The importance of reliable reporting for profitability
Joseph Policastri sells personal care products on his website, Amazon, and eBay, with most of his sales coming from Amazon. “It’s difficult to beat the prices on Amazon. If you want to sell on your website, you need to have your own brand, a private label,” he said.
Knowing his numbers has been key to staying profitable. Before he lists any product for sale on Amazon, Joseph uses a software that spiders through similar product listings to find out which ones would be the most profitable. “For each product I sell, I look at how many people are selling it, and whether Amazon is selling it. The software is an additional cost, but it helps me eliminate listings that wouldn’t be profitable.”
As profits for personal care items on Amazon are low (a few dollars per sale), Joseph chooses to list items that will likely sell at a high volume. He also diligently keeps track of merchant fees and shipping fees on a spreadsheet, which are different for each item.
“When you start out, it is important to get discounts from distributors so you can price competitively. You will probably lose money at the beginning, but that’s just part of process. The most important thing is to choose a product that will likely sell at high volume and good profit.”
Joseph also has to take into consideration the cost of inventory when Amazon shuts one of his listings down. “These things happen all the time. We just stay on top things, and make sure that we know our numbers to remain profitable.”
Although the bulk of his sales are from Amazon now, Joseph still has an online store on his own website. “The website helps us to build credibility with our distributors. Having a good relationship with distributors is really important in this business.”
Automating data entry into QuickBooks has also been key to ensuring that Joseph stayed profitable despite low profit margins. “Prices on Amazon can fluctuate daily and unexpectedly. It is really important for us to automate as much as possible with QuickBooks, so we can see which products are profitable.”