Why do I invest in projects that make me lose money

Why do I invest in projects that make me lose money

Right now I have many projects underway. With many of them I am losing right now. This is why I do it.

A couple of days or even weeks ago I touched on the subject. One euro invested in Amazon brings me a turnover of 2.5 back. At the profit level we are talking about € 0.5 for each euro invested. It is the 50% ROI that I seek as a minimum return on Amazon.

Looking at these figures and taking into account how “easy” it is being (if you know what to buy and have capital) I should invest all my money here. I’m not doing. There are even projects with which I am losing money.

Investor tool

It is the internal name that we have given you right now. It is the tool that tomorrow will bring me several advantages:

  • Statistics on profit (and not just billing) by days, brands and product
  • Accumulated profit per investor

I have already mentioned this last point on several occasions. The model

it may not be as described. I don’t think I will open the doors for everyone. Having few but large investors will make more sense. I said, this is still not 100% clear to me. In the worst case scenario, it is a tool that provides data to me, my brothers and my workers. This group will be able to invest for sure. The development right now is making me lose money but the idea is to get it back once the tool is up and running.

Internal ERP

This development is related to the previous one. We have grown in an “unexpected” way in 12 months, so it is time to professionalize the management. Having an ERP is a basic thing that we have not had to date and it is something that is really urgent. With Holded we have the application for it. By moving to premium service we are also achieving better service. How in any start-up there are still many bugs and in self-management we simply cannot get it started. Here I want to achieve the following:

  • Differentiate by inventory status: ordered, in stock (Spain or Germany), on the way to Amazon, at Amazon.
  • Obtain data on the inventory value (sale price and cost price).
  • Recommendations on buying new inventory (this last point is not typical of an ERP but ours will have it).

Market size

Yesterday I had a conversation with a person who leads the team’s marketing and sales topic. We still have some way to go to keep up with tools like Helium10 or Junglescout. It is clear that they have many more resources than we do to continue improving their application. Our competitive advantage is being a seller on Amazon for years. I want the automation tool to do these things:

  • Include automation strategies: by competitor prices, by time in the warehouse, by monthly profit, by competitor stock quantity, etc.
  • Offer an analysis beyond the rest that not only allows you to make better decisions but also directly makes you a recommendation with your best option.

These three fields make me lose money every month but it is clear that the idea is that tomorrow they will generate money in the form of cost savings, process improvement and new sources of income. I also want to achieve more independence from Amazon tomorrow. If it is achieved, it is something else. You will have to try it to find out. We’ll see.

Stay tuned.


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