How do you know how much inventory to buy when starting a business?

How do you know how much inventory to buy when starting a business?

This is a Quora question someone asked me today. It’s a great question and here is my answer.

That’s a great question. I bought $250 when I started. In 12 months I had over $100,000 in sales. That was when I restarted my internet business Hemispheres Trade 10 years ago. Prior to that, all my sales were direct wholesale by phone.

My next inventory purchase was $450, which I turned into $8,000. These were 450 battery chargers for big brand name cameras like Nikon and Sony. The average value was over $20, and some sold for up to $50 because most were brand new.

The myth is you have to buy big to grow fast. It’s not the quantity in dollars or units that counts but what you pay for the product. I bought products for $3 (New Samsung Adapters) and sold them for $13. That was 3000 units. It took me about 7 days to sell them for cash in advance. So it cost me $9,000 and I sold them in one shot for $13 or $39,000.

Now I sell about $100,000 a month. With anywhere from 37% net profit to over 50%.

There is a big fallacy that you need to buy big to get big. My average purchase for the last few months 2020 and now 2021 is less than $5,000. I just bought $4,000 in computer tablets yesterday that I will sell for about $9,000.

In fact, you don’t need any money because many companies and individuals will give you their stuff on consignment. Google gives all their surplus inventory to a company I buy from. The company pays Google nothing until they sell the product. So in essence they paid zero. They have zero dollars invested, therefore they have an unlimited return on their zero-dollar invested. The only thing that’s required is that they move the product into their warehouse, so you could say their only cost is freight, but they have bought the inventory for zero or no cost.

Therefore you can get inventory on consignment for nothing, and have zero cost as explained above.

You can dropship, which I do not advise, but have done in the past using Costco as my supplier. I wanted to test my theory, so I listed their top-selling items and sold them to my customers. My cost of goods/inventory was zero. My customer paid me in advance and then sent a portion to Costco, the rest was my profit. I never paid anything out of my pocket but used other people’s money to buy the items.

The following is an excerpt from my blog. Mega Shop – Maddiscash

In it, you’ll see how I started my business and what is required in capital

How to Start your E-Commerce Business from Home by Mike Addis

I will show you how to open your e-commerce home business in 6 simple steps.

Steps to Follow

  1. Create a sole proprietorship using your social security number
  2. Get whatever documents you need to open your bank account online
  3. Open an eBay and Amazon account and link your bank.
  4. List anything you don’t need around your house. Take good pictures and accurate descriptions of what you are selling.
  5. Find other people’s products to sell and take 40% to 50% commission after platform fees and cost of shipping etc.
  6. Save money, repeat the above.
  7. No cash required for inventory. You can do consignment.

So as you can see, it’s pretty simple to do this and easy too. The hard part is to continue doing it. Therefore it takes patience and perseverance to make money online from home.

My Multi-Million Dollar Business

Using these 6 basic steps I have created a multi-million dollar e-commerce business from home. Therefore it’s easy to start but more difficult to continue.

In other words, the difficulty comes with starting. So like anything worth having you need to start work today. Once you’re up and running and you sell your first item then it’s more of the same every day.

It’s easy to “fall off the wagon” and bemoan your station (your lot in life) and cry about why things are not working and why no one loves you. If you do the above then that will all change soon enough.

Pros and Cons


  1. You don’t have to commute. My biggest joy.
  2. Don’t have a boss to answer to anyone
  3. Take naps when you want. I have a big couch in my home office
  4. Tax deductions are wonderful too. Deducting Business Expenses
  5. You can live wherever you want
  6. Can become very rich.
  7. Freedom and Independence are all yours now.


  1. If you don’t work you don’t get paid
  2. Easier to work for a paycheck and twice as addictive
  3. People will want to borrow money from you.
  4. They will ask you how to do it and you’ll feel obliged to help them
  5. If things go wrong they will blame you. (people that is)
  6. You have to save and reinvest. No more Starbucks and other things you don’t need. Taking responsibility, focus, and commitment with a lot of discipline wins the day.

Is it worth it?

The best decision I ever made in my life was quitting my job back in the ’80s and working for myself. So it wasn’t easy, and you can read my books for the details. It did give me several things that I carry with me today.

Freedom to live where I want, and be with who I want, and take an afternoon, and or morning naps at home.

Therefore not having a boss, but giving up the addictive paycheck was all worth it. And it becomes worth it when you realize you don’t have to commute to a job you hate and a boss you hate even more.

So if you want what I got out of it then this is for you and you’ll never regret doing it.

Hard Part: starting a business

It’s harder to convince your spouse and friends that you are not crazy. Therefore be prepared to get zero support.

The other hard part is no social activity, not that it matters with the COVID. In other words, the COVID will end and people will hustle back to work, but a lot of it will change forever and already has.

Big companies like Facebook and Twitter don’t need you at the office anymore as long as you can get your work done at home. So they do offer an easy way out assuming you have a job with one of these companies.

In other words, paychecks are in a way easier to work for and less difficult. So in a way, it is easier but the new world order of socializing at the workplace is done.

eBay Amazon and Walmart

The three largest e-commerce stores are eBay, Amazon, and Walmart. In other words, there is no sense of opening your own store until you’ve tried out your product on these big store sites. So if you can sell products on these sites there’s a better chance you’ll have some kind of a chance to sell on your own site.

These big e-commerce stores have hundreds of millions of views and subscribers looking for products every month. So it only makes sense that it’s 100X easier to sell your products through the, Here are the simple facts.

  1. The big sites mentioned above have about 300 million-plus visitors a month
  2. They control the search engines. So if you are looking for almost wanting, their sites will pop first.
  3. It’s easier to just list your products, and see if what your selling people actually want.
  4. You get paid the next day or in the case of Amazon, every 2 weeks.
  5. Their sites protect you both as a buyer and seller.
  6. You have less risk of losing money because of number 5 above.

Conclusion: starting a business

I have my own e-commerce store. So far I’m selling nothing because it’s taken me some time to assemble it. Therefore I have a store that produces not much income because I have to promote the store so people can find me.

Eventually, I will begin the slow process of selling products directly and you will be the first to know my outcome.

Mike Addis, Carlsbad California. Mega Shop – Maddiscash

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