- Hi, and welcome back to another Amazon selling video.
This is sadly, my last video on the beach
but I am leaving one Magnolia to go to another Magnolia.
I'm headed to Waco, Texas to Magnolia Markets,
any "Fixer Upper" fans out there?
I'm really excited because
this is my fourth time actually going.
And every time we go there's something new.
So I can't wait.
I'm going to visit all those new little shops.
Last time it was a coffee shop.
Now there's all these other shops, so I'm really excited.
If you're new to my channel,
my name is Nikki Kirk, and I've been selling on Amazon,
doing retail arbitrage all from my fifth wheel RV,
which I live in full-time as I travel around the country.
Today, I'm answering a question from Christina B on YouTube,
who asked, "When, how did you decide
to start taking a profit out of your Amazon business?"
And I'm sure this is a question that a lot of people have.
So I thought it was a great opportunity to answer.
Obviously, everyone's financial needs,
and life circumstances, and Amazon sales are different.
So for me, I had debt, I had bills to pay,
but I was not supporting a family or had anyone else.
It was just, I needed to make a salary for myself to be able
to travel around the country and pay my bills, right?
So in Los Angeles, I went from a $1,300 a month apartment
and no car payment, to now an RV payment
and a truck payment.
But I do have a roommate now where I didn't before,
so that does help.
But of course, there's a lot of extra costs
that go into RVing, so we're talking campground stays,
which are not cheap, and gas,
or diesel because we have a diesel,
so $700 in diesel every month.
And of course, we're eating and I didn't necessarily plan
to travel on the cheap.
I mean, I wasn't trying to like splurge
and spend a lot of money but I was kind of excited
and just wanted to live my life
without really having to budget a whole lot.
So I was doing this Amazon thing part-time
and actually I still do it part-time, I've never changed.
Obviously, during Q4, when it's more exciting,
and sales are happening, and the big profit is coming,
I source a little more then
because I want to keep making that money
and that's just the time of year.
But other than that, I've always done it part-time.
I source once a week, I pack up once a week
and then that's it.
I've got the rest of the week to travel, or sit around,
or do whatever I wanted to do.
So when I started, I paid $300 for training.
I had like $200 with poly bags and stuff,
so all the supplies.
And then, I had $500 set aside for my opening inventory.
I was fresh off that Dave Ramsey mindset,
so the thought of using a credit card
actually didn't even occur to me until a little bit later.
After I had spent that initial $500,
I then was like realizing that Amazon takes a while
to pay you back your money, right?
So in the second month, I took out another £700, $750
from my savings, this is all money from my savings
because I had saved up six months of savings
to be able to travel and figure out what I wanted to do.
I forgot to mention that I was unemployed
when I started selling on Amazon.
So now, we're in my second month, and I'm spending $750 more
from my savings into more inventory,
'cause I really wanted to get this thing going.
So now I'm all in, at like $1,700 at this point,
or something like that, 1750, and it was working.
I could see that it was working.
Now at this point, I'm only two months in
and I knew how to get ungated in grocery,
but it was a $200 minimum order, which it still is.
And I didn't think I could justify
that spend right off the bat.
So we're going along.
And then my roommate at one point was like,
"Well, why don't you just use a credit card?".
Because I was complaining about
how I couldn't buy inventory,
'cause I didn't have money to buy inventory.
And it just didn't occur to me, for whatever reason.
And I was like, "Why don't I use one?"
So then I started using a credit card to buy my inventory
and I went through the ungating for grocery,
got ungating, and just the whole profitable items
started to open up.
So here's my first four payouts when I started,
just to give you a glimpse of what we're talking about here.
So I started,
my first shipment was the end of August, in 2017.
So by November, I had enough money
to start taking profits out,
to just pay back my initial investment.
So I think I first pulled out a thousand dollars
and paid that part down.
So I had a little spreadsheet
that I was keeping track of this on,
but it was an old computer that I don't have anymore,
so I lost the spreadsheet at some point.
But, so I was keeping track of my profit
and I took that initial part out
and I still had enough money to be buying more inventory.
And then a little bit later on in November,
I was able to pay off the whole investment.
So now, I have no investment in this anymore.
It's just the business going on its own.
It's like free and clear.
I am not losing any money, if this fails at this point.
Then the big Q4 payments started coming.
So my first December payment was humongous,
couldn't believe it.
And so, that actually paid off all the credit cards
of all the inventory, or credit card, I only have one,
all the credit card of inventory that I had at that point.
So then, my second big payout,
it's actually the end of December, think it was January 1st,
that was all pure profit.
So that was the first real profit I took out to pay myself.
And it was exciting because it was a lot of money.
Now obviously, with Q4 being my, what is that,
fourth or fifth month of selling?
It really did help me to be able to get that money back.
But typically, Amazon sellers who start,
they start taking a profit out around four to six months.
So, it was pretty in line.
The key to knowing when you're ready
to start taking out a profit is,
to understanding how much money you need for inventory.
You don't want to skimp on your inventory
to be able to pay yourself, unless you absolutely have to.
But you really want to keep building up your inventory
to the point where you have the money now
to keep this thing going and pay yourself
because it's making that much profit.
I feel like I'm just going to really quickly
insert here what profit is,
because sometimes people don't totally understand it.
When I'm talking profit, I'm talking about,
I paid off the cost of goods, I paid Amazon all their fees,
I paid for all my softwares and all that stuff that I have
for selling on Amazon.
And then that's the extra money leftover that I made.
So, I hope that clears it up a little bit.
Okay, now this is the way that I continue to pay myself.
So, that first December was the first time
I ever paid myself, but I did every month since then.
And here's how I did it.
I don't know if it's right, or wrong, or dumb,
I really don't know.
I've never really said it.
I mean, I've said it in the BOLO group a couple of times
but because I don't really know if I'm doing things right,
but that's Amazon, right?
We don't know what we're doing.
We just kind of jump into it.
So, how I would do it was,
I started just using one credit card.
I now have two credit cards,
totally different than when I started
because the first one was just a personal card.
But I took out some business cards
that earn miles and points, like cashback, because why not?
I'm spending thousands of dollars every month
to buy inventory, I might as well be
getting extra money on top of that.
So I have like so many miles now.
I think I can fly first class
kind of wherever I wanted to go.
But anyways, that's another point.
So, I have two credit cards I use now.
So, I just let Amazon pay me every two weeks
like they normally do.
I know you can request earlier,
but I just got in the habit of every two weeks.
So every two weeks, Amazon will pay you out.
And the first one of the month,
I use that to pay off all the costs of goods,
everything on my credit card.
So my software, all the different applications I use,
that's all on the same credit card, my business credit card.
So, I would pay that off
with the first payment of the month.
And the second payment every month was my profits.
Obviously, if there's stuff left over on the credit cards
I would pay that off.
But that's how I did it.
So, I don't know if it's good or not.
I mean, I still do it that way, (laughs softly)
it's just easier.
So that's how I decided when to start paying myself.
It was after I had enough money for inventory
and also to take money out and pay myself.
It could be a little tempting to pay yourself,
especially if you have bills to pay.
So, I know you got to do what's best for you
and your business, but that's just how I did it.
And it allowed me to work part time and travel the country,
45 or 46 states, I can't get it right anymore.
But a lot of states.
We've been back and forth across the country.
Like I said, this is my fourth or fifth time back to Texas.
We went to New England, and that was a lot of fun.
So yeah, RV life can be cheap.
And I feel like I've gotten better at it now,
but in the beginning, you know,
campgrounds are like $30 a night on the cheap end,
probably 35 is more accurate.
So, it is expensive.
So, that's all I got for you guys today.
I hope this video was helpful.
And next time I see you, I won't be in Waco just yet but,
in two weeks I will be.
Thank you guys so much for watching and have a great week.
(upbeat music)