February 2017 Earnings Report for The Cocoa Nomad

Revenue

Consulting:                        $0

Still haven’t received payment for the work in January. The additional project that was supposed to come about also didn’t materialize. I’ll turn my efforts onto freelance and check out sites like UpWork. My plan is to blog/vlog my experience with online work as well as any other income streams I attempt.

iOS App Store:                   $16.40

I just listened to the latest episode of the Under the Radar (https://www.relay.fm/radar/71) about Apps as Annuities. the primary theme is that apps afford revenue even though they may not be constantly updated. David Smith, one of the hosts, does note that in his experience unmaintained apps tend to decay in terms of sales at a rate of about 0.5% per month. While not a scientific measurement, it’s convenient way to think about the income stream from the app portfolio. My app income does not strictly adhere to this principle as it rose 50% over the previous period but the numbers are two small to try to draw any conclusions. I am confident that the next 2 months will show a change in these numbers.

Amazon:                            -$12.18

The lack of sales and mounting storage fees here means that I’m going to have to get rid of my inventory. I’ll start by deeply discounting the prices (probably 40-50%) to see if I can get any takers. I’d rather recoup some of my money than taking a complete loss. I’m not giving up on Amazon (though I am done with retail arbitrage for the foreseeable future) but I will have to change my product offering.

Total Revenue:                 $4.22

 

Expenses

Rent                                        $744
Food                                      $375
Travel                                    $305
Biz Services                          $264

Total Expenses:              $1688

I split my time in February between Vietnam, Thailand and Indonesia, so my travel and lodging expenses were much higher than I expect for the next three months, when I will be settled into Chiang Mai, Thailand.

Advertisements

January 2017 Earnings Report for The Cocoa Nomad

Consulting: $0

I did pick up consulting work in January but because I use cash basis versus accrual for accounting, it won’t show until next month. I was able to do some work for a former client who is finally shutting down the project but needed some final artifacts delivered. There may be additional work via referral in February as well but I’m not counting on it. I’ll keep networking to pick up some small projects to sustain me while I work on my primary apps.

iOS App Store: $10.77

A further decline in sales for my neglected apps. Fact is, I absolutely deserve this. I’m contemplating a shift away from paid apps to freemium or ad-supported, a decision that pushed back my release of the Capoeira Songs update. Team Tryouts update is also on hold.

Amazon: -$7.17

First the Falcons lost in the Super Bowl, now this. While I didn’t expect to recover all of the sales from the previous month, I never expected a negative. It’s a dead period for shopping in general and toys in particular (I guess the kids haven’t broken those Christmas gifts yet.)

Total: $3.60

Ouch! I went from pocket money to couch cushion money. Actually, I’m more bummed about the Falcon’s loss than my earnings. I’m back to working on a steady basis after the final month of Remote Year. New products are coming soon and I’m still excited about the future. There may be a new category for the earnings report as early as next month.

What About Expenses?

After the last earnings post, I was asked why I didn’t include expenses. The primary reason was that I just wasn’t thinking about it (it’s an earnings report not an income statement). The secondary reason was that I didn’t want to skew the expenses with the Remote Year costs (avg. $2041 month in program costs, much higher that what I will be spending going forward). Now that my gap year is over, I can provide a clearer picture of what it actually costs me to live and build my leveraged income streams. Those costs will be included in the Feb 2017 report.

Earnings Report for the Cocoa Nomad

Why Share This?

When I started blogging a few years ago about my development experiences, it was about sharing information. The iOS dev community was particularly welcoming and always willing to share with me. Additionally, I’ve always appreciated the transparency of developers and entrepreneurs who shared their sales data. It’s important to show the entire transition so as to never incorrectly access future successes as instant.

Documenting this experience is also about accountability. I’m making lots of mistakes by commission or omission and making note of them is only part of the process. Quantifying those mistakes is equally as important as sharing them. As Peter Drucker famously stated “you can’t manage what you can’t measure”.

December 2016 Report

Consulting: $0

I’ve not done any consulting work. After leaving my full-time job, I took a 6 month sabbatical as I needed to recharge and wanted to explore other business opportunities. This will most likely change in the next few months as I’m working toward a balance between my passion projects and some paid work.

iOS App Store: $17.20

This number is not the least bit surprising. My existing apps haven’t seen updated in 4 years and the sales reflect that. I have an updated version of Capoeira Songs that needs a bit more art work and it should be ready for release soon. While I don’t expect a huge increase in revenue for this app, I felt the rewrite was worth the effort. Next up is the Team Tryouts rewrite.

Amazon: $13.92

This is the most disappointing figure. My experiment with retail arbitrage has not been nearly as successful as I’d hoped. The toys (which few exceptions) have not sold well and the expected Christmas bump just didn’t happen. I naively assumed that everything would be gone by the new year. I may have been too aggressive/optimistic in selecting products. I could’ve paid closer attention to the sales ranking of certain products instead of focusing so much on margin. What good is high margin on a product that doesn’t sell? I’ll be faced with decisions about how to handle the inventory if the storage fees start to become a problem.
Total: $31.12

You probably have more money in your wallet right now than I made last month. Despite the low numbers, I’m pretty excited about 2017. I have a renewed interest in development and the amazing travel experience of 2016 was vital to that.

Uber Drivers Are Side Hustle Inspiration

In the past year, I’ve used many modes of transportation. While the opportunities to speak with pilots, bus drivers or train conductors are rare, Uber drivers are frequently open to conversation. Typically our talks are about our respective hometowns, what the city is like, tips about venues to see and me constantly checking the route to see if we’re going the right way. The best rides are when the conversation moves beyond the basics. More than just what jobs we have but why we do them. While it’s great to travel the world, it’s not a permanent vacation for me and I’m curious about what other people are doing to make ends meet. For most of the drivers that I meet, Uber isn’t their only job. In fact, it’s usually their side hustle.

My most recent encounter was with Alonzo, a driver in Charleston, SC. His story reminded me of my grandfather, who for many years in New York simultaneously worked at a hospital, drove a cab and had a dry cleaning business. Alonzo told me about his various gigs outside of Uber: a full time job at a local college, a fragrance business, a truck detailing service and selling on Amazon/Ebay. Once we discovered that Amazon selling was something that we had in common, we started sharing our respective experiences and swapping tips. I realized that I was missing some very profitable categories in retail arbitrage and he learned about the advantages of Fulfillment By Amazon (FBA).

I’m not only nomadic in my travels, I’m moving fluidly amongst my roles in pursuing business opportunities. At any given time, I am a mobile app developer or a market researcher or shopkeep. Getting comfortable with the frequent transitions has been helped by my experience in moving from country to country. The languages and customs change with each venue but in gaining confidence in my ability to navigate the world, I am more prepared to face the myriad challenges in making my new life work.

My Retail Arbitrage Experience

I’ve now gone out three times to find products to source for retail arbitrage (RA) via Amazon FBA. I’d heard about it on a few seller podcasts/YouTube vids and wanted to see firsthand what the experience was like. I’ve decided to provide some answers to questions that I had when I started. Perhaps they can help you.2016-10-19-16-20-21

Is it hard to get started? No. I created an Amazon Seller account and in less than 30 minutes and was listing my books and electronics. I had boxes, tape and a printer to package what I needed. I didn’t even have to pay the UPS shipping costs up front. I’m currently doing RA from the road and do my label printing via available business centers (hotel/apartments). Unlike the books I originally sold, I only needed to print a shipping label for each box.

What is your game plan? Each day, I map put an area of town that has a number of retail stores (Walmart, Target, Kmart, Big Lots, Toys R Us). My main focus has been toys as I heard it was a great category for bargains. Some tips:

  • Set a target value for the day. For example, try to get $400 (sale price) worth of  products per day. You can always go over but this gives you a good baseline
  • Set a profit target per item. I’ve heard various opinions on this one. Some people want $10 per item. Some are happy with $5. Others simply want products they can sell for 3x their acquisition cost (approx. 1/3 of that will go to Amazon/shipping costs).
  • Scan each item if you find similar items that are a different color/size. I bought a bunch of markers only to find out that Amazon won’t let me ship the yellow ones (the green and orange are fine). I’m sure it’s a bug but it was a reminder of the old carpentry adage: measure twice, cut once.
  • Upgrade to Pro Seller Account if you think you want to keep doing this. I missed out on many deals simply because I was restricted from a category based on my account type.

How much time do you spend doing this? I try to spend no more than an hour per location and sweep through the clearance sections. After about 4-5 hours, I’m usually ready to call it a day. I’m sure a more savvy shopper could come right behind me and fill a shopping cart with deals that I didn’t think to investigate. Total time in 3 trips was less than 15 hours (including shipping).

How much does it cost/Is it really worth it? I can’t say what the actual ROI is for my time/costs until the products are all sold. Through 3 trips, I’ve spent about $520 for products that should sell for about $1418.

Will you keep doing this? No, as I will be returning to SE Asia in a few days. It’s a fun activity I do each time I’m stateside but I’ve already accomplished my goals in doing RA, namely:

  • Learning more about selling on Amazon
  • Provide first hand experience to anyone interested in trying it for themselves
  • Getting product ideas for private labeling, online arbitrage, wholesaling (all of which I may try at some point)
  • Breaking out of my comfort zone by doing something else to make money.
  • After using existing tools available for doing RA, I now have an app idea to pursue. I constantly joke that my motto is ABD (Always Be Drinking) but in reality it’s ABT (Always Be Thinking of new product/service ideas)

Overall the experience has been overwhelmingly positive. It’s basically a real life scavenger hunt game show with real cash and prizes awaiting you in the end.

Thinking of a Master Plan

I left my job of 3 years in April to focus on developing my own apps and exploring other ways of making a living. I was burnt out and needed a sabbatical. Six months later, I’m looking to pass the mantle of President of Team Hangout to someone else on Remote Year and get back to work. When I left for Belgrade 60 days ago, I assumed that I wouldn’t need to return. I sold most of my possessions. I left someone I trusted in charge of selling my house. I assumed that I would be gone for at least another 6 months, yet I find myself back in the United States.

So What Happened?

The best laid schemes of mice and men, Go often askew

During my presidency, I spoke with a fellow Battuta who is making a living selling private label products on Amazon. I was familiar with drop shipping from an entrepreneurship class in grad school but hadn’t given online selling any serious thought since.

I decided to dip a toe into by creating an Amazon account and selling my books/electronics. While most of the items that I owned were not worth listing, I found a few gems that fetched a decent price, like a chord book of Prince’s The Hits that sold for $100. After watching my sales for a few weeks, I was hooked. The only problem was that I was out of inventory.

So What Now?

  • I’m sourcing products for retail arbitrage for FBA while I’m stateside. I’m both excited and nervous because I’m not sure if this is going to work. I’m currently packing the first shipment of items to send to Amazon. I’m still researching private label products.2016-10-16-12-55-14
  • I’ll continue working on app development (more app-specific posts to come). I haven’t lost my love for creating things, I just needed to diversify my attention (and income sources).
  • The house is still not listed for sale. The situation is further complicated by the effects of Hurricane Matthew. My house sustained damage but thankfully it’s not as bad as the countless others who have been displaced.
  • My tentative plan is to remain in SE Asia after the conclusion of Remote Year. It is inexpensive, the food/weather/people are awesome and there are communities of remotes that are working on both types of businesses where my focus lies.