It’s amazing how some businesses set their targets. Some businesses budget to do exactly the same year after year. Others aim to double their sales but assume they can do that with just the same advertising spend that worked last year. Some businesses don’t even budget.
You only can get so far without a good plan. For instance, if you really want to double your sales, you’ll need to work out whether that comes from the same products, or adding new ones. You’ll need to think about your pricing. And you’ll also need to think about how you grow those sales – what ad spend you need, how you get to the number one spot and own the buy box.
So first off, let’s think about your Amazon FBA business and what kind of growth you want it to have. Do you want to double sales? Do you want small but steady growth? How hard are you prepared to work for it? How much money and time are you prepared to invest? Jot down some top line ideas to work with.
Now look at what you’ve put down and see whether it adds up. (Doubling your sales without investing more than an hour a week and with no money invested doesn’t add up, for instance.) Once you’ve got numbers that add up, we can drive down into the detail.
Look at how your existing products are growing. Will that deliver the growth you want, or is there a shortfall? If there’s a shortfall, how will you make it up? Do you need to launch new products? Look at the average sales of your existing products. Will one product launch fit the bill, do you think, or do you need to launch two or three products?
You might also think about targets you need to achieve, for instance how much profit you need to make before you can quit the day job, or how much profit a product needs to make to repay your initial investment of time and effort.
If you’re aiming to get your growth from your existing products, then how are you going to drive that growth? For instance, you could spend more on PPC advertising. You might increase your social media presence – that might cost you time rather than money, if you’re doing it yourself. You might set some of your profit aside to invest in coupon offers to increase your sales. You might work with influencers to get your product more exposure.
Remember that these actions will have an impact on either your lifestyle (by taking up time) or your profit (by reducing your prices or increasing your costs).
It can also be helpful to break the year down into 12 months or even 52 weeks. For instance, suppose you need four new products next year, you can model introducing one product every three months. You can also model your advertising cost, assuming that you’ll advertise a lot to support each product early on, and then refine and reduce the total cost once it’s selling. But it’s easier to do this once you’ve already got your annual target, rather than build the yearly target up from individual weeks’ sales.
Think about what you define as ‘success’ and ‘failure’. Those numbers you’ve jotted down will never become reality. You might do better or worse. How much worse than the target does a product need to perform to be a ‘failure’? You may say, as long as it makes a profit, you’re happy. Or you may say that if it’s more than 25% below your estimate, it’s a failure.
After all this, you probably don’t have a spreadsheet that a bank manager would be happy with. But you do have an idea of what you want to achieve this year, and how much it will cost you to get there. And if you’re broken the year into months and weeks, you have a good way of checking your progress.
Whatever your target is – good luck with it! And keep checking back here for more advice on how to make 2022 a super-profitable year!