December 2014 Income Report + Student Loan Payoff Progress…

Hopefully you got a chance to read my previous blog post regarding my first experience selling during fourth quarter (Q4). That post pretty much sucked all of the content out of this post and consequently, this may be my shortest income report ever — or not — since I tend to be long-winded! 🙂

Usually I would add my disclaimer right about here, but to be quite honest, I put in more than 15 hours per week the first three weeks of the month so I cannot claim to have worked the usual 2-10 hours per week that I did prior to December. Instead, I estimate that I put in anywhere from 2 to 6 hours per day in December with the exception of Christmas week when I took a break. Also, I put in the most hours on New Years Eve and New Years day in order to get the last of our inventory out for January. Between my husband and I, we put in an 8 hour day on those two days because we had that much inventory to process. (Unfortunately, we let it accumulate over the holidays because we stopped packing and shipping items the week of Christmas.)

With that out of the way, let’s get right into December’s numbers.

eBay Sales

There is nothing to report on the eBay front for the month of the December. Literally…nothing. I didn’t sell one single item and I think this might be the first (or possibly the second) time this has happened.

Back in November I told myself that I would merchant fulfill hot items on Amazon and also cross list my items on eBay but that never panned out — and I am glad it didn’t. I would not have been able to juggle everything and my Amazon sales were steady enough to not warrant needing another platform.

Amazon Sales

100% of our reselling income came from Amazon this month. I do believe that is a first. Before I get into the numbers, I want to re-cap the goals that I set back in November:

Goal #1: Sell at least 800 units

Goal #2: Sell at least 400 pairs of shoes

I’m proud to say that were blessed to meet exceed both of those goals! 🙂

Starting with the first goal, we managed to sell a little over 1,500 units for the month of December. We almost doubled our goal and I didn’t believe that we even had that many items to sell in the first place.

You can definitely see the difference in sales from last year compared to this year. I would love to triple this figure for December 2015 and I do believe it is possible even working 10-20 hours per week!

The next goal that I set last month was to sell 400 pairs of shoes in December. We surpassed that goal and sold 525 pairs of shoes.

As I stated in November’s income report, I wasn’t sure how we were going to do it, but once we located a source for merchandise, all I had to do was place an online order and at least 60% of our shoe inventory was delivered to our doorstep. With help from my grandmother, we were able to get these items re-packaged (since Amazon requires that shoe box lids have to be secured) and shipped within a few days.

It turns out that shoes were our best selling product for the month of December. Unfortunately, we did not send in enough! We quickly ran out of our merchandise during the week before Christmas — and this was after replenishing two times before.

It is a no-brainer that shoes will be a major focus of ours going forward. In fact, we helped a good childhood friend of my husband’s to get started selling in this gated category and his shoe sales have far surpassed ours — and this was when he was fulfilling orders himself. Now he sends everything into FBA and I’m just waiting for my husband to tell me when his friend puts in his 2 weeks notice since he’s surpassing his Christmas numbers in January :).

The Final Numbers

While it appears that we had a good month in terms of sales, none of these numbers mean a thing if we were not profitable. To determine if we were profitable, lets begin by taking a look at our sales summary from Amazon:

As of writing this post (1/7/2015), these are the most accurate numbers that I have for the month of December. Although the numbers are much higher than what is shown in the first image, they also account for things like shipping credits (for my merchant fulfilled orders) and also include any reimbursements.

Here is a look at our fees for the month:

Things begin to level out here once you account for merchant fulfilled shipping costs and any refunds. When it’s all said and done, it appears that Amazon took about 30% for various fees and services. (This is NOT a per-item item estimate. It is simply an estimate for ALL fees, shipping, etc that allows us to see what kind of cut they get. So far this number hovers between 25-30%. To be on the safe side, I round up to 30%.) Ultimately, I feel that it was well worth it and I would gladly give away 30% of my gross sales in return for world class customer service, storage, packing and shipping of my items, and access to millions of buyers.

Moving along, here is a look at the payouts we received from Amazon in December:

…and finally, here is a look at our Cost of Goods Sold (COGS) for the month:

Thanks to Inventory Lab, we were able to keep track of all of our costs right from the start. Without this software, I would still be entering this information in manually and that just sounds like a nightmare!

Our COGS for the month of December was $10,892.31 or a little less than 1/3 of our gross sales. As much as possible, we shoot for 100% ROI on whatever we buy, but as I mentioned in my previous blog post, we did settle for as low as 50% ROI on low ranked items that we knew would fly off the shelf.

By sticking as closely as we could to that rule, we give ourselves room to drop our prices when needed. If we were operating on a much smaller ROI, then there would not be as much wiggle room.

In short, we WERE profitable in December. I’m hesitant to post a final number because I did not account for money spent on gas/travel, services (i.e. Inventory Lab, FBAScan, etc) and supplies (i.e. boxes, polybags, labels, tape etc), however, I will say that if we were not re-investing all of our funds back into inventory, I would have been able to completely pay off my student loans thanks to December’s net profit which was around $15k.

That is H-U-G-E! December was definitely our most profitable month in 2014.

Despite not being able to pay my loans off, I don’t doubt that this debt will be knocked out in 2015. 🙂

At the moment, this is where my student loans stand:

I made a tiny extra student loan payment of $100 back in December and I have $7,952.99 remaining on those pesky loans. Since hubby and I are so close to earning the amount of money we want to have on-hand to source monthly, come March 2015 we will stop re-investing all earnings and resume paying off this debt. I can’t wait! 🙂

Closing Thoughts…

I tried to be as transparent as possible with this post so that you could see what sales were like during December. This is certainly a month where the earning potential grows exponentially and now that I’ve gone through my first fourth quarter, I plan to get a jump start on this selling season beginning in June. I want to be prepared and I believe that we can be a little more hands-off next year if we plan accordingly.

In closing, December 2015 is not promised to any man. I don’t want this post to be misconstrued as if we are banking on the holiday selling season to really make a killing. We are not hinging our success on sales from October through December. Instead, I want to increase our sales throughout the year. There is no reason why we can’t have a January, February, or March that is just as successful as December 2014.

Going forward, we don’t plan to get comfortable. We are continuing to increase our knowledge and I want to take advantage of various sourcing opportunities available to us and that includes getting more involved in wholesaling and liquidation just to name a few. Our long-term goal is not be Amazon sellers. It never has been. Our long-term goal is to be debt free (and that includes our house) and to also invest in real estate. We are using Amazon as a way to help us earn the money to accomplish those goals.

Until next time,