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.
July 2014 Financial Results
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 (firstname.lastname@example.org) 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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49 thoughts on “July 2014 Financial Results from Selling on Amazon and eBay”
I just found your blog looking for reviews of Scanning Apps. We sell a ton on Ebay but I want to get more into Amazon FBA. I’d like an app that has option to add a Bluetooth fob/handheld to avoid having to use my phone and to speed things up. Does Scoutify or Scanpower have that option and do you use them? I ask about both as I saw in comments you said you might checkout Scoutify since it comes with your IL. Thanks!
Both Scoutify and Scanpower allow you to use a bluetooth scanner with them. I am personally now using Scoutify as my main scanning app.
Just found your blog via Thrifting for Profit podcast and I started going through your posts. Thank you for doing the blog as it gives me something to look up to and plan my own growth. I started 3 months ago and so far I have been exclusively doing retail arbitrage. I am hoping to get the numbers like yours within a year.
I’ll keep coming back to your blog.
Glad to hear you found it Mario, and best of luck in growing your business!
Great post as always! When you are doing the retail portion of your shopping, how many stores do you hit on an average trip? I know there will be huge variances because you may suddenly find a certain store put out clearance items the night before. But in general is it 2-3 or more like 6-8? Thanks
Thank you! I would say on a normal shopping trip I am going to 3-4 stores. As you mentioned this can vary quite a bit, but I most often find myself stopping at 3-4 stores.
Quick question (dumb one actually). what do you mean when you say you are wholesaling as opposed to the retail thing? I know that the retailing is when you buy everyday product from a store and sell to others at a profitat a profit. But when you wholesale, does that mean that you are private labeling a product, then wholesaling to other people? Or something else? Just want to understand. Thanks!!!
When I say wholesale, I mean that I am purchasing from wholesale sources versus retail stores. By wholesale sources, I mean buying further down the supply chain closer to the manufacturer. Wholesalers generally sell to retailers, so I am starting to try to buy directly from the wholesaler in some instances as opposed to from retail stores.
Let me know if you have further questions.
Hi Ryan! Just wanted to say thanks for your posts. I just came across your website today while researching FBA. I’m starting my store this week as a part-time addition to my full-time job with hopes of one day being my own boss. The 9 – 5 is killing me. 😉 Best of luck to you!
Hi Mary Anna,
Thank you! Best of luck to you in your journey to being your own boss!
Ryan, I was waiting for your July results. For some reason, I didn’t get the email notification. Congrats on another outstanding month in the slow season. Thanks for breaking down the expenses more. Trust your speech at the Midwest Conference was a huge hit. I saw you would be on Debra Conrad podcast today. I’ll definitely listen to the replay.
Are you moving towards sourcing from wholesale? I’ve been transitioning from retail to wholesale since last month. Would love to hear your results in due time.
That’s odd that you didn’t get the notification, if that issue persists please let me know. Thank you, it was another good month, and glad to hear you like the expenses breakdown.
As far as wholesale, I do plan to move more in that direction, but I don’t plan to move entirely to wholesale. I still plan to keep retail arbitrage as a good portion, but I want to get wholesale to be a good amount of my business as well.
These posts are extremely insightful! One question, would it be possible to add the number of FBA items sold? As I’m starting out, I’m trying to figure out rough averages per item. I know the item amounts probably vary greatly, but it may be interesting data. Thanks!
Thank you for the kind words! I will consider adding this next month. It won’t be the exact number of FBA items I sold, but if you take a look at my sales screenshot for the month you can see that in total I sold 821 items during July. I would say 98% plus of this was FBA, with the remainder being merchant fulfilled. I will definitely consider breaking this out separately within the post next month.
You want to save another $40 per month? See you use IL. Why not use their new scouting app? Scoutify. It’s out on iOS and will be on android in next 2 weeks. It’s a fantastic scanning app and super fast! Ditched Profit Bandit within 10 minutes of using Scoutify. Nice Scoutify is included in the monthly IL fee.
That is definitely something I will be considering. I am on android so I haven’t been able to try it out yet, but when it’s available, I do plan on testing it out.
Just found your website – your numbers look great and the information you provide is amazing – congrats and thank you. I’m new to FBA selling and had a quick question for you. I’ve listed to other FBA speakers and bloggers online and have even bought a few of their materials – but it was the fact that most of them had managed to work only “part time” hours yet made a very profitable income that caught my attention. I’m aware that it didn’t happen over night for them – but I was a little surprised to see you putting in a full 40 hours per week for your results… any comments on this? Do you think you could manage to eventually scale back to less hours per week with the same results?
Thank you for the kind words, and glad to hear you found my blog.
In this business you really get out what you put in. This past month I did take about 7 or 8 days completely off out of 24 working days in July. So on average I was spending less than 30 hours per week on this business. In addition if you read through the past results posts, I have taken time off here and there as well.
Overall though, I am looking to grow this business and see what is possible. I would definitely say that I could scale back and continue to see some solid results, but for now I am going to keep pushing forward and see what is possible.
Great post! We love inventory lab but we are trying to decide if inventory lab is enough for all of the FBA accounting needs. We are trying to determine if we should use Quickbooks as well or something similar. Have you thought about doing a post about what you use for accounting?
My wife and I read all of your posts!
Thank you for the kind words, and for reading! Right now I am just using a mix of InventoryLab and Excel, so I don’t have too much that I would be able to do a post about. I have, and am still, considering adding Quickbooks to the mix, if I do I will be sure to post about it. If you have any questions about my accounting methods in the meantime, feel free to comment or send me an email.
I really love the shoeboxed idea. I am so disorganized first on my agenda is to hire a secretary LOL. Or a personal organizer. I am excited come start of school I have 2 kids full time in school and only 1 3year old with me so we are going to do a good bit of sourcing (plus he LOVES doing the FBA stickers LOL). Started FBA 2 months ago up to 1100 items. Hope to get it up to 3500 by this time next year 😀 eBay is at 525 items but I have a HUGE backlog so I am plowing through that. And my poor Etsy store with 48 items in it 🙁
Sounds like some great goals Grace! I can definitely relate the eBay backlog as well, that’s one thing I am going to work on knocking out soon.
Your success is very inspiring! I found you on Google while researching FBA a couple of weeks back. I just got started with FBA and I would like to know how much capital I need to start with for inventory?
Thanks Phillip! There really is no amount you need to start with. If you have a few hundred bucks you can start with that, or if you have thousands, you can start with that. How much you put in is really all about your goals for the business.
Thanks Ryan for your response. Am from Kenya and joined the PAC course. Is there an email I can reach you at? I would like to discuss with you some of my goals.
You can find my email on this page: https://onlinesellingexperiment.com/about-me/
Hi Ryan, are able to use the info you input in Inventory Lab to calculate your cash flow statement?
It helps for some of the numbers, but the majority of the spending I do simply by tracking my credit card statements. So, it’s helpful, but it won’t give you all of the numbers you need for the cash flow.
I just wanted to say Thank you. I am doing well as well 🙂 Time to time I find myself thinking “Ryan would be proud of me” :))
Glad to hear it Galyna! 🙂
Would you mind giving us a rough breakdown of the percentages
of sales in retail store scanning, Online arbitrage and wholesale ?
Thanks and congrats on another great month!
Thanks Charlie! Here’s a rough breakdown for this past month:
Retail Arbitrage: 40%
Online Arbitrage: 55%
I will consider adding this in the coming months to my posts. The goal is to increase the amount of wholesale in the coming months.
The majority of your sourcing is online? Huh. Would you say its mostly the big online retailers?
Lately, it has been mostly online. It’s from a large mix of sites, some large some small.
Lol. The secret “formula” is in the vault. The things I would do for that key (:
Lol, I can’t give it all away 😉
I enjoy reading your posts as they are very informative. Your profit numbers look good however the cash flow numbers are scary? How much inventory of unsold goods do you typically have? What do you recommend as a safe level of working capital required?
Glad to hear it, and yes you could consider them scary, but I would consider them indicative of growth. My inventory levels are rising quickly, so if you were able to see my balance sheet that would show that I am increasing my assets, just not necessarily cash. I believe in the next 2 months that you will see significantly more cash coming into my business, much of it will likely be reinvested, but at any time I could start buying less and have very solid cash flow for a good period of time. I have over 3500 items in inventory currently. As far as working capital, personally I am trying to reinvest just about everything to be able to continue to grow, so I won’t weigh in on that for others.
Ryan, thanks for sharing the level of detail in your blog. I appreciate any other suggestions for online tools and services that you are using. Just setting up my FBA store and appreciate the advise.
You are welcome. You can find some more of the tools I am using on my resources page: https://onlinesellingexperiment.com/resources
The clarity of listing your expenses has helped me realize where the money drain was occurring. As someone just starting out I was keeping a general ” in my head ” list of expenses. Not a good idea. I would buy boxes for shipping FBA as an example and not keep a tally.
Tape, boxes, gas, etc. will now be kept.
Glad it helped Joanne, and yes it’s definitely important to track all of the costs related to the business.
Thanks for sharing! I just broke 5 figures in revenue this week! I am hoping to be on track to numbers similar to yours. I see ~30% net profit is about average for FBA.
Correction: I mean 5 figures for the past 30 days.
Awesome, nice work James!
Awesome info Ryan,
I never thought to use Shoeboxed.com for scanning in receipts. My only fear with a service like that is losing the receipts in the mail. I assume they email you a copy of the receipts once they’ve been received and scanned in correct? Do they have any maximum number or lengths of receipts?
It is a concern of mine as well to lose receipts in the mail, but thus far I haven’t had any issues. They do email you once they receive it and have everything scanned in. So far I have not had any issues with receipt length, but I have a couple of 10+ foot receipts from Toys R Us that I I will be double checking to make sure they get scanned in properly.
Got a question on the people you have on commission. Aren’t you running the risk of them deciding to go out on their own and competing for the same goods you’re selling?
Yes this is possibly a risk, but these are all friends of mine so I would consider it somewhat unlikely that they would. In the event they did go out on their own, it’s unlikely we would compete for the same goods as they are in different geographic areas than me.