August FBA monthly update at $216K

2019 August amazon fba revenue

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who read this. Also to keep trade secrets and sensitive information under wraps.


It’s over.

Slow summer sales.

August Amazon revenue closed at $216K compared to $200K in July and I’m seeing an uptick in sales already.

I’ll share what went right and wrong in August and a look at our Q4 preparations as the calendar races towards the end of the year.

Without further ado~

August FBA results

For all the talks of the economy slowing and an upcoming recession, we aren’t seeing the effects yet. People continue to shop and our sales are coming in at a steady pace.

  • Compared to last month, sales are up 8%.
  • Compared to last year, sales are up 17%.

17% is low compared to our previous growth of 75-100% range the past 3 years.

But I like it.

It’s good for our current objective as we try to scale down the number of products to focus on higher conversion, improving margins, streamlining operations and diversifying to other channels.

This is similar to what happened for us from 2014 to 2018. We built the foundation to support the massive growth that followed. From all the projects and ideas we are trying to execute, I believe it’s laying the foundation for another strong platform of big growth.

PPC spend over the past couple months has hovered at 11%. My benchmark is to keep it to 10%. Every percentage point plays a big role to the bottom line when it comes to Amazon selling.

august 2019 PPC spend
July and August 2019 PPC spend

I’ve had questions whether I use an automated PPC software that you see everywhere lately.

This is something I’ve tried, tested, pondered and decided against.

I see the benefit and the beauty of automating PPC, but there’s a limit to how much a software understands the logic and objective of a seller and is able to keep up.

If you have products that don’t need refinement, and no adjustments other than bid tweaks, automated PPC can work great. But if you are applying advanced techniques and strategies, it can worsen your results.

I’ve used Sellics in the past and found that it was making bids and adjustments that were wrong. Had to go in and manually fix those again. Defeated the purpose of what I was trying to do.

The numbers and methods I use to analyze my numbers are also different to what software provides, so I end up having to do it manually again.

Gorilla ROI does not support PPC data, but with the PRO Amazon business templates

  • I copy over my PPC report
  • combine it with the Gorilla Sales function for any period I want
  • get and easy to understand, actionable table of results.

Streamlining operations

We try to run a lean operation. Anything that can be automated, I want to automate.

During the early years, my biggest failure and hurdle was getting over my “save cost” mentality.

I grew up with frugal parents and my nature is to save where I can. I would go 20 minutes out of my way just to save $1. Whether it be for milk or coffee. Even though I could buy it directly next door to where I lived.

In areas of business, I preferred to spend 1 hour a day to manually fulfill orders. Spending $60 to automate, simplify and streamline operations was a ghastly idea. Not when I could spend 1 hour doing it myself.

Here’s some math to show what I mean.

  • 1 hour a day = 5 hours a week (assuming M-F) = 20 hours a month
  • 1 hour = $15/hr = $300 value of labor per month (see how little I valued my time?)

Cost of multi-channel fulfillment for my size at the time = $60/mo.

I was so proud of “saving” $300, but in reality, I was losing 20 hours a month + $240 + opportunity cost of new growth.

That’s the secret way of losing money in business. Wasting your time on tasks that don’t add value.

This summer, we’ve created more systems and processes in addition to the software and tools I wrote about before.

  • Replaced laser printers with thermal printers. One thermal printer for each purpose. No need to waste time switching labels or rolls.
  • Rearranged layouts to improve picking, packing and shipping.
  • Integrating Zapier into as many processes as possible. All emails, tickets, orders, notifications, messages, invoices that come in to our system get filtered through Zapier first and then sent to the correct place. No longer dependent on a person to forward information to the correct person.
  • Automated accounts receivables follow ups. Turns out Quicken has implemented this feature which I didn’t know about. Payment and overdue reminders are sent at appropriate intervals to customers. No more chasing people on the phone until it hits the 30/60 day overdue threshold.

These are just some of the areas we’ve streamlined and I’m looking to do more.

Amazon UK sales

We started selling on Amazon UK in Q1 of this year, and it looks like we’ll have to pull out.

Whether international Amazon marketplaces work for you will depend on the product you are selling. I realize for international markets, having higher priced items is key. Despite having grown the account to 5 figures a month, it’s eating up money and racking up losses so far.

The majority of our products are supposed to be priced between £10 – £15 but had to mark them down to try and get it moving.

Then consider, the pricing includes VAT, so after factoring the following, margins are super tight at best and negative throughout.

  • VAT and compliance
  • Freight
  • Product cost
  • Amazon fees
  • Marketing
  • Returns

The problems with our UK account is that a single 1 star review has nuked the one of our flagship products. It’s the same product that sells fast in the US, and we sent in large pallets assuming it would do just as good.

That one start review has annihilated the listing.

1,500 units of dead inventory. Ouch.

Even slashing prices does not work as people only look at that single review.

Unless you have mega fat margins to begin with, if your product depends on volume it’s a tough nut to crack.

Fattening margins

There are 4 ways that work to fatten margins on existing products.

  1. decrease cost
  2. increase prices
  3. improve conversions
  4. bundles

Decrease Cost

We’ve decreased our packaging cost, working on optimizing carton sizing and the way products are put inside the carton.

This all adds up and brings in large savings.

Increase Prices

For products affected by tariffs, we have to pass it to the customer. As Amazon is a convenience platform, there has been no push back so far.

Improve Conversions

Our peak conversion rate was in 2017 where it was in the low 30% range.

Competition has lowered it to the low 20% range.

amazon conversion rate
Our Amazon conversion rate

The higher the conversion rate, the faster the cash flow, the better the prices from suppliers. All leads to fatter margins.

Bundles

As we slow down development of new products, we’ll be shifting towards creating different bundle variations with our best selling products.

As our products are based on families, it’s easy for us to mix and match to create an assortment of bundles. The margins are bigger and I sell more of the same product. Win, win.

Sales vs profit

A mini rant. Feel free to skip.

There’s so much bad advice on the internet. Especially on the topic of sales vs profit.

If you are looking for a quick buck because you heard FBA is the next gold rush, then you deserve to lose your money.

If you are serious about selling as a real business, define what your goals are and don’t expect to take a salary for a while. There are no excess profit as your grow.

Newbies and small sellers who stay small, focus on how much they can take out of the business before they have even scaled.

In the beginning, I was so focused on saving pennies that I missed opportunities.

The gorilla size sellers do something that’s unheard of for small sellers: reinvest, scale and build equity to reap the rewards later rather than now.

They plow money back into the business to:

  • try different products
  • implement new strategies
  • go to networking events
  • spend on self improvement
  • break through plateaus
  • hire
  • scale
  • upgrade equipment, services, training
  • acquire new leads and penetrate different channels

Next time you read a comment on the internet asking “but what about your profits?” ignore them because they have already lost the forest for the tree.

I’m currently running on low margins, but if taking out as much money from my business was the goal, I could literally fire everyone, stop selling at trade shows, cut out excess fat and start coasting on cruise control to take out 30% in cash every month.

Don’t fall for the same small minded thinking that plagues most small sellers and beginners.

Preparing for Q4

I talked about improving conversions above but the added benefit is the increase in sales velocity. Amazon gives you better visibility in the results and pushes your product.

We’ve seen our best selling product increase in sales by 20% over the past month and to anticipate the Q4 sales, keeping track of inventory is pivotal.

Last year, we went out of stock for certain sku’s and missed a lot of sales. These are all hidden costs.

It may not seem like a big deal, but if I spent an extra $200 on improving our systems, we would have been able to capture anywhere from $2,000-$4,000 in additional sales for this single item.

With our new improved inventory spreadsheet and ability to load FBA data into spreadsheets with Gorilla ROI, everyone on the team knows the inventory level that needs to be maintained.

This has made ordering and keeping stock levels much easier. No sudden surprises. We can track of multiple data points to make sure we are ready for sudden spikes.

If you have issues with not knowing your data and numbers, Gorilla ROI gives you full access to your data via spreadsheets. So easy and convenient.

Wholesale and our Online Store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Wholesale continues to increase YoY for us. One of the benefits of having a unique product line that we can sell at trade shows. Our best accounts continue to increase their volume helping us to diversify away from Amazon.

We want to expand to east coast cities, which means travel and shows that we don’t have the time for at this time.

Free FBA spreadsheets for all

download amazon spreadsheet

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

Gorilla ROI Review: Load FBA Data into Spreadsheets

If you sell on Amazon and ever wished you could get your sales, inventory and product data without having to log on and download CSV or Excel reports, then Gorilla ROI will solve your needs.

In fact, with this addon alone, we’ve been able to:

  • Eliminate over 10 hours of manual data entry per week
  • Share data between departments without having to send spreadsheets back and forth
  • People in the shipping department know exactly what to pack and send
  • Increase profit by not going out of stock like we used to

Today, I’ll share how to use the Gorilla ROI addon to load your FBA data, stay on top of your numbers and eliminate a lot of the work that doesn’t add value to your business or operations. Think of this as a detailed Gorilla ROI review.

Here’s a quick look at what you can do.

Gorilla ROI Review

Our Gorilla ROI Review

Gorilla ROI is a Google Sheets addon for Amazon sellers to automatically load their stats into Google Sheets.

search for Gorilla ROI in any Google Sheet > menu > add-ons > get add-ons
search for Gorilla ROI in any Google Sheet > menu > add-ons > get add-ons

Think of it like a Chrome browser extension, but for Google Sheets. You can take Google Sheets beyond the normal capabilities thanks to Google’s continuous improvement of Google Docs.

Gorilla ROI was created as we were exporting reports far too often and relying on people to update data manually.

This was time-consuming, contained errors and always out of date the next day. It had to be updated constantly.

With the addon, you can eliminate a lot of the manual process to focus on making decisions that will grow the business, instead of feeling like you are chasing and trying to keep afloat.

This is a screenshot of the addon once it is installed and enabled. You can use it just like any spreadsheet formula or feature within Google Sheets.

Gorilla ROI google sheets add on menu and options

Features

There is only one main feature of Gorilla ROI.

To pull in your seller data directly into Google Sheets automatically:

  • without having to know any code
  • without having to log in to any website
  • without any restrictions to your data

Everything is based on using regular spreadsheet formulas and function.

If you have used a formula like =AVERAGE(A1:A100), then you have the skills to use Gorilla ROI to load your data into your spreadsheets.

We have many functions that you can use for specific or general needs.

With Gorilla ROI, start typing =GORILLA_ and the formula will start to autocomplete.

call gorilla roi function autocomplete

If I want to pull up historical BSR (Best Seller Rank), it would look like this:

gorilla roi functions to get Amazon BSR Best Selling Rank

This means you’re requesting Gorilla ROI to do the work in the spreadsheet so you can use the additional functions you need. And if the plugin is setup correctly, Gorilla ROI will autosuggest/autocomplete functions for you as you can see in the image above.

Pull in Sales Data

Our most used function is pulling FBA sales data, like how many you’ve sold and how much you made.

gorilla roi sales perfromance sheet

This is our FBA spreadsheet template that is provided for free. But if you want to create something like this, you would type into any cell:

=GORILLA_SALESTOTAL(period, [marketplace], [sku], [status], [start_date], [end_date])

Anything inside [ ] is optional.

Here’s a real example.

=GORILLA_SALESTOTAL(“last 30 days”, “US”, A2:A244, “all”)
    • “Last 30 days” is the time period you want to check
    • “US” is to pull data from the USA marketplace
    • A2:A244 is the range that has my list of ASIN’s or SKU’s
    • “ALL” is the status of the sales like shipped, pending, canceled

Here is another example.

=GORILLA_SALESTOTAL(“This Month”, “ALL”, “IPHN3724”, “Canceled”)

This formula will pull the data for:

      • “This month” sales
      • Across “All” marketplaces I am selling in
      • For the product “IPHN3724”
      • That was “canceled”

See how much control you gain over the type of data you want?

You eliminate the troubles of downloading a big messy file, cleaning it up and then copying over what you need.

You can pull sales stats over custom periods, for bulk ASIN’s or individual ASIN’s. If you need to report sales for tax purposes, it’s so easy to enter a formula and get your data immediately without having to:

  • Log in
  • Click 3-4 times to go to the proper page
  • More clicking to get the right settings
  • Generate report
  • Wait
  • Export
  • Wait
  • Download
  • Open up the file
  • Clean up and create pivot table
  • Get the data you need
  • Copy the data
  • phew

You’ve already saved 30 minutes from a single process.

Pull FBA Inventory Data

One of our biggest improvements to our own FBA business operations came from having up to date inventory numbers and then sharing it with our shipping team.

Inside Amazon’s manage inventory screen, you can see your inventory numbers. You can also get more detailed stats by downloading an inventory fulfillment report. This becomes a big hassle when you must download and copy over numbers multiple times a day.

gorilla roi will import relevant Amazon data

With Gorilla ROI, you can load your FBA inventory stats by using the formula:

GORILLA_INVENTORY(sku, [marketplace], [status])

=GORILLA_INVENTORY(“B00YD545CC”, “FR”, “instock”)

The ASIN is B00YD545CC, being sold in France and shows the total in stock inventory.

Have 2,000 products and want to see the transfer status?

No problem.

=GORILLA_INVENTORY(A2:A2000, “ALL”, “transfer”)

This will pull up the number of units being transferred across “all” marketplaces for ASIN’s listed in cells A2 to A2000.

With this type of inventory data, you can create custom tables and dashboards to show when you are going of stock, how much to send and what to send.

Amazon FBA inventory days left spreadsheet
Amazon FBA inventory days left spreadsheet

gorilla roi pulling Amazon in stock data

These FBA spreadsheets template is also included with Gorilla ROI and we also have free FBA excel/sheets template that you can download and use without signing up or paying for anything.

And because this is a Google spreadsheet, our shipping department has this data open all the time to know exactly what needs to be shipped and ordered.

All without having to ask people for access to Amazon accounts, reports and needless emails.

Get Product Details

The last example is how you can grab product details to track within your spreadsheet.

gorilla roi review price pro spreadsheet templates

You can get FBA product information such as prices, rating, reviews, title, category, images and more.

With this type of data, you can create your own product monitoring database. I use this to make sure hijackers do not change any of my images or product information.

Hijackers will always change the title and image and I have been able to detect it within 10 minutes when the thumbnail and title to my listing changed suddenly.

=GORILLA_PRODUCT(A2:A10, “Title”)

This pulls in the title for the products SKU or ASIN listed in A2 to A10.

=GORILLA_REVIEW(“B00YD545CC”, “US”, 5)

This pulls in the latest 5 reviews from the US marketplace for ASIN B00YD545CC.

=GORILLA_LOWESTOFFER(A2:C10)

This formula lists the lowest offered prices and information for a list of products in cells A2 to C10.

Yes, our formulas also support horizontal and 2D directions.

Who this is suited for

The type of seller who finds success with Gorilla ROI are those who:

  • Are focused on optimization, automation, efficiency
  • Are data-driven and want FBA data loaded directly
  • Are using Google Sheets already and know how to use formulas
  • Want easier ways to share data across people and teams
  • Value time as the most important resource

Who this is NOT for

No tool is perfect and we aren’t either.

Gorilla ROI is not for you if you are:

  • A small seller (less than 5 SKU’s and less than monthly revenue of $5,000)
  • Doing FBM (We do not support FBM. Only FBA.)
  • Bad with spreadsheets
  • Saving money is more important than time
  • Looking for accounting tools
  • Only want PPC data (we do not support PPC at this time)

Gorilla ROI (Pros)

  • Security
  • Data accuracy
  • No bloat
  • 100% customizable
  • Automate your systems and speed

The big upside to Gorilla ROI is convenience to your data without sacrificing security or accuracy.

We pull data from Amazon and relay it straight to you. There is no UI to deal with, no clicking around. Your data is only accessible to you, and you alone. No other party can search for your product data or information.

You can imagine how convenient it is to just type a function to let Gorilla ROI populate your Google Sheet. Type it, let it do its work & then share it with your team.

Automatic and updated Amazon data in a format that makes sense. If the format doesn’t make sense to you, you can change the format like any other old spreadsheet.

You can make whatever look or layout that you want in order to make your data easy to understand, easy to sort & easy to search. It’s Amazon data formatted using the whole functionality of Google Sheets.

Gorilla ROI (Cons)

  • Not for beginners
  • 10 minute set up involved
  • Reliance on Google
  • Spreadsheet only (no UI)
  • Too much data

Setup time can be confusing if you are non-technical or new to Google Sheets. We’ve solved this with our turn-key “done-for-you” installation service.

If you don’t like spreadsheets with little exposure to it, you will find the concepts and execution difficult.

Because it uses Google Sheets, it is dependent on the service. If you don’t have a Google account, you cannot use it.

As you have access to data directly, too much data and not knowing the best way to display it in an easy way can be a challenge. This is why we provide a free suite of templates so you can get up and running without having to create separate spreadsheets. All the screenshots you see above are available for download immediately.

Be aware that Gorilla ROI is built to automatically get and load FBA data into Google sheets for you to make sense of the data. We made with the goal of eliminating the inconvenience of manually downloading, sorting and updating spreadsheets.

Gorilla ROI is not a sourcing app or product research. It’s not a feedback management app.

The service currently supports FBA only. Not FBM.

Restrictions

As with most web services these days, Gorilla ROI has geographical restrictions as it doesn’t support certain countries.

Countries where Amazon does not exist or countries where Amazon is blocked. Also, countries where Google services are blocked.

For countries like China that block Google services, a VPN is needed to access Google.

Did this Gorilla ROI review help? Give it a try.

If you ever asked wished you could get your FBA data automatically insdie Google Sheets, then give Gorilla ROI a try.

You’ll save countless hours, get better numbers, stay on top of your business.

You’ve got nothing to lose, but a whole lot to gain.

The free Gorilla ROI plugin is fully functional but limited only to 3 ASINs. It’s perfect if you just want to try it out or if they only have less than 3 ASIN’s.

Try Gorilla ROI today and see how you can free up your time to grow your business.

July FBA monthly update at $200K

2019 july amazon fba revenue

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who reads this. Keeping trade secrets and sensitive information under wraps of course.

The purpose of this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

July FBA results

Prime day has come and gone and I’m sure everyone’s July has a bump thanks to it.

For the month, we ended up higher than last month at $200k. Last year in 2018 July, we did $165k. A 21% increase. Nice little jump but nothing huge.

On top of that, Amazon continues to get more competitive and expensive each year. The increase in competition means we have to spend more on ads and the higher tariffs cut into our bottom line.

Top line at 20% is nice, but the bottom line didn’t increase at the same rate.

Always something to work on right?

I didn’t list any products on Prime day actually. There were a couple of products that we were hoping to have listed and showed up on the list of eligible products, but for whatever reason, when I went to activate it the following week, the Prime day time frame disappeared.

The week following Prime day drops off, so no point in running any lightning deals during the summer.

In 2017 we were heavily doing lightning deals and was able to grow our organic rankings. Every week we were listing 5-6 different items. There was no limit on how many products you could run simultaneously.

But the new lightning deal only allows you to run one of your products at a single time.

No point in doing it now.

ACoS in June was 27.98%. This comes out to 11.2% of ad spend as a percentage of revenue.

I did a short interview last month on the topic of why I don’t focus on ACoS and why it’s not a good measure.

To summarize my points:

  • don’t focus on ACoS as it doesn’t give you a complete picture
  • High ACoS could be a result of low visibility and low conversions. More visibility and higher conversion could bring it down.
  • Low ACoS could mean you have a door open for the competition to walk through.
  • Track your sku’s as a percentage of total sales (ppc sales + organic sales).
  • Adjust your spend to get it to your desired range. For us, we want to keep it at 10% of total revenue. Just a tad above our mark, but it’s a big improvement compared to our Q1 where we were spending 13% of sales.
ppc acos sales amazon tips optimization
ppc acos sales amazon tips optimization

July Happenings

In this section, I can talk more small business related stuff other than Amazon.

July was stressful it’s rolling over to August.

We changed insurance companies to increase our liability coverage, but shortly after signing and getting our new policy, we received a letter stating they were going to cancel our policy because they didn’t want to insure anything related to personal care products that are applied to the skin.

We don’t do any in house manufacturing. We do contract manufacturing and all the products are under our name. But we are still classified as manufacturers instead of distributors or wholesalers. That puts us on a different risk category with insurers and they don’t want to bother with a company our size.

We have to be doing at least $10M for them to even consider it.

That’s been the struggle at the moment.

I have one of the best brokers working for us and she has been knocking on every insurer, but no one is interested.

With our move coming up in a couple of months, it’s getting down to the wire. The new landlord is a REIT firm so they don’t care who you are. The management company is a fortune 500 company, so again, they don’t care.

Some struggles of operating as a small business.

It’s why I wrote that it’s better to stay small or go big. If you are small,  you can contain operations and keep it lean to maximize margins.

If you get bigger, you get more leverage in other areas and can stand your ground.

If you are in the middle, you are in no man’s land.

Hiring and Firing

As our sales increase and more work and tasks need to be completed, looks like we need to keep outsourcing where possible and planning to hire.

We just fired our social media manager.

The results weren’t there based on the how much we were paying. Doing a post-mortem analysis, I realize it’s hard to expect much results from an external person or agency that is handling too many accounts.

There’s no way they can handle work involved, let alone put in the time required to carve a strategy and implement it.

We were paying excessively for someone to just post a few times a week.

I’ll be hiring somebody or training an internal employee to do this inhouse which will be more effective and controllable.

This brings me to expanding the team. With our thin margins, there isn’t much room to hire aggressively. To stay lean, we have to outsource or hire VA’s to do the easier tasks.

The goal is to track all the work our main team does that is repetitive and easy to train. Then to outsource it so that we can focus on ROI generating and strategic projects.

Margins for July

Summer sales is slow, but can’t forget that Q4 is around the corner. Product planning and ordering is required.

We have people who sell our products in different states so keeping inventory on hand is important.

New products arrived finally so we had some big bills to pay. The worst was two of our products being tagged for intensive exams at customs.

Argh…

On a cash based accounting, gross came in at 16%.

Each time I write these reports, I realize how off we are as accrual accounting shows a different picture. But cash is the life cycle of the business and good to track.

Nevertheless, if we want to sell our business one day, accrual will make everything easier and smoother.

As mentioned above, the account ACoS for July was 27.9%. We jacked up the PPC for prime day, but the increased sales make it even out.

Wholesale and our online store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Free FBA spreadsheets for all

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

This is why you shouldn’t use scouting tools on your listing

The two biggest research tools for Amazon sellers are:

  1. Jungle Scout
  2. Amz Scout

Research tools have changed the way we source and get data, but there comes a risk with using the tool.

What I’m going to show you is when and when not to use these scouting tools.

Not how or how not to use. There are plenty of tutorials and people wanting to make affiliate sales that will go over how to use it and why you should.

None of the negatives associated with it. No affiliate links here. Just straight truth of when and when not to use it.

Let’s go.

How scouting tools work

One area I find sellers to be overzealous is in the area of data protection and fear that a software company will steal their product idea.

I have found this to be far from the truth.

The real fear shouldn’t be whether the software company is going to use your data. But whether they use your data as part of their service to other users.

Scouting and research related tools work like this:

  • You give access to the tool and enter your seller ID and authorization token.
  • The software will start to download your data via the Amazon API.
  • Free chrome addons or paid extensions require you to feed them data manually.
  • The software will clean up and arrange the data.

Next comes the biggest difference between software tools.

  • Any tool that offers research functionality like inventory lab or paid web app tools will make your data searchable and viewable. It’s open for anyone paying for access to find and analyze. This is called “one to many” access.
Basic idea of how Amazon research tools collect and provide data
Basic idea of how Amazon research tools collect and provide data
  • Software like Gorilla ROI and accounting tools (think Quickbooks) do not share your data with anyone. It is siloed to your account. Meaning we provide 1-1 connection access only. No one outside of you can see or find your data. Our service is not dependent on being fed data from other users for the rest of the user base to see and use.
Gorilla ROI Silo connection to prevent outside access
Gorilla ROI Silo connection to prevent outside access

If you sell yoyo’s, another seller will not be able to check your sales data on yoyo’s. Each seller can only access their own data. Everyone is walled off from each other.

Knowing this important if you are worried about other sellers finding your product.

When to use scouting software

The best time to use Amazon scouting software is to perform research on a product or to find a category or idea.

Think of it as a filter.

Scouting tools help you when you are at the top of the funnel with thousands of different products and categories to choose from.

It helps you narrow the list down.

The lower you get in the funnel, the less you need scouting software.

I won’t get into the details of how to use the tool because there are so many tutorials out there.

When not to use Amazon scouting software

I’ve used Jungle Scout before but canceled and ultimately chose AMZ Scout as my chrome extension.

With the majority of Amazon sellers using Jungle Scout, every time the tool is run on a particular product, the data gets entered into the Jungle scout servers.

You guessed it.

The more people there are using it, the more likely people will find it.

With AMZ Scout, it’s lesser to some extent.

The key is once you have identified your niche and product, stop using the scouting software. There is no need to continually feed the latest data into a database for tens of thousands of other people to find.

One day when AMZ Scout made an update to their tool called “saturation”, it really opened my eyes to the data they are seeing.

AMZ SCOUT saturation score shows data on how many people found it
AMZ SCOUT saturation score shows data on how many people found it

This is for a random skin routine product I came across. Looks like 4 other people found the exact same product and brand.

Here’s a look at bbq gloves. One of the most copied and private labeled products on Amazon.

Other tools have the same thing, but AMZ Scout now shows you how many other people are searching for it.

I assume the numbers are calculated based on a monthly tally or something. 39 people in the last 30 days looking for bbq gloves. Not a product I want to be in.

For this very reason, once you know your product, it is better to try and keep it under wraps by not using scouting tools.

You have the experience and judgement to figure out how much something sells based on the BSR.

The best way to use scouting software

Using these tools to keep tabs on your competitor is a good strategy.

BUT

If you are searching in such a way that will expose your product, then it’s not good.

The better way is to use the research tool on your competitors Amazon storefront.

  • Not the search results after typing a keyword
  • Not the listing page

The Amazon Storefont – because it will only list the products in their storefront in the tools.

This way, you can hide your product while giving AMZ Scout or whoever, the data of your competitors.

Sure.

People can still trace it back to your product, but at least you aren’t updating your product and data for all to see.

Use scouting tools on competitor Amazon Storefront
Use scouting tools on competitor Amazon Storefront

Summary

  • Scouting and research tools are great and have made work so much easier.
  • Once you get past the initial stages of finding your niche and product, stop using the tool.
  • Publicly available tools require data to be loaded onto the servers allowing for others to use it.
  • Use the tools to look up competitor storefronts.
  • Use your internal data to keep track of your sales like with Gorilla ROI.

Looking to get data from Amazon into Google Sheets?

If you are looking to connect Amazon with Google Sheets, then you’ve come to the right place.

We are the only software that allows you to take full control of your data.

Rather than locking down what you can and can’t do, you get the flexibility to use your data how you want it. Get direct and flexible access to your Amazon data without having to know code.

Gorilla ROI is a Google Sheets Add-on that allows you to connect and import data directly from your Amazon Seller Central account into Google Sheets.

Do things like bulk convert your ASIN’s to SKU’s or FNSKU, breakdown the fees and charges per sku, pull historical inventory level for projections, load the number of units sold by month, week, last year, last month and more.

Here’s a demo that I did where you can see it in action and how it works.

Full transcript and timeline is available at https://orangeklik.com/demo-gorilla-roi/

FBA spreadsheets are available for new users.

Free Amazon templates are also available. No sign ups, no emails. Just copy to your account and away you go.

June FBA monthly update at $182K

2019 june fba revenue
Upfront disclosure.

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who reads this. Keeping trade secrets and sensitive information under wraps of course.

The purpose of this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

We’ll see how these posts evolve based on how you find it, and what information is helpful or not.

June FBA results

I’m writing this during Prime Day. Amazon created their own sale event to fight against slow sales right in the middle of summer.

Brilliant.

I’m going to leave out what we did to prepare for Prime day for next month’s update. Don’t want to spoil the fun.

We ended the month at $182k. A 5% drop from last month. 10k sounds like a lot, but when you look at the percentage difference, it’s not as bad as it sounds or looks.

We were around 125k last year so a 45% growth in sales is great for us considering we haven’t launched any new products so far this year. Growth has come through optimizing existing products, creating different bundles, improving listings, photos and PPC.

For the second half of 2019, we have a good lineup of new products on the way with the first to arrive in July. Our product development always takes a long time because we are investing for the long term.

We don’t private label anything. Everything is OEM, meaning:

  • Custom designed
  • Mold investment
  • Patented in China and US
  • Then we launch

It starts slow, the momentum takes longer to build up, margins get compressed.

Yes it’s expensive.

But once we sell through our initial order and get the “snowball” past the tipping point and rolling down the hill, for us the hill turns out to be a very long one.

Happenings in June

(That’s not me by the way)

In last month’s update, I went over some of the things we do during the slower summer months.

Things like:

  • plan and develop future products
  • update processes
  • re-train staff
  • upgrade assets
  • and improve other areas we can identify

In the past month, we’ve already executed and started most of the 5 points above.

  • We took some time to update documentation
  • Brainstorm product ideas and improvements to current products
  • New packaging ideas
  • Upgraded simple equipment to make work easier

The biggest in June was our 2 week trip to Hong Kong, China and Taiwan.

We were exhibiting at an event in Hong Kong (nothing related to the Hong Kong fair or Canton fair). Once the show was over, we visited our suppliers throughout China and Taiwan.

I never look forward to China trips. It’s rough because we are traveling from city to city every few days, in factories from early morning to evening where the temperatures easily get over 104F (40C).

Not much to look around and do when you are in the industrial zones of China.

But one thing is for sure.

Every visit we make is a good move in hindsight.

There’s only so much you know when doing business over a keyboard. But when you visit in person and see the full scope, capacity and capabilities of what a factory can and cannot do, you can:

  • identify new products you didn’t think about
  • find ways to improve your current product without increasing costs
  • speed up the conversation and finish in 2 days what would have taken 2 weeks over emails
  • find out how incapable your supplier is and look for a new factory

If you are on the fence about visiting suppliers in China, I highly recommend you to.

2 years ago, we found our best supplier from a factory scouting tour. Rather than just doing it through Alibaba, this was an important product that we needed to replace with a new supplier. We set up dates with 4 factories over a 2 week period. Took trains from city to city and came away with a partner that has served us and protected our products with utmost integrity.

Having seen their facility and capabilities, we’ve scaled our production and line up with this factory.

Win-win.

On the flip side, during this same trip, we discovered how incapable one of our current suppliers were and stopped dealing with them immediately.

This is only possible when you visit and see in person.

Margins for June

Margins were hit hard again in June as we made a large container purchase. Gross (using cash accounting) ended at 26%. At the end of 2019 Q2, our gross is at 29%.

Far below the 40% I am seeking. So there is a LOT of work to improve that.

The double edge sword is that as we try to gain international accounts and also create a distribution business, the margins are going to get squeezed further as we go for volume.

With Q2 finished, I’m not rating our business too highly this year.

I’d give it a 6 or a 7 out of 10 so far.

  • Top line growth of 45% – pass
  • Gross margin of 26% – fail
  • New products introduced – fail
  • PPC goal – improving
  • Cash flow management – pass
  • R&D – pass

Our account ACoS for June was 26.7% which is a good improvement over the 28.4% from May. It was previously 31% in the earlier months.

Still working to get it down to 25% without affecting sales.

Overall as a percentage of sales, PPC spend was 13% by the end of Q2.

3% away from our goal which is a big task to improve.

Wholesale and our online store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Free FBA spreadsheets for all

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

Gorilla ROI huge performance increase

We’ve invested a lot of time and resources into supercharging the data import.

Now you can load up to 2,000 data points in a few seconds straight into Google Sheets.

Try getting that much data manually or using pivot tables and you’ll be dizzy with the amount of data you need to pull.

Enter a formula, set your parameters and boom – you are done.

This ends the June update.

Come back for the July figures to find out what we did for Prime day and how the start to the second half went.

How to pull lowest price and offerings from your Amazon listing

What you’ll learn:

  • How to pull your lowest price
  • How to get the lowest price offered on your SKU’s
  • How to see the lowest offerings any of your products

Getting the lowest listed price on your product

This works the best if you are reselling items and competing with other sellers for the buy box.

Without leaving Google Sheets, you can pull the price being offered on the listing using 2 methods we provide at Gorilla ROI.

=GORILLA_MYPRICE( SKU )
=GORILLA_LOWESTOFFER( SKU )

GORILLA_MYPRICE will display your price only.

GORILLA_LOWESTOFFER also includes prices from other sellers.

If you did something like:

=GORILLA_MYPRICE("839-JDK-93K")

where the SKU (839-JDK-93K) has 5 other sellers, then it would show the price that you are selling for. If you have a sale price set up, this function will display your current sale price that will show up in the buy box.

=GORILLA_LOWESTOFFER("839-JDK-93K")

This function will return the lowest price that is currently being offered. This is not the buy box price. Another offer could be lower but not be in the buy box based on Amazon’s algorithm.

To view all the sellers listed on this SKU, enter more variables to define what you want to see.

=GORILLA_LOWESTOFFER("839-JDK-93K", "default", "fullwithheader")

This is the easiest example to display all sellers where;

  • the SKU “839-JDK-93K”
  • default marketplace (US, UK or whatever your main marketplace is)
  • will display all the headings in a table format

gorilla lowest offer

If there are multiple sellers for the SKU, this formula will create a row for each seller and display the full stats of each seller.

“Default” refers to your main marketplace.

“Fullwithheader” creates another row before the results with the table headers to make it easy to identify.

Combine MYPRICE and LOWESTOFFER

A good tip is to use both MYPRICE and LOWESTOFFER together in a spreadsheet side by side.

Let’s say you load myprice for all your SKU’s in column A.

You then load the lowestoffer for all your SKU’s in column B.

If you can see and compare the price from column A and B, you know:

  • you are not the cheapest
  • or your private label listing may have been hijacked
  • who the other sellers are and how many you are competing against

Spreadsheet Template Available for Members

free template for MyPrice and Lowest Offer
free template for MyPrice and Lowest Offer

Click the image above to see a preview of how it looks.

This spreadsheet is available to all Gorilla ROI members.

It’s available at Your Account > Basic Spreadsheets > BASIC] AMZN Reviews and Prices.

How I created this spreadsheet

The spreadsheet uses a mix of:

  • GORILLA_MYPRICE
  • GORILLA_LOWESTPRICE
  • GORILLA_REVIEWS
  • GORILLA_RATINGS
  • GORILLA_SALESCOUNT
  • GORILLA_CATEGORY

GORILLA_MYPRICE is used to bring in my price that I am selling for.

GORILLA_LOWESTPRICE pulls in the lowest price from the listing.

GORILLA_REVIEWS gets the user reviews for the product.

GORILLA_RATINGS displays the average review rating.

GORILLA_SALESCOUNT is used to get the last 30 days of units sold for a better dashboard.

GORILLA_CATEGORY grabs the product category for easier filtering.

All the data is then loaded automatically to create an all round dashboard that provides more context than the standard pages that you see on Amazon’s backend.

Short video explainer of the spreadsheet

To get a quick idea of how the spreadsheet is set up and work, watch the video below.

Someone is selling their FBA business and I analyze the numbers

What you’ll learn

  • How to analyze an FBA business
  • What the numbers say about this business
  • Whether it’s a buy or not

Once in a while, I browse through a marketplace like Flippa to see if there are FBA businesses, products or listings potentially worth buying.

The interesting thing with Flippa is that the seller uploads financials for anyone to see.

No account sign up, no deposit required.

In today’s post, I’ll share the FBA business that I found, the financials and what I think after breaking down the numbers.

But first, a story of why I do this and how it helps.

Before and after

During my twenties, I went to the gym regularly to try and bulk up my skinny frame.

There were signs of life during that year where I went to the gym religiously and ate as much as I could.

But what helped the most was keeping track of progress. I’m sure you’ve seen those nerds at the gym with a pen and paper and writing things down.

That was me.

It was good while it lasted. I didn’t bulk up a lot, but I got enough meat on my bones to upgrade from pushover anchovy status to normal skinny guy on the street status.

Being a numbers and stats person, I like to keep track and count of what I’m doing, and where I stand. Not for the purpose of comparing, but to make sure I’m not falling behind.

It goes the same for business.

I’ve been going through my numbers and I share my thoughts on margins and what levels we are trying to shoot for. In the post about how to price products properly, I showed how we try to model ourselves after Proctor and Gamble on the financials.

This is the equivalent to having a before photo of my skinny bod and an after photo of a lean and strong “after” photo shot.

Our current state is the before, and P&G’s is the after.

By keeping track of our financials like this, it helps us keep a healthy balance sheet and forces us to focus on making decisions that will make positive impacts to our financials.

FBA business on sale for $265k

Back to the Flippa listing.

The FBA business being sold is BluePeak USA.

Asking price is $265,000.

From the listing description:

Here’s a look at their products from their storefront. Using my tips on analyzing FBA storefronts, their #1 seller at the moment are double wall stainless steel tumblers, followed by protein shake bottles at #2 and #3. #4 is a Nespresso capsule holder.

See it for yourself while the listing is up.

BluePeak USA storefront top 3 products
BluePeak USA storefront top 3 products

They claim the business generated $1.12M in the last year with a net profit margin of 12.9%.

The pros I see:

  • Sales have been increasing.
  • There are only 6 13 sku’s. Some are high performing. Room to grow quickly.

The cons I see immediately:

  • I don’t trust the numbers. It looks very overstated.
  • The company is young so there isn’t much history to work with.
  • Very competitive product and niche.
  • Products reviews are going down on best selling items.

I want to say that if the numbers were 100% accurate and not massaged in any way, then this looks to be a no brainer deal.

$265k for a business that can churn a $140k of annual profit is literally a 1.9x multiple.

But that sounds too good to be true.

Let’s see if it is.

Let’s dig into the numbers

The seller uploaded financials going back from June 2017 to May 2019.

The excel file has serious errors with the total value where the seller is adding up 20 months rather than the last 12 months. They could have just left it empty which would have been better.

There are other issues where the number of columns being added are inconsistent with each other and line items are assigned in the wrong place.

Allocating a COG as an expense will only make the gross profit look much better than it really is.

Warning flag: if a seller can’t organize and upload accurate financial statements when selling their business, what else could they be hiding or missing hiding?

After cleaning up the financial statement and rearranging the line items properly, here’s a better representation.

Bluepeak financials corrected TTM
Bluepeak financials after correction TTM

None of these numbers are audited and my calculations are just based off what the spreadsheet says. I’m sure if I really wanted to buy this business and dug into the reports and transactions, I will discover a lot of discrepancies judging by the initial financials.

Original VS Corrected

  • $1.5M revenue vs $1.13M revenue (overstated by 25%)
  • $605K gross profit vs $245K gross profit (overstated by 60%)
  • $119K net profit vs $144K net profit (understated by 22%)

If you look at the numbers as a percentage, the original statements make it look like the business is operating at:

  • Gross margin of 40%
  • COGS of 19%
  • Amazon expenses of 59%
  • Net margin of 7.9%

After correction, the numbers really reflect:

  • Gross margin of 21.8%
  • COGS of 78%
  • Expenses of 17%
  • Net income Operating income of 13% (net income is after tax)

The before and after paints a drastically different picture.

Originally, what looked like a high profit margin product turns out to be a low profit margin product in a competitive niche, with bad reviews.

If the gross margins of the business is 21.8%, it’s on thin ice. Things could go downhill quickly because as you grow, operating expenses add up quickly.

The financials only include Amazon related expenses and Amazon PPC in the expenses line. There is nothing for payroll, social security tax, overhead, insurance, auto, R&D, customer support, fees and other expenses that come up with running a real business.

By the time all these expenses are subtracted from the gross profit of 21.8%, you have negative operating profit and negative net profit.

Deal or no deal?

If you have extremely lean operations and can operate with 21.8% margins, this isn’t a bad deal if you just take it at face value.

Most likely you cannot have any employees, operate out of your garage, and you definitely cannot pay yourself anything.

Long way of saying – NO DEAL.

But I can see the motivation for wanting to sell.

  • Reviews continue to trend down.
  • Some products are close to dead.
  • Seller wanting to get something out of a tough FBA product.

As I mentioned at the beginning, if I hold this company next to my requirements and benchmarks, it fails most of my boxes.

I’m aiming for 40% gross margins because I know my operating expenses will be around 20-25% and after any interest payments and taxes, my goal is to stay above 10% net profit.

You can try to analyze the business yourself. I’ve uploaded the original and corrected.

It also brings up the important point that there is going to be a reason for why the seller is selling. It’s up to the buyer to uncover the truth because the seller is always going to sugarcoat it or leave out the details.

However, considering that I already have suppliers that make capsule holders, there’s no reason for me to pay $265k + inventory for something that we could get done for $10k.

Summary

You can learn a lot by analyzing somebody else’s financials.

From this company alone, I can tell that the owner doesn’t know their numbers, costs are high, products are dying, margins are thin and the niche is competitive.

The business generated $1.12M in the past 12 months, but the owner is willing to sell for $265K. Not a horrible deal, but only if that person is brand new and doesn’t have the time to learn and do it from scratch.

Software and tools we use to grow our FBA business

What you’ll learn

  • How we optimize our operations
  • Which tools that are a must have for us
  • How our team uses these tools for Amazon

This is going to be interesting.

I know people are always interested in knowing how others run their business, so I’m going to share the software and tools we use to run our Amazon business.

It’s not just limited to how we run the Amazon side of things, but other things like customer service, project management, internal operations and aspects outside of Amazon.

I originally sent this out in an email, but I’ve added more examples and explanations to help you out.

This list is not complete or the proper way of doing things. It’s just what works for us. If you have some cool implementations on how you do it, leave your thoughts in the comment section below.

Tools used to run Amazon

Surprisingly we don’t use many tools for Amazon.

Scouting and research tools – AMZ SCOUT, Amazon Storefront, Retail stores

If you’ve been reading my newsletters for a while, you know how I feel about scouting software.

I’m not a fan and I only use it to get rough numbers on potential products and ideas that I have in my head.

I never use it for sourcing actual products.

The main issue is that anytime you run the tool on a product, it gets stored on a database for a million other sellers to look up.

I do not run the tool on any of our products for the same reason. No need to share our product and data with the masses.

However, I do use AMZ Scout over Jungle Scout. Purely for the reason that more sellers use Jungle Scout vs AMZ Scout.

To get accurate ideas and data on what is working and what isn’t, using the Amazon Storefront strategy is one of the best options. Amazon lists in order of best to worst selling items in your storefront.

All you have to do is look up competitor storefronts and you can immediately know which one is their top seller.

This way, it’s easy to expand your own product line and you have the most accurate data right in front of you.

The other option is to visit a big box retail store. Our top sellers have come like this. If a big retailer like Target, Walmart, Bed Bath Beyond, Home Depot or Lowes is carrying it, it means the market is big.

From there, we narrow it down a little and find a specific product that looks to be doing well. We then find ways of improving it and putting a unique spin on it.

Knowing that China sellers are copycats, they just want to private label something. i.e. ODM products.

Since we want to be unique and sell it for the long run, we create our own version to own the mold and prevent China sellers from selling the same thing. The more expensive and harder it is for a seller to copy our product, the bigger the barrier to entry.

One of our best selling products used to sell 100 units a day. That has now dropped to 20-30 because of so many copy cats. It was an easy product to copy and they got away with it.

Since then, we’ve decided that if a product is too easy to copy, we don’t want to sell it.

Listing software – NONE

We still use CSV files or manually create listings from seller central as we don’t deal with hundreds of SKU’s.

Customer follow ups – FeedbackWhiz

I used to use FeedbackFive, but ditched them because FeedbackWhiz offered the same features for email follow ups at half the price.

So far so good. They have other features like sales numbers and order information, but these numbers are inaccurate.

I’m looking at my dashboard on FeedbackWhiz and it’s telling me I have sales of $42k for the 2nd week of May. It should be $49k which is what Amazon and GorillaROI shows.

Promotion, launches, product reviews – NONE

Used to do promotions back in the day, but stopped and no longer use any services.

Product launches are a waste of time for us. Amazon is cracking down anyways and I’d rather let the shady China sellers get banned. Same with giveaways.

There are proper ways of doing it, but for what we sell, I’ve found that I can get the same results or more by spending more on PPC or reducing the price initially and then ramping it slowly up.

Keyword generators – KWFinder, Storybase, keywordshitter

Lots of free and good tools out there. The one that we pay for is storybase as we use it a lot for SEO and other content.

Keywordshitter is awesome. Check it out if you haven’t heard of it or used it before.

Data and analytics – Google Sheets, Gorilla ROI

Yes it’s a plug for our tool, but only because it does everything that we need.

  • Reviews
  • Inventory planning and forecasting
  • Hijacking
  • Sales reports
  • Team sharing
  • Custom reports

The latest spreadsheet we created internally is a PPC spend analyzer and optimizer. Not the typical style that you see with other software.

This spreadsheet is specific to our internal KPI. By being able to pull sales totals over various periods and combining it with the PPC spend, it has already become a very powerful tool in understanding our current performance and where we need improvements.

We used to use InventoryLab to get the fees and charges, but their numbers are off and Gorilla ROI pulls in all the fees and charges, much more accurately and is customizable.

By creating custom spreadsheets with Google, it’s become like an “internal app” that we can create and edit on the fly without having to know any code.

There are different spreadsheets for specific employees and departments so that everyone understands what their roles and KPI’s are.

Designs

We have our own designer that creates all the marketing images, packaging, mockups and digital stuff.

No software or expensive agencies.

Just a quality designer that we found proactively using upwork and dribbble.com

Rather than posting a job and waiting for somebody to come by, we have found our best designers and a team we work with by manually going through hundreds of portfolios and contacting the designer directly if we felt they matched our design style.

I used to do it all myself and I’m capable, but not great.

Since we started outsourcing this area I can focus on doing the things that scale and to do tasks that bring in revenue – not tasks that save money.

All in all, we keep things simple on the Amazon side.

Ecommerce outside of Amazon


This is where things get different.

Shopping cart – Prestashop moving to WooCommerce

I have used Shopify in the past. We used to sell high end ceramics so we spent a good deal of time and money on the Shopify site. The pro is that it’s easy to set up and get running, but if you do any decent amount of sales, it becomes expensive fast and severely handcuffing.

Shopify makes you pay for every-single-little-thing.

So for our current store, I chose Prestashop.

It’s free, all the things you pay for in Shopify are included. It works out of the box. Plenty of templates you can purchase and customize.

It’s great and functions very well, but I’ve changed my strategy of converting our site towards content heavy, landing style pages, and I need something very flexible and more of a CMS than a shopping cart.

Hence the move to wordpress and woocommerce.

I’ve already applied it to one other site and it fits what I’m trying to do, so I’m in the process of moving our main money site to this new format.

It should supercharge conversions and boost our SEO as we get content heavy and keyword rich.

With this new format, I’m also able to create single Amazon niche sites on the fly. I can literally go from nothing to a working and functioning woocommerce site in less than a week with a 100% custom design.

Email marketing – Sendinblue

I used to use Drip. Now I use Sendinblue as it’s simple, affordable and has all the tools you find in more expensive software like automation, but targeted for smaller sized businesses.

If the ecommerce site grows substantially, I’ll need to switch back to Drip or something more powerful, but for now Sendinblue works perfect for us.

It was a hassle getting things set up, but now that it’s running, no need to fix what’s working.

Customer service – Hotjar, Continual.ly, Freshdesk

Hotjar has a free plan and is just awesome. Can save videos of how visitors interact with your website. Gives you a lot of insight into which parts of your site needs to change.

Recently I got a no brainer lifetime deal for Continual.ly through Appsumo.com

It is the little round chat widgets you see in the bottom corner of sites nowadays which helps to capture leads.

Appsumo is one of my go to places for best deals. Especially for software as it is all lifetime one time payment based.

Freshdesk is our help desk and ticketing system.

People send emails, it gets registered into the system for someone in our team to answer. Rather than sending contact forms, questions and emails to a person’s inbox, it is better to centralize such communication into a single location.

Payment Processor and Gateway – Stripe

No introduction needed.

Gone are the days where you had to use old services that stopped innovating and helping sellers like Authorize.net.

Stripe is just easy. No contractual obligations. Fees are decent. If you do volume, you get a discount. They really changed the landscape for online selling.

Integrates very nicely with woocommerce.

If you have multiple stores, you can connect them all to one Stripe account which makes things so easy.

Webhosting – Ramnode VPS, Cloudflare

I’ve tried a LOT of different webhosting over the past decade of running online businesses.

From supercheap ($2/mo), to cheap like bluehost and godaddy (from $5/mo), to better and more expensive dedicated VPS solutions ($50-200/mo), cloud servers (several hundred) and so on.

At the moment, I’ve found the best webhost for our ecommerce needs. That’s Ramnode.

I pay $10 for some awesome specs.

Very reliable, very affordable, very good speeds and each of my sites are set up separately.

The downside is that for most people who don’t have developers, you have to pay extra for CPanel. A lot of people nowadays want a WordPress managed server, which I find to be a waste of money.

Then again, I have my own team of devs, so it’s a no brainer for us to custom set up servers based on our needs.

Communication and Operations

This is where the heart of our operations lie. It’s a simple and cost effective system we have set up.

We mostly use 3-5 tools that handle everything. But the heart and soul is Zapier.

Zapier, Trello, Slack, Gmail, Google Docs

If you don’t know zapier, the software allows you to relay data from one software or tool to another.

It’s the same as how Gorilla ROI operates. We connect Amazon seller central with Google Sheets.

Although we only support 1 integration (Amazon to Google Sheets), with Zapier, it supports hundreds of different software that you can hook up to send data back and forth.

All without code.

Here’s an example of how we use it.

  • I have a customer that likes to text me his wholesale orders
  • From my phone, I forward the text to a specific gmail like “[email protected]
  • Zapier recognizes this email based on the subject and from address.
  • Zapier is triggered to forward the message to our Trello board for wholesale orders.
  • Somebody in the orders team will see the Trello card that is created and fulfill the order.

Another example related to Amazon is:

  • Anytime a customer messages us directly, it is directed to a a single email account.
  • We have this email set up with Google suite.
  • Zapier recognizes the from address and subject.
  • Zapier forwards it to a slack channel which somebody monitors to follow up.
  • This way, every message is answered or handled within 24 hours.

An implementation method with Gorilla ROI is:

  • When a Google spreadsheet using Gorilla ROI is updated
  • Zapier is triggered that a change was made on this spreadsheet
  • Zapier can then forward the spreadsheet to team members, or alert somebody or do hundreds of other things.

You can create multiple levels of different tasks too.

After the spreadsheet is updated, I could have it automatically forwarded it to gmail, and then uploaded to Trello, send a notification to slack and so on.

It’s all based on the idea of “If This happens, Then do This”.

Can’t live without it.

Has automated so many of the little manual tasks that needlessly eats up time. We use it in ways that you haven’t even thought of that I can’t share. If you start using it, you’ll discover ways to optimize your workflow with the software.

For now, hope you got some insight and ideas of improving your own operations.

If you have some cool implementations, please share!

May FBA monthly update at $192K

May 2019 FBA Revenue
May 2019 FBA Revenue

Upfront disclosure.

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who reads this. Also need to keep trade secrets and sensitive information under wraps of course.

The purpose of starting this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

We’ll see how these posts evolve based on how you find it, and what information is helpful or not.

May FBA results

Sales is slowing down for the summer months. We don’t sell seasonal products, but when the sun comes out, people tend to go out and delay their purchases.

You can see it from the chart above as well. Last year, we were flat from Feb to June.

This year is an improvement though.

Our slow month kicked in starting April this year. Our best month ever was March which was a major surprise.

For the month of May, FBA revenue was flat coming in at $192k. Same as April.

If we can keep things steady for the next couple of months, instead of experiencing any big drops during the summer months, that’s a win for us. With some major expenses coming up, I’ll need all the cash coming in.

Summer slow downs have a positive aspect though. It’s a great time to improve our operations like:

  • plan and develop future products
  • update processes
  • re-train staff
  • upgrade assets
  • and improve other areas we can identify

Once July comes around and sales picks up again, the goal is to be prepped with inventory ready to go and have the improved processes implemented and ready to go.

Our office relocation in September isn’t going to make things easier. More furniture, more office updates and more improvements are going to be needed.

If it was still me, I’d be working out of a cardboard box, but with a team to take care of and making sure each person operate effectively, efficiently and safely, I don’t skimp on expenses required for such operations.

Also, getting enough product ready so that we can have a full 1-2 week blackout period is going to be crucial.

Area of weakness year to date

One aspect of the business lacking is our product development and getting new products into the pipeline.

The pipeline is thin at the moment as some projects just continue to get delayed again and again. Other projects were also pushed back for a later date as we try and make smarter product development decisions.

There are products that I thought would be super easy to make and push to market. My initial goal was to get it finished and launched within 2 months.

  • Found a supplier
  • Made sure they were legit
  • Specs delivered and confirmed
  • Samples received
  • Samples failed testing
  • More back and forth to clearly define requirements
  • New samples received
  • New samples failed testing

Since we do OEM stuff and never rely on reselling existing products, the process takes longer. In this new case, I find out after testing that the supplier is trying to use cheaper raw materials in order to maximize their own margins.

Usual sneaky stuff. Rightfully called – quality fade.

If this is something you want to know more about, you have to read Poorly Made in China. One of the best books that I’ve come across on doing business in China.

 

Thankfully, I do have some new products arriving this month. We’ve created different variations of a good selling product to expand our reach on Amazon. Also makes it easier if we can reuse raw materials to achieve scale and lower cost – every penny counts.

Now, let’s get into the numbers.

Margins for May

Last month, I mentioned that our gross was 45% and not to get excited because it’s just a single month.

Not to be expected as the norm.

May proved that case to be true. Our gross was just under 38%. I haven’t finished cleaning up the numbers, but it’s close.

38% gross is just ok.

Not great.

But again, the same argument holds. It’s just one month.

I was looking up the financials for Proctor and Gamble which is a great template for us to follow. I try to model our company performance based on Proctor & Gamble as well as Helen of Troy.

Check out the financials for PG though.

Proctor & Gamble Financial Statements 2013 to TTM
Proctor & Gamble Financial Statements 2013 to TTM – click to enlarge

To make it easy, I highlighted 4 main line items.

  • Gross profit of 50%
  • Operating profit of 20%
  • Income after taxes around 15%
  • Net income around 15%

Knowing these types of numbers and having a model company to base your company and where you want to be is very important.

Your strategy is going to determine your margins.

Are you operating a dollar store concept? Reality is your margins will be lower with more volume. Think 3-4% operating margins.

Are you more of a reseller? Then follow the footprint of Target’s margins.

  • Gross margin of 30%
  • Operating profit of 5-6%
  • Net profit of 4%

You can’t expect to get 40-50% gross margins when you run a Target business model.

For us as OEM sellers and brand builders, we work towards the 40-50% gross range.

The hardest part?

The discipline and objective decisions required to execute on those margins every quarter.

Biggest expense item

  • Amazon fees eat up 40% of expenses.
  • PPC came in at 12% of revenue. Ugh.
  • COGS is what it is.
  • Payroll – nothing I can do

These make up the bulk of the expenses, but as you know, there’s no way around any of these.

The best option is to increase ROI on the PPC ad spend. Our account ACoS for May was 28.4% which has improved from 31%. I really need to get it down to 25% in order to stay within the allocated budget.

Staying at around 25% ACoS means that PPC will be 10% of total revenue. If we go above 10%, then that spells trouble. Last month, it was 12% because we are still optimizing as well as experimenting with some new PPC strategies.

Exploring new ideas in PPC always equates to higher spending and pain in the short term.

I’m also starting to get into Facebook ads to drive external traffic. ACoS needs to be optimized and improved further so that there is more buffer to explore and experiment with other platforms.

Wholesale and our online store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Free spreadsheets for all

The free FBA spreadsheet resource page is now up and available to download for free.

These are spreadsheets I’ve been sharing via email but now you can download it immediately without having to sign up for anything.

Just copy straight to your account.

Some are simple, manually updating spreadsheets that analyze your data. Others can be used with the free addon from the Chrome store to auto load your Amazon data into Google Sheets

You can use it for free for any 3 FBA sku’s. FBM is not supported.

Bookmark, share and download it as I’ll be updating the page with more free spreadsheets to make it a destination for your one stop free FBA templates resource page.

Gorilla ROI now saves historical inventory levels

You can now extract your historical inventory data by dates and using the preset time periods we offer. The purpose of this function is to know when you went out of stock.

When you are planning and forecasting for inventory purchase, you can exclude the days you were out of stock from the equation for a more accurate picture.

Documentation and the functions page will be updated soon.

Here’s how it works if you happened to come across it while working with your spreadsheets.

It works exactly like GORILLA_SALESCOUNT() and SALESTOTAL()

=GORILLA_INVENTORYHIST(periodskumarketplacestatusstart_dateend_date)
=GORILLA_INVENTORYHIST("Custom""US", A1:A500, "INSTOCK", "2018-01-01", "2019-01-31")

this example will dump your historical “instock” levels from Jan 1 to Jan 31.

For Agency users, the formula includes the seller ID as the first variable.

GORILLA_INVENTORYHIST(sellerIdperiodskumarketplacestatusstart_dateend_date)

This ends the May update.

Come back for the June figures as it will be the halfway point of 2019 and I’ll have a better picture of our progress as we work towards our mid term goal of $5M in revenue.