How We Lost $40,000 So Far This Year

Here’s what’s happening with our Amazon sales right now.

So far in 2018, we are about 33% DOWN from last year. This is about $40,000 less than the same time a year ago.

What happened?

Long ago, when we were getting our eBay business up and running, we found a niche product that started doing pretty well for us. We bought it from a closeout dealer.

Now, a closeout dealer, or broker, or specialist, buys up someone else’s inventory mistakes or miscalculations. Often, it might be a company’s seasonal clearance, or it might be last year’s models, or maybe someone went out of business.

These brokers buy up this inventory for 10-cents on the dollar. They then sell it to us for 20-cents on the dollar. We sell it to the public for 50-cents on the dollar.

Everybody’s happy except for that first guy who spent the first dollar.

The reality is that we try to sell our closeout buys for what the market will bear.

In the case of this niche item, we bought it for 75-cents and sold it for $10.

And we sold and sold them.

Last year, from Dec 1 2016 to Apr 25 2017, we sold $52,000 of this niche. Of our top 10 sellers, this represented 8 of them. Our top 10 was $70,000.

The only problem with relying on closeout merchandise for our inventory is that there is a limited supply. We often bought up all there was of a particular design, then went on the hunt for more. When we found them, we bought them all up.

One time, we bought 3 pallets of them — and sold them all.

But, supply eventually runs out. Our brokers were always on the lookout for us. We found a new source, but for $5.00, not 75-cents.

We don’t have the inventory anymore. If we can’t get it, we can’t sell it.

The result is that only 2 of our top 10 this year are from these items. In the comparable period this year, we’ve only sold $12,000 of them. There hasn’t been anything else we’ve found that sells as well.

Did you do the math? These missing inventory items are exactly the missing $40,000 sales from a year ago.

We are scrambling trying to find new sources for this niche, including heading overseas (not literally) for Private Label manufacturing.

The lesson?

Find and sell profitable products. Keep on looking for more of the same. Don’t rely on a single niche to sustain your business. Explore new niches to find new products. Don’t have “tunnel vision” to focus on a single product.

We’ve made plenty of profit over the years finding and selling other people’s inventory mistakes. Now, we have to be sure to not make our own mistakes so we can remain profitable.

John L

1 thought on “How We Lost $40,000 So Far This Year”

  1. John, Nice Post! Hope this will help others too!

    a. Not predicting – Sales velocity and forecasting (this would have helped you to start searching for sourcing/manufacturers in advance)

    b. Product Ideas – it’s always tough to do this systematically and find the gold


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