Passively Invest in an Amazon Store!?

Passive Income = Freedom

Every week I bring you a couple gold nuggets to inspire growth in your business to build wealth & create freedom. Find me on Twitter @brianbeers

Business with Beers

Have you ever thought about owning an Amazon store as a passive investment? That is exactly what Ascend Ecom helps clients do. Ascend provides full automation for building & scaling Amazon & Walmart 3rd party stores.

In this episode you will learn about how you can start up a store then hand off almost 100% of the management. Ascend’s team of over 400 employees will source products for you, get them listed & sent to Amazon, handle customer service and more.

They are still in start-up mode and growing quickly. In 2021 they did over $30 million in revenue for their 250 clients.

Ascend is offering $1,000 off to for anyone who mentioned “BEERS”

Listen on Apple Podcasts or Spotify

After doing a ton of research on this Amazon business my brother and I decided to invest into 2 stores. On my Thursday solo episode I broke down my thought process of how I analyze the opportunity using RR/TT: risk, return, time & turn.

For any investment you need to decide if it makes sense for you based on your own risk tolerance and research. This is an abbreviated version of my personal take.

#1 Risk

There’s risk of losing the initial capital invested somewhere between $30k to $40k. On average many of their clients have recouped their initial investment within 10 to 12 months. If you don’t earn your initial investment back within 24 months Ascend will pay you the difference & take the store back. That’s a strong guarantee.

There’s risk of products being purchased on your credit cards that don’t sell. This is definitely something you’ll want to keep an eye on. They try to keep purchases at reasonable amounts, adjust pricing after 30 days and will liquidate if still not moving.

This is a risk with any retail business.

If you were doing this all yourself you’d be purchasing products in much larger quantities, potentially giving you a bigger risk exposure.

#2 Return

Much of the success of a specific store is determined by the amount of working capital available (business credit cards). This is a volume game. Buying a lot of products, selling them quickly, and then buying more.

According to Will a store could break-even by 1 year and then start cranking out $10k per month in profit starting in the second year. Some of there best do $20k per month in profit.

A store also has resale value. For example you start a store for $40k. After a year you’ve made all your money back, after 24 months it’s pumping out $10k month a year in profit. You could ride it as long as possible or you could sell it for somewhere between $300k to $500k depending on various factors and redeploy the capital into another cash flowing investment.

#3 Time

The work required to run a success Amazon business is the same no matter what: someone has to open the store, build out a team of remote employees, use software to help determine which products to sell, source the products, get them shipped to your house, repack them and ship to Amazon, list on the website, monitor competitors, purchase ads, and deal with customer service.

The question is who’s doing all the work? If you’ve got the time & energy then go do it. I personally don’t have the time and would prefer to pay for a “do it for me” model. I want passive investments that don’t require any of my personal time in order to be successful.

#4 Turn

How quickly are you getting your capital back. In many real estate syndication investments, the turn is 3 to 5 years. In this business it sounds like our turn should be about 12 months that we’ve “broken even” and got our capital returned through the profits.

I’ll let you know in about 10 months if that is true. The risk profile of the investments drops significantly once all your capital is returned back to you. With no money into a deal you’ve got an infinite return on your investment.

Ascend is offering $1,000 off to anyone who mentioned “BEERS”

Got 12 minutes? Listen to the full episode where I go into more detail on Apple Podcasts or Spotify.

One Quote

“Let's raise kids to be entrepreneurs” - Cameron Herold

I’m working on teaching my 5 yr old the “art of sales”

One Tweet

Some great management advice for having regular 1-1 meetings. It’s all about communication, expectations & being transparent.

One Podcast

Justin Donald: The 10 Commandments of Lifestyle Investing

In this episode Justin Donald, NYTimes best selling author talks about creating freedom through passive investing.

We are working towards the same goal: freedom to do what we want, when we want and with people we want. In order to have that freedom you need passive cash flow. Money that is not correlated to to your time.

My strategy is simple. I trade my time for money through my business then use that money to acquire cash-flowing assets. Those assets could be rental properties, syndications, private loans, or even Amazon stores!

Listen on Apple Podcasts or Spotify

If you liked this post from Business with Beers, why not share it?