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I’ve done a little over $250k in sales online year-to-date via eBay and Amazon.
Given that Quarter 4 accounts for ~50% of most seller’s annual sales, that means I am well on track to clear $1 million this year… as a 24 year old who is currently writing this from his bedroom while draped in an off-brand Snuggie.
The most common question I get asked is what I do and how I do it. (The second most common being a thinly veiled attempt to ascertain whether I am selling drugs and/or committing tax evasion). Whether it’s a morning routine, a time-blocking strategy, a team of assistants or a plethora of other schemes, there’s one thing in common:
Everyone wants to know what to add to their life. They all want a blueprint on what to do.
But, today, I want to talk about something I don’t do.
I don’t box up the items I sell.
I don’t print out the shipping labels.
I don’t drive them to the post office.
Honestly… I don’t even see most of the items I sell.
That’s right: I do over a million dollars a year in sales on items that I never see.
Oh… and I don’t pay sales tax on any of it either.
Prep Centers
I use what is referred to as a “Prep Center” to fill almost all of my online orders. The workflow is quite simple:
I buy a profitable item online for the purpose of selling it for a profit on eBay or Amazon.
Rather than ship it to my house, I ship it to the Prep Center.
The Prep Center unboxes my packages, inspects them, repackages them and then ships them to the buyer or to an Amazon warehouse on my behalf.
That’s it.
I touch nothing, I see nothing, I do no work after the initial purchase. I’m treasure-hunting online and, once I’ve struck gold, I have other people do the digging and load the bounty upon my ship for me.
I am buying over $100k in inventory every month and, yet, I have the freedom to run this operation from anywhere in the world that has a wifi signal and strong enough coffee to fuel my expedition. I could leave any state or country at a moment’s notice with no worries as to what to do with the inventory that funds the whole operation.
And here’s the best part:
I’m Getting Paid To Do No Work
Most sellers:
Buy inventory and ship to to their house. For math’s sake, let’s use $10,000 as an example.
Once the item arrives at their house, they must unpack the inventory, store it somewhere, prep & repack the inventory and personally drop all $10,000 of inventory off at the post office - probably in several round trips due to the size of all the boxes.
In the process, they’re paying ~8% sales tax. For $10,000 in inventory, that is $800 being wasted on sales tax.
That doesn’t fly for me.
I’d rather operate in a system where I:
Never see the item.
Don’t have to package, prep, repack or ship anything.
Don’t pay a cent of sales tax.
We’ve already talked about how I avoid Steps 1 and 2. Let’s get to Step 3.
See, my prep center is in a state with no sales tax. Sales tax gets charged based upon the state where the item is getting shipped, not where you are located.
So, I’ve done over a quarter of a million dollars in sales and have not paid a cent in sales tax on any of that inventory, thanks to this prep center.
On $50k/mo in spend, I am quite literally banking an extra $48k/yr by having SOMEONE ELSE DO ALL THE WORK FOR ME.
Does This Only Apply If I’m Doing Millions In Sales?
Absolutely not.
I signed an agreement with a prep center before I ever sold a single item on Amazon.
You can do the same.
In fact, it may make you even better at growing your business because you are coming at it from the viewpoint of an organization you run, rather than a side hustle you live in. You’re actually practicing business ownership rather than playing side hustle, thanks to the systems you are utilizing.
It may be a lot to manage if you don’t plan on scaling past a few hundred in sales a month. But, if you plan on doing several thousand (incredibly doable for anyone), it is well worth the tax savings alone to utilize a prep center.
How Much Do They Cost?
Most prep centers will fill orders from anywhere from $1.50-$2 per unit. I personally recommend finding a prep center that charges this fixed price. Some centers charge by a percentage of the sale, but that can quickly eat into your margins when you sell more expensive items.
As someone who sells lots of sneakers and vinyls for well over $100, I’d rather pay the $1.50 my prep center charges me, rather than 5% of the sale. I recommend you do the same.
That being said, the right reselling community will have partnerships in place with a Prep Center to get members a discount on services. If a prep center normally charges $2/unit and your $30/mo reselling community has a 20% member discount, you only need to sell 2.5 items per day to essentially be getting the reselling community for free.
If you’re looking for a reselling community that gets a 30% discount on a prep center in a state with no sales tax, you can join it here.
How Can I Get Started?
Resellers are notoriously guarded about Prep Centers. If their prep center is good, they don’t want to tell anyone about it because they’re afraid it will get saturated.
The best ways to find a reliable prep center are:
Ask someone you know who uses one. Resellers are cagey on this topic but, if you’re friends, they may let you in.
Google “Amazon/eBay prep centers”. These are usually the worst because they’re overrun and have slow turnaround times. Since anyone can easily Google them, they’ll have loads of clients and will get to everyone’s orders slower than a smaller prep center with fewer clients.
Join a reselling community that has a prep center partnership. Most good reselling communities - like this one - have a membership capacity limit. This means that only a certain amount of people can be in the community and you’re not prone to the saturation that you’d find if you were to simply Google “prep centers.” Furthermore, most of them will get members a partner discount which will essentially make your membership free. This is the ideal way to find a prep center.
Chase Freedom
One of the biggest reasons I’ve seen Amazon & eBay sellers fail is because they treat it like a side hustle, rather than a business.
This is stupid for two reasons:
People understand that business is hard, but think that side hustles should be fun. When things get tough, the people who view this as a side hustle are more prone to quit than to work through the plateau.
People think of side hustles as a one-man operation, but understand that a business is build off systems.
The people who realize that this is a business are the ones who make more money, do less work and have more fun.
If you truly want to scale in building an online business, you need other people doing the work for you. I take this to the extreme with:
A team of researchers sending me a daily spreadsheet of over a dozen Amazon leads (if you want, you can see that exact spreadsheet here).
An automation software updating email forms & Google Sheets, updating my Amazon prices and creating Tweets so I don’t have to.
A Prep Center who fills every single order for me without my touching or seeing a single item.
You make $0 by boxing, prepping and shipping your own orders. In fact - due to sales tax - you actually lose money by doing the work yourself.
Let’s Land The Plane
I’ve seen lots of friends make the leap from a job they hated to self-employment… which they also hated. The simple fact is that working endless hours on menial labor isn’t fun no matter who the boss is.
If you want to have freedom as an Amazon/eBay seller you need other people doing the work for you.
The two biggest and easiest ways to accomplish this immediately are:
Have someone else fill your orders.
Don’t get so lost in the weeds that you forget that this is all just a means to an end.
Your goal is NOT to make a ton of sales online… possibly at the expense of your free time, hobbies, health, well-being, relationships and sanity.
You just need to find a way to have the means to spend your time how and where you’d like.
You got into Amazon/eBay to make a few extra dollars, provide for your family or get free from the rate race. But, in your pursuit of freedom, you’ve actually lost a TON of it.
A Prep Center has given me the time and location freedom to run my business from anywhere I choose - while saving me money on sales tax in the process. It could do the same for you.
If you’ve been feeling burnt out and overwhelmed on your Amazon, eBay and online business journey…
This is a great place to start.