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May 2014 Income Report

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:

Amazon-FBA-May-2014

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

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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.

Best,

Diana

P.S. Please let me know that you stopped by – you can leave me a comment, find me on social media or subscribe to my new email list.  For now, the opt-in is on the top of my home page.

Photo Credit: © Stuart Miles – Fotolia.com

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{ 10 comments… add one }
  • Yolanda @ Extra Student Loan Money June 2, 2014, 7:53 pm

    Way to go Diana! I enjoyed such a detailed breakdown of your initial expenses. I think this is excellent for newcomers to see because you do actually have to spend money to make money, but like you said, from here, you’ll be in the black. 🙂

    Reply
    • Diana June 2, 2014, 11:39 pm

      Hi Yolanda, When I started, I didn’t realize the expenses would be that high, but compared to starting most business, the costs are very low. If I could do it all over, I would have waited until I got more inventory before joining as a Professional Seller and I would have bought a different set of packaging supplies. But it’s all good and hoping to make a profit in June.

      Reply
  • Yoly June 5, 2014, 1:39 pm

    Thank you for sharing your experiences. Agree with Yolanda that seeing all the initial expenses is fantastic. Great insight to what it takes to get started! Looking forward to seeing your business growth.

    Reply
    • Diana June 5, 2014, 5:19 pm

      Hi Yoly, I’m glad that the expenses are somewhat low from here on out. Plus, I can easily control them by cancelling services or being smarter with my shipping. Thank you for stopping by and leaving a comment! I appreciate that!

      Reply
  • Larah Brook June 6, 2014, 2:47 am

    Hi Diana, unfortunately as I live in Australia, it’s not possible to sell by Amazon FBA, the shipping costs would be way too much anyway, but I have heard about lots of people doing that as their main income. Also I always listen to Pat Flynn’s podcast and if you listen to episode 99, they go into a lot of details. I wish you a very prosperous month of June.

    Reply
    • Diana June 6, 2014, 3:27 am

      Hi Larah, Pat Flynn’s podcast is where I learned about Amazon FBA! I hope online selling works out for me (and you) as an income source. I’m thankful for that podcast because I’ve had to reduce my blogging/website time quite a bit due to serious eye strain from being in front of the computer so much. So, FBA gives me another income opportunity that has non-computer activities (shopping and prepping) that I can do. Since you are doing eBay, will you be able to ship most of your products within Australia? I also wish you a very prosperous June.

      Reply
  • Fatima July 2, 2014, 9:11 pm

    This is so helpful for a newbie like me, I just shipped my first shipment last week and still inactive. Let’s all grow together with Amazon FBA….so excited.

    Reply
    • Diana July 3, 2014, 4:08 am

      Hi Fatima, it won’t be long before you’re active and then it’s fun watching those sales go through! Are you on any of the FBA Facebook groups? If not, I recommend joining as there’s a lot of great info to help newbies like us. Good luck with FBA and if you ever have any questions, please don’t hesitate to ask. Diana

      Reply
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About Diana


I am working towards creating a full-time income by selling on Amazon. It's a lot of work but very fun! If you're interested in selling on Amazon, be sure to follow my blog as I'll be providing you with lots of tips!

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