#22 Money Clarity for Amazon Business Owners Part 2 of 2
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This Episode, #22 , is the second of 2 that deals with the area of money basics and accounting. This episode is about basic principles – the next will be much more specific to Amazon businesses.
Understanding and dealing with finances can be both intimidating and boring! Not a great combo! Sadly, this is one area of business you really cannot afford total ignorance of. However, once you gain clarity in the basic principles, it is easier to automate, outsource or even eliminate certain processes or records, meaning you get a more stable, safe business while costing yourself less money, less time and less worry.
I hope this episode helps you. However, I am not an accountant, and I really do have to recommend you get advice before you get far into this capital -intensive and complex business. I recommend Penny Lowe, who has had the ASM Amazon training and understands the needs of Amazon business specifically.
SHOW NOTES FOR EPISODE #22 -Money Clarity Part 2 of
- Amazon Business specifics -Cost of Goods Sold (COGS)
- Landed costs
- unit manufacture
- freight (see this episode for details)
- duty and VAT
- customs broker
- Other pre-Amazon costs
- China inspection
- UK/US inspection
- Other added items e.g., Batteries
- Cost of inserting added items
- inserts printing (e.g. “Join ourReview Club”)
- insertion of inserts
- Amazon inbound shipping
- Amazon costs
- sales commission (normally 15% of sales price)
- pick and pack/order handling ($2 a unit)
- weight handling (USA)
- Amazon Business specifics – Ad costs!
- Monitor daily or at least weekly
- Monitor Amazon stats:
- ACoS (Advertising Cost of Sales)
- by product
- by campaign
- by keyword
- Absolute spend & sales ($ or £)
- by campaign
- by product
- by keyword
- Product- based by week
- compare your sales for last week with ad spend for last week.
- What is your overall ACoS by product?
- What is overall ad spend
- Then look at the “True” profits
- Accounting software
- Xero (online)
- can give pro advisor ie accountant or book-keeper access
- can deal with multiple currencies (costs £5/mo more)
- can use “A2X” to import amazon costs and income ($19 a month)
- not cheap
- £20/month standard
- £25/month premium (includes multi currency)
- BUT there is an offer till 31 Dec. 50% off for six months!
- can’t deal with tracking inventory easily
- Waveapps (online)
- easy to set up
- not designed for inventory based businesses
- Not so easy to integrate with Amazon
- Quickbooks (According to my accountant)
- very standard
- more forgiving than Xero (According to my accountant)
- about £10.50 a month for “Essentials” (price held for next 12 months) or £15 including stock control
- (I haven’t used this so can’t say how well it works or how easily)
- more expensive than Waveapps
- I can’t recommend based on experience
- Using professionals
- financial consultant – get advice before starting to expand on a big scale – Wellington Consulting (Penny Lowe again!)
- accountant – Penny Lowe
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