So here’s a humble little investment I am making now.
But before you ask…. it’s not bitcoin.
(Although like half the known universe…I too am investing in digital currencies….more about that later.)
I just pressed ‘Go’ with an order for a product to sell on Amazon – with the intention of creating a healthy passive income stream from it.
Here’s how the numbers work on a ‘back-of-the-envelope’ basis.
We are buying 1,000 units at around $8 USD per unit.
The product will be priced at around $24 USD per unit.
Freight/Amazon fees etc. will take about $8 which will leave about $8 profit per unit (remembering the product costs $8).
There’s around 80,000 searches on Amazon for this product a month, so hopefully we can do good volume.
But even if we only sell 300 or so month, that’s still as much as $2,000+ USD profit per month.
But wait it gets better.
You see, Amazon businesses can be sold for 3 x yearly profit.
So let’s say we make a small profit of $20,000 in our first year that business could be sold for as much as $60,000.
But the real game is to add 10 more products like this which we will.
Soon we are talking about a serious income stream and a valuable asset.
And the best part?
Because of the ‘Fulfilled by Amazon’ service once the product is on Amazon’s shelves…there’s very little work that needs to be done once you’ve got the product stocked.
You can largely ‘set-it-and-forget it’ till it comes to reordering.
But what I really love about this type of business is the longevity.
- In 1 year from now people will buying products online…
- In 2 years from now millions more people will be buying products online…
- And in 10 years from 100’s of millions more people will be buying products online…
It’s an exponentially growing trend.
Knowing how to sell products on online and making a healthy cashflow profit is a skill to potentially give you financial independence for life.
It’s a skill I’ll teach my little rug-rats too (ages 4 and 7).
Because it’s a ‘future proof’ income stream unlike so many other jobs and vocations that are at risk from outsourcing and automation.
So that’s my latest little investment!
Want to understand selling on Amazon a little bit better?
Here’s a video from my mentor Amazon Guru Sophie Howard to explain how it all works: