It’s true that I haven’t bought any new courses for a while, but it’s a topic that they probably don’t tell you about. It has to do with the growing capital ball every time you have to buy stock of your product again.
Let me explain. Imagine that you start placing an order for 500 units of a product that has a total cost of 2 euros. You put 1,000 euros on the table and in a matter of three months (more or less) the product arrives and you make the shipment.
Now things are going well
Great! After selling 250 units you do the math and you realize that if you don’t place an order you’re going to run out of stock in a few weeks. In most cases you’ll definitely run out of stock, which is a pretty negative factor in Amazon’s eyes.
The next order to have more stock email data you want to place is for 1,000 units. Now instead of 1,000 euros you have to put 2,000 euros on the table. You have 50% of the units left to sell and you have just received the payment from Amazon, but you still have an outstanding balance in the relevant account that you have not requested. In addition, you will soon have to pay VAT on the income made. You are running out of funds.
This is a scenario for an entrepreneur
But it does not matter if we are talking about 1,000 euros or 100,000 euros. Our next order for a new top seller will now be 9,000 euros and things in reality other tasks may arise are looking good, so we have to make another one shortly after for 15,000-20,000 euros, which could already create a cash flow problem for us.
As you grow
The ball of capital needed to continue accumulating sales becomes larger and larger. If you do not have a huge margin and ROI, it is practically aob directory impossible to grow with what you generate. Sooner or later you will need bank financing and/or investors. It is a “nice” problem, as I said initially, but it is still relevant because it can prevent you from positioning yourself in the market and allow the entry of new competitors who are not able to accumulate the necessary capital…