Light Your Way with a Clear Vision
“The only thing worse than being blind is having sight but no vision.” – Helen Keller
Garry here. Today, I’m going to share with you my knowledge of all things Amazon. I have some eCommerce advice as well as some invaluable insights I’ve acquired through my Amazon work, and some thoughtful lessons I’ve learned on my life’s journey. I’m going to walk you through, not only this April’s numbers, but the total sales, returns, and return to sales ratios for the past seven Aprils. These long-term numbers will reveal a broader picture of my business’s successes rather than just a snapshot of a single moment in time. Challenges are inevitable, but if you can hold onto a vision of what’s to come, you can boost your chances of achieving your dreams..
The chart below reveals my data from April 2016 through April 2022, and we immediately notice some important trends.
|Data Across 7 Aprils||April 2016||April 2017||April 2018||April 2019||April 2020||April 2021||April 2022|
Returns to Sales Ratio
In partnership with my wife, I began my online sales excursion back in 2015, and by April 2016, I had been sinking my teeth into the Retail Arbitrage (RA) game for several months. During my first April, I sold over $68K and had over $7K in returns. When you divide the return figure by the sales figure, the R/S ratio is revealed. This number, along with all the others, is significant and can help you determine the direction your business is moving.
My numbers for 2016 and 2017 are similar, but jump to April 2018, and you can see a dramatic difference in my profits. During this time, my RA sales took a dive when my wife and I traveled to China on a sourcing trip for a private label. While my numbers suffered during this time, I was blown away with the possibilities that I saw while I was there. Not only was my voyage to China interesting and amazing, it filled me with ideas for my future business endeavors. Looking at a single number at a moment in time could have been detrimental, as it may not have given me an accurate picture of what was actually happening. Conversely, seeing single data points as part of a whole system can be life-changing and helpful in making decisions that will impact your future. I’d like to remind all of our followers that if you give up, it’s because you lose vision, and you can’t succeed if you lose vision.
Additionally, if we keep our minds open, we can learn from unfortunate circumstances that may enter our lives. It’s essential in business, as well as in life, to learn from setbacks and to use them as stepping stones for moving forward with an even clearer vision than before. This is exemplified when you look at the substantial jump from 2019 to 2020. In 2020, my wife and I began ramping up our operation and started hiring people to do the buying. We hired individuals to help us do the basic work, so we could focus on operation and planning. This was a profitable decision, as we went from over $57K to over $91K. Outsourcing some of the leg work was a great decision, and it paid off big time. Fast forward to this past April – April 2022, and you will see a dramatic upward swing in my sales. The upward swing is even more prominent when you compare it to that very first April. This general growth trend over the past seven years was a real eye opener for us. I’m able to really ‘visualize’ my success when I look at long term growth and trends.
Finally, I’d like to focus on the R/S ratios. When you look at $7K, $8K, and even $12K in returns, you may start feeling nervous. However, I know from being in the insurance business for 41 years that this number is actually right on par with the known and predictable cancelation of sales rate. In the insurance industry, a 10% sales cancellation is the norm, but the best sales agents can enjoy rates as low as 6%. These agents know the tricks of the trade when it comes to keeping returns and cancellations low. Additionally, I’d like to point out that sometimes the R/S ratio is not as big as it appears because a lot of merchandise that gets returned can go back for resale, therefore, the R/S ratio is a soft number rather than a hard number. From my prior knowledge, and my compilation of results over the past seven years, I’m better able to see that my business is thriving.
If you are just starting out in your Amazon sales business, it’s important to understand that you need to take steps to grow your business every single day. At the same time, you can’t get bogged down with a single measurement from a single period in time. You need to be diligent in watching your numbers, but you need to look at the long term and keep the future in mind.
As I reflect on my numbers from 2016 through 2022, I want to remind everyone that vision is not just eyesight, but the ability to “see” further than the eye allows us, and I’ll draw on inspiration from one of my favorite quotes, “Where there is no vision, the people perish.”