Hello Everyone, hope your month of June is off to a great start! May was a busy and exciting month for my business and we’ll get into the details shortly. If you missed any of my past financial results posts, you can find them HERE.
We’ll get started with how my time was spent during May. I only worked on weekdays on the amazon business for the most part. During May I took 5 working days off. 2 days were to take a trip to New Orleans with 3 friends from college, and 3 days were to take a road trip with my family to visit my grandparents and family in Indiana. Other than that, I was working 8 to 10 hours per day on the amazon business. I would estimate I averaged 30 to 35 hours per week over the course of the month due to taking basically a full week off.
Before we get to the numbers, there is 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 May. 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 format will be the same as last month and I will be sharing numbers exported directly from my InventoryLab account. The numbers below will NOT be the exact numbers that go on my tax returns as there will be additional deductions not included here (cell phone, health insurance, etc.). It’s also possible that I missed a receipt or 2 and the spending numbers may be updated slightly. Also for clarity, this does not include any income from any other sources, it is simply my income from amazon and eBay.
May 2015 Financial Results
Now the expenses for May:
These are screenshots of excel files exported directly from my InventoryLab account, which is the main accounting tool that I am using. A couple of notes are that certain items will only show up in one of the time periods even though they occurred over the course of the month, in these instances look at the total number for the month.
Net profit for April was about $19K, so profit decreased a little over $3K in May, despite about an 8% increase in sales. There are several contributing factors to this, which I will get into, but this really highlights how deceptive sales screenshots can be.
One of the major reasons for the decrease is due to “inventory writeoffs” which has not been present in past months. This amount is for inventory that has either expired (grocery/beauty items) or has been damaged to the point of not being sellable. I had been neglecting customer returns for some time, and finally went through them this month. In reality this amount should be spread out from January through May, but it’s all showing up here since I didn’t report it previously.
Another major reason for the decrease in profits is the increase in commissions/wages which increased by just under $2K. This was influenced by bringing 2 additional team members on board, and expanding the retail arbitrage sourcing role of another team member. This will pay off over time, but due to timing it shows a higher expense without the associated future revenue. For all of the details on how I outsource retail/online arbitrage checkout my ebook Outsourcing Sourcing.
Yet another major reason for the decrease is a higher than usual number of returns. I have been experimenting with selling in the clothing & shoe categories on amazon, as well as some other higher end items. On the clothing & shoe items in particular I am seeing much higher return rates than I was before beginning to sell in the categories. I am going to be continuing to evaluate these categories to see if they are areas I want to dedicate more time to.
Finally, one last contributing factor was purchasing a $397 ticket to Jim Cockrum’s CES conference that will be in September of this year. Hopefully, I will see some of you reading this there!
Overall, none of these things are overly concerning. The bulk of these added expenses are investments in the future, and should pay dividends in coming months.
Here are the current services that I am using that make up the above numbers for the subscription expenses (note that some of these I paid for on an annual basis to obtain a discount):
InventoryLab – I use their service for listing all of my products for sale on amazon, as well as the majority of my accounting. I use their scanning app, Scoutify, as my main scanning app. Current cost is $49.99/month, you can sign up for a 30 day free trial with no credit card required.
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. If you sign up through this link you can receive a 1 month free trial, and a 20% discount on your first 6 months if you become a paying user. Current cost for the plan I am using is $29.99/month.
Appeagle– This is the repricer I am using. It has been saving me significant amounts of time manually repricing. In addition, it reprices items up as well as down, so I have sold many items already for more than I have listed them for. They have a 14 day free trial, and if you enter coupon code “RYAN_G” you will receive 50% off your first month’s subscription if you elect to become a paying user. The current cost for this service is $50/mo.
Feedback Genius – This service automatically sends out emails when items are out for delivery to the customer, as well as 4 days after the item has been delivered. I tried out the free trial of this service, and it nearly doubled the percentage of orders on which I receive feedback without adding negative/neutral feedback, so I am now a paying customer.
Now, let’s take a look at cash flow for the month:
Cash flow for May was a bit negative. This is about where I want it to be as I have been continuing to aggressively spend on inventory. I am also in the process of obtaining a line of credit for my business to allow for access to additional capital if opportunities present themselves. This should be in place early in June, and assuming it is, I plan to run cash flow a bit more negative to continue growth.
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 below 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:
It was exciting that this month was the first month over $100K in sales outside of Q4, but as the income statement shows, the sales numbers don’t tell the whole story. Now, for my eBay sales:
Overall, I am happy with how this month turned out. I believe that some of the investments of both time and money that were made this month will start to show some quality results in the coming months. Here are a few of my goals for June:
1. Have my first private label product sell on amazon
2. Obtain a line of credit
3. Invest a minimum of $65K in inventory
Finally, I want to do something I haven’t done in about a year on the blog, and that is to do a contest.
The prize: Three (3) individuals will win a 20 minute phone call / video call with me via the method of their choosing from the following options: phone call, skype call, or video call via google plus. In the call you can ask me any questions that you would like about selling on amazon, selling on eBay, tips to grow your business, board games, sports, products you sell that I should be using, or any topic you would like to discuss. Each winner can ask whatever they want.
How to enter: You can enter this contest by either of the following methods:
- Entering your email in a pop up box by clicking THIS LINK to subscribe to future updates. Even if you are already subscribed to email notifications, you can enter via this method.
- Share a link to any post or page on onlinesellingexperiment.com via any social media channel or via email. If you enter via this method send an email to: email@example.com with the subject line “June Contest” and a link or screenshot of what you shared.
- Leaving a comment below sharing your goals for June 2015.
That’s it, enter via any or all of the above 3 options for your chance to win. There will be a maximum of three (3) entries per person, and each entry method can be used only once. The deadline to enter is June 14th 2015 at 11:59 PM ET. At that time 3 individuals will be chosen by using www.random.org. Winners will be contacted via email to arrange scheduling. If you don’t win, I do offer a limited amount of coaching each week. That’s all for today, thanks for reading!