Part 3 - £100K KDP Business Case Study Update
21st March - 10th April
Some strong developments.
As mentioned in part 1 & 2, the core goal of this project is “to build a business valued at £100,000 in 12 months without doing *many* of the “tasks”.”
The reason for adding the “many of the tasks yourself” point, is 2-fold;
The first is I’m not working full time on this project, we have 4 other businesses. 1 of which is in a growth season.
The second point is just down to how I wouldn’t be utilising time/skills effectively enough. But we do have a number of processes already set-up.
As mentioned in part 1, you can boil the £100,000 business valuation goal all the way down to daily profit targets, which makes life a lot easier and things seem a lot more achievable if you are just starting out.
So £100k / 30 months = £3.3k net profit per month to achieve this goal.
Going to also use a daily profit figure of £110/day as I’ve found having daily goals makes things a bit easier to track on how progress is going.
So we have our goal of £100-120/day.
I’m just going to use £100/day for now to make the maths/scale processes easier to explain.
To hit this number there’s obviously tons of ways to get there in terms of volume of products, profit margin per book, even upsells in some cases, but again to keep things super simple, it will be the following process explained below.
Creating digital & printable products, utilising Amazon’s KDP platform.
Marketing these using our already proven Amazon marketing strategies, to create £100 net profit per day, with less than 30 different SKU’s.
This also takes into account VAT, Amazon fees etc.
Below is a screenshot from how I track things like this, which is made pretty easy as Amazon does all the fee calculation before the “royalties you earn per sale” type stat, unlike in FBA.
The First “Book”
The first book that was launched was a colouring book that was created by a team member using prompts from Midjourney (the Ai image generator).
This was my first experience playing with these AI image generation tools and in-short, Midjourney is a lot better than I thought it would be. Dalle I found quite poor for our book creations and others just weren’t quite right, so we went with Midjourney.
The book turned out not bad for a first attempt, but it’s not something I want to invest marketing dollars into pushing as I don’t think the upside is that good, but it’s a good test.
The Real Plan:
The first book was realistically just a test and understanding the whole process of how the KDP back-end works.
Seeing it this way made it easier to realise that although we “invested” around £300 of team time, softwares, fiverr gigs etc, it won't make that back, but doing this made it a lot easier to understand the processes and how things work, where the pain points are, etc.
The real plan that’s now been developed and started is to create 3 books in quite different areas;
Puzzle book
Air fryer recipe book
ADHD book
All extremely different niches but with the same structure/goal; good search volume, medium competition, easy enough to develop and quick to market/rank.
All this to say that these 3 books will be the real test as to whether this entire process and business model has legs.
If we launch all 3 of these and after fully launching (rankings/reviews etc) have very few daily sales, it’ll be time to move on and cut the losses.
If we are above the £10/day net profit mark then it’ll be time to iterate, improve and repeat.
Ideally I’d like to reach this £10/day net profit mark in May, but we’ll see.
Profit Tracking
For all businesses I launch, I like to monitor how many days it takes to make certain small daily profit targets.
These profit targets are £1/day, £10/day and £100/day in profit.
As the last one of these targets is the goal for our entire case study/challenge or whatever you want to call it, that has a timeline of 365 days, although I think if everything went well we could be closer to 250 days (8-9 months).
The £1/day goal has actually already been hit;
£8/week profit obviously isn’t much but the process of this is promising so early on.
Sidenote: This is always funny when people ask why I’m more excited about making £8/week profit on something like this vs 1,000’s in an agency business and although it's mainly just about doing something creative/new/from scratch, it's also because these assets are so hyper sellable, whereas agency business models come with constant client hassle, integrated teams that need managing etc etc.
Next stages:
The next few stages are pretty easy but there’s a lot of waiting around on others & Amazon;
Merge accounts - Just a technical KDP thing that needs to get solved for tax/reporting elements that hopefully Amazon won’t f*ck up.
Upload and launch the ADHD book.
Continue rankings/review generation for 2 other books.
Update 21st April:
The first goal of moving the account over and sorting all the admin/technical structures out actually was fairly painless. Spoke to a very useful Amazon customer support person and the whole thing was in motion in 30 minutes and all live and ready the next day.
It was so smooth that I was actually in shock based on how shockingly bad Amazon FBA customer service is… Which is another positive mark in the KDP over FBA model.
Aside from this there wasn’t a massive amount to report on, we had another strong week from the 7th - 13th April which had a jump to £22 (£3/day net) and is good to solidify at least the £1/day mark which is the first goal for any business.
The goals now moving forward for the next 1-3 weeks are:
ADHD book - get this fully proofed, formatted, finished up and live. This book was pretty expensive to get fully completed but that’s a mix of 100% of things being outsourced as per this business’s plan, and also just the first of it’s type (30,000 word self help niche). A similar one in the future should be about half the price and potentially half the time if I did any of the “task” based work.
Work towards the £10/day mark - to do this 2 things would have to happen; The first is the puzzle book would need to improve a bit, and get to at least 3 or 4 daily sales consistently. The second is that the air fryer book would need to start generating 1+ a day as well. Both could happen in the next 7-10 days, so quietly confident about the overall progress of things but time will tell.
Will write up part 4 of this case study in mid-late May.