In this video, I wanted to show you the power of our 4 year Amazon Cashflow Spreadsheet for Amazon Sellers.
The focus of this case study is looking at the different pricing strategies of a variety of competitors in a market and seeing which ones would survive.
The test for survival was:
- Reached $1million in sales within 4 years
- Able to withdraw $100,000 as owners salary in year 3 but no owners drawing in years 1 and 2.
- Never going into negative cash.
If the business goes into negative cash then they do not have enough to restock their inventory and the business stops – never getting beyond that level of sales.
I assumed that each brands price was reflective of their overall pricing strategy for their entire brand.
So to find a sample for the case study, I looked through the best sellers for Home & Kitchen until I found a typical non brand name private label product that sold over $15.
Found Apple Peeler – you might have one in your home – peels and cores apples and makes a mess.
A search of Amazon for Apple Peeler found 13 of the almost exactly the same product – There were some that were plastic and motorized which we excluded from the case study.
So out of the 13 Brands, assuming that their price for the Apple Peeler was reflective of their Amazon strategy, which ones would survive and which would stop because they didn’t have enough cash.
Plus: Join Treehouse Metrics for detailed graphs and analysis on your markets. It’s free, just click here to join.