February 2015 Financial Results from selling on amazon & eBay

March 4th, 2015

2015 is cruising on by and February is now in the books.  That means it is time to share my financial results from the past month here on the blog.  If you missed any of my past financial results posts, you can find them HERE.

We’ll begin with how my time was spent during February.  There were only 20 week days in February, and I didn’t take any of them off from working on the business.  I didn’t work much on the weekends this month either, in total I would say I averaged around 40 hours per week.

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 February.  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!).  This month I will keep the same format that I used last month for the income statement directly from my InventoryLab account.  The screenshots are unedited with the exception of blocking out any accounts related to sales tax, as I am not a CPA, and am not able to provide tax advice.  The cash flow statement will be in the same format as in prior months.  The numbers below will NOT be the exact numbers that go on my tax returns as there will be additional deductions not included here.  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 sources, it is simply my income from amazon and eBay.

The first screenshot will be of the revenues. To get a better look, click on this image (or any others in the post) to enlarge.  As noted above I have blocked out the line items related to sales tax in the screenshots below.

February 2015 Income Items

February 2015 Income Items

Now, in this second screenshot my expenses for the month:

February 2015 Expenses

February 2015 Expenses

As stated previously, these screenshots are directly from my InventoryLab account which is the accounting system 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.   Also the “other income” is the net effect of my eBay sales which I manually enter, which was a small profit this month.

As you can see from these screenshots my profit for the month was just a bit over $8,000, which is a significant increase over the approximately $3,000 from January.   Profits were quite a bit lower than usual in January due to selling off some items where prices dropped that I lost money on, and in February there were very few items sold at a loss.  Profits also increased due to continued sourcing, and the items the amount of sourcing that has been done in 2015.  The amount of sourcing done by the individuals sourcing for me has contributed a significant amount to this as well.  The majority of the $5K in commission/wages is commissions.  If you want to get to the core of how these commissions are ultimately earned,  Outsourcing Sourcing discusses the exact arrangements I use with these individuals, the buying guidelines I give them, how to pay them, and much more.

Here are the current services that I am using that make up the above numbers (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:

February 2015 Cash Flow

February 2015 Cash Flow

Cash flow for the month was just a bit negative.  This is a very comfortable range for me this time of the year.  I was able to build up a little bit of cash reserves in the business account from this past Q4, and this allows me the ability to continually grow my inventory by having cash flow go slightly negative.  I anticipate having cash flow hover around zero for at least the next few months.

The one time costs were for buying another cheap all in one computer for my warehouse, and Quickbooks.  InventoryLab is great for the income statement side of things, but I am looking for something that can track cash flow and the balance sheet, and tie everything together.  So far I am not a big fan of Quickbooks, but I am going to play with it a little more, otherwise I am going to look into the costs of getting a bookkeeper so that I can be assured everything ties out every month.

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:

February 2015 amazon sales

February 2015 amazon sales

Now, for the eBay sales:

February 2015 eBay Sales

February 2015 eBay Sales

Overall, I am very happy with how this month turned out.  Sales were up slightly compared to last month despite only having 28 days in February, and profits were up significantly.  My goal is to continue to increase the inventory purchases each month, and continue to grow.

On Monday I launched Outsourcing Sourcing, which shares my complete system for having people I trust source and ship items to amazon for me.  The strategies outlined in the book added over $33,000 to my bottom line in 2014, and as you can see from this post they continue to add more every month.  If you are interested you can check out the sales page HERE.

That’s all I have for today, if you have any questions or comments, please let me know below!

 

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27 responses to “February 2015 Financial Results from selling on amazon & eBay”

  1. HAROLD says:

    Hi,

    I have some money i want to use to start selling online, however, i don’t quite know what inventory to to start up with. I have thrift stores, Target and walmart within walking distance of where i live. Do you have pointers on particular products you can recommend for a newbie?

    • Ryan Grant says:

      Hi Harold,

      I would recommend getting the amazon seller app and then going to the local stores you mentioned and look primarily for clearance items. Also, this video I made awhile back about what I would do with $1,000 and no prior knowledge of FBA, would likely be helpful for you: https://www.youtube.com/watch?v=qfByRTVVrhI

      Best Regards,
      Ryan

  2. Hi Ryan,

    I am currently using Xero.com for accounting and Receipt-Bank.com. Those two are a VERY powerful combination. I am currently using a service that trained me on how to use and work with both. I am more than happy. I, too, hate working with Quickbooks and have used it for prior businesses for years and it’s just not something I’d like to do for my Amazon business. I think you should check it out and consider it.

    Will

    • Ryan Grant says:

      Hi Will,

      Thanks for the suggestion! I will definitely check that out.

      Best Regards,
      Ryan

      • I now have quite a bit of experience in using the program. If you need help, maybe you can give me some of your FBA tips and I can help you get setup with Xero + receipt-bank if that is the way you want to go. Let me know. Time for time I guess.

  3. Brent says:

    Hi Ryan,

    Another month of impressive results! Wave Apps is the accounting software that I use. It’s a web based application and free and syncs up right with your bank accounts to import transactions Also it allows you to upload your receipts via your phone or email. So far I’m pretty impressed with it!

    Regards,
    Brent

    • Ryan Grant says:

      Thanks Brent! I will have to look into that as well, but sounds like a solid setup.

      Best Regards,
      Ryan

  4. Brian says:

    Hi Ryan,

    Nicely done as usually!

    Do you keep a seperate income statement on a cash or accrual basis? I am leaning towards accrual because it looks like it might more accurately reflect what happened doing the month.

    Also, do you keep a balance sheet of all your assets and liabilities? If so, do you enter them at the price you paid for them or the selling price.

    Would you consider getting a VA book keeper? I might go down this path to.

    • Ryan Grant says:

      Hi Brian,

      Thank you! I do my income statement on the accrual basis. I don’t prepare a separate one for the cash basis, but it would essentially be the same as my cash flow statement. I have a rough balance sheet now which is why I am looking into Quickbooks, but inventory is valued at cost which is the price I paid on it. I haven’t looked into bookkeepers too extensively, but I would consider a VA bookkeeper.

      Best Regards,
      Ryan

  5. Paul says:

    Was very close to signing up for Inventory Lab or Quickbooks Web, bummed to hear Inventory Lab doesn’t do everything you need it too, I was hoping it was my solution.

    • Ryan Grant says:

      Hi Paul,

      InventoryLab is great for many things and it is still a very essential service for my business. It is focused around the income statement, more so than an all in one accounting system. As I continue to grow the business and have to track more transactions (commissions, wages, payroll taxes, etc) I need a system that can tie everything together.

      So depending on your volume InventoryLab and excel could be a great combo, it really just depends on what your accounting needs are.

      Best Regards,
      Ryan

  6. Skip Roberts says:

    Hi Ryan, great insight as usual. Not sure I’ve heard you mention this topic before, or how much you care to share: But how do you pay yourself from your profits? Just take enough from the bigger months like December and January to get you through to better months down the road, or a more systematic strategy. Appreciate any insight you could add.

    Sincerely,

    Skip Roberts

    • Brian Wood says:

      To piggy back on skipps comment, what percentage of your profits are you going to pay yourself. I know the IRS mentions it has to be a “reasonable” amount, but i was wondering what your approach was.

      Thanks!

      • Ryan Grant says:

        Hi Brian,

        I pay myself a monthly salary that was determined to be reasonable by my CPA. Unfortunately, that’s all I will say on the issue, as I don’t want to have people using the amount I use without really understanding what goes into the decision. I am not implying you don’t understand as it sounds like you do, rather it’s just a decision not to share the actual salary amount at this time.

        Best Regards,
        Ryan

    • Ryan Grant says:

      Hi Skip,

      I do pay myself a monthly salary for tax purposes. I have the payroll tax portion as well as the monthly payroll processing fee included in the expenses, but not the actual amount I am paid. So essentially the profits of the business for the month would be the approximately $8K less my salary, but ultimately all $8K is mine.

      I will say that my salary was what was recommended by my CPA, and is what is “reasonable” for the role in the business that I have. I won’t say the exact amount as every CPA is going to have a different view.

      Let me know if you have any further questions on this.

      Best Regards,
      Ryan

  7. Ron says:

    Another great month, congrats Ryan! One of my highlights of the new months starting is making sure to stop by and check out how well you did on the previous month. Living vicariously through you lol. And great inspiration to keep plugging away on my own business.

    I had a question about inventory that I hope you would be able to answer without giving away any of your real secrets. Although I’m still strapped for cash to use towards inventory (though trying to continually reinvest each month), even with my small budget I often have a hard time finding a good amount of “clearance” items. I live in a pretty good area with like probably 4 targets/walmarts within close driving distance but even if I hit them all I still often leave without a lot of merchandise. Some days are better of course but I find myself having a harder time finding enough inventory that will be profitable than I do coming up with the cash to buy it with.

    I’m curious how you are finding enough to spend tens of thousands a month. Are you hitting dozens of stores hundreds of miles out? I do assume your “outsourcing sourcing” is a good step to help expand…but still seems hard to find enough “clearance” items to really bulk up and was hoping maybe you had some tip. I have resorted to taking smaller and smaller profit margins just to keep inventory flowing but of course there are more risks with price changes and competition and it sucks to spend my already limited sourcing budget on small margin items.

    I was excited to hit 700 items listed just recently but many of those are repeat skus with low profit margin lol. But it feels good going from my starting months during Q4 maxing out at like only 300 items heheh.

    Thanks as usual for the inspiration!

    • Ryan Grant says:

      Hi Ron,

      Thank you, and glad to hear you are stopping by each month! As for my sourcing strategies, I am sourcing via a variety of methods including retail arbitrage, online arbitrage, wholesale, and liquidation. So some of this is clearance items but the liquidation and wholesale aspects are starting to contribute significantly as well.

      I will consider sharing some more detailed sourcing strategies in the future, but for now I would just encourage you to diversify your sourcing methods and to continually look for new ways to find inventory. I started off buying just a few thousand per month, and built up to the amount I am now at today. It took a bit of time to be buying in this volume, and the experience I have gained along the way has been huge in allowing me to continually buy more.

      Best Regards,
      Ryan

  8. Paul says:

    Looks like things are going great for you, just goes to show that hard work and dedication pay off. I just wanted to say that I have spent the last hour reading through your blog and it is truly inspirational. I’ve been looking into going the entrepreneurial route for many of the same reasons you’ve mentioned, and seeing your success makes me feel much more confident that it really is possible. Keep up the good work and I look forward to your upcoming posts.

  9. Jason says:

    I don’t understand how you spent $34k in inventory and got paid only $39k and went negative. If I spent $34k on inventory I would hope to make a little more than minus $2,000. I’m new to this and don’t understand financials quite as well so would you explain this to me?

    • Ryan Grant says:

      Hi Jason,

      If you look through the rest of the cash flow statement you can see exactly the other expenses that caused cash flow to be negative. My cash flow is negative due to an intentional strategy to grow the business, and will create profits in future months. I would recommend looking through some of my older results posts and you should be able to see that cash flow varies from month to month, and some months it is very positive, and some months it is quite negative. Over time though, it should be a very positive number.

      Best Regards,
      Ryan

  10. Jim says:

    Ryan,
    You are truly an inspiration as to what dedication to a goal and hard work will do for one.

    Quick question, being the newbie I am to all of this, in many forums/training/etc. it says to go wide, but not deep to learn what sells and what sits on the warehouse floor.

    Can you provide a bit of insight as to how many SKUs and quantities you strive for now?

    This becomes a gating factor for scaling if only buying five items at a pop! 🙂

    Thanks,
    Jim

    • Ryan Grant says:

      Hi Jim,

      Thank you for the kind words. Going wide versus deep definitely diversifies risk, but it also limits upside as you are limited to the handful of sales of a single item as your comment alludes to. My goal now is to buy as many of a given item as I think makes sense. Sometimes this will still only be a handful, and other times it will be 500 units. If I have continual access to supply is another major factor.

      My preference is to buy larger quantities, and those are what I spend more time searching out, but I don’t pass up opportunities to buy 1-5 of an item if it is profitable.

      Hope that helps!

      Best Regards,
      Ryan

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