I am constantly looking to buy internet businesses. Usually I do that in Latonas and EmpireFlippers, sometimes Flippa. 2016 Amazon FBA businesses for sale appeared at quite nice valuation 24-30 months income with few hours per week of management. I have analysed 30-50 such businesses but decided not to buy as the risk was too big of not knowing many things. Therefor decided to try to do one product by myself. Initially i spent 100+ hours learning, by reading blogs, watching youtube and listening to podcasts. I even got a mentor who was running single FBA product successfully. He gave me some shortcuts on product selection, shipping and general questions which would have taken me 10s of hours to find out in couple of minutes.
First i started analysing products that i was passionate / interested myself. As I had some backpain problems, I checked
- foam rollers – even though the profit margins are insane in this niche, the competition is crazy.
- standing desks converters – the competition is quite low, but I decided not to do this because the initial investment by my calculations had to be around 40k € to start this, and this is too big amount for me for testing. Another reason is that i stopped believing in converters myself (after using them) and i think the electric standing desk + monitor mount is the best solution for workplace. I might get back to this business in Spain. One of the german companies i admire that sell direct and on Amazon.
So after skipping those two I have chose the ‘perfect’ product for beginner: baby crib bumper. To go more niche and have no competition I decided to manufacture “black crib bumper”. I have ordered 3 samples and decided to go through with one manufacturer. His sample was good, and his communication skills were best. Initially he asked me for 70% down payment, but we agreed on 30%, but I paid 34% as I was eligible to get Alibaba assurance something with free inspection. (at the end i did not get alibaba free inspection and had to hire my own)
So after a product was done – I have sent inspection service – and fail rate was 40%. I was shocked and a factory promised to fix everything. At second inspection i was expecting fail rate to be less than 3%, but it came to 18%, (10% that i would pass and 8% that were really bad).
Finally I have made decision to skip on this deal. My total loss with this learning / experiment was about 1200€.
What i have learned from this:
- Textile is difficult. (I have a friend selling t-shirts. he flies to Bangladesh, Vietnam to check for quality himself)
- I need to focus. This was my side business that i was not passionate about at all just did for the sake of doing.
Now I am back to grow my dating and classified ads sites 85% of my time and 15% looking for passive investments.