#287 – Bookkeeping And Accounting Tips For Amazon Sellers

Many Amazon sellers think of bookkeeping, financials, and accounting as one of those “unsexy” tasks in their day-to-day operations. First-time SSP guest and Freedom Ticket 3.0 instructor Matt Remuzzi agrees… with one important caveat: These things are all vitally important. 

Matt shares his best tips and practices on bookkeeping and accounting for e-commerce sellers. In addition, he also shares stories of success, common mistakes, and his insights on various issues surrounding this topic.

In episode 287 of the Serious Sellers Podcast, Bradley and Matt discuss:

• 02:46 – The Basics Of Bookkeeping And Why It’s Important
• 6:15 – Good Bookkeeping vs. Bad Bookkeeping
• 8:15 – Do Not Commingle Your Business Expenses And Personal Expenses
• 11:30 – A Simple Way To Shelter Some Of Your Income From Income Taxes
• 13:30 – Is There An Increase In People Selling On Other E-commerce Platforms?
• 17:00 – Do You Need A Different Accounting Firm If You Sell In Other Countries?
• 19:05 – Setup A Separate Legal Entity Right Off The Bat
• 22:45 – The Biggest Accounting-Related Mistakes Amazon Sellers Make 
• 27:15 – Frequently Asked Questions When Looking For An Accounting Firm
• 30:00 – Negotiating With Your Suppliers Using An Accountant’s Perspective
• 32:45 – Does Nexus Sales Taxes Still A Problem Today?
• 37:45 – How To Contact Matt Remuzzi 

Transcript

Bradley Sutton:

Do I need to remit state sales tax on Amazon? What’s a way to save thousands of dollars with just one accounting change? What are the top bookkeeping tips for all e-commerce sellers? We’re going to talk about that and more today. How cool is that? Pretty cool I think.

Bradley Sutton:

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Bradley Sutton:

Hello everybody and welcome to another episode of the Serious Sellers Podcast by Helium 10. I am your host Bradley Sutton, and this is the show that’s a completely BS-free, unscripted, and unrehearsed organic conversation about serious strategies for serious sellers of any level in the Amazon and Walmart and e-commerce world. And our guest today is Matt from CapForge. And I think Matt, aren’t you close to me? Aren’t you here in San Diego?

Matt:

Yeah, we’re up in Carlsbad actually.

Bradley Sutton:

Even closer. Yeah. Like I’m like five minutes from Carlsbad here. Like five minutes from Palomar airport road over here in Carlsbad. So we’re practically neighbors and I don’t think we’ve met in person here in San Diego.

Matt:

No, I know we’ve been on a couple of other events together, but haven’t met in person yet. In fact, Palomar airport, I can see the airport from my office window so we are very close.

Bradley Sutton:

Nice. I mean, it was so convenient when they used to have flights out of there to like, you know, either just go to LA or go to, you know, connect to other places, you know, just take a five-minute trip as opposed to having to go all the way down to San Diego airport. But anyways, we’re not lamenting the the negatives of north county San Diego here. I’m having you here to talk about, you know, your area of expertise, which is like something that a lot of Amazon sellers don’t want to have to you know, think about, or it’s not that sexy of a topic, but it is something that literally every single one at one point or another has to deal with and that’s bookkeeping and accounting. And you’re actually the first one that we’re having. And we’re going to have a series of podcast episodes where we’re featuring different guests instructors in our new Freedom Ticket 3.0, and were you in the Freedom Ticket 2.0?

Matt:

Yeah. And I did a video episode for the 3.0 one as well.

Bradley Sutton:

Excellent. Yeah, that’s live and people are already seen it. So we don’t want to spoil the entire thing, but I remember your 3.0 is entitled like, ten important tips or something like that for Amazon sellers. So, what I thought we would do today is maybe like, let’s talk about, you know, maybe five of those tips? You know, that it’s your choice. And then let’s just talk about some other, you know general things that are going on in the e-commerce world. So does that sound good?

Matt:

That sounds perfect to me.

Bradley Sutton:

All right. What would you say is number one, like what’s a tip that can help e-commerce sellers out there when it comes to, you know, knowing about bookkeeping and things like that?

Matt:

Yeah. So, I mean, I, you know, I know too, right? Bookkeeping is not that sexy, right? Not that sexy is my middle name, so that’s fine. But at the end of the day, right? It’s super important. And one of the things that constantly catches me by surprise is I’ll talk to some, somebody who’s a seven figure seller I’ve been selling for three, four or five years. They’re doing really well. And then they’ll kind of admit, like, it was sort of a shameful thing, like, yeah, but, you know, I don’t really do bookkeeping. I don’t really have books. I just kind of give all my stuff to the CPA at the end of the year. I’m like, you know, that’s fine, but you’re really kind of missing out. So, I mean, tip number one is just have bookkeeping, right? Because the thing is it’s, it’s not just something you do at the end of the year, so you can try to pay the least amount of taxes.

Matt:

I mean, it does that too. And without bookkeeping, chances are, you’re probably paying more taxes than you should, but just on a day to day, month to month basis, good bookkeeping helps you make good business decisions to know where you’re profitable, where you’re potentially, you know, losing some money, where there’s room to improve things. And it’s just, it’s just another tool, like all the great Helium 10 tools, right. That people look at everyday, it’s just another tool to help you run your business better. So not having it, you’re really kind of penalizing yourself and not using all the tools that you could to get the best results out of all that hard work. So that’s tip number one is just have bookkeeping.

Bradley Sutton:

All right. Sounds good. Now, when you say bookkeeping, you know, like, are you referring to, you know, like, Hey, you need to have software or you’re just like, Hey, you know, go ahead. And literally keep the books. Well, like the old days, you know?

Matt:

Yeah. No, what I’m referring to really is bookkeeping that is done on an accrual basis, done correctly. So, and not to get too in the weeds with accounting jargon, right. But accrual basis just means that the same month that you have a sale, we want to record the sale and we want to record the cost of that sale. So your Amazon fees that went with that sale, the cost of the product that you shipped with that sale, the cost of your ad spend with that because there’s different ways to do bookkeeping, right. And one way is just to kind of say, “Hey, what went into and out of my bank?” And you can say, Hey man, this month I bought, I spent 50 grand on inventory. And then if you, if you’re just looking at looking at that, you’re like, oh, it was kind of a down month, but you know, really it wasn’t because you didn’t even get that inventory for another month. And then you probably didn’t sell it for three months after that. And then when you actually sell it, that’s when you want to know, did I make money or lose money on those products I’m selling. With accrual-based bookkeeping, if you’re doing it right. We’re trying to line up, okay, you sold this product for 25 bucks. Amazon took $8 in fees, the product itself that you sold cost you five bucks. Then you spend another three on ads and then how much was left in profit. That’s what we’re trying to line up. So you can really see, okay, for each time I sell this SKU, how much am I actually keeping? Because otherwise it’s really hard to tell, you know, you bought inventory two months ago, you sold it this month and an Amazon doesn’t pay you till next month. Right. It can get super confusing to figure out, but am I making any money or not? So that’s what good bookkeeping should be telling you every month. Are you making money? Bad bookkeeping tells you, “Okay I know how much is in my bank account”, but that by itself, doesn’t give you the whole picture.

Bradley Sutton:

Okay. All right. Good, good. Well, what’s another tip?

Matt:

That was another tip, right? Is do the bookkeeping correctly on an accrual basis. The other place that accrual is super important. And I promise that’s the only accounting word I’m gonna use. I won’t use any other accounting words, but accrual keep that in mind, because if you’re thinking about selling your business, right? Presenting your financials on an accrual basis is going to get you a much higher value than if you do it on a cash basis or worse. You don’t have any books at all, right? Same business, same results, same money in the bank. But just by having that pictured on an accrual basis where you can see month to month, here’s my profitability. Here’s my growth that is literally going to let you sell your business for a substantially higher amount than the identical business. Just with messy books or no books. In fact, there’s a lot of brokers. They won’t even list your business if you don’t have books, there’s a lot of aggregators that won’t even give you an offer. If you don’t have your books done properly, because they can’t tell like really how well the business is doing. So tip three, I guess, is if you want to sell your business for the most amount of money you’ve got to have your books done right.

Bradley Sutton:

Okay. Alright. Excellent. Yeah. I mean, we’ve been talking, you know, two years ago, we weren’t talking about aggregators and stuff. You know, like people were exiting their businesses but now that’s all the rage, you know, how many aggregators out there now, each of them buying, you know, accounts like once a week, it seems. And so this is a definitely very real thing. And that is what they’re, you know, the ones that I’ve interviewed here, like, you know, the ones from Thrasio on here have all mentioned the importance of what you just said. So we got that. Maybe a couple more tips.

Matt:

Sure. So another tip I would throw out there is don’t commingle your stuff, right? It’s, you know, it’s easy to think about, look, it’s all my money. It’s all in my bank. So if today I want to, you know, spend money on Google ads. And tonight I want to take my wife out to dinner. Why shouldn’t I use the same credit card, but the more you do that, the messier it gets the harder it is to pull apart. The more time it takes. So really to the extent you can and it’s easier as you get bigger, I get it when you’re small, you’re just launching like all your money is kind of in the same bucket anyway. So, I’m not saying never do this. I’m saying, as you work your way up, you get bigger. You take your business more seriously. One of the ways to take your business more seriously is really separate out that personal, those personal expenses from business expenses, keep your business stuff in a business checking account, or pick a couple of credit cards that you’re just going to use for the business.

Matt:

And then when you go to go out to dinner or buy gas for the car or whatever, you know, put it on a separate personal card. So you’re not running it through the business. There are things that for tax purposes, we can pick up home office expenses, cell phone, even auto expenses, but you don’t want to just co-mingle your whole business life and personal life together because it just makes everything messy. You want to do it sort of neat and organized way and keep yourself out of trouble and make the bookkeeping easier. So you don’t dread it so much or working with somebody like us costs you less because there’s less for us to have to sort out and ask you about all those embarrassing purchases that you didn’t want to have to explain.

Bradley Sutton:

Yeah, let’s stay on this one for a little bit, because, you know, I think a lot of Amazon sellers, you know, struggle with this, especially, you know, some of them who are just starting out and maybe they’re keeping their day jobs, it’s maybe easier for them because, you know, they’re getting their regular salary, they got their personal credit cards and they’re not even taking any money out of their Amazon account. It’s like a hundred percent just going in. And, you know, it’s all kind of separated, but then, you know, let’s say there’s Amazon seller. Now Amazon is the day job, right? You know, that’s their full-time. And if they want to get money for their rent or mortgage, it’s gotta come from the Amazon business. So what structure would work? Is it like they need to pay themselves salary or how would that work? And what about now that we’re all remote and everything like, you know, does that mean if they’re running their business out of their house, their mortgage is now a business expense?

Matt:

Yeah. So I mean, the best thing you can do is, is set up two different bank accounts. One is for the business and one is for your personal life when you need money and you’ve got enough coming in that you can afford to pay yourself. And that could take awhile. Then what you want to do is just transfer money from your business account, to your personal account, 2000 bucks here, a thousand bucks there 5,000, if it was a good month or whatever, that way it’s easy to track. Okay. Here’s how much normally, you know, when the early days, yeah. I reinvested every dollar back into the business. I get that. But as you get to be a little bigger, you get to quit your normal day job and do this for as your full-time gig, then yeah. You got to pay yourself, you got to be able to pay your rent and pay for groceries and everything.

Matt:

So what you do is move money out of that business, into that personal now, as you start to get even a little bigger, what a lot of people find out what a lot of our clients we talk to them about is, Hey, you may be a good fit for actually being an S-corp or if you’ve got an LLC being taxed as an S-corp and it gets a little bit more complicated because then what you’d end up doing is you pay yourself a little bit of salary, like actually a paycheck with a W2, and then you take the rest as distributions. And again, without getting into the details of what we find is a lot of times that kind of setup helps people keep, you know, as much as 10, $15,000 extra in their pocket versus paying it to the IRS and the state and in payroll taxes.

Matt:

So, you know, that’s a little bit of an advanced strategy, but as you get bigger, there are ways to shelter, some of your income from income tax and more ideal ways to set things up, to benefit yourself. But the simplest, even from the early days, the simplest thing you can do is, you know, have a separate business account and a separate personal checking account. And when you need to put money into the business, transfer it in and when you want to take money out, transfer it out. And that just keeps it a lot cleaner than having all of it go into one bank account.

Bradley Sutton:

Okay. Alright. Did we do five already of the ten?

Matt:

That might’ve been five.

Bradley Sutton:

Okay, excellent. Now, let’s just take a– so first of all you guys, I mean, that’s obviously a lot of great stuff and there’s even greater stuff. That’s in the Freedom Ticket module. Let me just check my list here. If you guys are Helium 10 members, you have full access to the Freedom Ticket course, that’s over 40 hours of training. These come from module 3.10. So that’s in week three go to module 3.10 and get the rest of the tips. Now obviously, you know, your, your module there is about 30 minutes long. This isn’t just the entirety of anything that you would absolutely need to know about, about bookkeeping. I’ll ask some general questions that come to my mind. You know, you’ve been doing this for a while in the last couple of years. Have you seen an increase in people who are kind of diversifying where they sell? Like, you know, maybe I would imagine, you know, three years ago or something, a lot of people were only selling on Amazon, but have you seen increases in Walmart? Shopify?

Matt:

Yeah, definitely. I mean, it’s interesting. A lot of our Amazon sellers have also added a Shopify store. Most of them know, you know, you don’t see much volume in there. It’s still like 98% Amazon revenue and then a handful of sales in Shopify, unless they actually, you know, take the time to create an ad campaign and drive traffic and try and build a community around their product, which some of them do, but just opening a Shopify store, you know, doesn’t generally do much for you. Same with Walmart. You know, a couple of years ago, it seemed like Walmart was going to be the new frontier. Everyone was going to jump on there and double their sales. And we just haven’t seen that happen. A lot of people have moved into Walmart, but again, unless they really sort of specifically tried to push that platform, those add-on sales, haven’t amounted to that much.

Matt:

Another place we’ve seen, a lot of people try to go is try to go into the UK and EU markets. And, you know, again, it’s a lot more expensive. You’ve got to deal with VAT over there. You’ve got to deal with, you know, shipping and storage and issues. And then, you know, for all the company or all the countries, except the EU, right. Or sorry, the UK you’ve got to pay for localization, right. And translate it to Spanish, French, German, Italian, whatever. And we haven’t seen, I’d say three out of four people who try to go into that market. It doesn’t pan out for them. You know, just between the, the decreased profit margins, the extra costs, the extra hassle it just doesn’t seem to work out. So I always advise clients, if you’re thinking about going over there, you know, just do it with one product, your best seller, your highest margin product, and go slow because you know, better to learn that it’s not going to work with a $10,000 investment than with a hundred thousand dollar investment.

Matt:

There definitely are people who can do well, and there are products that are in demand over there, but it’s just, it’s a different place. And even, you know, Germany’s different from France is different from Italy, right. And just because something sells in one area, you can assume that it’s going to take off in the other. So, you know, I wouldn’t say don’t try it. I would just say, be cautious and have a plan and make sure you’re, you know, ready for that. You may do a lot better just doubling down on what you’re already selling well in the US or adding new brands in the US versus trying to expand, you know, that way, or at least be careful with it. That’s all don’t, it’s not just like, wow, there’s another 300 million people over there. I can double my sales is not going to happen automatically.

Bradley Sutton:

Okay. Now, you know, you’re talking about, you know, international marketplaces. So like, let’s say I’m selling here in the United States and I’m based the United States. You know, I would probably use, let’s just say, I’ll use your, your firm to handle my books or whatever. Should I, in addition, if, if I’m selling in Germany or just the EU in general, should I have also like you know Matt from Germany, Mathias, let’s just say, or something, you know, from Germany handling my books. So he can say this is bad or does this, or, you know, like, I don’t know, like, or do you handle all that? And vice versa, I’m a German seller selling in Germany now I’m expanding to USA. Do I stick with my firm that I have there in Germany? Or do I find somebody like you base in USA to handle my US books?

Matt:

Good question. Yeah. So the way we look at it is if you’re a US-based seller, we can work with you when you sell throughout the world. And we do have clients who sell successfully all over the EU. They’re in Australia, they’re in Japan or UAE, they’re opening up Brazil and Turkey and, you know, that’s fine. We can handle all that because ultimately all the money is coming back here. And so we’re still doing the accounting here, cause you’re a US-based business, even though you sell globally on the flip side, though, if you’re in Germany or Romania, and you’re only– your company is only based there and you’re based in euros and you know, all your statements are going to come in German or Romanian or whatever, then we’re not really the right fit for that because one might, you know, I don’t read German, I don’t speak Romanian. I can’t really help you with your tax questions about how German taxes or Romanian taxes work. But we do have a lot of sellers who are located internationally. Who’s opened up a US company. And so in that case, we will do the bookkeeping for them, for their US company, all the activity that happens here, we can track for them. We can help them with their US-based taxes and then whatever flows back to the home country, then they deal with, you know, with their local CPA or whoever they work with on their local side.

Bradley Sutton:

All right. Ah, I’m just going from topic to topic or just, whatever’s just comes to my mind here. And just something that came to my mind right now is going back a little bit before, towards the beginning of this conversation, one of your tips was talking about, you know, keeping things separated. Now, that being said, you know, there are reasons in which to, you know, foreign corporations or LLCs or something when you’re selling on Amazon, you know, that have to do with brands and maybe liability insurance and things like that. But, but from an accounting standpoint, what do you suggest to people who ask you this question? Like, Hey, should I just be a sole proprietorship or should I get sell under my own name? Cause I’m small, you know or is it 10 times out of 10, Hey guys, incorporate or LLC or something when you’re a starting on Amazon, even if you’re, you’re going to be small potatoes in the beginning.

Matt:

Most people, we recommend that they set up a separate legal entity. One, because, you know, hopefully you’re planning to get bigger. And as you get bigger, there’s tax advantages to not running things under your own personal name. Two, there’s liability issues, right? And now Amazon is making a big push for liability insurance and whatever, which is fine. It’s an extra cost, but it’s protection as well. But I mean, this is the US right, almost anything can hurt you, right? A fluffy pillow can hurt you or somebody can claim that it did and, you know, file a lawsuit. So you don’t want to wrap your personal name, your personal assets, your personal bank account up in any of that nonsense. So by having a separate legal entity, you’ve now sheltered yourself somewhat from those potential liability claims too. So I would say even when you’re small, it doesn’t cost much in most states now, California, the great state of California here is an exception. It costs a fortune to set up an illegal entity here. But for most states it’s a pretty small expense and there’s a pretty good benefit to it. And then furthermore you know, as you expand, if you decide you want to start a second brand or a third brand, what a lot of our clients do is they’ll treat their first company as basically the parent company. And then they’ll set up a second LLC or a third LLC to own those additional brands. They get a separate EIN. They opened a separate Amazon seller central account. Now why do that? Well, the reason is down the road, you may have, let’s say three brands and you only want to sell brand B, right? If you open all three brands in the same Amazon seller central account, it’s going to be very hard to split that out, right?

Matt:

Either you give somebody else your SKUs, but they don’t get your account. So they don’t get the ratings and the reviews and everything, or you give them your whole Amazon seller central account. But that means now maybe you’re selling some brands you wanted to hold onto. So if you’re thinking about big picture down the road, the best thing to do is have one brand per Amazon, or one brand per LLC, one seller central account per LLC. And then down the road, if you own three or four, you can just sell one without interrupting the rest of them. Or you could bundle two or three of them together and just hang onto one or whatever you want. But now you’re flexible. You don’t have to show somebody your entire operation just to try and sell one of your two or three or five brands.

Bradley Sutton:

Okay. Makes sense. Now, you know, we’ve been talking about, you know, tips, but what about, I dunno, anti tips. So like, you know, you’ve been, you know, dealing with, you know, possibly hundreds of sellers and, I’m sure you have that face-palm moments when you, when you first like, look into what they’ve been doing, you’re like, what in the world were you thinking or something. So like, what would you say are the top three biggest mistakes of when you onboard somebody you’re kind of auditing what they’ve been doing? Like, what is one of the, some of the biggest mistakes you’ve seen Amazon sellers make out there?

Matt:

Well, I mean, I just had this earlier this morning, so this is fresh in my mind. We just onboarded a seller who is just got over seven figures, about $1.5 million, actually close to two, a 2 million bucks in sales, 1.5 million in sales. And he is still set up as a sole proprietor. Now in the last 12 months, you know, he’s made close to $400,000. Had he been an S Corp? You know, he could have saved five figures in taxes versus being a sole prop. So, you know, just that one, single, I was like, well, and I had the conversation. He’s like, nobody ever told me my CPA. Didn’t tell, like, I don’t know. I can’t explain why, you know, you work with advisors who don’t give you advice, but I’m telling you right now, right? If you’re a sole prop as a business owner, and you’re making more than about $30,000 in profit, you need to seriously reevaluate that because this poor guy for the last four years has been in a position where had he been an S corp?

Matt:

He literally, probably, if I added it all up could have saved himself close to a hundred grand and you know, that’s money in his pocket that instead he’s paid out where he could have avoided that same business, same results, same everything, just being an escort versus being a sole prop. So, I mean, that’s one of those things where, you know, it’s easiest to start out as a sole prop. I get that, but I mean, really once the business gets up and running and you feel like things are going to go along and you’re going to keep doing it. It’s really good to, to evaluate whether or not making a change for that of that entity type makes sense. And 99 times out of a hundred, it does. And it saves you money and it’s a hundred percent worth doing, but just people sometimes don’t hear about that advice or they don’t understand how it works for them, or they think it’s, you know, somebody tells them Oh, there’s a lot of paperwork it’s kind of complicated, so they just never get around to it.

Matt:

And they’ll go, well, yeah, it’s about 20 minutes worth of paperwork. Would you give me a hundred grand for 20 minutes worth of paperwork? I mean, I’d make that trade all day long. Right? So it’s just one of those things that, that’s one of the biggest ones that we see. Another one, just as one other example, I’ll give you again, going back to doing the books on a cash basis, we had a guy a couple of years ago sold his business to on cash basis financials, right? He got not a very good price for it. The guy that bought it, hired us to go back, redo the books on an accrual basis. And then this guy literally flipped the business 30 days later because it took us about three weeks to get the financials done. As soon as we were done, he relisted it and he sold it for a hundred grand more than he bought it for the identical business.

Matt:

He’d owned it for less than a month. The only difference was flipping the books from cash to accrual and he sold it for a hundred thousand dollars more than he’d just bought it for. And of course, the guy, the original guy, the seller was face palming himself. Like, I could have paid CapForge 1500 bucks to fix the books for me. And I would’ve made $98,000 more, but I didn’t. And this guy just, you know, for, for basically hiring us and waiting 30 days, he made an easy hundred grand. So it’s just that kind of stuff. Not having books, not having books done right. And not getting good advice on, you know, from the tax side, those are some basic things any seller can do, you know? And I think that what happened, they look at us as like, oh, CapForge, or any accountant or CPA, right. Oh, it costs this much. It’s a cost. Okay. You may pay me some money, but if I can save you 10 grand on taxes or make a hundred thousand dollars more for you, when you sell your business, I’m no longer a cost. I’m a very, very cheap investment. So it’s just your sort of mind frame on it as to how you think about it.

Bradley Sutton:

Okay, good. Good to know. Now what about on the other side, you know, like, I honestly don’t have too many questions on my own because accounting is such a headache to me. I really don’t even want to think about it. So I just like let other people in my team just handle everything. So like, I don’t even know what the common question is, but when you’re onboarding people, what are, you know, some of these common things that you hear the most? I’m sure some of it, I just, you know, I probably had probably mentioned because yeah, some of the, some of these things I’ve heard from, from sellers, but what about something that we haven’t mentioned today that people always ask you, because I’m sure our listeners out there are probably wondering the same thing.

Matt:

So, I mean, one of the things, a lot of people, you know, are concerned about when they first talk to us is they imagine that they’re going to have to do a lot of work every month. They’re like, oh my God, I’m going to have to spend all this time. I’m going to have to do this stuff that I hate. I’m going to have to, you know, pour through all these transactions, I’m going to have to highlight stuff, download stuff. You know, you’re going to be constantly bothering me with questions about accounting, stuff that I don’t want to think about. And I tell them really it’s the opposite, right? We try very hard to make this as painless and as easy for you as possible. Our average client spends 15 minutes a month, tops, you know, helping us answer some questions for stuff that we just can’t make heads or tails up.

Matt:

But that’s it. I mean, we don’t want you to spend a ton of time babysitting us and emailing us back and forth because we know the reason you hired us is because you’ve got better things to do. You’ve got more, you can add a lot more value to your business by sourcing new products or creating new brands or building new ad campaigns to drive revenue, right? You helping us with accounting. Homework is not where we want you to be. So I think a lot of people have this sort of mindset of, I don’t know, it’s going to take a lot of time and I don’t like this stuff. And so they shy away from it. But really our whole goal is the opposite. We want to take this load off your shoulders so that you can have the peace of mind to know, Hey, that’s getting done, it’s getting done right. But at the same time, spend as little time as humanly possible on this. So you can go on and do other things with your time and just get the end results, the financial statements, to know where your business is at, but not have to, you know, really struggle with it. Cause I get it. Like I said, I know this is nobody’s idea of a good time. Nobody’s looking forward to doing accounting. Nobody wants to sit down and review their books. Like everybody’s trying to get away from that. So we’re aware of that. We know this is, you know, what you don’t want to spend your time doing. So we really try to set ourselves up so we can do the most for you with the least amount of your time involved.

Bradley Sutton:

Okay, good. So what about payment to suppliers? Like have you noticed any, like, are there other things that people can save money on that you’ve seen or, or they’re, they’re not you know, using it as, you know, a certain kind of expense or, you know, they’re using credit cards instead of wire transfers or I dunno, like, I’m just thinking of the big money transactions that happen. And obviously the credit is your, or, you know, the incoming is what you’re selling on Amazon, but the biggest outgoing costs is what you pay your suppliers. Is that pretty much straightforward or are there things that people might be making mistakes with being able to save money on that?

Matt:

I think it’s not so much the payment method that there that’s a problem, but I think people don’t necessarily negotiate as much as they should and around as many options as they should. Right. So a lot of people just kind of, they email, you know, find somebody on Alibaba that email, Hey, what’s the price for a thousand pieces. They get it. And they go, oh, okay. I guess I can, you know, but really everything should be in negotiation, right? What’s the MOQ, the minimum order quantity. What’s the delivery time. What’s the cost for freight. What’s the cost per unit. You know, all of those can potentially be negotiated. And how much do I have to pay you today? How much do I, can I pay you later? 30 days, 60 days, can it be 90 days? Like there’s a lot of different potential levers you can pull.

Matt:

And the bigger you get, the bigger you are in importance as a customer, to that particular supplier, the more you have the leverage to negotiate and change those things. And those all can be changed to your benefit. Even if the price doesn’t change, if the terms can change, you know, that can help you. I’d much rather get paid from Amazon before I have to pay my supplier versus the other way around, right. Or if I’m paying interest, I want the interest to be as low as possible. I want them to, you know, give me the best possible price, but I don’t want to have to pay for that today. You know, maybe if I commit to ordering 10,000 units, you can give me a unit price. That’s half what I’m paying today, but I only want a thousand of them now and I’ll take a thousand next month and a thousand a month after that.

Matt:

Right. So you’re allowed to get creative and negotiate to your best possible advantage. I think a lot of people just aren’t used to that idea if they’ve been never been in business before, or even if they have, they’re just not used to dealing with suppliers in this way, but they, those guys over there, they expect you to negotiate. They expect to haggle and work out deals. And when you don’t, when they just give you a price and you go, okay, they’re rubbing their hands together going, ah, we won that one. So, you know, just keep that in mind. You can, you know, you can always ask, right? They can say no, but if you don’t ask, they’ve already won.

Bradley Sutton:

Okay. one last topic before we get into maybe another tip our 30-second tip of the day. But you know, I know years ago, but the hot topic as far as accounting and taxes and stuff was always about like for Amazon sellers in nexus, like, Hey, do I have nexus in this state because I’ve got inventory there and, and you know, correct me if I’m wrong, but when Amazon kind of did that marketplace facilitator attacks were now Amazon, if I’m not mistaken, almost all states collects it. Is that now a moot point? Like, is there really no state tax on Amazon sales that any Amazon seller needs to do? Or am I missing something here?

Matt:

No. So, I mean, you’re right. A couple of three years ago, everybody was like, what about sales tax? How’s this going to work? Do I, oh, should I respond to this letter that I got from this state that says I might owe? And they’re willing to, you know, grant me clemency. If I just fess up to my sales and send them a check that was all the drama three years ago, it kind of went less two years ago. And now at this point, you’re right, Amazon has pretty much said across the board, we will be responsible for sales tax. Not because they want it to, but basically because all the states put a gun to their head and said, look, either you do this or we’re going to have to take you to court. So on the sales tax side, the Amazon problems have mostly gone away, but there are some other problems that have cropped up.

Matt:

Like if two or three years ago, when this was happening, you registered the pay sales tax in California. A lot of our clients have now gotten letters from California from the income tax people. And they’re saying, Hey, look, if you had sales tax that you paid in California, you must’ve had sales in California. So therefore you probably owe some income tax in California on those sales. So on the one hand, the sales tax thing has more or less been tamped down, but there’s other stuff that’s cropping up. We’ve seen clients in Pennsylvania who have a 3PL in Pennsylvania, even if their office or they don’t, you know, they don’t have anything, but a 3PL in Pennsylvania, Pennsylvania has started sending them letters. So we’re seeing these specific state-by-state issues popping up where it’s not about sales tax or it’s only somewhat related to sales tax. But it’s still a nexus question and a tax question. So obviously beyond the scope of the podcast here to kind of nail those down one at a time, but it has been popping up. And, you know, again, I’d say, you know, if you’ve got questions about that, you know, I’m happy to talk to people individually, but it’s just, it’s a lot easier than it used to be, but it hasn’t completely gone away. There’s still some states out there that are still hunting for ways to charge people.

Bradley Sutton:

Okay. All right. Now, you know, you’ve been giving us different tips throughout this episode and also the ones that were in the freedom ticket module, but we do this thing on the show called the, or the TST 30-second tip. So is there anything you haven’t mentioned, that’s kind of like a quick-hitting tip or tactic for Amazon or Walmart or other e-commerce sellers that they can you know, go ahead and, and implement right away.

Matt:

Definitely. So something people can do right now, if you’re not already is if you’re paying for ad spend on Amazon and at this point, almost everybody is right. You have a couple of ways to do it. You can have Amazon take the money for that ad spend out of what they otherwise would have paid you in your deposit, or you can choose to pay for it directly using a credit card. And that is the route I would recommend. If you don’t have a credit card already get yourself one, that’s got a good cash back rewards or miles or whatever, you know, makes sense for you and shift your ad, spend over onto that platform, right? You’re still spending the same amount on ads they’re paying you out. And then you just turn around and pay the credit card. But we’ve literally got clients who are making, you know, $50,000, $75,000 a year, just in cash back rewards by running their ad spend through their credit card, rather than letting Amazon hang onto it and reducing that payout. So that’s an easy bonus. You can, you can do immediately as an Amazon seller, that benefits you, you get those rewards for money. You were going to spend anyways, rather than letting Amazon hold onto it and reduce your payout. So just a quick, easy tip, a way to put some money or miles rewards points back in your pocket for selling on Amazon. That’s easy to do. Doesn’t cost anything extra and you know, is a nice perk of being an Amazon seller.

Bradley Sutton:

Awesome. All right. Well, I appreciate you coming on here. You know, we’ve definitely need to go to the, you know, like surf brothers teriyaki or whatever. One of the, one of those places right there on Palomar airport road, get some, get some food soon. But you know, if people are not around here locally and can’t do that with you, how can they find you on the interwebs? Maybe they want to hit you up with some more questions.

Matt:

Definitely. So capforge.com is our website. That’s a great place to, you know, kind of learn more about what we do and either, you know, if you like the phone or phone numbers on there, if you like email, you can send us an email. I’m happy to set up a time to chat with anybody. Who’s got questions, you know, client or not, you know, beginner or experienced seller, whatever. I’m happy to chat. If we can help you out. Great. If not, you know, just pass on some info, but you’re not ready or not interested in services yet. No problem. I feel like it’s all karma. It all comes back one way or the other. So if you’ve got specific questions, you’ve got a tax letter from California. You want to know, you know, you’re thinking about selling and want to figure out how to get the most for your business, all those good questions you know, just reach out and hit us up. Awesome.

Bradley Sutton:

Thank you so much, Matt. We’ll be in contact for sure.

Matt:

Awesome. Thanks for having me.

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