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05/17/2018 at 9:27 am in reply to: File Exchange v. Wonder Lister/Six Bit/Other eCommerce Management Platform #40160
Marjean: Wow. I have to commend you on this process. I’m a total spreadsheet geek and I can follow what you are going for process wise. My only concern with your process is to make sure you have some checks along the way. I’ve done similar processes for accounting and inventory, and while it can be wonderful, it can also make a lot of mistakes quickly (and sometimes hard to unwind).
I hope this works well!
05/16/2018 at 7:31 pm in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40120Yeah…nobody wants to be like an accountant… 🙂
05/16/2018 at 4:57 pm in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40116Paulo: Wrong is a strong word. It is accounting after all. As we say in the biz..
What is 2+2? Whatever you want it to be…
All kidding aside, I would keep it as simple as it can be, to be accurate to what you need for tax filing as well as for management reporting. I like seeing Revenue by platform in our financials. SixBit also gives us a Gross Profit by platform. I can use that and see how each is doing.
This is also why I split out the PayPal downloads for each sale into 4 lines (Product Revenue, Shipping Revenue, PayPal Fees, Sales Tax Collected). Then I can see Shipping Revenue vs Shipping Expense, a true Product Revenue without Shipping, PayPal fees are shown as an operating expense line (they are really similar to a bank fee), and Sales Tax Collected for annual reporting.
Just shoot me an excel download from QuickBooks of any reports you are looking at on a regular basis (daily/weekly/monthly). Anything you make a decision on.
And anything you are reporting to your tax person. They may have reasons for certain things, so I wouldn’t change anything (don’t mess in someone else’s sandbox), but it would be an interesting review.
As to your standard/variances…you are a brave man. I do cost accounting for a living (well, contract now), and I ain’t doing it for this business. Way to messy for my taste. I can back of the envelope enough for the big things to make buying and pricing decisions, and that is enough. But if you get good info from it, more power to you!
05/16/2018 at 12:51 pm in reply to: File Exchange v. Wonder Lister/Six Bit/Other eCommerce Management Platform #40089Gotcha. I went down the VA route earlier this year, but we couldn’t get the numbers to work with what we do. The labor rates are cheaper, but there wasn’t a way to get the volume efficiency where it made sense.
That was why we went down the photographer route. Veronica and I can crank out the listings (either Draft through eBay for her or SixBit for me) very efficiently, and then the photographer takes our items from there. He does the prep, photo, photo editing, weighs the items, and puts them in clear poly bags and attaches the SKU tag. Twice a week, he drops of the completed items, I get the photos from his thumb drive, and he picks up new items.
It has speed up our process tremendously, as I can do 50 items a day by myself with no problem. We have kept our listings per week around 120 the past couple of weeks and I have been gone 2 days doing contract accounting work.
For us, we found that the lister needs to have the item with them during listing. Data from photos wasn’t enough. So when we hire a lister, we are looking for someone that will list at their own house using Drafts. That way they can work on a different schedule from us (like a VA) and we can pay per item.
05/16/2018 at 12:40 pm in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40085First thing I do at a garage sale…look them in the eye and smile.
Same goes for everywhere else… 🙂
Jay: That is the Keto way! Love eating just meat, cheese, and nuts. We end up doing that most days anyway. Great for backpacking too…
05/16/2018 at 11:37 am in reply to: File Exchange v. Wonder Lister/Six Bit/Other eCommerce Management Platform #40078Marjean: I’m curious on the cost per listing that you are paying your VA to do the listings. Are you comfortable giving that information?
05/16/2018 at 11:29 am in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40077Amen Jen!
You have to go at life. Play life on offense, not defense.
05/16/2018 at 11:27 am in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40076Paulo:
We are similar on Gross Revenue, though we break out by platform (Amazon, Ebay, Etsy, Bonanza, TrueGether) and Shipping Revenue.
So are you applying a standard cost for your expense types and capitalizing to your inventory? And then allocating variances somehow?
I would love to see a copy of your reports (you can xxx out the numbers) just for reporting. tsatterf@yahoo.com
For me, the only COGS I would care to report are Inventory (Purchase Price only) and Shipping Expense. For us, Revenue – COGS – Shipping would be Gross Profit. All other lines are Operating Expense. Again, you can argue some other lines like Labor and Packaging, but since I only use Quicken and Excel (not QuickBooks, that is overkill for me right now), I want to keep it simple.
05/16/2018 at 11:19 am in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40074“But we have a long conversation with her the week prior at the open house and she was happy to let it go to a nice young couple.”
Reinforces the best advice I have ever received, and I try to live by: Business is 95% people, and 5% numbers.
Coming from a numbers guy, you would think that this would offend me. But it doesn’t. Selling is about people. Life is about people. Make a big difference.
05/16/2018 at 11:16 am in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40073Amen on that Mike. Only get as detailed as you need. I have spent 20+ years in accounting and finance, with the majority of that time in cost accounting. Taking every cost that we use in manufacturing (materials, utilities, labor, maintenance and repair, overhead, etc.) and identifying what the true cost of manufacturing was for each item. Lots of spreadsheets, lots of numbers, lots of data. And good information…if done right. I’ve seen other processes where they have gobs of data, but no information.
If we want to include fees into COGS, we can. If we want to put procurement into COGS, we can. Whatever works for getting to meaningful information to make good business decisions.
And yes, get a good business and tax person to talk with (those two may be the same person, or maybe not). Makes all the difference in the world.
05/15/2018 at 5:09 pm in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #40009Marjean: “While it may not be a game changer, it certainly may be a game enhancer. This is only plausible if it can be achieved without compromising the listing efforts on the main platform (e.g. eBay, etc.).”
Double Amen!!!
PS – Not to get ticky-tacky, but COGS wouldn’t include the selling fees. The fees would be an operating cost to the business, but not a COGS expense. COGS technically would be all materials that are shipped to the customer plus the labor involved in that product. To be “truly right” per GAAP, we should all include a cost for the packaging materials (poly bags, tape, boxes, etc) as well as the labor we are capitalizing for the item (in our case, a $2/item photographer charge). Even being the OCD accountant I am…I ain’t doing that…
If we were running this on a standard cost basis, we could argue to add the fees as part of Standard COGS, but we would have to then allocate the variances we have in the current month, attribute that to the current inventory, and sell off the deferred variances. Messy.
I think there are some companies that look at these as COGS, but unless you are creating a standard cost and accounting for variances, then I would not. For me…keep it simple.
jadowa: Got it. We are dipping our toe in the similar stream. Were your purchases online or in-store?
I’m finding that as well. Working on a couple of options now, but it is a lot more searching to find ones where the money makes sense. ROI is definitely lower, but if I can get the ASP high enough, then we can make more money per hour.
So were you just using RA to hit those Revenue numbers? That is a TON of sourcing and capital!
05/15/2018 at 10:50 am in reply to: Scavenger Life Episode 360: Is Diversification a Myth or Reality? #39972Amen on the differences Jay. We are on different business models as our requirements are different. You guys are no kids and no mortgage, we are 2 kids and still a mortgage. That is one of the great things about this blog…so many people on different paths…but what works for one may work for another. All a great buffet…
Shippo is easy. Links in your eBay sales with a click. For us, we like it because we can also link in our Etsy sales, and when we get a sale on Bonanza or Shippo, when I am entering the order in SixBit to remove from inventory, I also enter the information into Shippo. Then we can print our labels and most importantly, get a SCAN form for all our packages (regardless of platform) for our postal carrier to scan at pickup.
On eBay, the only way to get SCAN sheets is through the bulk label tool, which means you have to print all labels at once. We did that when we first started Guaranteed Delivery. Problem was it wasn’t as efficient. We had to write the item and SKU on the package to make sure we put the labels on the right packages. And the tool had issues…not fun.
With Shippo, we can print the labels one by one as we ship, and then when we are done, just print the SCAN form. Easy peasy.
So we improved the process. Easy SCAN forms and 1% back on shipping.
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