February 2014 Results from Selling on Amazon and eBay

March 3rd, 2014

February is in the books, and it’s time to share this month’s results.  If you missed last month’s post, you can find a link HERE so you can compare the changes month to month.

Today also happens to be the birthday of my very first subscriber on this blog, so first off HAPPY BIRTHDAY Mom!

We’ll get started with a little background on how my time was spent this month before we get into the numbers.  I took 1 day off in February, and would say I averaged 35-40 hours per week directly related to online selling activities.  I spent some time researching what business structure would make the most sense, and set up an LLC during the month.  I also have been doing research related to sales tax, and working to get systems in place that will work as I scale this business.  My goal is to continue to scale my selling activities quickly, and I want to ensure that I have the systems and resources in place that I need to do this.  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 prove that this can be done, and is not meant to be seen as bragging or anything of that sort.  I just want to show that working hard and smart, and sticking with your plan  can pay off.  If the results turn out to be poor in future months, I will share that too.

With that said, let’s get into the numbers.  I will be sharing the same level of detail as was shown in January.  I want to provide as much clarity as possible into what I am doing on a month to month basis, and will continue to add some more details as the months go on (if you have suggestions, 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.

February 2014 Income Statement

February 2014 Income Statement

As you can see, I increased my profits from the prior month by over 47%.  This was great to see, especially considering that February is the shortest month of the year.  Consistently sending in inventory to FBA throughout January and February is one of the largest drivers of this increase in profits.  My eBay results were down significantly compared to prior months, and this is due to focusing my efforts on FBA for February.  This number will go back up in March, as I have some eBay ready inventory that I have been neglecting.  Other items worth noting include, I spent over $300 stocking up on poly-bags and shipping boxes, these should last me several months and will keep expenses lower in the coming months.  I also purchased a few “one-time purchase” items that are basically tools to help me be more efficient.  I will have some posts coming out later in the month explaining what I have purchased in both January and February that fall in this category.

Now, let’s take a look at this month’s cash flow statement: Cash Flow statementOne item to note here is that inbound shipping costs and refunds to customers are directly taken out of my amazon account, and are factored into payments from amazon in the cash inflows section, and as a result do not need to be added into the cash outflows section.  I have continued to buy significant amounts of inventory, and the goal is to continue to grow the sales through this increased spending on inventory.  The net cash flow was quite a bit higher this month, but that is due partially to the timing of the end of the month, as I will be purchasing significantly more inventory in the early days of March.

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 February (click to enlarge, same goes for all screenshots in this post):Feb Amazon salesAs you can see, I just barely squeaked out $20K in sales, which I was very happy about.  It was exciting to see this number in the month of February.  Now, here is my sales by category for the month: Sale by catToys and grocery have remained 2 of my top categories.  I had a really good find on some high dollar office products that I sold early in the month that had high selling prices and were very profitable.  I am also very happy with my sales levels for beauty and health & personal care, they made up over 16% of my total sales, compared to less than 5% last month.  I plan on continuing to grow these categories, as they should be consistent sellers year round.

As my ebay sales were rather pathetic, I won’t be including a screenshot this month.

Overall, sales for February between amazon and eBay were $20,424.27 compared to $13,588.54 for January.  I am very happy with these results, and excited about the growth that I have seen month to month.  My goal is to keep this momentum going and continue to rapidly grow the sales and profits to strive to reach my goal for the year.

I have the data for the experiments that I did in February ready to go, and I will be providing updates on how those went in the coming days.   HERE is a link to what the experiments I did were if you missed it.

That’s all I have for now, if you have any questions or comments PLEASE leave one below or send me an email at grant.ryanj@gmail.com.  Anything is fair game!

Make sure to subscribe (left side towards top of screen) so you don’t miss out on future posts!

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43 responses to “February 2014 Results from Selling on Amazon and eBay”

  1. Rob says:

    Ryan,

    I found your blog via a Facebook Group that I belong to. I started with FBA in the UK at the end of January and have done pretty well in my first month with over £1000 in Gross sales resulting in a profit of around £350. I am very much part-time with this as I have a full time job so I was really pleased to do so well in my first month. I am now keen to reinvest and increase the stock in my inventory so that I can grow my business as quickly as possible – whilst still retaining a sensible approach of course. Your blog posts are inspiring and I will be visiting regularly to keep track of your achievements. I appreciate that it takes hard work but it sure beats working for someone else. Well done and keep on going – you are doing a great job.

    • Ryan Grant says:

      Hey Rob,

      Sounds like you are off to a great start, and thank you for the kind words! Let me know if you have any questions along the way.

      Best Regards,
      Ryan

  2. Kenny says:

    Hey Ryan!

    I emailed you a few questions a few days prior and I’m glad to see you posted your results for Febraury. It really seems like you’re starting to get this business down quite well now. Do you think there will ever be a point in your business where you can’t scale it anymore due to the number of hours you will work? Also, how was the process of setting up an LLC?

    Thanks

    • Ryan Grant says:

      Hey Kenny,

      Thanks for leaving a comment! I remember your email, did you receive my response?

      I think that there will be a point where the number of hours limits my ability to do some of the tasks related to this business, but my goal is to get employees involved to do some of the packing/shipping, and then I can focus some more time on sourcing and finding items to sell. So, I think that this will become an issue in the near future, but I am not quite there yet.

      As far as the LLC, it took about 2 hours in total to get it all setup, and was a relatively pain free process. Let me know if you have any additional questions.

      Best Regards,
      Ryan

  3. Ben says:

    Ryan,

    This are great results – thanks for sharing ! You can be proud of those results and you have a healthy profit margin. I think if you are able to find steady suppliers you can easily bring up your monthly sales to 100k on Amazon FBA.

    • Ryan Grant says:

      Hey Ben,

      Thank you for the kind words! I definitely think that there is the potential for that as well, and my goal is to prove that it can be done.

      Best Regards,
      Ryan

  4. Chuck says:

    Ryan,

    Quick point of clarification here, you don’t fulfill anything yourself, correct? It’s all FBA? Reason why I’m asking is that I was trying to figure out if you were getting preferential treatment on listings using FBA and that was one of your big drivers. Tks – Chuck

    • Ryan Grant says:

      Hey Chuck,

      Thank you for stopping by and leaving a comment! I do not do FBA for everything and I am fulfilling some items myself. Beyond the benefits of having a good seller rating I am not getting any preferential treatment on listings that are not available to everyone. Let me know if you have further questions.

      Best Regards,
      Ryan

      • chuck says:

        How do you decide which products go where? My products are really bulky so my sell through is normally though my own warehouse. Why would you have them ship anything at all? Just because of man power on your end?

        • Ryan Grant says:

          Amazon tells me which items to ship to each location, so I don’t get to pick where I am sending my items. It is generally 3 or 4 different locations. I have amazon ship my items for many reasons, but the main 2 are: it allows me at any location I want and my orders are still being fulfilled, and I find that items sell faster through FBA in general.

          Best Regards,
          Ryan

  5. Sabine says:

    Hi Ryan,
    I am really impressed with your integrity in this field. There are many other ‘resources’ I have looked at but you sure are the real deal. Congrats on all your success and a big thank you for sharing the knowledge you have gained with us readers. If you could do it over again, what would you suggest to yourself to get immediately. I am a total newbie and want to avoid the big pitfalls in this market. I would love to know the top 5 or 10 things you think are necessary to get the FBA going. For example: do I get a Thermal printer, or what do I do with receipts of my purchases etc; what online class if any should I take to learn more? Thanks for all your support!

    • Ryan Grant says:

      Hello Sabine,

      Thank you very much for the kind words! I am glad to hear that you find the information I share helpful. You have asked an excellent question, and I have had this question in a couple of emails from others as well. I will plan on dedicating a blog post to this topic of what I get started with if I was starting today knowing what I know now. I will plan on having this published by next Friday (March 14th) at the absolute latest. Hope you can wait that long for an answer, and stay tuned!

      Best Regards,
      Ryan

  6. P says:

    Another great month, you are an inspiration! Keep it up.

  7. George Loudon says:

    Hi Ryan,
    Have you ever used Liquidation dot com and what are your thoughts?
    Thanks,
    George

    • Ryan Grant says:

      Hi George,

      I purchased a lot of textbooks on liquidation.com about 3 years ago. I didn’t really understand sales rank at the time, and many of these books didn’t sell very well, and I still have some of them available. I have sold some books on liquidation.com 3 different times, and it worked well to get a little money for books that weren’t worth much on amazon.

      It’s not part of my strategy currently, but I may explore it again further down the road.

      Best Regards,
      Ryan

  8. Dean Thompson says:

    Hi Ryan,

    Another great update as your business develops further. It provides great inspiration/motivation to us newbies.

    You mention you’ve neglected ebay as you scale your business with Amazon.
    As your business develops further how realistic will it be to keep scaling both areas (ebay & Amazon)?

    Kind regards,
    Dean

    • Ryan Grant says:

      Hi Dean,

      Thank you for the kind words! My focus will remain on amazon, and I plan to work to continue to make that the priority. I do think more is possible with eBay as well, but it’s really not what I am focusing on. I think the ideal situation would be to hire someone to run the eBay side of things on a part time basis for me, so that is what I am going to look into in the near future. Let me know if you have any further questions.

      Best Regards,
      Ryan

  9. Sharon says:

    Thanks again Ryan for sharing how your business is going, you are going above and beyond. I too am interested in the blog you will be posting about if I were starting today….

    • Ryan Grant says:

      Hi Sharon,

      No problem, I am happy to share! I will definitely make sure to get that post ready by next Friday, so stay tuned.

      Best Regards,
      Ryan

  10. Larry King says:

    Great post Ryan! Are you doing mostly retail arbitrage?

    • Ryan Grant says:

      Thank you Larry! Yes, I am currently doing almost entirely retail arbitrage at this point. I am looking to expand into wholesale in the near future, but for now it’s just about all retail arbitrage.

      Best Regards,
      Ryan

  11. Great post and great results Ryan. My first FBA box goes out this weekend. Let the business begin.

  12. Quinn Tay says:

    Hi Ryan, thanks for the info sharing. Really inspiring. I experimented a little on Amazon via amazon merchant fulfilled. However, the result is disappointing so far. No sales at all, although two of my items are listed with the lowest selling prices. What will you see about amazon merchant fulfilled? Is it because my seller account is brand new without any feedback?

    Another question about FBA. When you source for FBA, what’s your gross profit guideline to do the purchase? For example, if the GP from an item (after matching the lowest selling price) is only $1 or less, will you still buy it? It seems that the profit isn’t worth the whole workload.

    Thank you very much in advance.

    All the best,
    Quinn Tay

    • Ryan Grant says:

      Hi Quinn,

      It can be a little bit tough getting started right away without having very many items listed, and without feedback. I think that it likely has something to do with your new account, but if you keep finding items that have good sales ranks you should start to get some sales right away.

      For FBA, the absolute minimum profit per item I am looking for is $3 per item, as below that does not leave much room for error. Hope that helps, and I would encourage you to try out FBA as soon as you can!

      Best Regards,
      Ryan

  13. Kris says:

    Hi Ryan,
    enjoying your posts! Glad that you are doing well :-). How do you set up and collect sales tax? I checked the Amazon tax section and its not that informative. If you sell in the 50 states, do you have to register in all 50 states or just the state that you are doing business in? Let us know or if you can point us in the right direction.
    thanks
    Kris

    • Ryan Grant says:

      Hi Kris,

      Thank you! 🙂 As for sales tax, I will be coming out with a post in the next couple of weeks with some details about sales tax and what my thoughts are, so stay tuned for that.

      Best Regards,
      Ryan

      • Kris says:

        Ryan,
        thanks for the quick response! I am looking forward to your posts. It would have been so simple if sales tax did not apply to online sales as it did in the past. 🙂
        Kris

        • Ryan Grant says:

          No problem! I agree completely that it would be nice if we didn’t have to even worry about sales tax 🙂

          • Kris says:

            Ryan
            For Amazon FBA sellers using UPS as the preferred carrier, is there a way to get additional insurance for expensive items being shipped? In seller central, there is no checkbox or selection to purchase additional insurance as far as I can tell.
            thanks
            KRIS

          • Ryan Grant says:

            Hi Kris,

            I have not found a way to purchase additional insurance when buying shipping using amazon’s partnered rates, so you may have to just buy shipping without amazon’s UPS rates to purchase the level of insurance you feel you need. This link talks about amazon’s damage policy and it covers items in transit to their fulfillment centers when you use their partnered shipping: http://www.amazon.com/gp/help/customer/display.html/?nodeId=200242960

            Personally, I have shipped items into FBA that have selling prices as high as $400 in a box with other stuff, and have not ended up purchasing any additional insurance. Keep in mind that shipping insurance will only pay you the cost of the item, and not what it would actually sell for, should it be damaged or lost (and that is assuming you win your claim). Hope this info helps.

            Best Regards,
            Ryan

          • Kris says:

            Ryan,
            thanks again! I will check the link that you provided.
            KRIS

  14. Jay Dedman says:

    New to the blog. Great discovery.

    I really appreciate how you are posting your numbers, including all costs. I find its extremely frustrating when the dudes on Youtube throw around unrealistic numbers. It’s never easy money.

    We post our weekly numbers as well at ebayscavengers.com. We just sell on eBay mainly because it’s where we started and there’s just not enough time in the day for us to list on multiple platforms. I’m also a little skeptical of the longterm viability of retail arbitrage. I feel that the big stores are going to catch on quickly and just sell their extra inventory online themselves.

    So after reading your numbers, did you make $4334 in profit from February? After paying off all your costs, shipping, returns, and buying inventory? That’s the most important number that I hope people are looking at because this is the number that actually pays the rent.

    I think most people brag about their Gross Profit, but that’s really an arbitrary number. I can sell $100 items all day long, but this makes no sense if I’m buying the items for $95 each and eating free shipping.

    I’m going to be following along. Keep it up.

    • Ryan Grant says:

      Hey Jay,

      Thank you for the kinds words, and glad you found my blog! I just checked out yours as well, and I will definitely have to listen to a few of your podcasts, it looks like you have some good stuff on your site. I completely agree that it’s frustrating when people throw out unrealistic numbers, and that is part of the reason I try to show the whole picture here.

      As for your question, I do my accounting on an accrual basis, so my profit for the month was $5812 (this does not factor in mileage, cell phone, etc.) and my cash flow for the month was $4,334. The profit number does factor in the cost of all goods, shipping, returns, etc, the only thing it doesn’t include are things I specifically name as not included (but I plan to add those as well in the coming months). The cash flow is simply the difference between the cash I received and paid during the month related to selling online. Hope that makes sense, and definitely let me know if you have further questions.

      Best Regards,
      Ryan

  15. Christine says:

    Hi, Ryan, Thank you for sharing your numbers and information – it’s a very good article!

    I would like to ask you how you track your numbers and/or pull them out of various Amazon reports. For instance, your inbound shipping costs: Do you go down your list of shipments for the month, one by one, and record each costs, or is there a particular report that one can get from Amazon for this data.

    This is one part of our FBA business that confounds us: how to keep track of the various income and expense numbers. We haven’t yet found a time-efficient method, for instance, in plugging these various numbers into a spreadsheet. Any tips? Thanks so much!

    • Ryan Grant says:

      Hi Christine,

      Glad to hear you enjoyed it! I am using InventoryLab to keep track of my income and expenses, and it makes life a lot easier than tracking things manually in excel. There are reports you can run within InventoryLab that will break out your profit, expenses, inbound shipping, and more. If you are starting to get to the point where it’s hard to keep track of everything, I definitely think InventoryLab is worth a look. Let me know if you have any further questions.

      Best Regards,
      Ryan

  16. Brandy says:

    Hello,

    I found your site from the recent guest post on Jessica Larrew’s blog. It’s exciting to see the actual numbers broken down but how much of your profit are you using to reinvest back into your business? I read some start out reinvesting 50-100% at first. How much capital did you have to start your inventory with? Do you recommend buying from sources like Liquidation.com?

    Excellent informative post!

    • Ryan Grant says:

      Hi Brandy,

      Glad you found my blog, and thank you for the kind words! Right now I am reinvesting as close to 100% back into the business as I can, and I plan on doing this for the next year or so. My living expenses are quite low currently (I owner occupy a duplex) and my goal is to continue to scale this quickly. It’s hard to say exactly what I started with as I didn’t properly have my bank accounts separate from day one, but it was in the $3,000-$5,000 range initially.

      I personally haven’t had much luck at Liquidation.com from the one time I purchased from them. My opinion is that there are better sources of inventory out there, but you will have to find what works for your business, and purchasing from liquidation.com might be a good source for you. I know that sounds like kind of a “politician style” response, but I don’t like to steer people away from any potential sources, as they might find deals that I would never notice. My mentality is to try buying from anywhere once and then evaluate if it’s worth going back to again.

      Best Regards,
      Ryan

  17. Will Kemppainen says:

    Hi Ryan,

    Thanks for taking the time to put up such an informative and educational site. You have a lot of great information here for free that others are charging for.

    I have a question on inbound FBA UPS shipping. Do you know approx. what you pay for pound on average? We just sent in our first products in 4 boxes for a total of 71.53 pounds for roughly $30 or $0.42 per pound. I thought this seemed rather high.

    Thanks and best wishes,

    Will

    • Ryan Grant says:

      Hey Will,

      You are very welcome, glad you find the information I share helpful!

      As for your question, it varies quite a bit depending on the weight of the individual box and how far away the destination is. I have never had a single box be less than about $5 so based on your numbers I think that sounds reasonable. If you shipped this 71.53 pounds in 2 boxes as opposed to 4 then I would have expected it to likely be a little lower, but overall I think that sounds reasonable. Let me know if you have further questions.

      Best Regards,
      Ryan

  18. Debbie says:

    Thank you for sharing your experience! I find it encouraging since I have been wanting to start selling on amazon for the past month, but I find it a bit overwhelming knowing where to start. You said you just set up your business as an llc, that is one of my struggles right now. I don’t know if I should start off with an llc type business. I don’t know which license need to be applied for first, local county and then llc or the other way around. Right now I have an EIN and that’s it. Do you have any suggestions for a GA resident?

    • Ryan Grant says:

      Hi Debbie,

      You are very welcome! unfortunately I am unable to provide specific legal advice as I am not a legal professional. I have written a few posts which you may have seen about the business structure I am using, but I am unable to advise you personally what the next steps would be. I would recommend consulting a legal professional, and if you don’t want to pay one, http://www.score.org could be a good resource.

      Best Regards,
      Ryan

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