October 2014 Financial Results from Selling on Amazon and eBay

October 2014 Financial Results from Selling on Amazon and eBay

October is in the books, and Q4 is getting into full swing.  That means it is time for me to share my financial results for October.   If you missed any of my past financial results posts, you can find them HERE.

We’ll get started with some background information on how my time was spent this past month.  From October 16th – 19th I was traveling to and attending the first annual ecom Chicago conference.  I drove there and back from Minneapolis, and sourced along the way, so not too much time was lost over this trip.  Other than that, I didn’t take any extra time off.  I did have a friend begin working for me on a full time basis as an independent contractor.  We spent about 2 weeks training, and shipping in items that I had backlogged.   This time will not all be immediately revenue generating, but it should pay significant dividends in the coming months.  For October, I averaged between 45 and 50 hours per week working specifically on the amazon results that I am sharing here.

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 October.  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, rent, 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 sources, it is simply my income from amazon and eBay. To get a better look, click on this image (or any others in the post) to enlarge.

October 2014 Income Statement

October 2014 Income Statement

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.

This was a pretty significantly down month for me, which wasn’t completely unexpected.  I had been spending my time on some very seasonal strategies during much of July through August and allowed my non-seasonal inventory to drop to lower than usual levels.   Other factors contributing to the lower than usual profit are the amount of training wages that I paid to my friend who is now working full time as an independent contractor, the increased mileage going to the Chicago conference, and making some investments in the future of my business.

These investments included buying a Samsung Galaxy Tab and bluetooth keyboard to help speed the process of listing eBay items.  I simply use the ebay app on the tablet, and then am able to type the descriptions, I have found so far that this speeds up the process of listing fairly significantly.  In addition to this, I bought a security camera, and paid a friend to assist me in the approval process in the clothing & shoe categories on amazon.  If you are interested in getting the contact information for this individual, join the Online Selling Experiment Facebook Group, and I will share his info there.  All of these things brought down the immediate profits for this month, but I believe all will pay off significantly in the future.

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

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 (grant.ryanj@gmail.com) 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.  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.

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.

Appeagle– This is new this month, and is a repricing service that I am using.  So far I really like the results from using this as it will end up saving me a lot 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 for me is $25/mo.

Let’s take a look at my cash flow statement before I discuss my overall results:

2014 October Cashflow Statement

2014 October Cash flow Statement

Cash flow for the month was very significantly negative.  This is due primarily to heavily investing in inventory, and the majority of these purchases were in the second half of the month.  The cash inflows were down due to my inventory mix that I had going into the month, so the negative cash flow of about $27K is not unexpected.  I am expecting to likely have net cash flow around zero and potentially negative for November as well.  When my payouts related to December hit, that is when I am expecting to have significantly positive cash flow.

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:

October 2014 Amazon Sales

October 2014 Amazon Sales

If you want to see the breakdown of the product categories that comprised the $27K in sales, you can get a free one page PDF via email showing the breakdown by clicking the link directly below. Simply click this link and you can enter your email to receive the report.

Now, here’s a screenshot from eBay to show those numbers:

October 2014 eBay Sales

October 2014 eBay Sales

Overall, my profits were a little lower than I would have liked them to be, but I made significant investments of both time and money that should pay off over the next couple of month and beyond.  The negative cash flow number is also according to plan, and should be reverting to positive by the time I receive payouts from December.

Lastly, I have a quick announcement that I will be releasing a brand new project that I have been working on for the past couple of months this Friday.  A couple hints are it’s going to be a website, and it’s going to provide more free content, but that’s all I can say for now.  Check back on Friday and I will provide a link here on the blog!

That’s about all I have for now about October. My goal for November is to have my highest month in terms of both sales and profits this year, so stay tuned to see if that happens.  If you have any questions or comments, please share them below!


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