October is among us and with it comes the start of the busy 4th Quarter season that I’ve been hearing about. I hope that my products fly off the shelves as I really need it after a not-profitable September.
September wasn’t all bad because I did get approved in Health & Personal Care. This gives me a wider range of products to sell and I’m looking forward to sending in my first items. I’ll be applying in Beauty next and I’ll be writing a blog post soon about the application process.
I’m sharing my Profit and Loss Statement with you now as I worked on it last night and my mind is still in “numbers-mode”. I’m happy to say that my monthly sales are my highest ever but sad to say that I’m also at a loss. After you see my numbers, you’ll see first hand that higher sales don’t always equate to higher profits.
Before I show you the numbers, I’ll put my usual note in that I sell on Amazon FBA part time as I work 50 hours a week at my regular job. I estimate that I typically spend between four and ten hours a week on FBA.
With that said, my FBA time in September was less than normal due to a much needed trip to Las Vegas and then from coming down with a cold after I returned. I think I went almost two weeks without shopping for inventory. And now today as I write this post, I’m sitting at my dad’s house in Arizona. Retail Arbitrage will not be happening again this weekend. Believe me, I rarely go on vacation and I rarely get sick. And then boom, everything happens at once.
Well, here is my newest Profit and Loss Statement:
Sales, COGS and RepriceIt
My sales were very slow the first few days of September. So, to see if I could get them going again, I signed up for a 2-month free trial of RepriceIt. On September 8, literally minutes after having them reprice my inventory, my sales took off. Not only that, but I was also selling some of my older inventory items that I gave up on.
But if you compare my COGS to my sales numbers, you will see that my ROI went way down. In June, July and August, I was selling at over 3X my inventory costs. In September, I went below 3X. I’m more careful now with RepriceIt and I review all price changes before sending them to Amazon. At this time, I don’t know yet if I will continue with RepriceIt after my free trial is over.
From May through August, I only had one customer return. This one wasn’t a big deal because after it was returned, Amazon put it back into inventory and I immediately sold it again at the same price. My luck ran out in September as I got hit with three returns. And to make it worse, two of them were for higher priced items. My September returns:
- A silly “As Seen on TV” product that I bought new for $5.00 and sold for $15.99. The customer returned it stating that it was an unwanted item. Amazon marked it as customer damaged. I had it sent back to me and found that the product itself was still in great shape but the box wasn’t. I sold it to a co-worker for $5.00. So this return wasn’t a big deal.
- A set of curtains that I bought on clearance from Toys R Us and sold for $34.86. The customer returned it stating that they ordered the wrong item. Amazon marked it as customer damaged and the product is currently in transit to my house. I hope that it’s still in decent enough condition that I can list it again.
- An electronics item – network adapter kit – that I bought on clearance from Office Max. I sold it on Amazon for $44.48 and the customer said that it’s defective. The item was returned to Amazon today and I’ll have it shipped back to me. I hope that it’s really not defective as I’m unsure if I can still return or replace it.
I am glad that Amazon has an easy return policy as that helps our sales. I have bought plenty of products from Amazon and it’s to nice to know that I can return most products within 30 days. But as a seller, it stinks to have brand new items returned as customer damaged. I know it’s a cost of doing business and that I’ll have to live with it.
For those that have been selling for a long time, what percentage of your products are returned? Please leave me a comment below as I’m very interested in knowing.
Education and Prepping/Shipping Supplies
These were again my two non-Amazon expenses that took a big chunk out of my sales income. In fact, if I didn’t make any purchases in these expense categories, I would have been up for the month.
For education, I bought:
- The Reseller’s Guide to Board Games by Stephen of Full-Time FBA. I bought this because it was on sale and I needed something to read on my plane ride to Las Vegas. The main reason though was because I am interested in purchasing more games for resale. The profits are there especially if I buy them from the thrift stores at just a few dollars each. You can see an example of this in my post about selling a used Operation game. What is nice for me is that there is a thrift store on my way home from work and it’s very easy for me to stop in there and check for games.
- Online Arbitrage: Sourcing Secrets for Buying Products Online to Resell for BIG PROFITS by Chris Green. This was actually an impulse purchase one night when I was sick and was frustrated that I didn’t have the energy to source at the retail stores. The book is very expensive but so far, I have learned a lot about sourcing online. In fact, two days after buying it, I made my first online inventory purchase. I bought two items and if they sell at the current price on Amazon, I will make over half of the book money back in profits. Oct 7, 2014 Update: Amazon lowered the price on the book so I requested a partial refund from them. They are going to give me back $18.71 which will be recorded on my October P&L Statement.
For prepping/shipping supplies, I bought poly bags and labels. I could have held off and bought them later this month, but BubbleFast had a 15% coupon code for Scanner Monkeys that expired in September. The coupon code saved me $17.00 so I felt it was worth making the purchase a few weeks early.
To see the products and services that I use for Amazon FBA, please check out my Amazon FBA Resources Page.
I’ll be spending the next few days at my Dad’s house. It’s a very quiet environment and it’ll give me a chance to go over the Online Arbitrage book and look for more items to sell. I truly enjoy shopping in person more, but I also believe that if I want to take my Amazon FBA business to a higher level while still working 50 hours a week that Online Arbitrage is the way to go. My goal is to purchase $100.00 worth of inventory from online stores each week.
Beyond that, I’ll just keep doing what I have been doing – learning and stopping at the thrift stores after work.
I hope that you enjoyed this post and please leave a comment below even if it’s just to say hi.
Featured Image of Rainbow: © makam1969 – Fotolia.com
Profit and Loss Statement: Diana Poisson