Action - Find Out If Our Products Pass The 5X Rule
congratulations on finishing mini gold too. By now you've used our basic product criteria sheet to find three potential products in this next mini goal mini goal three. We're gonna narrow down our search and decide on one product that we want to import in this first video. Our task is to see if our products past the five X. Rule. The sheet that we're going to be using for the next couple of videos is called the advanced product criteria sheet. As always you can find this in your resource packet or you can download it as an attachment to this video. We're going to start out with my first product which is the double dog leash. But of course you're going to want to use your own products. Let's talk about what the five x. rule is. The rule is you can purchase the item for 20% of the sales price and shipping included. So that means if our item is selling for $15 on Amazon, we want to be able to buy it from our manufacturer for 20% of that price or around $3 for the sake of this criteria she...
et. We're not looking for exact numbers. We just want to get a general estimate about whether or not our item passes this test. One thing that's important to note about this test is we're not going to know the actual shipping cost unless we message a manufacturer which we don't want to do at this step. So instead we're just going to take a general estimate to see if we think our product passes or not but it's not going to be very precise and that's okay to get started. Let's open up an internet browser and we're gonna go to amazon dot com and we want to find out the average selling price for the item. So in this example we're looking at the double dog leash and I'm gonna pull up unicorn smasher so we can see all of the prices. And as I was talking about in an earlier video, I think if we sell a higher end double dog leash, we can expect to sell it for $15 per unit. So now we want to find out what 20% of $15 is. And I'm gonna open up a calculator to do this. So we're thinking we can sell this product for $15. And if we times it by .2, we'll see that 20% of $ is $3. So this means we don't want to spend more than $3 for each double dog leash that we purchase from our manufacturer. To see if this is possible. We're going to open up a new tab and go to Alibaba dot com and then we're gonna want to type in our product at this point. Don't worry about finding the perfect manufacturer. We just want to get a general sense to see if it's possible to make this item for that low of a price on the left. We can see photos of all the different types of double dog leash is that we can buy. And there's one type in particular that I really like and that is this type. So now what we have here is the price per piece and also the minimum order quantity. One thing that's interesting about the price per piece that they list here. And the minimum order quantity is very often if you were to talk and negotiate with the supplier you can get a lower unit price and also a lower minimum order quantity. Since we're just looking for an estimate at this point we don't want to go through the trouble of messaging the supplier yet. But from this since we know that we can usually negotiate the price down, I think it's safe to say that we can expect to buy this product on the lower end of the spectrum and spend $2 per unit. And keep in mind when we did our calculation That we're looking to buy the product for no more than $3. So since we're able to get the product for $2 per unit, I think that gives us plenty of room to add extra cost for shipping. And we still pass the five x. Rule by not spending more than $3 per unit. So I'm gonna go back and check off. Yes. So now let's take a look at another one of our products, the acrylic stapler. I'm going to do the same process by going to amazon and typing an acrylic stapler and then I'm going to click on the unicorn smasher button And after looking at these prices, I think we can expect to sell the stapler for around $16. Now. As you can see, this process is not perfect or very precise, but we're just looking for that general idea at this point. So let's find out what 20% of $16 is. That's $3.20 per unit. So if we can buy the stapler with shipping costs for less than $3.20 per unit, Then we passed the five x rule. So this is not the product we're looking for. But this is right here. Unfortunately, this spectrum is so wide, I don't think we can use it one cents to $6 per piece. That doesn't give us any good information. So I'm gonna keep looking. So here we have $2.5 to $3.8 per piece. And as I mentioned before, I think if we negotiate with the supplier, we're likely to get a little bit of a lower price. And for that reason I'm going to the lower end of the spectrum at $2. and I think at $2.50 even if we were to add shipping costs on top of that, We would still fall under the $3.20 per unit. And for that reason I'm going to say that this stapler passes the five X rule. And finally we have the belly casket. So we're gonna start on amazon type in belly casket, look at the average price And I'm gonna say $17. And if we look at our calculator, $17 times .2 to get 20 Is $3.40 per unit. Now we're going to head over to Alibaba and see if we can get the belly casket For less than $3.40 per unit was shipping. And it looks like there is a pretty wide range here. So I'm gonna keep scrolling to see if we can find another seller that has a less wide range, Here's the same thing here, a dollar per unit to $4.50 per unit. If we wanted to be very sure we could contact the supplier and ask them what their price per unit is. But for the sake of what we're doing, I don't think we need to go through the trouble and we'll message to suppliers later on in this course. But for now, given that the range is $1, $3.50, I think it's safe to say that we can probably get this product with shipping for less than $3.40 per unit. And the reason why I say that Is if we were to go in the middle of the spectrum from $1 to $3.50 per unit, That cost would be $2.25 per unit. And that is well below our target of $3.40. And if you were to add shipping on top of that, I think we still would not exceed $3.40 per unit. For that reason, I'm going to say that this product does pass the 5X. role in this video, we found out if our products past the five X rule in the next video, we're going to see if our products have a low minimum order quantity, pause this video now and don't move on until you found out if your products past the five X rule.