September 2014 Financial Results from Selling on Amazon

October 6th, 2014

September has come to an end, and the 4th quarter of 2014 is officially underway.  The next few months are sure to be busy, but now that we are in the beginning of a new month, it’s time to share my results from last month.   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 September 3rd through the 7th I was in Dallas, TX for the second annual CES conference that was put on by Jim Cockrum.  If you are unfamiliar with this event, you can find out more about who spoke and what was covered HERE.  I did not do much sourcing during this conference, but I made many great connections, and learned a lot from attending the event.  In terms of the month of September, attending the conference was not revenue generating, but over the coming months and years I expect to see a large return on investment from the conference.  In addition to the conference, I moved into a 720 square foot office/warehouse location on September 9th.  Getting things moved into and setup has been quite time consuming, and remains an ongoing process.  Between the conference and moving into the warehouse there was a significant amount of time that was not revenue generating, but was spent on activities directly related to selling on amazon.  Other than those items, I did not take any weekdays off from activities related to selling on amazon in September.

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 September.  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.

September 2014 Income Statement

September 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 very solid month for me, but was a bit of a decrease in profits from last month despite the increase in revenues.  This was due partly to incorporating some lower margin strategies, as well as testing some other new strategies that resulted in selling a decent number of items at a loss during the month.  Rent is a new number this month as I just began the lease on the office/warehouse space.  The number shown this month is a pro-rated amount, and the full monthly amount will be shown in next month’s post.  The amount of commissions that I paid to people sourcing products for me was down significantly this month which is due mainly to the amount of time they spent sourcing, as well as the strategies I have them working on.

One other noteworthy decrease is the FBA inbound shipping amount.  This is mainly due to time being spent on activities that were not related to shipping products into amazon warehouses, such as the conference and getting my location set up.  I expect this amount to increase significantly next month.

Note that the miscellaneous costs this month related to food/travel costs related to attending CES, as well as buying Online Arbitrage by Chris Green at a CES special price.  This amount only includes food and some travel, as the hotel and flight were both paid for with credit card rewards.   If there is a change in amount that I didn’t just cover, let me know in the comments and I will be happy to address it.

The services that I am paying for that comprise the above monthly totals are the following  listed below.  Please note that some of the links below are affiliate links which I will receive a commission for if you choose to sign up for the service.  These links do not cost you anything extra, and help allow me to be able to provide free content here on the blog, if you choose to use them I truly thank you!

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.

Note that of these services, the current total costs do not add up to the numbers shown above, as I paid for some of these on an annual basis to obtain a discount.

Next up, we’ll take a look at my cash flow for the month:

September 2014 Cash Flow Statement

September 2014 Cash Flow Statement

Cash flow for the month was significantly positive which was good to see.  This was the result of some seasonal strategies, as well as a decreased amount of inventory purchases.  For the foreseeable future my plan is to operate at close to zero cash flow to continually reinvest in growth.  As soon as my office/warehouse is fully setup and operational I expect to up my spending on inventory and will be reinvesting the positive cash flow from September.  Also, the reason the rent amount is higher in the cash flow section is the result of an $800 security deposit.

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:Amazon Sales

Overall, I am happy to have hit $50K in sales for the month, however I don’t put too much emphasis on my total sales volume.  As can be seen above on my income statement my profits were actually higher last month with less sales volume.  My main goals revolve around profits and cash flow, and I focus on those when setting goals related to selling on amazon.

If you want to see the breakdown of the product categories that comprised the $51K 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.

I will not be sharing an eBay screenshot, as I did not have any items that sold and shipped in September.  I did have one item sell on September 30th, but it did not ship until October, so it will show up on next month’s results post.

Overall, I am very happy with this month’s results.  I was able to make over $9K in profits while attending a conference, and moving into a new location.  For October, my goal is to exceed $10,000 in profits and get my office/warehouse fully optimized. The goals for November and December will be significantly larger and I want to get everything in place this month to be able to take advantage of the 2014 holiday sales.

What are your goals for October? Any questions/comments for me on this post? Please leave them in the comments section below.  If you enjoyed this post, please consider sharing using one of the social media buttons below!

 

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29 responses to “September 2014 Financial Results from Selling on Amazon”

  1. john iii says:

    what is the insurance cost? for the new office/warehouse or something else?

    • Ryan Grant says:

      Hi John,

      It’s for commercial general liability insurance. It is required for the warehouse, but is also required by amazon depending on your account and sales volume. I have had it for the past 6 months or so now.

      Best Regards,
      Ryan

  2. Sunny K says:

    Great Post!
    Generally when you source at a walgreens or target, how much time do you need to wait before you hit them up again?

    • Ryan Grant says:

      Thanks Sunny! Generally, I like to wait about a week before going back to the same store.

      Best Regards,
      Ryan

  3. Chris says:

    Ryan,
    Thanks for sharing your numbers. It’s nice to see real numbers instead of someone throwing around sales numbers on a facebook group.

    Chris

    • Ryan Grant says:

      You are welcome Chris! Sales are far from the whole picture, so my goal is to provide a complete picture of what a FBA business entails.

      Best Regards,
      Ryan

  4. Pedro says:

    Wow Ryan…those are some ridiculous sales #’s! Congratulations on your success.

    How many SKU’s do you currently have in stock via FBA?

  5. Marie says:

    Thank you Ryan for sharing. Congrats on all your hard work.

  6. Doug says:

    Hi Ryan, I have been following your blog and really appreciate all of the detail, it has been really inspiring! I am in my second month of selling through FBA and have only had a few sales with 85 products listed. A little discouraged, was hoping for a better start for sure. Will keep at it though. Do you think the new Chris Green book is worth it?

    • Ryan Grant says:

      Hi Doug,

      Thank you for the kind words! I am not very far through the book yet, but it appears to have some good information. If you buy the physical copy, you can always sell it when you are done to significantly lessen the investment. If you reply to this comment in a month or so, I will likely have finished it by then, and can let you know my thoughts after finishing it.

      Best Regards,
      Ryan

  7. LEWIS says:

    Do you just scan at shops, or do you import products too?

    • Ryan Grant says:

      Hi Lewis,

      My inventory comes from a mix of retail stores, online sources, liquidation sources, as well as wholesale. Currently I am not importing products, but that is something I plan to expand to in the future.

      Best Regards,
      Ryan

  8. Asaad says:

    Good advice! i was doing research and was wondering if SellerEnginer Plus is on par with Inventory Lab or is it different? My issue is getting the right functions and sticking with one thing. Price is no issue for me.

    Thanks!

    • Ryan Grant says:

      Hello Asaad,

      I have not used SellerEngine Plus, so I can’t comment on how it compares to InventoryLab. I can say that I am very happy with InventoryLab, and that since I have started using it I haven’t had the desire to look for other services that do similar tasks. If you have any questions I can answer about InventoryLab feel free to let me know.

      Best Regards,
      Ryan

      • Asaad says:

        Hey,

        I was about to get IL but suddenly i realized they don’t support Amazon.ca!

        What a bummer, i am looking around frantically for a listing tool that supports Amazon.ca, nothing so far.

  9. Randy says:

    Wow a 155.8% increase in one month!
    Awesome.

    Thanks for letting me join your
    facebook group.

    – Randy

  10. Chris says:

    Hi Ryan,

    Thanks for the insights you provide! When you are sourcing, and choose products that are new to you and your business, are you choosing new products that are not yet available on Amazon? Or do you choose products that only have a couple of sellers? Every time I get on a good roll, its not long before someone comes behind and starts selling the same item. I guess that just comes with the territory. 🙂

    Best,
    Chris

    • Ryan Grant says:

      Hey Chris,

      In general, I am selling products that are already listed on amazon. I don’t worry a ton about competition on items, so I prefer items with low competition, but I will still sell items that lots of other sellers are too.

      Best Regards,
      Ryan

  11. paul says:

    Hi Ryan
    Thanks for sharing your journey and taking time to reply to everyone. I have purchased PAC and Amazon Bootcamp and the course by Lisa Suttora on sourcing along with lots of products handbooks and I believe I am ready to begin. I am now trying to decide which scanner to use etc etc. I also have a friend in China who lives there with his Chinese girlfriend in the manufacturing district of Guandyong. We hope to start shipping in some products to Amazon UK and USA. Do You have any insights on this as an option? I am nearly there on shipping and importing, customs etc. Having read your post on Taxes I am still not too sure what I need to do on Nexus as I am not USA based any clues? Also coming from this post you mention your Insurance costs and I see you have answered this above but can you please tell us what kind of insurance cover is required? I understand there are certain things you must have from another Facebook post I read this week but I don’t know if there is a definitive guide so that we could approach brokers to get it. Can you help on this in particular as you have it in place please? Thank You Paul

    • Ryan Grant says:

      Hi Paul,

      I am not going to be able to address all of these questions, but will keep them in mind for future blog post ideas. Based on all of the courses you have gone through I believe much of the material should be covered.

      Best Regards,
      Ryan

  12. Brit says:

    Hi Ryan,

    Really enjoy all the information you so readily share. Just wondering if you would know if selling on Amazon is profitable if you live in Canada? Also, how do you know what the big sellers are on Amazon and how much time do you spend per week buying?

    Thanks so much!

    Brit

  13. Dan says:

    How much do you think the use of the repricing engine has helped your sales?

    • Ryan Grant says:

      Hi Dan,

      It’s hard to equate a direct correlation from the repricer, but I have noticed a boost in sales. More than that though, I am able to set the repricer once, and then I don’t have to deal with manually repricing items multiple times.

      Best Regards,
      Ryan

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