. Make a list of your processes so that you know exactly what it is that you do. You may not think that you have that many, but once you break it down you start to realize how many different aspects form part of your daily, weekly or monthly work schedule. Examples could include:
– Running scans on sourcing software to identify profitable online arbitrage products
– Reviewing the results of those scans
– Listing products on Amazon
– Setting up everything on your repricer
– Receiving and checking your stock deliveries
– Creating shipping plans
– Prepping and sending stock
– Managing customer questions, feedback etc.
– Reviewing stranded and unfulfillable inventory
– Dealing with returns
– Preventing excessive long term storage fees
– Reviewing and taking action on your Amazon reports
(if you are now saying “What reports???” see screenshot below for example)
And those are just some examples, and just for online arbitrage. If you do retail arbitrage, wholesale, private label etc. you will have a load more on top of that.
Now you know why running your Amazon business is hard sometimes, why all of your time, thoughts and energy are devoted to it. Once you break it down you start to see what is really involved, and if you are working by yourself or as part of a small team why it can be tough to grow Amazon business and expand – because you’re running to stand still.
What we’re going to do next will involve some work upfront, but will ultimately let you become far more efficient as a business and is the foundation of every successful enterprise that I have been part of.
Documenting Your Processes
Don’t worry, this isn’t going to be as time-consuming or tricky as you might think, but it’s something that can make a big difference if you do it and get it right, for two key reasons:
(1) By being able to view and understand our processes, we can easily identify where it is possible to make efficiencies
(2) By having documented processes, we can easily follow them and carry them out the same way each time we do them. Which means we should have consistent results. This allows us to be able to continually rinse and repeat the things that work well for us
(3) Having efficient, documented processes allows us to easily outsource those parts of our business which take up time but don’t necessarily require us to do ourselves. This is a key aspect of being able to scale and grow Amazon business, because if we don’t have time to focus on the areas that “add value”, we will just be continually running to stand still
How you do this is up to you. I prefer to take a full process flow approach using online software (free options include Lucid Chart and MeisterTask), but you can easily do it just by writing each step of each process down in a Word document or sketch it out in a notepad.
However you do it, I would recommend at first doing it quite high level, then breaking it down into more detail.
Your first draft, for Product sourcing as an example, may look like this:
Run product sourcing software
Check product sourcing results
Purchase and list products that I want to buy
Once you start adding in more detail, it then becomes:
Create schedule of online stores to source at
Add in product filters (e.g. minimum ROI, net profit etc)
Run product scan
Identify and remove product mismatches
Identify products that do not have positive historical sales rank data etc
So you can start to see the individual steps more clearly. You can even assign a “time taken” value to each step, so that you know how long you are spending. Why this is important comes into play in the next step.
Making Your Processes More Efficient
Knowing what you are doing and how you are doing it is crucial to developing efficient processes.
Efficient processes mean we can do things quicker, with less effort and still get good or better results each time we do them.
So if we continue to use the example above to see how we can make the process more efficient. In our first process flow, we just had “Run Product Sourcing Software” as an action.
By thinking in a bit more detail about what that actually means, we realize that we are just running searches in a random fashion, picking stores and categories without really thinking about it.
This then leads us realizing that if we create a schedule for sourcing, targeting products that we know are more likely to work for us, and follow that schedule we are going to end up with much better results.
This gives us our first type of process review result – identifying better ways of doing things. If we do this through all of our processes we can fairly quickly be making significant overall improvements.
It also allows us to be able to identify processes or parts of processes that take up a lot of our time. This is where we have two choices – find a way to do it quicker, or look to see if it is something that we can outsource.
In next month’s blog post we will investigate how to use the work we have done on documenting our processes to identify what and how we can outsource, and how we can plan the way we work better to maximize our opportunities to truly grow Amazon business.
Biography: Dan Ashton is an experienced Amazon seller and entrepreneur. Due to the success of his online businesses over the past two years, Dan has moved from Liverpool, UK to the beautiful Mediterranean island of Mallorca, where he continues to work to build and expand them further. Dan shares his experiences and helps others to establish their financial freedom via his website www.danashton.co