To connect Outright with Amazon Seller Central right now:

1.) Login to your Outright account. (Or make a new one. It’s free & you’ll be able to integrate your Amazon account immediately after you sign up!)

2.) From your dashboard, click your business name and then “Linked Accounts” from the drop-down menu

3.) Click the orange “Add an Account” button

4.) Under the “eCommerce and Invoicing” section, click “Amazon Seller Central” and follow the instructions from there

Your account will take a short time to sync up. After that, you can use Outright to get a handle on your Amazon income and expenses, your quarterly and annual taxes, and your day to day financial flow. Try the “Reports” tab to see fun and informative reports like “Sales by State” and your profit and loss.

Welcome Amazon Sellers!

Determining If You Need Sales Tax

Most states in the U.S. require sales tax, but there are a few exceptions. Businesses in Alaska, Delaware, Montana, New Hampshire, and Oregon don’t have to worry about sales tax because their states do not require it. If you are living in a state other than the ones listed above, you will need to go through the steps to collect and report tax on the items you sell.

Getting a Sales Tax Permit

Before you can collect or report your sales tax, you need to have a license for it. There are several ways to go about doing this, so you have to figure out which one is right for your business. Here are the steps you may go through to get your sales tax permit:

Step 1 – Establish Your Business

You will have a much easier time obtaining your sales tax license if you have a DBA, an LLC, an Inc., or some other formal identification for your business. Research which business entity is right for you and select the one that best suits your plans for the future.

Step 2 – Apply for an EIN

An EIN is an employer identification number. This is issued by the federal government as a way to identify each business numerically. Think of this as the social security number for your business – the unique code that separates you from everyone else. Visit the IRS website and print off the SS-4 Form on the site. After you fill out the information on the application and submit it, you should be able to receive your EIN in the mail.

Step 3 – Apply for a Sales Tax Permit

You can contact the Department of Revenue for your state for information about how you can apply for a sales tax permit. Most states will allow you to apply online, but some will require you to mail in your application. If everything goes well, you should soon have the permit you need to collect sales tax at a craft fair.

You may have to wait a few months to get your sales tax permit, but then you can operate as an actual business at a craft fair. Apply for your permit as soon as you can to avoid a lapse in sales.

Collecting Sales Tax at a Craft Fair

Once you have the permit you need for collecting sales tax, all you have to do is add the tax for your area to each item that you sell. Sales tax varies significantly throughout the country, so you will have to research what the going rate is for your state and county. In most cities, this will be around 8%. Make sure you have a calculator on hand to add that price into the cost of each item. That will ensure that you gather the right amount of money for the number of items that you sell.

Keep an accurate record of the sales tax for each of the items you sell at the craft fair. You may do this on the computer or by manually assessing your receipts at the end of the day. If you do not want to do that, you will need to calculate your sales for the day and take out the money you owe in sales tax comparatively. Put your sales tax money aside to turn into the government, and then you can go about reporting your taxation to the IRS. Ideally, you should create a separate account at your bank to hold the sales tax, preventing you from unintentionally spending it on materials and marketing.

Note: If you are selling your products to a reseller who plans to sell them to other people, you do not have to charge them sales tax. They will be responsible for collecting sales tax when they sell the products to the final customer. But ask to see the person’s reseller’s permit or resale certificate before exempting them from sales tax, just in case he or she is lying to you – otherwise, you could end up in hot water.

Reporting Sales Tax to the Government

Every state is different when it comes to the way sales tax is reported within it. Some states will allow you to report your sales tax online, and others will ask you to fill out forms every month. If you have the opportunity to report and pay sales tax on the internet, take advantage of it. That will be a much more convenient option for you in the long run.

The amount of times you have to report your taxes annually will depend on the volume of your sales. If you sell a high volume of merchandise at craft shows, you may have to report once a month. If you only sell a handful of items on the weekend, you may be able to report every quarter. Do research on the laws in your state for more information about reporting schedules.

Pay attention to the due dates for your sales tax reports. If you miss the deadline, you may be charged a fee for being late. Avoid the reports for too long, and you could lose your sales tax permit altogether. Even if you go a full month without making a sale, you need to report “0″ to the government so they can track the progress of your business.

You will need to submit your sales tax money when you report it to the state. Do not assume that you will turn it in when you file taxes at the end of the year. You will be able to report your sales tax on your tax returns, but you will not pay them at that time.

You might be able to save money by pre-paying your sales tax to the state. This will require you to predict your sales taxes early on, but it may help you cut your costs on a month to month basis. Explore this opportunity a little further to reduce your business expenses.

Additional Tips for Handling Sales Tax

1. If you travel to multiple locations for craft fairs, you will need to check the sales tax laws for each area. You may have to charge more money in one city than you do another, so make sure you know where you are and what you need to collect.
2. You may be able to streamline your tax collection and reporting through software programs on your computer. Try to find a bookkeeping program that will sort all of that information for you. Then you can focus on making products, rather than calculations.
3. Keep a copy of your EIN and sales tax permit with you at the craft fair, just in case you are questioned by a sales tax agent for the state. You probably won’t have this problem, but it is best to be prepared at all times.
4. If you work with resellers at the craft fair, make sure you get a copy of their resale certificates for your own records. You may be asked to provide proof of this when you report your sales tax, so you might as well keep the paperwork as a backup.
5. Check the state sales tax rates throughout the year so you can charge the most accurate amount to your customers. You will need to verify the going rates for your district and city as well, adjusting to changes as they come.
6. If you plan to take your sales online after the craft fair, do not worry about collecting sales tax. The only reason you would have to do this is if someone makes a purchase while living in your state. You can put a disclaimer about sales tax on your website, explaining that people within your state will be charged an extra fee to cover state taxes. In most cases though, you won’t be dealing with customers in your area.

Now that you know how to handle sales tax when selling at craft fairs, all you have to do is prepare for the fair and collect taxes as you go. If you have questions about the rules and regulations for your area, get in touch with [your state's] Department of Revenue. You may also find answers through a local small business association, or through other crafters at the fair. This may not be the most exciting part of the job, but it is something you have to do as a business owner. Take care of your responsibilities every time you make a sale, and you will never have to worry about illegal conduct.

This investment of time isn’t a bad thing, provided you’re picking up a tool that will save you even more time in the long run — or at least save you money over what you’re spending now. That does mean, however, that it is important to make sure that you’re making the process of adopting a new set of tools as easy to manage as possible. You need to have your new tools integrated into your operation and running smoothly as soon as possible.

Use the Free Trial

Most software comes with a free trial, letting you at least spend a little time working with it before you have to hand over money. There are even some other tools that might be able to use on a trial basis. So take advantage of any free trial you’re offered. The worst thing that can happen when you’re upgrading tools, or changing to entirely new ones, is to find out that a particular tool just won’t work for you after you’ve purchased it.

You may need to schedule an appointment with yourself to go through all of the features of any tool you’re considering adopting for your business. That can seem like you’re sinking even more time into the process, especially if you have to try out several different options. Just the same, it’s worth the effort — better a little time now making sure you get exactly what you want than a lot of time later trying to make a hammer do the job of a wrench.

Make a Plan for Data Conversion

The big time sink for moving to new software, whether we’re talking about web-based apps or software you need to install on your computer, is making sure that you get all of your data moved over — and that you’re putting new data in the right place.

There are organizations that try to time changes such that they don’t need to move any records from an old tool to a new one — like changing accounting software at the end of the fiscal year. It’s not necessarily a bad idea, but it’s important to remember that you’ll wind up with legacy systems this way. Sooner or later, you will need older records for something, which means that you have to keep maintaining tools you aren’t using anymore. More often than not, transitioning completely is the better option.

You need to sit down and plan out just what steps are necessary for you to get all of your data converted over to the new tool. Many software companies offer assistance for common migrations, but if you’re dealing with paper records or an obscure format, you may need to look at how to efficiently get data entered. Perhaps you can have someone just scan everything and upload it, although depending on just what kind of information you’re dealing with, you may need someone to enter it by hand.

Arrange for Training on Your New Tools

Even if you’re the only one in the office, training is a necessary step in changing tools. You can find tutorials for almost anything online these days and setting aside time to work through them may be enough to get you up to speed. You can also arrange for more in-depth training, if need be. If you need to get an entire team up to speed, it might be worthwhile to bring in a trainer to show the whole office at one time.

But one-time training probably isn’t enough. You need to make sure that you have resources that you and your team can fall back on to figure out anything not covered in that initial training session. You also need to make sure that, for the sake anyone new joining your team, you keep those training materials around.

It can seem like training is as expensive as the new tools you’re purchasing in the first place. But good instruction is worth the money: you’ll save yourself the time that you’d otherwise spend trying to figure out how to make everything work the way you need it to. When you multiply that number by the number of employees in your business, it may be even more cost-effective to arrange for training.

Set Aside Time Regularly for Your Tools

Just as you keep a budget for how you’re going to spend money on new tools and the other expenses that go along with running a business, you have to budget your time. You need to manage your time effectively. That means choosing carefully when you’re going to change tools — and how often. It’s a rare business that can afford the time that has to be spent on changing systems on a regular basis. Even an upgrade will always take more time than you expect.

But every business also needs to improve on its tools and systems every so often. Otherwise, the competition will get ahead. It’s crucial to block out time for upgrades and changes on a regular basis, just as you plan to take a car in every so often for an oil change. Setting a date to review your current tools on a regular basis will let you budget your time for bigger upgrades and changes more effectively.

The more you know what to expect when you’re looking at new tools, the more effectively you can budget your time and energy — and the faster you can get everyone back to work.

When it comes to running a small business on Etsy, most people think about the products they want to sell and the customers they want to attract. The idea of paying taxes on their sales never comes to mind. No matter how small your business transactions may be on Etsy, you will need to pay taxes on the money you make. The question then becomes: How much money will you owe in taxes, and how will you file your tax returns in the coming year? The guide below provides the answer to those questions and more so you can be prepared this tax season.

Self-Employment Tax at a Glance

Some people have a hard time identifying themselves as “self-employed” because they still work under an employer during the day. If you are running a business on your own, you are self-employed. There is no way to get around that. This categorization includes side projects on Etsy that provide a secondary income for you. Here is a quick look at the taxes you will pay as a self-employed individual.

What is self-employment tax?

Self-employment tax is a fee that some people pay the U.S. government to cover the cost of Social Security and Medicare. This tax is similar to the tax that most traditional businesses pay, but all of the tax falls onto the self-employed individual. In a business setting, the employer takes care of half the taxes and the employee take care of the other half. In your Etsy business, you will have to cover all the taxes on your own.

How much is self-employment tax?

Typically, self-employment tax is 15.3%, or roughly 1/6 of your income. However, the 2010 Tax Relief Act reduced that rate to 13.3% for 2011 and the years following. For now, expect to devote about 1/7 of your income to self-employment tax until the laws change again.

Who has to pay self-employment tax?

Self-employment tax is reserved for individual business owners who earn more than $400 a year. If you only sell one or two items on Etsy every month, you may not have to pay self-employment tax. However, if you rely on this site for your sole source of income, you will have to cover this tax every year.

How to File Taxes as an Etsy Business Owner

Filing your taxes as a self-employed person is not as easy as filing taxes with traditional W-2 forms. In a standard business, all you have to do is plug in numbers from your W-2s and calculate your tax refund/balance from there. In a self-employed business, you have to calculate an entirely different set of numbers, and none of them will come from a W-2. Here is a simple guide to filing taxes for your Etsy business. (Hint: Using Outright to track your income and expenses and deal with taxes is way, way easier!)

Tax Write-Offs for Etsy Business Owners

In order to save money on self-employment tax, you should take advantage of every tax write-off possible. These deductions will reduce the amount of income you have to pay taxes on, and they may help you avoid a huge debt to the IRS. Common tax write-offs for Etsy business owners include:

• PayPal Fees: Calculate the amount of fees you paid to PayPal throughout the year, since those are considered business expenses.
• Rent: If you rent your home, you may be able to use your office as a tax deduction. Calculate the amount of square footage in your office compared to your home, and use that percent of your rent as a business expense. If the office comprises 10% of your home and your rent is $995 a month, you can consider $99.50 a month as a tax write-off.
• Internet Costs: Determine how much of your internet is used for business purposes, and compare that to the amount of money you pay for web access every month. That, like your rent, can be used as a tax write-off.
• Utilities: Using the same calculations as you did for rent, determine how much of your electricity, water, and gas is used for your office. Report that money as a deduction on your taxes.
• Materials and Office Equipment: You may deduct money for the materials you use to create Etsy products and any office equipment you may have used to sell those products. If you bought a new computer, printer, wireless router, or similar, you can remove the cost of those products from your taxable income. Just make sure you save the receipts for them, in case you get audited in the future.

Scope out as many tax write-offs as you can find to make up for the money you may have to pay to the government.

How to Pay Self-Employment Tax

Most Etsy business owners do not have the luxury of getting a tax refund at the beginning of the year. Instead, they have to pay money to the government based on their annual profits. If you are in this predicament, there are several ways you may go about paying back your business taxes. Possibilities include:

• Estimated taxes: You could start estimating your tax payments early on in the year by making quarterly calculations. The IRS has an estimation form to fill out so that you are not overwhelmed by your taxes at the end of the year. Maintain your payments this way, and you will only pay a small amount every quarter. Look under the “Taxes” tab on our Outright.com dashboard to see how much you owe in quarterly estimated taxes each quarter.
• Balance payments: If you have the ability to pay the balance of your taxes after you file them, do so. Send the money to the IRS online or through the mail so you do not have tax debt looming over your head.
• Monthly installments: If you cannot afford to pay your self-employment tax all at once, you can set up a payment plan with the IRS. This will allow you to pay for a small portion of the debt over the course of a year or two, much like you would for a loan or credit card. Note that there will be fees involved with this process, which will increase the amount of money you pay to the IRS.

You may make your Etsy tax payments through an online service or by sending money directly to the IRS. Pay back whatever you owe in a timely manner, and then you can start saving for next tax season. If you keep up with the taxes on your Etsy business early on, you should have no trouble making money and still upholding your commitment to the government.

Personally, I sell many different types of items from antiques and collectibles to clothing, shoes and accessories.  This can be a bit more challenging than listing the same type of items over and over.  Over the years, I’ve found ways to utilize time to the fullest when it comes to listing on eBay.

Use Templates to the Fullest

Whatever software you use for listing make a template that has all your basic information such as your return policy, payment policies and accepted payment methods.  There are many free and paid listing software tools out there for different levels of need, find the one that fits your needs the best and let it work for you.  Even using eBay’s own sell your item form you can select a listing you’ve already created and sell similar which brings up all the same information.

Know the weight of your shipping materials

If you don’t have a scale already, get one!  You have to know your weights both on your products and your shipping materials.  The priority mail supplies are free and anytime I can ship something this way that is how it goes!  For standard shipping methods I order supplies from BubbleFast , this way when I do have to use a plain box or envelope I draw from a supply that has consistent weights instead of those dumpster diving finds (which can be all over the place weight-wise).  Oh and let’s not forget dumpster diving takes time and those free boxes are not free because… say it with me… time is money!

Group the items to be listed by type

In other words, if you have figurines, mens ties and plush to list make sure you do all of the same type items at the same time. This way the info you’ll be researching and writing about will be similar, thus cutting down on the time it takes to find what you need and switch tracks.  What I do is even save up items for a few weeks, and when I’m out sourcing I tend to look for things that will fall into certain categories of listing so that I can be more efficient, as well as pull in more potential buyers by having a variety of the same type of item they might be looking for.

List in Sets

As mentioned above when out shopping try to keep your mind on things you know you already have waiting for you to list. For instance if I had 2 or 3 nice men’s ties I would be on the look out to add to this and try and get about 10 of them bought and ready to list.  Whatever your category, look for things that can make you more efficient by not having to change things so much in your research, titles and descriptions.

Develop and Stick to a Routine

Now you have your items, you’ve got a group of them to list – develop a routine that works for you.  I will tell you mine, but that doesn’t mean it’s the best… this is something you will need to find on your own, since everyone works differently.  I like to research and write my items up first.  I don’t spend a ton of time on research because… say it with me… time is money!  I have tabs open on my computer to look at eBay completed items, sorting by highest first.  Don’t reinvent the wheel!  If something you have to list has sold at a good price pick out those keywords used and write yours up similarly.  Never copy another seller word for word, only use this as a stepping stone to your own listing. 

From there, Terapeak Title Builder is a quick way to find some other keywords you may not have thought of .  My rule of thumb is to spend no more than 5 minutes researching an item worth under $50 so that you can spend a little more time on something of greater value, as these can be harder to find information on.   I research in one tab and have my listing tool open in another so I research and go right over and type the information into my title and description.  I put the item on my scale which sits next to my computer so I can enter that information.  Now I’m ready to move these items over to my photo table, snap those pictures, upload the pictures, edit them minimally (a small amount of cropping and sometimes some contrasting is all I do).  Now I’m ready to add those pics to the listings I just created and launch or schedule the listings.

Conclusion: Time is money!

There is no one answer to how you can be more efficient, this will be something that only you can determine and put into play with the suggestions above.  The one thing that has helped me the most was remembering – you got it – time is money.  Keep that in your thoughts as you go through your routine of sourcing and listing.  Anything you can do to cut down on the time it takes to list on eBay the more money you will add to your profit margins.

Small Business News of the Week

What’s the most business friendly state? You may think that’s not measurable, but 6,000 businesses from around the country beg to differ. Thumbtack.com took a survey of which state has the best benefits and tax codes for their means, and the answers may surprise you.

According to small business owners, Vermont, Rhode Island, California, and New York are among the WORST states to own your own company. California even had three of the worst cities in the nation: Los Angeles, San Diego, and Sacramento.

Who’s got the best? Texas had three of the best cities in Dallas-Fort Worth, San Antonio, and Austin. Idaho, Nevada, and Delaware have the best small biz friendly tax codes according to those surveyed, and Texas and Idaho won out overall in friendliest states.

Who’s the most optimistic about their chances in the future? Surprisingly, folks in Nebraska thought that everything was going to be ok, but business owners in Iowa weren’t feeling too great about what’s to come. Overall, the South won out as a great place to start a business whereas New England was seen as hostile.

Does this reflect what you’ve experienced as a business owner? How would you rate your state’s friendliness?

Outright Community Speaks

How long were you in business before you really started looking at numbers & profit margins?

Outright Pro Tip of the Week

Don’t you think it’s time for you to go outside? Depending where you are, the weather has been beautiful as of late. That means your customers are out there mixing it up, enjoying life. And if you’re stuck inside, that means you’re missing valuable one on one time with them!

Find out what local events are happening in the new few weeks and months and plan some time to go out and meet some real people. No matter how big or tiny your business is, you can always use some actual face time with the people in your community.

One great idea is to volunteer for a charity or charitable event. Nothing says “I love the community” like helping some kids raise money for a donation to soldiers overseas or a bike ride for autism. It’s a great way to actually help out and “advertise” without even advertising at all.

Around the Entrepreneur Web

5 Tips on How to Present Like Steve Jobs – Need to present to your peers or a random audience? Don’t just focus on stats, sell the benefits of your products.

3 Common Small Business Pricing Mistakes – You can sell a zillion things, but if your pricing’s all wrong you don’t make any real dough.

Social Proof is Real, Robust and Reliable – Can you measure social media influence on your bottom line? With social proof, you can.

That’s all for today’s Outright Weekly Round Up. Make sure to join us next Thursday May 17th for a webinar on how to build your ecommerce social media program!

If you are the type of person that just cringed, because I mentioned the “B” work, you will be happy to know that Outright actually makes creating a budget a lot less painful.  Most business budgets are nothing more than an educated guess of what your revenue and expense will be each month, for the coming year.  The good news is if you have been using Outright for the previous year or more, you have the starting point for you budget.  Go to the reports tab and select the Profit and Loss report. Most budgets are prepared based on monthly numbers, so select to view the report by month.  While it is great to prepare a budget for an entire year, the truth is you can choose any time period you would like to work with by selecting the ending month of your historical report.  Select the update button to make sure you are viewing your report based on the criteria selected and then scroll to the bottom of the page and select the export link.

Profit and Loss

Export will download your monthly profit and loss information to an Excel spreadsheet like the one above.  If you don’t have Excel, you can also read this report in a free version of Google Docs or Open Office.  It will help if you are somewhat familiar with using a spreadsheet, so if you have never worked with Excel or other programs like it, there are great resources online to help you learn how spreadsheets work.

When you open the spreadsheet you just downloaded, you will see all of your revenue lines at the top with all of your expense categories below.  I suggest the first thing you if you have more than one line for sales or revenue is insert a line to total all of your revenue lines for each month.  You can see the TOTAL line I added to the example above.

Next take a look at your expense categories and think about the types of expenses that you put in each category.  You should find that there are two ways to categorize all of your expenses.  The first choice is some expenses are variable, meaning as your sales go up or down, these expense also go up or down.  Items like PayPal fees, shipping fees and cost of goods sold, will typically fall into this category.  Other times will be more fixed and not change much from month to month.  These would be expenses like rent and web hosting.

To create a budget for your variable expense, you need to calculate what the ratio of each variable expense is to sales.  You do this by adding up the yearly total for that expense category, then dividing that number by the yearly total of your sales.  You might want to take your spreadsheet and insert a column next to the expense category names to type in this ratio for each of your variable expenses.  For your fixed expenses, you can just write the average monthly expense in this column.

Now you have created the basic framework for what your budget will look like.  The problem is you still have your numbers from last year in the spreadsheet.  Here is where you have to do some good “guesstimating.” Start with your sales figures and estimate what your think your sales will be for the next 12 months.  Looking at your historical sales, you will probably see that certain months tend to be better than other months and for most businesses this type of seasonality does not change much from year to year.  Replace your historical sales numbers with what you think your sales will be for the coming months.  This is typically the hardest part of creating a budget, because you are dealing with the future and no one knows for sure what will happen, but don’t stress about being too accurate.  You will probably find that the more experience you have budgeting for your business, the better you will become at making these estimates.

Once you have your revenue figures, expenses are usually easier.  Using the ratios we calculated above for variable expenses you can project your variable expense by multiplying your ratio amount by what your projected sales are for each month.  If you know how to do formulas in a spreadsheet these types of calculations are one of the reasons spreadsheets can be such a powerful business tool.  For the fixed expenses, you simply copy your average monthly expense across for each monthly column.

You may notice that at the bottom of your report you have a Profit/Loss line.  Outright actually hardcoded your amount in this line when you downloaded the original spreadsheet, so the last thing you need to do is change this Profit/Loss line to a formula that takes your total sales and subtracts all your expense lines.  Copy this formula across for each month and you can see what your projected profit and loss is for each of the future months and by adding across for each month, you can project your income for the year and that is your new budget.

While we know the numbers in your budget are based on estimates, it can be a very powerful tool to make some “what if” calculations.  Say you think increasing advertising $1,000 per month will increase revenue by 10%.  Using the budget spreadsheet it is easy to adjust your budget and see if spending that extra money might result in more profit for your business.

You can also use your budget numbers to compare to other similar businesses.  BizStats.com has average financial ratios for over 500 different industries, that you can compare to your business.  As you progress through the new year, you can also use the profit and loss reports from Outright to check yourself and see how good of a job you did in budgeting.  By continuously updating and refining your budget, you should find that you do an even better job of managing the financial success of your business.

Yes, almost all of us have woken up with that post-Tax Day hangover.

During the year, it’s easy to put off tracking your business income and expenses, dealing with receipts, entering your financial records into accounting software, and just generally taking care of tax preparation. Most of us promise ourselves the day after a particularly brutal Tax Day that we’ll never let that happen again. Of course, the headache wears off and the months start to fly by…

Coffee, a greasy breakfast, Red Bull and apples… we all have our hangover cures. But the best prevention for a hangover? No devil-may-care binge at all! Instead of ignoring your business finances until April 14th, sign up for accounts with Outright and Shoeboxed and let us help you prepare for taxes all year long – on auto-pilot!

Outright imports all of your businesses’ financial information from your bank accounts, credit cards and PayPal, making it a snap to keep up with income and expenses and fill out your Schedule C come tax time. Plus, Outright allows you to monitor your business’s financial health all year long – with easy-to-understand visual reports and no pesky data entry.

Shoeboxed scans your receipts and then extracts the data from them, so you have all you need for taxes, bookkeeping and expense reports. More importantly, in case you are audited and need to prove an expense, bank statements are sometimes not enough. No worries! When you store your receipts in Shoeboxed, they are put in a searchable, online, IRS-accepted archive – forever.

Together, Outright and Shoeboxed keep you prepared for taxes all season long, so you never have to experience the terrible, horrible, post-tax hangover ever again. Don’t wake up squinting into the sun, cursing the little chirping birds. Sign up with Outright and Shoeboxed today!

But I’m an online seller. And running a successful business, big or small, means understanding my numbers. What’s my profit? How much am I paying in fees? What’s the best selling mix for my items, Auction or Fixed Price? What is my inventory costing me? Do you know all of these answers for your business? As Jim “Griff” Griffith, Dean of eBay Education and Senior Manager of the Selling Experience team at eBay says, “The numbers…you can’t manage what you do not measure. And a business you can’t manage, you can’t grow.” And he’s right.

Learn from Griff’s Words

Griff recently did a webinar called “Know Your Numbers: Managing Your Business to Greater Success by Tracking Your Business Metrics.”  I know, not quite the appeal of the The Hunger Games… But I’ll bet Griff’s webinar will do a lot more to make your online selling efforts more successful! Anyway, I transcribed his presentation and wanted to share a few of his recommendations. It’s a long presentation but I’ll share Part I now, Part II next month.

The Important Numbers

Naturally we want to turn our attention to how much money is coming in versus how much is going out. Those are important numbers to understand, of course, but what about the numbers behind profit/loss?

Well, how much did you sell last quarter? Last year? How much did you pay in fees? What were your shipping costs? How much did you lose in returns? If you don’t know off the top of your head, can you get those numbers quickly? These are all important to run your business. And more questions. Do you know your current conversion rate? Do you know what a conversion rate is? How about your conversion rate by format – Fixed prices vs. Auction? What about your return and refund rate? If the answer is “no” to any of those questions…you have some work to do. And no, my 8-year-old son is not available to help!

In order to better understand why your business is successful/struggling, Griff suggests creating a Profit & Loss statement. Here’s what it contains:

• Gross Sales
  • All the revenue you took in during a specific period.
  • Cost of Goods Sold
    • In order to sell goods, you need to buy them. So this is that cost.
    • Gross Margin
      • You probably know that subtracting your Cost of Goods Sold from your Gross Sales will give you your Gross Margin.
      • Operating Expenses
        • These should be broken out into specific categories. There are some common ones and others that will be appropriate for just your business. These could include: facilities, selling fees, shipping costs, supplies, losses, advertising & promotion, and everything else. Add these all up.
        • Net Income
          • This is the magic line. It means everything to your business. Your Gross Margin minus your Operating Expenses equal your Net Income.

Part II

The next post will talk about another set of important numbers. These have to do with your conversion rate, format mix, sales velocity and more. You can wait….or you can watch a recording of Griff’s entire “Know Your Numbers” webinar right now as well as download the guide that transcribes his comments and incorporates with his slides into a PDF for easy access.

Best success!

Chris Taylor,

Chris Taylor is VP of Marketing at Page Mage. Page Mage, a recipient of eBay’s 2011 Ecosystem Champion Award, offers free custom eBay listing templates for eBay sellers looking to stand out from the competition.

Exploring wholesale brings a whole new side to your business; whether you are selling on Amazon via Fulfillment By Amazon (FBA), eBay or another marketplace. I’ll be concentrating on wholesale for FBA for this article but many of the reasons for adding Wholesale products are the same no matter what marketplace you happen to sell on.

By adding wholesale items to your inventory you will add many things to your business but the most important, in my opinion, is repeatability. In eCommerce circles, this is known as “depth of inventory.” When you are sourcing only through thrift stores and other similar outlets, you are limited almost exclusively to ‘one off’s’ or individual units. Even when you start using retail arbitrage it is normal to only be able to purchase 2 – 5 units per item. You can find larger quantities sometimes but that’s simply not the usual result.

The point of saying all this is that you will spend hours sourcing and find individual units to sell. When you move to wholesale sourcing, you will spend the same hours sourcing but once you find that item, you can replenish your inventory of the item easily and use those saved hours to source the next product. Wholesale sourcing is a way of multiplying your sourcing time, as well as somewhat stabilizing your sales income as you are not dependant on what you found this past weekend at a yard sale or thrift store.

When I began using FBA seriously, I concentrated most on my usual sourcing methods. Which is to say, I shopped every Saturday for 4 – 10 hours, visiting every yard sale, estate sale and thrift store in the local area. I did very well and made a good profit. However, it was tiring! And time consuming! In addition, I had to keep going out every weekend, with trips to additional thrift stores during the week, to continue growing my inventory, my Amazon business and my paychecks. A light bulb came on one early Saturday morning, when I though, “What about spending some of that time searching out wholesale products using the same criteria I was using for my other inventory?” So I did. And guess what? My inventory grew, my paychecks grew and became more reliable AND I could sleep in on Saturday morning. This made for one Happy Kat!

So how do you get started? Should you simply Google “wholesalers”? NO! Anyone can call themselves a wholesaler on Google and 90% of those with the big catchy ads or high ranking for the work ‘wholesale’ are NOT true wholesale suppliers.

With most retail products there are many middlemen the products go through to get from the manufacturer to the store shelf. The closer you can buy the product to the place it was made, the lower your cost. However, depending on how you define “wholesale” many of these actual middlemen will qualify. Remember the store you drove past a few weeks ago with a big sign reading “Wholesale to the Public”? Yeah, well, most assuredly that is NOT a wholesaler. Remember what your mother taught you, “If it sounds too good to be true . . . it probably is.” To find a true wholesaler you’ve got some work and research ahead of you.

Getting Started Buying Wholesale Products for Resale

One good plan is to start with products you’ve found that sell well on Amazon and don’t face stiff competition. Once you’ve identified such a product, see if you can discover where it’s made. Use the label and try to make contact. If the company you find from that information truly is the wholesaler and tells you that they don’t sell to retailers, ask for the contact information for their distributor.

Another good option is to join some of the well known clearinghouse sites that promise to connect you with wholesalers. Most of these places have ratings systems and do at least minimal vetting of the companies on their site. Three better known are DOBA, Worldwide Brands, and AliBaba. All three sites have their detractors and their defenders. Just be aware that you will have to be responsible for doing your own due diligence. In other words, ask questions, do research and get samples whenever possible to check the quality and authenticity of the products.

Another option is to take a course about wholesaling from someone you respect in the eCommerce space. One that I am a happy affiliate for is Lisa Suttora’s new “Sourcing the Right Products Wholesale to Sell on Amazon.” I’ve heard so many testimonials from Lisa’s students on this particular course that I do not hesitate to recommend it wholeheartedly for those who want to jump into Wholesale Sourcing right now. In addition, Lisa is running a sale on the course from now until May 15^th.

Stay tuned here as future articles will delve into the details of how to find legitimate wholesalers on all three of the sites mentioned, as well as back-tracking a product you find in a store.