Dropshipping took the world by storm. It seems like Amazon, and AliExpress sellers came out of nowhere, and they made millions. They had a simple idea that worked. Find a product, create a website about it, market it brilliantly, and then profit from it.
There are many benefits that come from using these platforms. The main idea behind them is that you sell their products, and the sites ship it. This means no warehouse costs for you. And in case the marketing process doesn’t go as planned, you don’t have full storage rooms full of items that you don’t need.
When you start doing it, you see that there are two ways to approach this business model. The first one is to find low quality, cheap product, and sell it for a few extra dollars. You’re making a little bit of money from every sale.
This means you have to sell thousands of these items to make enough money to keep the business running. On the other hand, there’s a different strategy that works just as well. You find an expensive, niche product, and you only market it to a select group of people.
You pick the demographics and interests, and you don’t need as many sales to make the same amount of money. Both strategies work, but the only thing that can make or break them is how you handle the accounting and the bookkeeping.
Basic Principles to Follow
Bookkeeping is one of the most boring tasks out there. But that doesn’t mean it shouldn’t be done. In fact, you need to do it regularly. If you find a way to incorporate it into your daily routine, it will be much more manageable. Follow this link for more info https://www.digitaldoughnut.com/articles/2016/july/5-bookkeeping-best-practices-to-help-manage-your-s
The way people approach bookkeeping at the start is wrong. An entire week passes by, you make a ton of sales, and then when Monday comes, you have three or four hours of work waiting for you. If you divide the job daily, you’ll only need to do half an hour of accounting.
In fact, doing this builds character. When you sit through a tiresome task that needs to be done, you’re strengthening your mind. It creates a discipline that can transfer to many other areas of your life. If you put on some music, you might make the process a bit more fun.
Think positive thoughts and put some happy music in the background. If the songs aren’t instrumental, make sure that you know the lyrics and melodies beforehand. If you listen to new tunes, that will defocus your brain, and you’ll be more prone to make mistakes. If you’re humming to a track, you know, your concentration will improve, and the entire process will go much faster.
Inventory
Most online sellers don’t have a physical storage room. Instead, they opt for a different tactic. But if you’re one of the few that wants to look at a place full of inventory, then here are some tips on how to do it. You need to track seasonal sales.
If you’ve been doing this for a few months, you know that sales surge in some periods, and they completely diminish in others. For example, pool noodles usually make a hit every summer. You can’t expect to sell many of them in the winter, even if you have the best marketing strategies in the world. An Amazon seller accountant can help you monitor how your inventory stacks up against demand.
In fact, supply and demand are the biggest issues you’ll have as an entrepreneur. If you have too much of a product, and not enough demand, you’ll be at a loss. On the other hand, if you have a ton of demand and not enough products, some of your audience will go over to your competitors, and gradually you’ll lose a lot of business. Find a balance between both factors and you won’t have any problems.
Purchases
Whenever you start a business, you need to pay some money upfront. That can as basic as paying the Internet bill, online software, domains, and memberships. All these costs happen monthly and you need to take them into consideration because you might forget about them.
A worse thing that can happen is this scenario. You get a free membership on a site that will start charging you in two months. Most people start using the service and then forget about it. However, when you forget about it, that doesn’t mean that the website forgets you.
They’ll charge you monthly until you manually unsubscribe. Many small businesses fall into this trap, and when they realize what happened, thousands of dollars have gone down the drain.
Sales
This is what owning a business is all about. You need to track everything in this area. If you follow a funnel methodology, you need to know how your incoming traffic is grouped, and at which place in the funnel they belong. Click here to read more.
Every sale means extra cash that you can invest, and it will tell you how you’re doing based on the benchmarks you’ve set beforehand. This helps you to know where your business is at the moment, and how fast it’s moving forwards. Make sure to boost the marketing of top-performing products, and decrease it where sales are bad.
Keeping precise records of how money is moving in your entire structure is crucial to creating new plans and implementing strategies. Without attentive bookkeeping and accounting, you’ll never know what to pay attention to.
