MODULE

1.10 How Much Money

Do I Need?

An introduction to
capital, business
How Much Capital
scaling, and cash flow
Do I Need To Start?
There’s no magic number. The more you have,
the more options you have to start.
f The more products you’ll be able to choose
f The more you’ll have for advertising

Numbers don’t tell the whole story.

Don’t just generate sales

f Otherwise you can theoretically make 7 figures in sales but still be broke

Focus on your bottom line.

f Sell your business?
f Side income?
f Quit your job?

Naturally, the less money you start with, the longer it will
take to build up.

Key: divide the money you have by 2.5 minimum; 3 is better

f i.e. $5k divided by 2.5 is $2k
f That value is your cash available for your first order
• For example, if you have a budget of $5,000 of capital you can invest,
then your total product costs (inventory, shipping, duties, taxes), can
not exceed over $2,000.
f This ensures you have enough cash for your second order, should the
first order be successful

1 How Much Money Do I Need?

Module 1.10

$5k is suggested to start

Do not quit
your job f You can start with less, though it will be slower to build

prematurely
Unless you have a
You need money for expenses
large safety net for
f software costs
yourself and family
f Advertising
Do not risk anything
f 3PL expenses
you can’t afford to lose
(such as savings you f product giveaways
need for other things)
f new inventory to reorder
If you’re trying to grow
Amazon typically pays you every 2 weeks
your business, you
won’t be able to take
a paycheck from it for
Be careful not to run out of stock! If you’re selling well consistently,
a while since you don’t wait until you get paid to reorder more inventory
should be reinvesting
the profits

Do not be greedy. Cash flow vs. cash out?

Set goals.
Cash flow: generating cash for you to use now
f Enjoy the profits now, at expense of long-term goals
If your goal is to
sell the business:
Cash out: reinvest, grow, ultimately sell business
Sell when the
f Long term, generates the most money
numbers show growth
(upswing) f Once you sell your business, start over with a new concept
f A brand isn’t necessary to sell the business; many investors just
Do not sell when
want a successful product
progress is flat
or declining

There are consultants

that can advise on the
best time to sell - see
our recommended
resources

2 How Much Money Do I Need?

Module 1.10

Pricing: Conclusion:
Ideally do not sell products at less The more capital you start with, the easier
than $20/unit: it will be to grow your business
f Many start lower because of a lower barrier Don’t quit your job yet!
to entry, but that results in much lower margins
and a super-competitive space Do you want cash flow or do you
want to cash out?
f For an example, check sellers who are active in
the sub $20 space; 40% of them are from China Keep your price/unit range in mind as you
• This space is VERY cutthroat consider what to sell
f Prefer units in the $20-$50 range, up to $100
Think outside the box!
• Lots of opportunity for more expensive items
• Fewer units/day, but opportunity is there

Don’t get too concerned with size/

weight, restrictive price range, © Freedom Ticket, All rights reserved.

BSR, etc. No part of this document, including the text, data, graphics, inte-
rior design and cover design, may be reproduced or transmitted
in any form without explicit consent from Freedom Ticket.
f The problem with this is a “cookie cutter”
approach that many other courses
and gurus promote

f Here at Freedom Ticket, we want to think

outside the box!

Learn about how Bradley Sutton successfully

launched several products with just $5,000
in this case study blog post

Listen to the podcast episode:

Helium10.com/podcast/launched-12-products-for-
5k-amazon-case-study

3 How Much Money Do I Need?