If you are serious about making this a business, there are a couple of things that you should consider. Some people wait until they get to a certain amount of income prior to taking these steps. However, setting up an LLC helps to protect your personal assets if there was ever litigation that took place against you business. If you are a sole proprietor you put your personal assets at risk (home, retirement funds, etc). So once you decide that you want to pursue selling online and growing a business getting an LLC set up is very important. It doesn’t cost very much to get one and you can do a lot of the paperwork yourself and then simply pay filing fees.
- Business Basics Video
- Setting Measurable Goals
- Understanding the Costs in Your Business
- Hiring An Accountant
- Getting Business Insurance
- Using Your Inventory Health Report
- Business Cash Flow
- Understanding Amazon Fees
- Managing Amazon Feedback
**I am not an accountant or attorney. This is intended ONLY AS A STARTING point for you to have a discussion with a licensed professional. You are responsible for business decisions and consulting licensed professionals. By continuing to read this page you agree to contact the correct professional services and release Robyn’s Nest for any liability. There are no guarantees in business or in this video stated or implied. See also the legal stuff section of our site.
Business Basics Video
Most of us in the eCommerce world didn’t come from business backgrounds. This video is meant to give you some base information for you to be able to ask the right questions. Not everything in the video will apply to you. However, you can use this video as a starting point to understand some basic business concepts. You want to take the ideas in this page and talk to an attorney, licensed insurance agent, and/or CPA/Enrolled Agent/Accountant.
Understanding Costs In Your Business
Here is Angela our Accountant, from Taxanista.com taking about understanding your business expenses.
Here is some more great from Angela.
Hiring an Accountant or Bookkeeper?
Unless you come from a background in accounting or bookkeeping I highly recommend you make hiring a bookkeeper at the minimum a priority. Accounting is a lot more than just keeping track of your expenses and revenue. A good accountant will save you far more than he or she will cost you. A good accountant can counsel you on how to lower your tax liabilities and give you an estimate for your federal and state taxes.
What is a P and L and Balance Statement?
I have written an article on how to pursue getting insurance. I have provided some phone numbers to get quotes and a sample script to let the insurance agent know exactly what you need! Read the Article
Using Your Inventory Health Report
Here is a video on several of Amazon’s Reports
You can get your Inventory Health Report by going to Seller Central, then Reports, then Fulfillment Reports, Inventory (click see more), then Inventory Health Report.
Here is a list of reports you should run regularly:
- Inventory aged 90 days+
- (Add to Repricer)
- Excess Inventory
- Profitability Analysis
Every other week
- Return Reports
- Bottom Performers
- Inventory Value
- Replenishable Stock Levels
- Repacking Option
- Stranded Inventory
- Account Health
- Reprice (manually)
- A-Z Claims
In this video we show you how to use your inventory report.
Here is how to manually calculate your Inventory Value.
Business Cash Flow
You want to think about cash as the gas that keeps your business moving. Understanding how your cash will move through the business will make a huge difference in your ability to grow your business. You cash flow is different than what your accountant or book keeper creates (that is a P & L or Profit and Loss). In order to make sure that after buying inventory you still have money to pay yourself, your bills, etc. You need MUST keep a regularly updated cash flow.
Step 1. What is your business costing you?
How much does your business cost you every month? If you haven’t run the numbers yet, write down a guess.
Now add up all of your monthly expenses, before buying any inventory. Here are some common expenses for our eCommerce to help jog your memory:
- Amazon Professional Seller Plan – 39.99
- Scanning and Listing Services (Inventory Lab, Profit Bandit, Scan Power, etc)
- Boxes, tape, labels
- Courses (The cost of this course, any other courses or programs)
- Facebook Groups, Sourcing Lists, Membership Fees (Scanner Monkey, Sourcing Lists, etc)
Those basic costs, added together, is the minimum amount of after Amazon fees, you will need to net to keep your business alive. The video below will give you an idea of exactly how to create your own cash flow template. We also have a sample excel file that you can use to create your own cash flow sheet.
Step 2. Create Your Own Cash Flow Spreadsheet
As your business grows and gets more complicated, you will need to update your cash flow more regularly.
One of the quickest ways to actually LOSE money selling on Amazon is to guess on Amazon fees. Make sure you run the actual numbers on every item before sending it into Amazon’s warehouses. You will also want to read this article on dimensional weight.
Managing your feedback on Amazon is very important. It can play a crucial role in your ability to sell on Amazon. However, especially if you use the FBA program, most negative feedback can be removed. Here is a video on what type of feedback can be removed and how to submit the ticket to seller support to have it removed.