Summer is continuing to cruise on by, and August is already here. That means that it is time for me to share my financial results from this past month. If you missed any of my previous financial results posts, you can find them HERE.
We’ll get started with some background information on how my time was spent this month. I took about 7 working days completely off during July to go on a couple extended weekend trips with my family, as well as 2 days completely off to attend the 2014 Midwest eCom conference that was held in the Twin Cities. All of these provided some good breaks from working. With the aforementioned exceptions, I would say I averaged about 40 hours per week directly related to the online selling activities that I am blogging about here. I am still planning on doing a “week in the life” post where I track how I spend a full week, but this was a somewhat unusual month with the amount of time I took off, so keep an eye out for this type of post later in August.
Before we get to the numbers, one more topic to discuss. My goal with sharing my financial results is to show what can be done, and is not meant to be seen as bragging or anything of the sort. I want to show that working hard and sticking with your plan can pay off. If the results turn out to be poor at any time I will share that too.
With that said, let’s get into the numbers for July. I have revamped the format of the income statement to provide some additional detail of revenues and expenses. Everything that was there in prior months is again present, as well as the new additions. The main addition that had many requests was breaking out my cost of goods sold (COGS) and amazon fees separately. I want to provide as much clarity as possible into what I am doing on a month to month basis (if you have suggestions for additions to these posts, please let me know!). The numbers below are basically the profits that I am making for the month. The profits are calculated only on items that have been sold and shipped during the month. They were calculated by taking selling prices, minus all fees, minus all shipping and packaging costs, and subtracting the cost of the items. Certain important numbers such as: COGS, inbound shipping to amazon, customer returns, supplies, storage fees, and services have been broken out separately. The FBA profits number factors in reimbursements from amazon for items lost or damaged at the warehouse. This will NOT be the exact number that goes on my tax returns as there will be additional deductions for cell phone, home office, etc. However, some of these are costs I would generally be incurring anyway, so for simplicity I will be leaving them out of the calculations. It’s also possible that I missed a receipt or 2 and the spending numbers may be updated slightly, but all numbers from amazon/eBay are 100% accurate. Also for clarity, this does not include any income from any other source, it is simply my income from amazon and eBay. To get a better look, click on this image (or any others in the post) to enlarge.
Notes: These are pretax income numbers and mileage has been calculated at the IRS rate of $0.56/mile. MF stands for merchant fulfilled and FBA is fulfilled by amazon.
As you can see this format is a bit different and includes a bit more detail than the previous format. In the coming months I will keep in the prior months results in the new format for comparison purposes, but for this month you will have to flip back and forth between last month’s post, and this one.
A few notes on the above numbers:
The commissions number of 703.38 is the total amount that I am paying to several individuals who are helping me source products. I have various arrangements with each of them, ranging from upfront payments to a percentage of the profits when items sell. These numbers will likely be significantly higher in the coming months as this is really the first full month where these individuals have been helping me source products.
The services that I am paying for that comprise the above total are the following:
Inventory Lab – I use their service for listing all of my products for sale on amazon, as well as the majority of my accounting. Current cost is $49.99/month, you can sign up for a 30 day free trial with no credit card required.
Scanpower– This is the primary scanning app that I use in retail stores. Current cost is $39.95/month, you can obtain a 1 month free trial by entering my email (email@example.com) when signing up.
Shoeboxed– This is a service that I use to manage my receipts. I send my receipts off to them in an envelope, they scan them into an online filling system, and mail them back to me. Current cost for the plan I am using is $29.99/month, you can sign up for a one month free trial.
UPS Smart Pickup – This is a service to have UPS pickup boxes from my house, rather than having to personally drop them off at a UPS location. Current Cost is $41.20/month.
Note that of these services, the current total costs do not add up to the numbers shown above, as I paid for some of these on an annual basis to obtain a discount.
Now for some analysis of the actual income statement numbers. Profits were up almost $3K from the prior month, which was due mainly to the increased amount of buying that took place during June. Having the additional individuals help with sourcing has also helped to continue to have a more consistent stream of products even when I don’t personally have the time available to source.
Next up, we have my cash flow statement for this month:
Cash flow was back on the positive side for the month which is nice to see. My inventory spending was down a bit this month, but that was more due to the amount of time I allocated to sourcing than anything else. I will plan to continue to grow my level of spending in the coming months.
Now I will share some screenshots to provide some support for the above numbers I am sharing. Please note that the amazon sales number will not be exactly the same as what is shown above, as the screenshot shows all orders that have been placed (but not necessarily shipped), while the above numbers are only for items that actually shipped during the month. Due to this the variance is to be expected:
I did about $23,000 in sales for July, which I am very happy with. There were a few large peaks and valleys during the month. I believe some of these were due to when I was sending in new products to FBA, but also were due to the timing of when I was repricing. I am planning on testing out using a repricer later this month, and want to see if that will help to see more consistent sales throughout the month.
Here’s a screenshot of my eBay sales:
My eBay sales were relatively low this month, and that is due primarily to focusing my efforts almost exclusively on amazon FBA. I do have a decent backlog of items that need to be listed on eBay, so I do plan on having some more significant sales on eBay in the coming months once I invest some more time there.
In prior months, I have included a screenshot showing my sales by category. For the next few months I have decided to discontinue sharing the sales by category. One of the main reasons for this is I have some very category specific strategies that I have been implementing recently, and am not quite ready to share what these categories are within the results posts.
Overall, I am very happy with this level of profits for the month especially considering the number of days that I was not working this month. Last month, I had said my goal was to exceed $7500 in profits, and I didn’t quite make it.
For next month, my goal is to exceed $10,000 in profit for the month of August. With some of the strategies that I have been implementing recently, I believe it is very possible to reach this goal and likely exceed it by a good margin, but it will all depend on if things go according to plan. Be sure to check back next month to see what happens!
What are your goals for August 2014? Did you reach your goals you set in July? Any other questions or comments for me? Please let me know in the comments below!
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