Cash Flow Analysis for Amazon – Million Dollar Amazon Seller Reveals How to Free Up Cash
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All. Right so I think we, are live it's going to be going live in just a second, there we go all right it always takes a minute for facebook life to get kicked in for us so, welcome, everybody I this, is a really. Cool call we're gonna be doing completely free, training for, you with. Someone. Who has been around the ASM, community, for a little bit her her husband, and in fact I just found, I seen a picture, here, that I have I don't know if I can even she. Regardless. Of me and, charity, and her husband, Ben at last. I look like Las Vegas seller con so you were in Las Vegas at the last live event yeah, it was a meeting that Austin. Lost so with that being said, first. Of all I'm gonna tell you that this call is all about a cash flow solution, so as you know with Amazon, sellers, cash. Flow is an issue you know that cash flows can be hung up in your inventory it. Can cause issues and, really when you don't have your cash flow under control what, you think is going to be deposited, in your bank often. Isn't and it, really, can be stressful frustrating. Um you, know and but it's actually not that hard to gain control now, it doesn't mean it doesn't take work and it doesn't mean that you don't have to do some things but, there's some tips that we're going to share with you today that charity is going to be sharing with you on. Helping, you to free up some of that cash flow so you can have better control over your business so. Charity thank you for being here really really appreciate, you doing this yeah, absolutely excited. To be able to share. Some of the stuff that we've been able to already start to implement in our business improve, our cash flow and excited, to be able to share that with everybody else very, cool so I apologize, I just realized, I have a blinding, light behind, me so, we're in I'm in Scottsdale, right now we're in an air B&B as we're, doing treatments for my daughter so I I guess I'm new to this stage right now so I apologize, for that this, is all about charity and her training so that's good anyway so one thing I'm going to ask you to do we got lots of good training that's coming your way right here if you could do us a favor and please share and like this post, it really means a lot to us because it gives us an incentive to keep on giving.
This Free content, you know charities taking time out of her day to do this as a form of giving back, you know she's caught the bug you know what I mean about that is about it about training, people often, people wonder well why do you guys teach you know why don't you just focus on your business it's, because by leveraging what we learned doing this business to help other people change, their lives there, is nothing, better there is nothing better for a profession, that I found and that's why we do this training because we always have people come up to us and thank you and, charity, it seems like this is something that's really caught on with you as well yeah. Exactly exactly, so. And that's one thing especially my. Husband Ben and I we have, helped. Other people get started and their Amazon businesses, and that's, probably one of the funnest things is when you, know we. Have a lot of people invite us over for dinner these days just so that we can sit and chat and but also be able to just help them and and you know the little hurdles that they have just helped keep them moving forward and that's, always just really, the big thing is at the end of the day and you know going home from having dinner with friends just that sense of fulfillment, of hey I think we really were able to help those guys you know we're really able to help them overcome, where, they just felt stuck, you. Know or they felt like well how are we gonna overcome this hurdle and, just, be able to look at things and other. Perspectives, and, always when you go through those troubles, in life I find, for myself when I'm able to share with others to help them prevent them you know it helps you feel like that wasn't a loss that was in a way something, beneficial came, from it um, so right before we get into this training I got one thing I do want to remind everyone, of so if you have not already registered, we recommend, we've got our Orlando, event of seller con coming, in April seller.
Con Is, the. Number. One Amazon. Seller conference, in the world and I lay claim to that because I know it, is if, you want to network with people and I mean network with amazing, people if you want incredible, training but, most of all to me if you want motivation. And inspiration I, really, recommend, you check out seller con you can go to it at cellar con-com. And in, fact with the power, of the, internet, here I'm just going to show my screen really, quickly. Maybe not. No. I won't and that's, okay because that's. Right because I'm live-streaming so I just wanted to bring up seller Khan because I want you guys to be able to check it out cuz there's one important, thing we're. Only got 30 percent of our tickets left, so that means we're almost sold out plus in five days the price and actually in just a little over four days the price is going up so whatever comes first make, sure you don't miss out on this I promise you if you're an Amazon seller this, is an event you want to go to as, you'll hear later we'll talk about this the event itself has changed people's businesses, and lives something, you want to check out but, with that being said let's get right into the training so charity, if you could please, the one that have you, get. Your screen, sharing set up and we're gonna get right into this yeah. Sounds, good. Get. This pulled up here. So. What we're going to be doing just before she gets into this so as she's going through this training we will have a Q&A at the end so, we'll be answering some questions that you put in the comments, below so, feel free to comment and if, you're loving the training at the same time again remember, to comment that you love it and please like it share so, go ahead dirty awesome. Awesome well, this, training, is really just something that has, been birthed out, of my. Husband and I started our own Amazon, business a little over two years ago and. We, you. Know things were going well we're supposedly. Making all this money we're, making lots of sales, we. Were selling, over a million dollars a year and yet, it seems like every single time with. Our business it was like I needed to reorder inventory, or we wanted to do more in advertising and, our, cash flow was so tight and it was like we had to really strategically. Plan that. Next inventory, order or that next big advertising, effort, and so. I really, started digging. Into this further and like okay this, just. Doesn't feel right it's mean so what do we need to do and so this, really is how this was birthed so I'm really super excited because I am thinking this is gonna really help a lot of you guys that are a similar situation and, if, you're just starting out as a seller, this. Is good information to have now because you're gonna be able to avoid some of the pitfalls that we fell into so, super. Excited, so. We. Have fir first. You. Get. My slides move in here. So. If you've ever asked yourself I know, I'm making sales in revenue, but. Why don't I have any money that is a question that we, asked ourselves so, you might have seen this on Facebook, Jason put this on Facebook Amazon sellers, want to know where's all my money and this, is how we were, feeling every. Single time we get a pound from Amazon, it, was like just the names and faces of the dollars were changed to protect the innocent because. As soon as it came in it had to go back out again whether it was inventory, or advertising, costs, or whatever and so, we. Really started diving, in to say okay why, is, it that. We're looking at our bottom line every month and we're just not really taking home the amount we want to take home and we started this business to. Be able to leave a day job for my husband for me, to be able to do something from home and it's at the end of the day we were like why are we not taking home more money than. What we are and, if we're going to really truly replace, my, husband's income we need to be taking more home. Than what we are taking home right now so. We started asking these questions about. You know we want to pay ourselves more, where. Did all the money go right, it's like we make a million dollars in sales every year great. Where, is all of this money going so.
What, We started to find out was something called our inventory, turnover ratio. And basically, what that is is. That, as a ratio showing, how many times the company's, inventory is, sold and replaced over a period of time, so. It's. An Amazon seller this is a little bit of an interesting proposition based. On. The fact that we are selling physical products, but. When you look at other retailers, that. Have the ability to get. Products maybe faster so, I started talking to a lot of other business owners they're also sold physical products but, they were not importing, such as we're importing the majority of US Amazon, sellers are importing, so. When we order inventory, we have to order way in advance we. Have to order usually bulk, quantities. And. So that means to have good cash flow that. Inventory turnover, right, so how long does it take gets to go through that order when you're first starting how long does it take you to solve the first order the second order and so forth, so. There's, actually a mathematical, calculation that. You can use to make these calculations. And, determinations. To be able to determine what. Is your, current inventory turnover, ratio, or how many times in, a, given calendar period. Are you making that turn to where you're completely taking, that order turning, it over and then, making your next order and turning that over and. So there's. A couple of mathematical. Calculations, that can be used to do that so. The first one is if you take your cost of goods sold and, divide that by your average inventory, or, if you essentially divide your sales by your inventory, now, if you. Are an Amazon seller like we are, unless. You're keeping super detailed, records, of your inventory level numbers, on a monthly basis, because we all have access to, what's an FBA right but. If you're storing inventory. In a warehouse if, you're storing inventory, like, right now I have a pallet in my garage right, so. That, can be a harder, number to kind of determine, and so. Unless you're keeping super, detailed, records, of those inventory. Numbers, and those levels on a monthly basis, they. Can kind of be hard to make these calculations, and so. Basically. What we found what I found is, the easier calculations. To be able to make to be able to really get into these numbers and look at these numbers because here's the here's the thing and here's why that, you want to dig into this and I'll get into this in a couple of more of the slides but. This is gonna be your key to cash flow okay so. Right now, don't. - now don't, you know it this will pass the who-cares test, I promise you even. Though it feels a little bit boring and you're like math great, I hate math I suck at math no this will pass the who-cares test, just. Let's keep moving here and I'll show you in a minute why, so. This. Can be a difficult calculation as, far as you know all these numbers and how do I do this and everything else right and especially then if you have multiple SKUs cuz then it's like oh now I have to track my inventory numbers, on 20. Or 30 SKUs, great. Even. More math, so. The easiest way. That I found to be able to make this calculation is, to, actually look, at. Something. Called days and inventory, rather, than your inventory, turnover ratio in, days, and inventory, is basically, how, many days, worth of inventory do, you have on an average to. Where if you took, just inventory. You have sold, completely out how many days would it take you to do that which. Gives you a good baseline then, of kind. Of what that turnover. Ratio is depending, upon how many days that you're stocked for, so. To. Do that what, you can do is um. To. Calculate, this you take. What. You have as far as your cost of goods sold and you, divide that by your year in inventory, dollar amount, and that's going to give you a number right, I have it as X I know don't, seriously, this will pass the who-cares test don't, be like great now. There's algebra. I suck at algebra, seriously. You, just want to take that number right and I'll give an example on the next slide that will make it easier to kind of look at numbers, wise, so. You're going to take that and then divide that by one and multiply. It times 365. Because there's 365. Days in a year and that's, going to give you how many days of inventory, that you have so. Now these numbers are, going to be found on a couple of your financial reports, your profit, and loss statement, in your balance sheet, so. Again if you're, like great I haven't. Been keeping detailed, financial, records.
First. Of all let me encourage you to start doing that today if you haven't already, second. Of all I'm going to give you a calculation, here in just a little bit that, will be a little bit easier way to help you come up with these numbers as well if you, haven't been keeping detailed, financial, records but, if you have a profit and loss statement and if you have a balance, sheet you can come up with these numbers really really easily so. This. Is the example this and these are actually, data that I was able to pull because Walmart is a publicly, traded company so their. Numbers. As far as their profits and things like that are available. As far as public knowledge so. For the fiscal year of January, 2016. Walmart. Stores reported, an annual, sales of, 482. Point one three billion okay so, that's your annual sales so like for you as an Amazon seller say. Your annual sales was maybe somewhere like you know we were doing like 1.2, million or you know 1.5 million or 2 million or even it was only a hundred thousand, okay so that's your annual sales number we'll, just use a hundred thousand for round figures. Then. Your year-end inventory. Again, where you can do on your urine inventory, this is going to come from your balance sheet so. You're gonna pull that dollar amount on your balance sheet and your. Year-end inventory. Also needs to include any inventory you have in transit, so like for instance right now we. Are Amazon sellers we import just like a lot of you we have inventory, that's in transit, we have inventory that's on a boat coming from overseas we. Have inventory that's in semi trucks moving into FBA so. All of those times when you place those orders you, keep track of your inventory dollars. What, you have an inventory for your dollars so. That you because you also need to track your cost of goods and that all figures into that these, are all things that if you're just using an even just like a simple. Accounting. Software you. Can pull these reports, out of that accounting, software and it makes it super easy to come up with these numbers, so. Going. Back to the calculation. Their annual sales. We're, um four. Hundred and eighty two point one three billion their. Year-end inventory. Was. Forty. Four point four seven billion, and their, cost of goods sold was. Three, hundred and sixty, point nine eight billion, so. You can, see in the calculation. They're taking the cost of goods they're, dividing, that by the inventory. At the end of the year which, gives them a number of eight point one two, that's. Where you take the one and divide it by the eight point one two, times. 365. Because there's 365. Days in a year which. Gives you 45, days so. This tells you that walmart, sells their entire inventory, in a 45, day period that. Is super strong that is why they have extremely, good cash flow because, they're able to make those quick turns I ran. This calculation, in our business, and I. Will just say this our inventory, turnover for, days and inventory and how often we turn around VIN Tori was. Not 45. It. Wasn't even double that or triple that it was a lot higher than that so I found out very very, quickly, why. We're low on a little bit of cash flow here right we, are essentially, not. Moving our inventory, fast enough which creates a cash flow problem, so. Now. For you that are newer sellers, or maybe this is like a completely, foreign concept you've. Just been focused on getting selling, on Amazon which is absolutely, where everybody, starts this where we started it's where any needs to start and. So, now it's like okay what, if I don't have annual sales numbers I've only been selling for six months or nine months or I've been selling for a year but I just haven't really kept track of my numbers that well to know and. Be able to pull these calculations. So. You can still get a good baseline of what. Your inventory, turn rate is even if you're a newer seller by. Doing a couple of simple things so, first of all you want to know how long you've been sawing on Amazon, this. Is really easy to find out you just go to your seller central, you. Can adjust. The dates right on that dashboard to pull reporting, from pretty much the date you made that first sale which you'll have you know in your head approximately, what month right everybody knows approximately.
What Month they started selling on Amazon so. You're gonna figure out how many days you've been selling on Amazon right or how many months or however you want to figure that out days, or if you want to say okay been selling six point two months however that works for you, go. Through all your supplier, invoices and find, out how many times you've been or you've ordered supply, you've ordered, inventory, ordered from your suppliers in the. Number of days that you've been selling okay. That. Is going, to give you a good idea of how fast you're turning your inventory, if you've. Been selling on Amazon for a year and you've, placed three orders with your suppliers you're. Only turning your inventory, about three times a year. Based. On cash. Flow laws. If, you're only turning your inventory, 3ish, times a year you're. Gonna be a little tight on cash flow especially, in this business because you. Have a lot of lag time, other. Businesses, that maybe can order from a distribution center that's in the United States already and have us you know a load of more stock within two or three weeks does it happen for us Amazon, sellers you, have production times you. Have shipping, times if you're shipping by sea add more. Time on to that so. You want to get this inventory turning, as fast, as possible, and this is where actually. The. Amazing. Selling machine course, criteria, really helps because if you're doing your product selection, well you're picking products that have a fast turn so. You just need to do whatever you need to do to help that turn a little bit faster. So. I am totally Austin, Powers fan anybody. Else has Austin Powers and my one of my little favorite clips is where he says what does it all mean Buzzle. Like. You might be feeling like, that right now okay great. So. What. This means to you and why you should care again, I always, talk about the, who cares test um when. I share information, with people I really just want them to you know feel like it passed the who cares test right so. What. This all means is money in your pocket okay this, means greater cash flow this. Means you're gonna be able to pay yourself what you want to pay yourself this, means you're gonna have money to put back into more products, money, to put into advertising, money, to really reinvest, in your business, reinvest, in yourself. Do. What it is that you want to do because if the cash isn't there to do it at the end of the day it's. Pretty hard to then add the second product or that third or fourth product, to your product line if you.
Are Just barely keeping ahead of your. You know keeping in stock of what you currently have because. That's not turning, very quickly, so. Um. Where's. Your money which was the question we were asking right I have this money but, where is my money. Each. Unit, you have and, this is where some of our money is those are a lot of our money is right now each. Unit you have sitting. On the shelf at FBA, or, warehouse, right imagine instead. Of that unit right if you're selling, a spatula, that's. Really not a spatula sitting. There that's, a stack of dollar bills sitting there so. That's what you have to remember is each time that you have something there that's a stack of dollar bills and. When you have a stock a dollar, sitting on that shelf that. Sack of dollar bills is costing you in storage, fees it's, costing, you an opportunity, cost because you don't have that money available to go then maybe spend on advertising efforts Facebook. Ads further. Training for yourself, which. Is why I love these free trainings, because we're able to come on and say hey we'll, just we'll help you out here and on to spend, anything but if there was something you did want to purchase you. Have that money tied up in those, units on that shelf and then, if especially, if you took out loans then. You have interest cost as well so, every time you have a unit sitting on the Shelf it's, costing, you money the longer that it sits there, so. Faster, inventory, return means. Profits, realized, faster, and less overall expenses, because then you don't have as mentors, fees if you, have loans out you're not paying interest you. Don't have an opportunity cost, that's costing, you because you're not able to maybe then add that second, or third or fourth product, so. The. Key is keeping, this stuff turning and selling as quickly as, possible so Mike, joke with my husband was I found where all our money is we've been asking here, it is it's all sitting, at FBA, on, pallets. On shelves. There's. The money, so. The. Thing is how are we gonna take it from here right and how are we gonna put it in our pocket well what, we need to do is. A couple of different things one. Is we can increase our sales right so. We already have on most of our products we have some good sales but we have some slower moving products that, obviously, is costing, us money because. It's sitting on that shelf so. You can, increase your sales promotions. Sending out emails, Facebook. Ads there's. All sorts of things you can do to drive some external traffic, to your Amazon listings, to generate, more sales than, what, you're currently getting. So. More sales it's. Gonna be faster inventory, turn faster. Dollars in your pocket, another. Option that we've seen a lot of sellers, go, with and this is something that we're actually in process of ourselves in our own business, is to, get some wholesale business so, is there a retail, outlet or, another outlet, that, would be interested in doing some bulk purchasing, of your products right so think of it like if it was a group buy if when, you go to order from your supplier and you order a thousand, units and you have 500, of those essentially, pre-sold, that, helps, you turn, that inventory way, faster, but, it also helps, you with that upfront expense, as well which, is going to increase, that cash flow to you because, you've already made those sales it's, a help turn that over a lot faster, so. Eliminate. Slow moving products, offer, some BOGO, deals you can set up BOGO deals on all. Sorts, of different things that you can do to take those products, that you know are moving slower, and just. Eliminate, those because, they're costing, you in cash. Flow they're costing, you an opportunity, they're, costing, you and storage fees if it's, not something, that you can't get your sales up through other channels and, through other avenues you know if you send out an email or for, whatever reason you, just have products, that are not moving um, consider. Kind of liquidating, that so that you can get that cash flow back into your business to put towards those things that, are making you money right so. So many of us we talk about the 80/20, rule there's, a chance that 20%, of your products are generating, 80% of your profits and make, sure that that's where your focus is a hundred percent of the time so.
Creating. Again faster, inventory, turn another. Thing that you can do that we've started doing with our suppliers, because. We are a large, volume, repeat. Buyer I want. You to remember that phrase large. Volume. Repeat. Buyer, when. You talk to your suppliers make sure that you remind, them of this, I am. A large volume. Repeat. Buyer for, you what. I would like to do is I order 10,000, units from you a year anyway or, whatever that number happens to be can. We batch these out so, you're not asking for a lower moq what. You're doing is you're saying I'm still committing, to buy this amount of unit but. Instead of having to pay for it all at once or instead of having to put a deposit, down for it and then, get all of it in all at once and then I have inventory that's gonna last a year or more, I would, like to batch this out in smaller, orders, maybe. Say a thousand, apiece or, two thousand, apiece so, that you can turn that faster, and then. You, can keep that inventory moving, faster you create better cash flow and, you're, still buying, the same amount of units from your supplier. You're just batching, that order out instead. Of doing it on one fell swoop, so. Another thing you can do which is it's similar concept, that asks the suppliers again if maybe that they would give you a lower and low Q at the same price when. We negotiate we, usually negotiate kind, of using this anyway where we ask for, well what is your pricing tier structure and if, it's you know cheapest, at ten thousand units we, say would you be willing to let us place you know an order of this mo Q for the same prices to ten thousand, again. Using, the phrasing, large. Volume, repeat. Buyer gives you a lot of leverage to negotiate, these types of deals with your suppliers, and again. The, faster, you turn your inventory. The. Better position your cash flow is going to be in so, if you can negotiate these, types of terms, with your suppliers, you're, gonna greatly. Increase, that, cash flow, so. The. Goal is we want to take our. Inventory. Right because we have dollars, essentially. We don't really have products, we have dollars, that are sitting on shelves at, FBA or a warehouse or wherever happens to be sitting every day and we, want to turn that into money in our hand we want to turn that into money in our account money. In our pocket, so. A couple. Of takeaways for, you guys that you can write, down. Pull. Your sales numbers so the units you've sold and know, how many units you're selling a month approximately. If. You were selling during fourth quarter we just came through that that's a good number you're gonna want to know anyway because, for, stock, for next fourth quarter it's. A good it's a good number to know so, that when you go to restock, for next fourth quarter you kind of have a baseline well this is what I sold last, fourth quarter so, going, into fourth quarter so you need to kind of know these numbers so you can look at how many units that you're selling per month. Perform. Your inventory, turnover calculations. Or pull your supplier invoices and look at how often you're ordering but, basically you need to know where you're where you're at now because. You need to know where you need to go right so. You look at where you're at now how, often is my inventory turning, over how, many days worth of inventory do, I have on-hand how, often, am i ordering things like that so. Like right now is, an overall average for, us we're. Turning our inventory, about four times a year as an average of all of our products across the board which we have about 30 SKUs, so. Our goal now is to, say okay if this is where we're at now where, do we need to be and that gives us a baseline of where to go so we're setting our goals for how often to turnover inventory. Based, on what we're doing now and knowing where we need to go so. And then create that action, plan so. A good, goal and our goal is six, to ten times a year to turn that inventory, because. We'll create a way better cash flow situation if, you can even get one, more inventory turn in than what you currently are getting you'll. See a huge, difference. In your cash flow situation, so. Set. The bar high, shoot. High but even if you only get one extra turn in per year than, what you're currently getting you. Will start to see that difference, in your cash flow and in your bank account so. Those, are what you can do now what. You can really even do tonight, after we get off of this training is go over those things and um.
Move. Forward from there. It. Has stop, sharing my screen now. Great. Job so that was excellent thank you thank you thank you so, if you if, everyone, who is live right now we've got a lot of people live with us if you enjoyed, that please give a thumbs up you know it doesn't matter if you've already clicked it once click a like again and, show your love over there you can show some hearts to let charity know that you appreciated, it we've, got a couple of questions not too many questions, and that could mean that your trainer is just so fantastic, I. Hope. I don't have everybody's, head spinning, and saying math, and algebra I'm out what will you do, one person, here looks like Gina Dillard, said math is hard so, she's got a few reactions on, that I might. They said you know I have, to say though math is critical, math for business. Someone. Who taught. Me early in business reminded, me of this a few years ago when, he said he, doesn't understand, how most people most business people don't know, math and it's, not the hard math it's just plus and minuses, but it's understanding. Things like your inventory, and you know, so that was really informative and, I saw in here you know that there was people, that are just getting started and there's people that are obviously, already selling and yes, at the end of it what we're saying is, you know the more turnover. There's something called just-in-time and it was back, in the 70s. I believe it started in Japan and in the 80s it was really when Japan came on the the, market, for the automotive, and how they were so efficient, and everything and it really got to what, it was is just in time inventory meaning. That if, you have inventory waiting. In the warehouses, that's cash, that, is tied up and so, it's no different than the big companies, and the small companies, is you want to be moving your inventory, as fast as possible, but there has to be a break-even point too it's always going to be one of those, Kurt, bell curves because, there's also the added expenses, of shipping, costs, and everything the bigger the order you can do at one time obviously the cheaper you'll get it but then if that's my money that's tied up that you could use now, to, buy even more products, for down the road for different, types of products, you know that's a huge investment so you've got to really look at that so if you're just getting started really. Really important, now your first goal is to get enough inventory that you don't even run out of inventory if you're just getting started but, as you learned in here like you've got to really watch it and once you start to get some sales history do, those calculations so, you understand, not only so you don't run out of inventory but, you also can start to understand, okay how, much inventory do I really, need you. Know and I think you mentioned this in here charity but what is your philosophy, on that like do you do.
You Add 10 percent or, like how when you reorder, your inventory. Looking. At that how do you forecast it, yeah, so basically what we try to do is we try to always kind of keep like, what we call a six week buffer and the. Reason for that is we've run into so many things just over the years we've been selling right like I had, a shipment that was coming, actually out of Hong Kong and it, got delayed at the airport a week because there was a typhoon you, know like these little things that just weird. Stuff, and stuff, happens or you. Know they go to pick it up at the port in LA and the port is so congested, that the semi-truck can't even make an appointment to get in for a week you, know so we always try to keep kind of a 6-week buffer of. Inventory, on hand, when. We're doing these types of calculations to, give ourselves that buffer of the, ship can't get to the port there's, a typhoon, in Hong Kong you, know all of these strange things Amazon all of the sudden lost a hundred of our units, or you know weird stuff, that can happen as a seller, to, try to just basically have that safety net to not run out of inventory, but. Kind of like you were saying one of the things that I've. Been talking and doing a lot of research on this subject lately, and I. Talked to somebody that was saying you know if you're a grocery, store you, always make sure that you have eggs and milk and it doesn't matter if maybe, you run out of something else you always have eggs and milk because, that's what people are coming to you for and I, think what we've even done is started looking at all of our products, and say okay what are the eggs and milk of our products right and then, let's make sure that no matter what we don't run out of that because. That's our eggs and milk yeah, that's I have a good friend that they own, a fairly. Big, grocery. Chain in Michigan. And that was one of the things that are surprised that is that they have things there's a lot of canned goods that they always lose money on it's those certain, not to say that you want to lose money on any of this stuff but there's no staples that, you you have to have for one business advantage, and they don't really lose money because people come there to buy those and always pick up other stuff and that's the reason, you get it very cool, so let.
Me Just double check the question so I seen honey, said are the benefits of batch order is outweighed, by multiple, shipping costs and I think. That's obviously, why you need to have a track record a little bit like this isn't something right out of the gate this, is something more like once you're an established seller, you. Know I don't need to answer this stuff for you. If. You want you want to take that one yeah, I know it's totally fine and. I agree with Jason what you need to do is you need to kind of look at what those costs are, as far as those additional shipping costs to figure that out because, the. Thing is is that you may have, you. Know especially, if you're shipping by air and it's. A more of a price per pound that, price per pound isn't gonna really change much, right, with air shipping if you're shipping by sea and you're shipping a full container load versus, a less than container load you, may be able to get a better price on your shipping that way so, it kind of depends upon the product it depends upon how you're shipping it you. Have to sit down and kind of run over the you know run through these numbers and see what makes the most sense for you and, then decide okay if it's gonna add to. My cost right what does it add to my cost is it a dollar product. Or whatever else if I'm doing this you know where I'm shipping it in batch orders, versus, doing one huge order and then, again, outweigh. That against, the other costs like one thing we just recently sat, down into, the calculation, because we have some history now is, we looked at all of our expenses, that are fixed, expenses. Variable. Expenses, advertising. Salaries, everything, right and we, decided, and went through and said okay if we sell a certain, amount of products, in. A year then. Divide, that by those expenses, our cost, per product sold, is. You. Know X right. Or let's just use round numbers so we'll say $4, right so if our cost per product sold is. $4. Including, all of our other expenses, advertising. You. Know salaries. All. Of our monthly subscription. You know everything, right so that equates into kind. Of our cost per product sold on a grand, scheme of things, then. We have to look at those costs, and say okay if I, can create a faster, inventory, turn and create. Better cash flow does. That then help lower other expenses, and I'm paying in storage, fees and, things like that because if you're gonna pay in storage, fees, versus. What you're gonna pay a next shipping costs it, may be a wash but you're gonna be a better cash flow position. Awesome. So I'm just having a little bit of laughter here with, senior, your your child in the background, and your dog and your cat waiting.
For A second, and then it's like no. So. You, know and I see a few questions again, like Tim seen when you focus purely on cash flow doesn't, that impact your profits, and and, that's why this isn't about like just an instant, like light switch kind of thing you've got to calculate those things and the whole idea is you. Know let me just say this myself is I've sold, out of inventory, because it was a product I just didn't want to sell anymore so, sometimes, profits, isn't really, the highest priority, for where I'd rather just take that money back I accept, and this is more when you have a few products but I accept, that this, product isn't something I want to sell anymore we're, gonna lower the price and just move it because we don't want that being hung up in inventory because, then I don't want to pay for it up from Amazon, plus, I would give us a cash injection right, now where we can reinvest, in other products, those. Are all business strategies. Though and that's the thing it's not like they're just yes or no answers, there at the time constantly, looking how things are going and really, you know if there's any secret, out of this what, the biggest takeaway from me out of this is just, really have a system built into your company, where you're constantly, looking, at the important, things like money. Like understanding. Profit, but cash flow is so important because you, know I could raise my price, where I'm only getting where I'm getting the most profitable. Price. I could get but I'm only getting four sales a day so then that equals you know say a hundred bucks a day I get well, if I want to increase my cash, flow to $200. A day I might have to take less profitability, hang on one sec Gail, you. Got a stop yeah sorry, attacked. When. I take the you. Know I don't just look at the probability, I need to think cash flow so I want cash in hand but I also want to reinvest, I also want to grow the company so, it's more than just the one, topic, right. Exactly, and I think just like with what you said with. Looking at it from a profitability, standpoint. Versus a cash flow standpoint is, that if you're turning your inventory, faster, for maybe a lower profit margin. But, you're increasing, your cash flow that. Just gives you more opportunity. To add other products, to do other things business-wise. And. The other thing is to is like you know if you really wanted to get even more nerdy on the math side you, could start making projections out right, if I if I keep going the current track ongoing, what, is my business gonna look like in two years what is it gonna look like in five years and so, you know I mean if for people that are just getting started the biggest. Thing is is get, started get selling, you know start moving some stuff but then the next step is from a business standpoint is.
Okay I've created this business right we mean we've. Created this awesome, ecommerce. Business, and we, want to run it well we want to be good stewards we want to be good managers, of what this business is that we've built so. That we run it effectively, and we. Run it efficiently, so that it lasts. Right we don't want to then just go under in two years or five years and. Throw our hands in the air and say well the market just got you competitive, when no it was really us not doing a good job of being good managers, of the business, that's. Right yeah, you know and that's why you, know being a student, of the business is so powerful, so those people that are here right now all of you like good for you because this is what's critical, is you have to really understand. You the business and all, these nuances and, even if right now it kind of seems a. Complicated. Or far off at least it's planting a seed for, you so that when it comes to the point when you're looking at cash and really understanding. You know did we make as much money as we thought well if not and here's a real good simple, solution, to look at like well maybe it's our inventory, I don't. Really see too many questions, that are new a lot of it is just kind of like thank you great advice, so. This was excellent, I thought, it was very worthwhile, I think anybody that's watching this you. Know you've definitely got, some good nuggets of. Experience. Teachings. Here so thank. You charity for being able to do that and I want to remind everybody, before, we close off and I'll let charity, close the call off. About seller con on. The. Beginning of April we're holding, the number one Amazon, slush conference in the world and that's called seller con so we this will be our seventh, or sixth, I can't remember which one it is now but. We've had them everywhere from in Austin, Texas to Las Vegas to Nevada and now have we actually had it in Barcelona. Spain and, now. We're hosting, it in Orlando, Florida so, there is going to be it is a fun, time and I'll let charity, share about that too in a second, cuz she's been an attendee, and she's, gonna be an attendee, again coming guaranteed, and, I really want you to understand, that no matter where you are in your journey if you're just getting your product up and selling or if you're already an established seller, the, value comes from first, of all the networking a lot of people say all networking, that's kind of a you, know a hassle. Or I don't like meeting people but I promise, you the things that you can learn by creating a group of people that, you work with close in hand that will help you share things that help you have those questions answered, where you can feel that you can really expose things plus, the inspiration. From sitting beside people that are selling millions of dollars some some of the millions of dollars a month plus. There's other people, we've had people that have met new suppliers, at the event I'm so, much like that plus we have these incredibly. Fun networking. Opportunities, plus we have world-class, speakers. Where when you leave there our focus, is to not only have you learning. Strategies, that you can implement in your business and meeting people that can help you grow your business but. To be inspired, and motivated to. Really keep going, with your business and take it to the next level I don't. Want to be the one selling this because you, know obviously it's you know I'm hosting, this event, it's, called seller con and it's Orlando but maybe charity, you can share a little bit about your, opinion, of this event and why people should sign up yeah, absolutely so, my. Husband and I like you mentioned we're already, have our flights booked I mean we're coming, because. This is super important we started, making preparations, as soon as the dates and the location, and everything were announced, just because we believe in it so strongly, at. The Las Vegas event, it was just, totally. An. Invaluable, piece, of our business because we were able to make connections with other people. Sometimes, and it was really interesting because there, was a survey sent out and one. Of the questions was just you know like what like what are you hoping to get out of this event right and for. Us it was like we, sometimes, as Amazon, sellers like we're on this island you. Know like we're on this island to ourselves you, get together with other people they don't understand, e-commerce they don't understand Amazon, so, you really can start to feel isolated and, you start to feel like you're running into problems and, you, know it's just it can be hard in that situation, and so seller, con is a great place to connect with other Amazon, sellers, to then be able to meet people that have stronger, skill sets in different areas.
To, Be able to then pull all those resources together and say oh you're, great with sponsored, ads well I'm really good with copy and how can we you know talk and how can we support each other and so, just make those connections so, especially. For the networking, if nothing, else the networking I mean all the sessions are always so good every. Day after we could go back to our hotel room it was like we would we'd implement, something right then and there that helped moved our business forward and so that, was the great thing too is having just these you know nuggets, of like okay we can go implement this right now and, you know start to move our business even further forward in these areas, so yes, come to seller con whatever. You have to do to be there make. It happen you have to go to this event, right. On well thank you very much and so for if you want to sign up go to seller con SEL. Le, rcon. Com you can learn about it there silicon com and with that said thank you charity, this was a great call I was just actually skyping, with my good friend Mike McCleary who has been you know part of the amazing machine he said what a great call what a great topic, so, excellent. Job and yeah for any established, seller or a beginning seller these, are real nuggets that will help you give you an advantage over the. Competition and, when you have better cash flow that's. When you're able to really you know start, to dominate on, amazon's, marketplace, q so, awesome. Job thank you so i'll let you close off with any closing, remarks you might have on behalf, of myself mazing, and amazing, calm i'm gonna, say good night to everyone and charity i'll let you close off awesome. Thanks yeah thanks for, everything, everybody, and I really hope that you're able to get some good information. Whether, you implement, it now or whether you implement, it later it's good information to have it's, good things to be able to look at and know and then track moving forward if maybe you don't have a good financial, system set up yet if you're not keeping, very detailed records, it gives you a good place of like okay I need to start this now so, as we move forward I don't have as much catch-up to do or I don't have to backtrack as, much so, wherever. You're at in that process you. Kind of know what to do moving forward to be able to then just really effectively, manage your business.
2018-04-15 05:48