Picture this: you’re embarking on a journey from the starting point to the illustrious finish line. But hold on – it’s not just a straight shot. It’s more like a sprawling maze of possibilities, with numerous paths twisting and turning before you. Each path, like a hidden adventure, comes with its own set of costs that stand between you and your ultimate destination.
Similarly, the inventory You purchase has different Routes to go through toward Amazon FBA and has a different level of costs associated to it, which impact your Cashflow timelines and Profitability.
Here, there are three key considerations:
🚚 ROUTES:
- Supplier to Amazon
- Supplier to Preparation Center, then to Amazon
📦 PACKING WAYS:
- Boxes only
- Boxes on pallet(s)
🚛 SHIPPING WAYS:
- 3rd party courier shipping — This includes supplier courier, prep courier, or your courier
- Amazon collection
By combining different aspects of the three factors mentioned above, we generate various types of arrangements, each carrying distinct implications for Time, Money, Effort, and Risk costs.
- ⏰ ‘Time Cost’ signifies the duration needed to make inventory live on Amazon.
- 💰 ‘Money Cost’ represents the expenses incurred in making inventory live on Amazon.
- 🏃♂️ ‘Effort’ indicates the extent of work required from either you, your service provider, or others throughout the process.
- ⚠️ “Risk” refers to the likelihood of encountering issues or the probability of unfavorable outcomes.
There are nearly 8 arrangements that we can have, including:
- 🚚 Route: Supplier to Amazon; 📦 Packaging: Boxes Only; 🚛 Shipping: 3rd Party Shipping — Supplier Ships to Amazon Warehouse
- 🚚 Route: Supplier to Amazon; 📦 Packaging: Boxes Only; 🚚 Shipping: Amazon Collection for Amazon Warehouse
- 🚚 Route: Supplier to Amazon; 📦 Packaging: Boxes on Pallet(s); 🚛 Shipping: 3rd Party — Supplier Ships to Amazon Warehouse
- 🚚 Route: Supplier to Amazon; 📦 Packaging: Boxes on Pallet(s); 🚚 Shipping: Amazon Collection for Amazon Warehouse
- 🚚 Route: Supplier to Prep Center to Amazon; 📦 Packaging: Boxes Only; 🚛 Shipping: 3rd Party — Prep Center Shipping (We cover the Shipping) to Amazon Warehouse
- 🚚 Route: Supplier to Prep Center to Amazon; 📦 Packaging: Boxes Only; 🚚 Shipping: Amazon Collection for Amazon Warehouse
- 🚚 Route: Supplier to Prep Center to Amazon; 📦 Packaging: Boxes on Pallet(s); 🚛 Shipping: 3rd Party — Prep Center Shipping (We cover the Shipping)
- 🚚 Route: Supplier to Prep Center to Amazon; 📦 Packaging: Boxes on Pallet(s); 🚚 Shipping: Amazon Collection for Amazon Warehouse
Let’s delve deeper into these arrangements regarding their impact on your costs and profitability:
✅ Arrangement — 1:
Arrangement —
🚚 Route: Supplier to Amazon
📦 Packaging: Boxes Only
🚛 Shipping: 3rd Party Shipping — Supplier Ships to Amazon Warehouse
Impact —
⏰ Time Cost: Low
💰 Money Cost: Low
🏃♂️ Effort: High
⚠️ Risk: High
✅ Arrangement — 2:
Arrangement —
🚚 Route: Supplier to Amazon
📦 Packaging: Boxes Only
🚛 Shipping: Amazon Collection for Amazon Warehouse
Impact —
⏰ Time Cost: Low
💰 Money Cost: Medium
🏃♂️ Effort: High
⚠️ Risk: High
✅ Arrangement — 3:
Arrangement —
🚚 Route: Supplier to Amazon
📦 Packaging: Boxes on Pallet(s)
🚛 Shipping: 3rd Party — Supplier Shipping to Amazon Warehouse
Impact —
⏰ Time Cost: Medium
💰 Money Cost: Low/Medium
🏃♂️ Effort: High
⚠️ Risk: High
✅ Arrangement — 4:
Arrangement —
🚚 Route: Supplier to Amazon
📦 Packaging: Boxes on Pallet(s)
🚛 Shipping: Amazon Collection for Amazon Warehouse
Impact —
⏰ Time Cost: Medium
💰 Money Cost: Medium
🏃♂️ Effort: High
⚠️ Risk: High
✅ Arrangement — 5:
Arrangement —
🚚 Route: Supplier to Prep Center to Amazon
📦 Packaging: Boxes Only
🚛 Shipping: 3rd Party — Prep Center Shipping (We are covering the shipping cost) to Amazon Warehouse
Impact —
⏰ Time Cost: Medium to High
💰 Money Cost: Medium to High
🏃♂️ Effort: Low to Medium
⚠️ Risk: Low
✅ Arrangement — 6:
Arrangement —
🚚 Route: Supplier to Prep Center to Amazon
📦 Packaging: Boxes Only
🚛 Shipping: Amazon Collection for Amazon Warehouse
Impact —
⏰ Time Cost: Medium
💰 Money Cost: High
🏃♂️ Effort: Low to Medium
⚠️ Risk: Low
✅ Arrangement — 7:
Arrangement —
🚚 Route: Supplier to Prep Center to Amazon
📦 Packaging: Boxes on Pallet(s)
🚛 Shipping: 3rd Party — Prep Center Shipping (We are covering the shipping cost)
Impact —
⏰ Time Cost: High
💰 Money Cost: Medium
🏃♂️ Effort: Medium
⚠️ Risk: Low
✅ Arrangement — 8:
Arrangement —
🚚 Route: Supplier to Prep Center to Amazon
📦 Packaging: Boxes on Pallet(s)
🚛 Shipping: Amazon Collection for Amazon Warehouse
Impact —
⏰ Time Cost: High
💰 Money Cost: Medium
🏃♂️ Effort: Medium
⚠️ Risk: Low
Here is a table to help you better understand these arrangements and their related costs for your business.
Conclusion:
As you can see, various types of arrangements require varying amounts of time and money. Consequently, these arrangements have an impact on your company’s cash flow timeline.
In the upcoming post(s), we will delve into different arrangements and ascertain the time they required and how they influenced your business’s cash flow timelines.
This understanding will help us address your inquiries about the cash flow timeline, budget requirements, and the profitability of this business model.
Up Next:
As you’re already aware of the numerous turns and stages your investments undergo, it’s now time to delve into one of the most intriguing and vital aspects that can truly transform your investment into a highly profitable endeavor when managed correctly: Time. In our next article, we will explore how much time you can anticipate for various stages of the journey and how long it might take for your current investment to return to your bank with added profits: Investment Series – Cashflow and Profitability Timeline — Part 3.a: Time – Your Profitability Timeline
If you have any queries related to this business, feel free to contact us via the various chat options we have provided.