I completed my first month of Amazon FBA and would like to share with you my financials and why I believe June will be a better month. First I would like to say that learning how to list, label, prep and ship products was rather overwhelming. I almost gave up but I’m glad that I didn’t because now it’s a process that I no longer fear. So, if you are in the beginning days of Amazon FBA, keep on going – it does get easier.
When I look at my numbers, I can’t compare myself with others that are making hundreds or even thousands a month. They have been selling online longer than me and some do this full-time. Because of my work schedule and other regular life obligations, I work on FBA about 5 hours a week. This doesn’t get me down because I have completed other goals slowly. Based on my past experiences, I know that as long as I work on my goals consistently each week, I will eventually reach them.
Currently I am tracking my numbers in Moneydance and in Excel. However, I need to find a better system or make a better spreadsheet. Recently someone in the Amazon FBA Facebook group that I belong to had a question about using Quickbooks. At first I thought that Quickbooks was not needed for doing Amazon FBA bookkeeping. However, now that I thought about it more, I am reconsidering. I’ve used Quickbooks, Quicken, Moneydance and Excel spreadsheets to track finances in the past and one of my goals in June is to decide which system will work best for me. I want to work this out quickly so I will have no more than two months of transactions to enter in whichever system I decide to use.
Ok, here are the numbers:
As you can see, I lost $206.80 last month. Keep in mind that it’s not actual money out of my pocket as some was “free” money – birthday money and $125 VISA Gift Card money. Another point to remember is that I spent an additional $74.67 on inventory purchases that isn’t reflected in the spreadsheet. I’m only counting sold inventory on my P&L calculations and will include my unsold inventory as an asset in my balance sheet. Once I start making money and I’m dealing with larger dollar amounts, I’ll have my accountant review my financials to make sure everything is setup properly.
Reasons Why Will June Be a Better Month
- I have many of my expenses out of the way. For example, I won’t be purchasing another shipping scale. I paid for Profit Bandit (more on this later). I have enough labels and poly bags to last for a long time. The only supplies that I plan on getting this month are more packaging tape and a bottle of Goo Gone. The cost for both should be under $20.00 and since I have Office Max rewards dollars, it may be less than $10.00.
- I will control other expenses better . The first is to reduce my shipping costs – no more shipping a box with just 3 items in it! Another expense that I can lower is the cost of items sold. Now that I have a reseller’s permit, I won’t have to pay sales tax on new inventory.
- I will have more inventory at the Amazon warehouses in June. My first May shipment wasn’t listed on Amazon until May 14th. The next box didn’t arrive until May 16. Basically, I’ll have active inventory for the full month of June versus just the last half of May. No wonder I didn’t get my first sale until May 27. June looks much better as I already made a sale on June 1!
However, not all is 100% great as I do have new (yet optional) expenses:
- Since my free month of the Professional Account is over, I’ll now need to pay $39.99 a month to continue as a Professional seller. However, each sale will cancel this fee out. Individual sellers pay 99 cents more in fees on each item that they sell. So, once I sell 40 items a month, that fee will be cancelled out. If I sell more than 40 items, I’ll be ahead. However, to be honest, I don’t care if the fee is cancelled out or not as long as I can cover it with my profits. I want to keep it so I can continue using the Profit Bandit App.
- Profit Bandit is now going to start charging a $9.99 monthly subscription fee. This was not mentioned when I purchased the app in early May. At the time, I was led to believe that it was just a one-time $14.99 fee. The subscription will start on June 4 for Android users and will start for iPhone users later (date unknown). Since I’m an iPhone user, I can continue using Profit Bandit at no additional charge for now.
- The TaxJar membership is $9.95 per month. I’m still in my free trial period and I haven’t decided if I will continue it. It depends on what my sales are and how comfortable I am with figuring out the taxes on my own.
So, if I keep my Professional membership, Profit Bandit and TaxJar, I’ll have up to $60.00 in monthly fees (remember, each sale reduces the Pro Membership fee by 99 cents). Right now I want to keep all three but will need to reevaluate monthly. Sixty dollars really isn’t a lot of money in business expenses and I don’t mind paying it if I benefit from the services. However, if my profits are $60.00 or less each month, then something will need to go.
So far I feel good about making extra money with Amazon FBA and my regret is that I didn’t start sooner.
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Photo Credit: © Stuart Miles – Fotolia.com