EP 12: Healthy Gross Margins for Amazon Sellers with Cyndi Thomason

Narrator: (00:01)
Welcome to the Process, to e Eco Profit Podcast, where we know top line sales just isn’t enough to have the business of your dreams learn to run a profitable business online that doesn’t run you.

Robyn: (00:16)
Welcome to the process to e-com profits podcast. Today we’re talking about something that’s really important. In fact, when Cindy and I work with businesses, this is usually the thing that if a business is having cash flow issues, they’re having trouble scaling. This is one of the fundamental pieces that has to be in place in order for you to find success in the eCommerce ecosystem. So today’s, Cindy’s gonna be sharing a little bit about gross margin and about how we need to look at that as business owners and what is an appropriate, gross margin. so Cindy, can we start by having, can you just explain, just redefine what gross margin is because, especially I think a lot of people use it, in a lot of different ways. And when we’re talking about gross margin, what, what are, what are we talking about?

Cindy: (01:02)
We’re talking about the, the, difference between the income that you take in and the cost involved in actually pro producing that product and selling that product online. So, it’s not all your additional cost for advertising. It’s not cost for your insurance or your bookkeeper or, you know, the software that you may use. It is specifically the cost of actually getting that product out to, to your customer. And so it’s important to think about, it’s important for any business, not just an e-commerce business. it’s important for you to understand because what’s left after your gross margin, it’s what you have to use to grow and scale your business or to pay yourself and to pay for, the operations of your business, your team members, et cetera. And when people, are too slim on that they find themselves really, boxed in and they don’t have cash load to add extra inventory if their inventory is growing or to add extra products or, or to even pay themselves. So, getting that gross number, gross margin number right from the beginning is, is really important.

Robyn: (02:15)
When you’re talking about including that gross margin number, lot, some people will ask, Well, does it include this? What, what does it include? What doesn’t include? Can you kind of go through the things that you’re, you know, you look at your profit and loss, there’s everything that’s kind of above the line. And that’s what we’re looking at is gross, gross margin, right?

Cindy: (02:31)
That’s right. And, and the, the line being, income and then your cost of goods sold. Everything below that line is, is your operating expenses. And then, then there is yet another line where there may be business activity that doesn’t, doesn’t really relate to the operations of your business. For example, we just came through a period where people had a bunch of, covid, loans for Covid, PPP, E I D L, and those things would be below the line because it, you’re, they really weren’t relevant to your business operations. So when people say above the line and below the line, it’s like, Okay, well, let’s be clear what line we’re talking about. And so, we’re talking about that line, immediately on your p and l after your cost, a good sold portion of your p and l,

Robyn: (03:22)
to kind of help others, you know, are we including Amazon fees? What about like packaging and shipping from China?

Cindy: (03:30)
Yes. it includes the actual product cost. So if you, you know, you’re paying $5 for your product to be manufactured, it would include that, it would include your fees for transit, getting it in from China. If there’s customs and duties, it would include that. We like to include the Amazon fees in there as well. I know not all accountants do, but it’s, our perspective is that this is vital. This is where you sell. And so it’s a cost of doing business for your, for your particular type of business. So we include those fees up there as well. if you’ve got like a, a packing, prep service, or you’re doing that in your own warehouse, those kinds of cost go up there as well. It’s anything that adds value to that product. labels, you know, certain types of, boxes and bags, your, your labor to put it all together and, and, all of those things would go in there including the shipping that you have to get the product to you from, from your manufacturer.

Robyn: (04:41)
And so when, you know, I know we were doing an advanced salary retreat like right before the pandemic, and we, you, you said this is a recommended percentage of gross margin. A lot of people are like, oh no, that gross margin is too high. But what is the minimum gross margin that you think people should be targeting for, if you’re selling primarily on Amazon?

Cindy: (05:00)
The minimum that we see where people are able to grow and be successful is 30%. And I do get arguments about that from people, but I look at a lot of people’s books. We have, you know, I’ve worked with hundreds of sellers as clients and I see the ones that are making it and able, that are able to grow, able to buy the next round of inventory that are working from a positive cash flow perspective. And those that are on real skinny margins are struggling and they’re having to bring in debt. Those that have 30% or more, and then they manage their cost. I mean, anybody that’s doesn’t respect, you know, the cost involved and, and are throwing money around, can take care of that 30%, you know, in short order too. But if, if you’re careful at 30%, you can grow your business and have, pay yourself and, and be in a situation where you can grow your business.

Robyn: (05:54)
And I’m sure there’s gonna be somebody who’s like, I get a 5% gross margin and I make a lot of money I bring home. And there’s always an exception to every rule. but especially with, as unpredictable as supply chain has been, all of the changes that have been happening and advertising off Amazon and on Amazon, you wanna make sure you have a little bit of room to breathe for when shipping prices go up once cost of goods go up. so having that extra, that having aimed towards that 30% gives you a little bit of that flexibility that you need as the markets and, and everything changes. well, and,

Cindy: (06:29)
And too, I mean, just recently there was a new fee introduced by Amazon that’s a, you know, a substantial percentage that, that people are gonna be hit with and people that are, are on very slim margins. It, how do they absorb that? And so you really do need to be operating in a, in a position. I mean, I, I, you know, well, I have people say, you know, 30% is just, there’s no way I could get to that, but I’ve got people operating close to 70 and 80% and they’re very successful. They’re in, in a situation where they’re growing their product lines, et cetera. So that may not be where everybody can be at 70 or 80%, but if you’re struggling to get to that 30%, then consider what you might do to improve that. Or maybe you don’t have the right product and, maybe you’ve learned on this product and you need to find another one that’s gonna generate a better, a better return for you. because we’re all in this to make money and, you know, provide for our families. And, if we wanted to do charity work, we would just go do charity work. And so it’s a lot of effort put into running a business. So you wanna be sure you’re getting the return that you need.

Robyn: (07:44)
And, you know, I just retweeted something, this is gonna date the episode, but, as somebody posted something that said, a lot of people, a lot of brands are mistaking their roaz problem, their return on investment problem with their margin problem, that they really are having an issue with margins and making have not having healthy margins. Cuz if you have healthy margins, you have the ability to like, be a little bit more aggressive on ads and, and kind of stomp out competitors and knockoff before they, they come out. But you know, somebody’s below that 30% mark, what are some things that they can do to work on increasing that amount, so that they have more flexibility, have more cash flow in fewer sleepless nights?

Cindy: (08:25)
Well, the, the inputs are, the price that, that you charge for your product, out in the marketplace. So you can adjust your pricing and you may have to do that slowly and monitor it over time. But I always get a lot of pushback from people, you know, wanting to adjust prices. But I can tell you how many of us have been hit with price changes just every day. Now the gas prices are changing, the, the food prices are changing. big business doesn’t hesitate to go in and adjust their pricing. And when I’ve worked directly with clients and we’ve made those adjustments, they’ve always been surprised at how much better they can do on pricing than they, they’re just nervous to do it. So you don’t have to do it forever but do it long enough to get a test and see what’s going on there.

Cindy: (09:14)
The other, the other part of the equation are your cost. So what can you do to reduce your cost? Can you, can you order a smaller quantity? Can you find a supplier that’s local or more local so that you, you don’t have to order a big batch all at once and have it shipped and, very expensive shipping, et cetera. So what can you do to, to cut on your cost? Sometimes there’s product redesign, packaging redesign that you can do to cut your cost. So those are the, those are the inputs. It’s, it’s what you charge and what you’re being charged, and you really do have a lot of control over those things. So just get in there and start testing out pricing changes and start looking at your product from the standpoint of what can you take out of the cost that’s not gonna, reduce the value.

Robyn: (10:02)
And, you know, there’s a lot of price elasticity, especially if you’re not, if you have a lot of brand affinity, you might be surprised that you’re able to absorb. We most of our brands during this recent 5% increase of, FBA fees, which, you know, for most products, you know, it was 15 20 cents, per unit. But if you have healthy margins, then they could just raise the price a little bit. If they’ve been controlling their resellers, they could just raise the price and, pass that on to the consumer. if you are have really tight margins and you’re not in a place where you can pass that onto the consumer because the number of resellers that you have or the amount of competition you have, then that really limits you. and, and the other thing, that, you know, you, you talked about packaging, with Amazon fees too, you know, check your size tier, see if you change the packaging on your next version could put you under a size tier. You know, we had a product that we were working on and we just, if we, if they just shrink wrapped the head of this particular item, it saved like $3 and 75 cents per unit, on FBAs. And this is something that they sell a hundred, 200, 300 a day of. so it’s, it makes a big, big difference in your overall margin. So, you know, take a look at your, your pricing as well. yeah,

Cindy: (11:17)
And just be sure that, that your, the fees you’re being charged are, are accurate. I’ve worked with clients before when we go back and study, and for a long time the fee was, you know, 15 cents and then suddenly it went up to 65 cents. Well, what changed? Well, somebody measured it incorrectly when it was being received, and that just became the standard. And so we went back in and, and, had that adjusted, but things changed. So you can’t just set it and forget it. You have to look at it and make sure that if it looks like you’re not getting the money, you should, there probably was a, a change and, and it may be warranted and it may not be. Sometimes, sometimes those adjustments just get made without your, your awareness of it, especially if, you know, if you’ve got a lot of products you’re pushing through,

Robyn: (12:05)
So you have somebody. So the first thing that seems like people need to do is they need to take really a little solid look at their numbers, looking at their FBA fees, looking at their pricing, their packaging fees, all of that. Then once they have that, you know, what are, what, what, what is the next step that, you know, I think we talked a little bit about it already starting to look at trying to negotiate maybe some of those price. We can’t raise the price up of a product, then we need to lower the cost of the product, right?

Cindy: (12:31)
Lower the cost of the product, lower the minimum order quantity, lower the, the shipping cost. Those, those are the kind of variables where you have control. And, you know, we, we really didn’t talk about, but I, I think it’s important for, for folks to think about their gross margin at a couple of different levels. The first is at your overall financial picture, you know, what is the gross margin for your business? And then if you’ve got, different product lines, you might wanna look at gross margins by those product lines. And finally then at the smallest level is what is your gross margin for that particular product? And so where I, where we get a lot of books in that we have to adjust is where clients are using cash books. And what that means is whenever they buy their products, they’re putting all those product cost in as cost a good sold at the time they pay for those products.

Cindy: (13:30)
And so it shows up in the p and l as one big lump s and it has no relationship to the sales that they’ve made for that month. It just happened to be that they, they sold so many this month and that’s their revenue and they ended up buying so much that month, and that’s their cost. But it’s not giving you a relationship between what your, what your income is and what the cost was that relates to that particular income. And that’s a fault I find with cash books. And I think if a seller is, interested in profitability, which I hope we all are, and you are interested in selling your business one day, which again, we need to be setting ourselves up for that end game. And to be successful, then you need to be thinking about your, your profit and loss from the standpoint of being able to compare what your income was and what the cost were associated with that income.

Cindy: (14:29)
And it’s, it’s, a different type of accounting. it can either be accrual accounting or it could be a modified cash accounting, but it’s not the traditional cash accounting that a lot of, a lot of people use for reporting their taxes. So I think that’s the first place is to get really clear about what you’re looking at on your p and l so that you can do a calculation to know if that 30% makes sense or not. I can tell you over a long period of time, maybe a year or year and a half, it will all even out and you can probably get a margin number. But if you’re wanting to look at your numbers month by month to see how you’re doing, then you need to be on at least a modified cash basis to be able to understand your monthly profitability.

Robyn: (15:15)
You know, I think that that’s really important. I, you know, I know I talk to a lot of people that only do their books like once a year or, you know, they, they kind of put it all off to the end, but really you wanna be looking at your books on a monthly basis to see where things are running away. So if your books are being done, like, so my, you know, my books are done by Cindy, so, or not by Cindy per se, but by her amazing team. and so if they see if, if I, it’s because the way they do it, they separate out like the transactions that happen in this month. So sometimes you’re, you’re, you’ll get three payments in one month. and so does it make it so it makes it so it’s really clear, Okay, I, I didn’t do something different in July that made it so much better. It’s just the way that the dates fell. and so, and then by doing that, it’s really helped me to be able to see, Oh, look, something ran away. I didn’t realize we didn’t cancel that subscription. I tried on a trial or, and that’s below the line, but, you know, can also help you identify, h we must be getting charged the wrong Amazon fee for some products because our gross margin just took a serious dip and none of the other variables have changed.

Cindy: (16:20)
Yeah. Shipping, for example. Yeah, you know, there was a time where people, were, were shipping costs, were getting surcharges for fuel, et cetera, and all of a sudden that made a big change. You could look at the p and l and go, Okay, that’s when that happened, and that’s when all that got sorted through. but yeah, you, you wanna be able to, to be able to compare what did you sell and how much money did you get for it, and then how much did that cost you so that you have a true margin to look at month by month. And one of the things that I’ve seen over and over with clients is, they, they book a cost a good sold number on their p and l every month, you know, assuming they’re doing a modified cash or a cruel, but they never go back and check to see if it matches, and make sense with the inventory that they have on hand.

Cindy: (17:09)
And that’s another place where I see people really get caught with, a big surprise at the end of the year. They go, Okay, we’re gonna do a physical inventory and they do account and every month they may have been bleeding costs that weren’t properly getting recorded on the p and l, or they may have had damaged products or lost products that never got pushed through. And all of a sudden at year in, they make one big adjustment to get their inventory right. When you make that adjustment to get inventory, right, the opposite side of that adjustment goes on cost of goods, sold on your p and l and all of a sudden what looked profitable might not look profitable. And so the inventory side of things, while it’s not necessarily a p, and L activity, it does impact p and l and you wanna be looking at that more often than once a year.

Cindy: (18:04)
I remember at that event seller retreat that we were at, one of the, one of the things that I did was meet with the, attendees and look at their books. And one of them had me look at his books and, you , I hate being this person, but I had to tell him, you know, what I’m seeing with your inventory is going to totally negate your profitability, when you make that. Cause he told me, he says, Now there’s this inventory issue and I’ve gotta write it off and I wasn’t sure how to do it. So when I do it, what do I do? And I showed him the entry to make and it took him from being profitable to having a negative year. And, you know, I hate delivering that kind of news. And so we talked about how do we not end up here again in the future?

Cindy: (18:49)
And my suggestion was true, up to your inventory every quarter go in and do a physical count or something that gives you some confidence in your inventory number and then push out any difference between the value of what you have on hand and, and your physical count. Push that out to cog. So at least every quarter you’re seeing, a true, a true up that gets you closer to an actual inventory value. and a true profitability number. Some of our clients, we do that every month because they have a really good handle on their inventory. We can take that value of their inventory off of their three PL or their, inventory management system. We, we have confidence in that and then we push everything to cogs and that’s just how we do it every month. So you can do it as often as monthly, but for sure do it at least quarterly.

Robyn: (19:42)
And you know, you, this is also gonna allow you to catch things like maybe there’s an item that you’re not realizing that there’s a lot of breakage on, and this is why you wanna do it regularly. Because if you’re not doing that until the end of the year right now, in the summertime, you’re gonna reorder a whole bunch of those. Realize not really being grounded in the reality of how profitable that product is because you’re not accounting for those returns or the breakage or what have you. and so, you know, when we’re talking about, going back and looking at the numbers, cause I know it’s tri, you know, like what me what, you know, there’s that business quote, What, what gets measured gets managed mm-hmm. and it, it’s used a lot, but I mean it is very much true when you’re really managing for profitability and for gross margin.

Robyn: (20:28)
It really does change the way you operate your business. But I know, to get there for, you know, a lot of sellers including, you know, when I was first really starting to get into like really focusing more on profitability than top line revenue, cuz prop line, top line revenue is just a, it’s a, it’s a great way to have a lot of stressful week, weeks, and months. so if somebody’s there, there’s probably somebody listening that’s saying, I know that I should do this, but I’m overwhelmed because I’m afraid it’s going to be bad news and I’d almost rather not know because right now things are kind of okay.

Cindy: (21:07)
Yeah, I mean, I, I get that. it’s like going to the doctor, right? , you’re something’s going on and you think, Oh, this could be very serious. I’d rather just put it off and maybe it’ll go away, but as soon as you go, it’s probably something not too major and you can take an antibiotic and then you’re better. And, I think it’s just human nature. We, we kind of are programmed to think about what, what’s the worst it could be. But the reality is the worst it could be is, you could be, you could be blindsided and surprised and not have time to react, whereas knowing your numbers puts you in a position to be proactive and to see what’s coming down the road to make better decisions about whether that product is, having excessive breakage or, whether or not you’re getting enough profit from it.

Cindy: (21:57)
And maybe you need to make some adjustments in cost not knowing is, I don’t know, kind of analogous to me to, to walking in one of those mazes from Victoria and England, you know, and you’re just walking around feeling the walls trying to say, okay, is this gonna be my exit? There’s no map to help you get through it. We’re fortunate in business, we, we have a language that we can communicate with the, the, the numbers tell us what we need to know. And, and just, to me it’s one of the major roles of being a business owner is learning that language and learning what it means. So you can actually do your job as an entrepreneur, which is provide products and employment for people, in the world. That’s why we exist as entrepreneurs. And if we’re neglecting the number side of it, then how can we do that? Well,

Robyn: (22:48)
The thing about when you’re hoping that, because right now things are kind of okay, if you look at the numbers now and it’s bad news, you still have time to fix it. By the time you’re like, Wow, now I have to do cuz we don’t have enough cash from having to borrow loans, take those kind of things than at that point now your options are less, you have less options, they’re gonna be more expensive options and there’s always the chance that it’s going to be too late. That by the points you get there, you won’t have the cash flow you need in order to place the order that you need or to change your advertising strategy or change your, even your distribution channel to maybe, you know, if you were looking at your selling on a different platform, you’re moving from Amazon someplace else or someplace else to Amazon, you might not have the resources to do it.

Robyn: (23:34)
So, you know, it, it set up, you know, that’s, you know, that’s, that’s actually how Cindy and I became such close friends I think is that we set up accountability with each other as business owners where we called and we talked about our goals every week and we, you know, like this way there was somebody, if I said I was gonna look at those numbers and I didn’t look at the numbers I was there with Cindy. Now that you, you don’t have to talk to Cindy to do that. You can talk to any business owner, and you can even do it within your organization where you have deliverables that you’re going to set up. but you know, it’s really important that you, you set up some accountability for you to do that because it’s not easy. And your first inclination is not gonna be like, Ooh, let’s go dig into those numbers

Cindy: (24:15)
. Right? And, and I mean, not everybody likes it the way I like it and I get that, but I do think, as a result of us having that relationship, I, I think, I know you still get some anxiety, but you know that, that when we talk about it and we look at the numbers, we look at it from the perspective of, okay, what’s, what’s actionable here that we can do something about instead of, Oh my God, what am I gonna do? You know, we this, you know, if there’s stuff that needs to take action, we, we look at it and make a plan and then, and that’s what business owners should be doing. They should be looking at their numbers, seeing what data they get, and then make a plan for what they’re gonna do to improve them in the future.

Robyn: (24:55)
You know, it, it does take the telenovela, I mean the, the soap opera out of the business, right? Where, you know, it’s not like, but that’s Jackie’s cousin, he can’t marry them. You know, it takes away all of the, the crazy drama that can be around your business and it’s like, all right, X happened, now I need to do y and it makes it so it’s a lot more approachable, and a lot less overwhelming and it’s a lot easier to separate your business’ performance from your personal self-worth as well.

Cindy: (25:23)
Yeah, exactly. I have so many people and you know, we do profit first and we do a profit first with a lot of our clients. And they’ll, they’ll say, you know, before I put profit first in, I would open my bank account every day and I would look at it and if the number was big, I would think, Ooh, it’s good, good day. And if the number was low, then it was like, Oh God, it was stressful and I’m start worrying about it. I’m such a, I’m such a bad business owner and you know, I shouldn’t even be doing this. And, and what am I gonna do to pay payroll next week? The nice thing about Profit First is it takes a lot of that anxiety out by the way we, you know, work with our accounts and, and prepare for rainy days and prepare for the taxmen cetera. but I, I, I hear exactly what you’re saying and I’ve seen it firsthand. People tie up their self-worth into what their bank balance is,

Robyn: (26:16)
And it’s not reflective just, you know, there’s, there are really good people, really smart business owners that have bad years bankruptcies, and there’s people who are, you know, they just got lucky and they, their balances are so, it’s not a reflection of who you are or what value you bring to your organization, it’s just what’s so, and, and getting to that makes a big difference, especially when it comes to your gross margin because that’s gonna be where you have the, the room after that to look at how much advertising you have in looking at what scaling is really realistic. what other, is there any like final, like we should probably talk about this too, for gross margin that we don’t wanna miss.

Cindy: (26:58)
I think we’ve pretty well summed it up. I, I think it’s, it’s like equivalent in real estate when people say location, location, location for us as, business owners that sell products as gross margin, gross margin, gross margin, and everything hinges on having good gross margin. Your ability to pay yourself, which believe me relieves a lot of stress at home. Whenever you’re putting in long hours and you’re able to bring some money home, that makes that go over a whole lot better than putting in long hours and not being able to help your family, you know, make the grocery bills. So, gross margins helps a lot with just, making sure you’re taking care of your family because everybody gets in business from the perspective of how this is going to help their overall personal family lifestyle situation. Yeah. And so, but very quickly we get into this habit of saying, Well I’m not gonna take a paycheck this week. And that habit goes over and over again to where the money that you’ve brought into the business you have, you’ve learned to operate the business with you not taking a paycheck. You can learn to operate the business with you taking a paycheck. And so, gross margin just solves a lot of those problems. I love to implement profit first. I will tell you with clients that don’t have good gross margins, it’s a hard road implementing profit first, if you’re not making a decent margin, is a hard thing to do.

Robyn: (28:32)
Cause there’s just not enough,

Cindy: (28:33)
It’s just not enough

Robyn: (28:34)
To borrow. You start to put, there’s nothing in the envelopes and you, because cuz you are running, if you, especially if you’re running at a negative every month, that profit first kind of break, that analogy kind of breaks down at that point because there’s nothing, there’s not a dollar left, you know?

Cindy: (28:48)
Yeah, I mean, it does point very clearly to you have a gross margin problem and you need to solve that. And, so it, it is useful as a diagnostic tool to say, this is where you’ve got to focus, but then after you’ve got that problem solved, it, it makes all the rest of it a lot easier.

Robyn: (29:09)
It does, it does. So, you know, I wanna make sure that we’re, we’re trying to keep the episode shorter. Some episodes we do better in some episodes we don’t do as well as trying to keep it, you know, that keeping the episodes to a shorter period of time. but, if people have other questions about gross margin, they can look at your blog. I believe there’s a couple of books keep.com there’s several blogs on gross margin, right?

Cindy: (29:34)
There are, and I, I would caution people from going out there and saying, I, you know, I’m gonna solve this for every product. If you have a lot of products, then you might want to just say, Okay, I’m gonna start with the top 10% that bring in the top revenue or that I sell the most of. That’s where I would start. You, you don’t want to, you don’t wanna get paralyzed because you’ve bitten off too much. So if you’re wanting to get started and you’ve got more than a handful of products, or even if you do say, I’m gonna pick the top five, 10%, do a deep dive on those products, once you understand what’s going on there, then do your bottom 5%, those in the middle are probably pretty much okay, but if you get the top five or 10% and the bottom five or 10%, then you can start to see where the real stars are or where the real dogs are, and you can make some really important decisions that can flip that margin, equation to, to where you’re in positive territory.

Robyn: (30:33)
And I, you know, it’s also important that we don’t make too many changes all at the same time because otherwise it can be like jumping in an ice bath and it can hurt your cash flow. So, you know, you do wanna, like she said, you wanna follow Cindy’s advice here and, and looking at products and groupings is usually the way that we’ll do it. like tiering out profitability and revenue, and looking at those that you can look at, you know, first prioritized by top line revenue, and then look at the ones, You could also look at the ones that are the closest to gross margin that have some sales velocity too. So, lots of ways to approach it and, you know, it’s one of the things that Cindy does with her with, one of things Cindy’s team does with, with the books that they do is the, there’s the ability to get kind of feedback on that as well with some of the, the work that she does.

Robyn: (31:19)
So, that’s, that’s it for today. I hope you have a prosperous week. And here’s our five minute fix. This is Robin Johnson with your five minute fix. Today I wanna talk about ramping up for high season. So if you’re thinking about Christmas, you’re thinking about if you’re a Halloween inflatable seller and you’re thinking about Halloween, one of the questions that people ask our agency a lot is, when should we start to prepare to for ramp up season? And we really wanna start preparing about six months out at the minim absolutely minimum three months out. The reason for that is, one, we wanna make sure that you have projections. So let’s say it’s May or June and you have your peak sales during January. If you wait until October, you’re gonna not be able to forecast the correct amount of inventory. And then on top of that, your advertising isn’t gonna have enough time to ramp up, so you’re not gonna have enough time to test it.

Robyn: (32:11)
really isolate what are the keyword phrases that are really going to be most successful for you. In addition to that, we wanna start to get to that top of the ranking. We know that each conversion that we get for a keyword phrase, can kind of help us with the organic ranking. We wanna try to get to those top organic spots before everybody is bidding up those, those terms. So before everybody’s really ramping up their seasonality. So getting started early is gonna one, give you the, the velocity metrics that you need to really identify how much to order for these Christmas order. The other thing that is going to do is gonna help you to give you time for your advertising on and off Amazon. There’s, there’s a learning period for all of these tools, and all of these platforms for the ads that the ads run on.

Robyn: (32:58)
So it’s gonna give you time to let the ads start to learn, let the campaign start the age or season, and it’s also gonna give you a chance to learn which, which channels, which ad types, which match types are performing the best, so that you can isolate that. And then you can also really focus your ad budget on the things that have the highest profitability and the highest ability for you to drive revenue, the combination of that that works for you. Then finally, the we, the other reason we wanna make sure that we’re thinking about this ahead of time is we wanna make sure that, you are really thinking about making sure that you have the cash flow that you need, the all of those finite resources like labor, that you’ve thought about, you’re really clear on how long it takes you to prep a thousand units so that you are really, able to do that and so that you’re not scrambling at the last minute trying to find, you know, additional polybag or trying to order last minute, items to fill out your product mix for q4.

Robyn: (33:55)
So starting early at least three months, but preferably six months before your seasonality and starting to slowly ramp up and prepare and forecast is gonna be what really separates those that are able to have a spectacular Q4 year over year versus those that are just kind of hoping that it works out. So this is your monthly, your yearly reminder. Now is the time to start working about q4. That’s it for today.

Narrator: (34:20)
Thank you for listening to the Process to e-Comm Profits podcast. Make sure you subscribe to get updates for new episodes. Leave a review and one lucky winner. Each month will win a one hour call with your choice of our hosts, a value of over $300. Keep listening to Hear the Winner Announce on the first show of the month. You can contact our hosts by using the Contact us form at process to e-comm profits.com. You can also find the contact information of our hosts and show guests in the show notes for each episode.

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