The rise of the ecommerce industry has been in parallel to the discovery of the internet and it became popular ever more so because of the drastic and fast evolution of the technology that we’re using and experiencing today. We’re not saying that retail selling is already a thing of the past, no. We just evolved and adapted to the new ways and it makes things more compatible, accessible and easier for all of us. But what are the things to consider in running an ecommerce business?
“Did we actually make money on our bank accounts” is the first thing you’ll ever wonder when doing an ecommerce business. Either you do the bookkeeping yourself or you can hire a bookkeeper for your business, you need to track down all your expenses so that you’ll know whether your business of choice makes a profit or not. It may be merchant fees, refunds or chargebacks, ad spend, cost of goods sold (COGS), etc.
It is important to know how the cash flow works in your business because the revenue that you see on paper is more of the time different that what’s actually going into your bank accounts. There are shopify fees and many other factors like timing difference where it takes the payment processors 2 days or more to be validated which at the end of the day does not reflect the same amount in your bank accounts.
Another thing that you also need to know is how you will manage your revenue cash flow issues. One important factor is dealing with your customer service. “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful”, says Jeff Bezos, the founder of Amazon. Communicating with the customer is the most important method when dealing with adversities concerning their orders. Problem with a shipping company? Notify them in a civilized manner that they will receive their product at a later date because of etc etc.
“Those customer experiences that will receive your products will have a ripple effect on your business”, Christian said as he explained why customer service is important. So it’s better to be good and consistent in your ways of doing your business. It can even go down to the packaging quality since that’s how the customers will perceive your products. Whether it’s high or low quality will be judged on the state of the product after they receive them. And just always keep in mind what Jeff Bezos said up there.
Good product reviews lead to more customers. High quality product reviews will earn their spot at the top of the search engine, giving it more chances to be seen, which in the end will attract more customers, because who would want to order low quality products, right? If that’s the product that most people are using, then it’s your turn to hop on the rollercoaster ride and buy that same product because it’s already proven and tested.
Inventory markup and return on ad spend are the two factors that you should be monitoring for you to be able to assess the scalability of your ecommerce business. You can have an outstanding inventory markup with a crappy ROAS but still a very scalable business and vice versa. All of these are just a summary of a fraction of things that’s being taught on Christian Rivera’s The Ecommerce Accountants firm.
Christian is a seasoned CPA specializing in tax and accounting for retail consumer products and service companies (public and private) before he founded his own firm, The Ecommerce Accountants in 2019. He offers business structuring, accounting consulting, auditing, tax compliance and tax planning. Given his prior achievements and experiences that are all laid out in the public, you’ll have no time to doubt him because he’s certainly one of the real deals.
You can check out their website to see the three different programs that they offer including the things that you can get in each of them. Cost of each program will be clarified once you give them a call. There’s a link on his instagram account where in that link, he posted two shortcuts to youtube interviews of him by two of the popular names in the drop shipping industry, Scott Hilse and Sebastian Gheorghiu. You might want to check them out to know Chris better and at the same time learn from his broad knowledge in the ecommerce industry.