March 2014 is history, and it’s time to share my financial results. If you missed last month’s results post, you can find a link HERE for comparison purposes.
We’ll get started with a little background on how my time was spent this month before we get into the numbers. I took about 4 days completely off in March as a result of a couple of birthdays in the family, a friends wedding, and a trip to Austin, TX (although there was some sourcing done on this trip). Besides the aforementioned days that I was not working, I would say I was working about 25-30 hours per week the first 3 weeks of March, and about 40 hours per week for the last week and a half of March directly related to online selling activities. I could feel my efforts slipping towards the middle of the month, which is a large part of the reason I started experiment #3 on the 24th. Some of this time was also spent researching, as well as finalizing the setup of my LLC. Overall, most of the month was spent on online selling activities, but not all of these activities were revenue generating.
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. I will be sharing the same level of detail as last month. 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. As with last month, I have broken out the cost of inbound shipping to amazon, customer returns, supplies, storage fees, and services. 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 mileage, cell phone, home office, etc. I will consider adding these separately within these posts in the coming months. However, these are costs I would generally be incurring anyway, so for simplicity I will be leaving them out of the calculations. Also for clarity, this does not include any income from www.textbooks4you.com, it is simply my income from amazon and eBay.
You’ll notice pretty quickly that this month I saw a decrease in my profits of about 24%. There were a variety of factors contributing to this lower profit number, but I believe the largest driver was an overall lower effort level in the beginning of March compared to my efforts from prior months. I am not a fan at all of excuses, so I won’t make any, I believe I obtained the results that I earned based on my effort levels this month. Overall, I am pretty happy seeing this profit level, but I am not going to allow myself to get complacent and plateau already. I believe I can do better than this, and I am going to work to see much better results in the coming months.
Now, let’s take a look at this month’s cash flow statement:
This month my outflows exceeded my inflows and I had negative cash flow. At first glance you might think that this would be a very poor results, but I would argue that isn’t necessarily the case. The primary reason for the negative cash flow is that I spent about $12K on inventory during the month, with those purchases being weighted heavily towards the end of the month. I am comfortable having this negative cash flow as I am working to continue to grow my level of sales and profits. In addition, my cash flow has been positive in prior months. Negative cash flow can be a very serious warning sign that something is wrong with a business, but I am quite certain that you will see in the coming months that negative cash flow will not be a recurring theme.
When analyzing your numbers it is important to understand the difference between profits and cash flow. As you can see from my results, looking at either number individually paints a vastly different picture of how my business is doing, so it is essential that you understand the importance of both. If you have questions on this, please feel free to let me know.
Now, here are some screenshots from my amazon account to provide some documentation for the profit numbers. Here’s a screenshot of my amazon sales for March (click to enlarge, same goes for all screenshots in this post):
As you can see I did a little over $17K in sales on amazon versus about $20K last month, the decrease in sales definitely contributed to the decreased profits as noted above. Now, here is my sales by category for March 2014:
The categories my sales are in this month are pretty consistent with last month. It’s good to see that around 35% of my sales are coming from grocery, beauty, and health & personal care, as these should tend to be consistent year round sales.
Overall, I had sales of $18,583 this month versus $20,424 last month. As mentioned above, I am looking to stop this downward trend immediately and increase both sales and profits in April. To help hold myself accountable, I am setting a goal of $25,000 in total sales for the month of April. Want to hold yourself accountable? Share your goal for April 2014 below in the comments and I will follow up with you in May to see if you reached your goal.
One other update, I recently created a facebook page for this blog and I share some tips there that don’t always appear on the blog. If you are interested, check it out HERE.
That’s all I have for now, if you have any questions or comments please leave them below or send me an email at firstname.lastname@example.org.