Help!! I feel stuck in a rut!!
I just started my FBA-only business in January, and things seem to be going very well. I am doing this as a side hustle by myself from home, but have formed an LLC and am sourcing products from wholesale distributors.
I had $5000 of seed money I put into the business, and after just 3 or 4 months I am now making quite decent profits of $1500 to $2200 a month (that was April), which gives my family and I plenty of breathing room in our budget–that was the goal. However, I have not yet been able to take any pay from the business because I’ve been reinvesting in inventory. I do plan, however, to take a paycheck starting in June, perhaps at a rate of 50% of profits until I have basically repaid myself the original $5000 I put in–then I will take 100% of the monthly profits as pay. After all, I’m not trying to scale up.
The niche I’m selling in is arts and craft supplies, and I am basically looking at my competitors (I’m pretty sure we have the same distributor) and buying the same products they are and offering them for lower margins (my method is basically minimum 15% gross margins including shipping to FBA, + $0.50/unit for my efforts in prepping).
However, I feel like I’m stuck in a rut. I’m really only selling 3 brands (and brands I’ve never personally heard of). Probably 80% of my profits are from one brand with 20% from the other two if I had to guess. My biggest fear is that this one brand will disappear or prohibit sales on Amazon and then my business is basically going to be done for. I just want some steady cash flow coming in.
I’ve been trying to branch out to toys, but I’ve done a couple test buys with a distributor and it seems like I cannot trust their delivery directly to FBA because each time there have been damaged units (5-10% or so each time) and I don’t want to be dealing with poor feedbacks or possible suspensions.
I also wanted to try grocery (like imported candies, etc.) but I think it will be difficult to get an account with a wholesaler given that I only do Amazon sales. Also, my state would require me to register my home as a “food warehousing facility” subject to surprise inspections. Not ideal.
Anyone else feeling the same way? Any tips on ways to diversify the business or how to approach this?? Or maybe I just need to see a therapist and be thankful?