Seller Profile: “Accounting Saved My Amazon FBA Business”

Shane StinemetzUncategorized3 Comments

In last week’s blog post, we talked Amazon seller cryptonite – bookkeeping. I have found that 80% of Amazon sellers are uncomfortable with basic accounting practices. Let’s face it, accounting is really hard when you have never done it before. So what options does a seller with no professional finance background have?

Two Options for Managing Business Finance

1. Pay someone to manage the finances for you

2. Teach yourself the accounting basics and manage the finances yourself

Option number two is the right choice for most Amazon sellers. Financial professionals (accounting firms etc) charge hefty, hourly rates that distract capital. That precious investment money could be dedicated towards product expansion or more enhanced marketing campaigns. And what is worse, you forfeit the opportunity to get really good at managing your business’s finances.

Remember, the Profit and Loss Statement and Balance Sheet are like a Magic Eight Ball. They hold the keys that will unlock the answers to critical business questions like…

  1. Should I boost my Pay Per Click campaigns on this product?
  2. How many more products should I order, and when should I place the order with my supplier?
  3. Can I afford to add another product to my brand, or should I consider taking out a loan?

Amazon sellers are an aggressive bunch, with dreams of growing and scaling their businesses. Sure, there might come a time when that growth and scale is realized, and it makes sense to outsource some financial tasks (taxes, for example). A business owner can delegate authority to other parties to perform certain tasks, but they can not delegate the responsibility associated with that task.

Regardless of how “hands on” Amazon sellers elect to be with their finances,  the biggest danger is ignoring the accounting tasks all-together. So, what are the effects of ignoring bookkeeping entirely?

This week, I talked to Michael, an experienced Amazon seller who ignored his Magic Eight Ball for the first seven months following the launch of his first product. The results were devastating for his business. He was spending more money than he was making, and tax season nearly killed him. Michael wised up and buckled down. He taught himself the bookkeeping basics and got control of his finances. Now he is on track to profit over $150,000 in 2016, and he is a total bookkeeping ninja.

His story is full of great takeaways for Amazon sellers. Check it out…


Michael’s Journey from Financial Mismanager to Accounting Ninja



Shane: How long have you been selling on Amazon?

Michael: I just hit my 1 year anniversary! It has been a crazy ride, but I love it. My FBA business has given me the freedom to live the life I always wanted. I made the jump to full-time Amazon seller about 4 months ago. Now I work from home and prioritize the things that are important to me. Friends, family, travel – the kind of stuff that I did not have much time for.


Shane: What motivated you to start selling on Amazon?

Michael: Well, I wanted to a make a change with my life. Sounds cliche, but it is true. After college, I got a typical corporate job in marketing. I would commute 45 minutes to work every morning through horrendous traffic in order to get to my cubicle and look busy. I was more focused on impressing my manager than doing good work.

The promotions were never that fulfilling because I had no passion for the work. And, it was frustrating to see all the money in the corporation flow up to the executive management, or out to the stockholders. Those of us doing all the work were undercompensated for our efforts. That realization is what kick-started my interested in entrepreneurship.

One of my colleagues at work was always talking about becoming an entrepreneur. I guess that talk is common among dissatisfied corporate employees. He told me about a podcast episode with Greg Mercer and how we could both get rich producing products in China and selling them on internet platforms in the United States.

That was the start of my FBA journey. I started reading everything I could about selling on Amazon. My goal was to make enough money selling so that I could eventually quit my job. I am proud to say that I achieved that goal within 10 months.


Shane: How much money are you making on Amazon, if you do not mind me asking?

Michael: I do not mind at all. My average profit per month over the past 4 months has been $15,500. By the way, I think Amazon sellers should always know the answer to that question. That is something I believe strongly in.

I am apart of two FBA mastermind groups, and we are always open about our numbers. Being honest about our businesses helps motivate each other and it keeps us accountable to the finances because we know it will be the first topic discussed when we get together. I highly recommend mastermind groups.

Anyways, I spend a lot of time and effort managing my books. To me, it is the most important part of running a successful Amazon business.


Shane: Have you always been an accounting nerd? ha

Michael: NO WAY! When I started selling on Amazon I had no idea what a Profit and Loss Statement was. I took Accounting 101 to get my business degree in college, but that was ten plus years ago. It did not seem important to me back then, so I hardly paid attention in class.

When I first started selling on Amazon, accounting was a completely foreign topic. I do not think people in my same situation should be deterred from starting a business. But it is critical to train yourself on the accounting basics once you decide to become an Amazon seller.


Shane: What motivated you to get good at bookkeeping?

Michael: This is a pretty embarrasing story. To be honest, it took total FBA failure before I finally started to prioritize accounting. As I said earlier, I placed zero emphasis on learning how to keep the books for my brand new Amazon business.

I had two products on the market and they were selling really well. Each product was selling around 500 units per month, so 1000 total units sold per month. I thought I was golden.

I would log in to Seller Central a few times a day and check daily sales. It was such a rush. I loved seeing 20 new product sales. When sales dropped below 10 units per day for one of my products, I would run another promotional campaign and boost PPC bids on my keywords. It worked like a charm. Within a few days, I would be back to 20 product sales per day.

Seller Central Dashboard

My supplier started telling me about other various products they could make for me, so I started production on those new products too. Why not? Everything went on the company credit card. I was spending money like crazy, but I did not see a problem since I was getting so many daily sales.

The 2016 tax season is when I got my big wakeup call. I remember it like it was yesterday. At the time, I was getting serious about quitting my marketing job, so I had decided to try out the home office thing. I had built a fancy home office and I was sitting in my brand new $500 ergonomic chair and filing on Turbo Tax.

The frantic sweat started within 10 minutes of logging into Turbo Tax. The realization hit me hard. I had no idea how much money I was actually taking home! I started looking through old credit card statements and comparing expenses numbers with Seller Central data. It was completely overwhelming.

That was the moment that I knew something needed to change. I knew I needed help, so I found a mastermind group in my area and they gave me some great advice. I filed for a tax extension, canceled all of the outstanding orders with my supplier, and froze my Pay Per Click campaigns. It was time to learn accounting.


Shane: So how did you become a bookkeeping ninja?

Michael: I focused on two things. Education came first, then calculating and interpreting my financial reports.


To dig myself out of the hole, I embraced Amazon bookkeeping with the same enthusiasm I had for learning the FBA process back when I started. I was reading blogs about taxes, and studying simple books about business finance for small businesses. I become an internet expert in just a few weeks.

The most important thing I taught myself was how to read a Profit and Loss Statement and Balance Sheet. Boy, are those critical elements for running a small business.

Financial Statements

Next, it was time to put my learning into practice. I built a janky excel spreadsheet to calculate expenses against sales. This was the biggest challenge of my accounting journey because the data inside Seller Central is hard to collect and interpret. My spreadsheet was far from perfect, but it opened my eyes to how poorly I was running my business.

[Example spreadsheet from Fetcher’s free Profit Margin Calculator. Add your email to the popup box in the right margin and we’ll send you the complete version for free]screen-shot-2016-09-09-at-5-01-00-pm

Shane: How do you manage your finances now?

Michael: I turned the corner when I started using an excel spreadsheet that functioned as a light balance sheet and profit and loss statement. The problem was that I was spending upwards of 5 hours per week running manual calculations and parsing together various reports from Seller Central. Very frustrating.

Now I use Fetcher to do all of that for me. It saves me those 5 hours per week, and I have greater confidence in the data. But, just because I have a bookkeeping software to calculate the numbers does not mean I can go back to being the old Michael. Much of my time is spent interpreting the numbers and making informed decisions about my business.


Shane: Thanks for the Fetcher shoutout. Whats features in Fetcher have been the most helpful for you?

Michael: I love the Costs pie chart on the dashboard because it gives me the ability to compare my various costs. For example, here I can see that my Pay Per Click spend only makes up 2% of my total costs in August. Maybe I can afford to let out the reigns a bit? That is the kind of stuff I like to spend my time thinking about.

Screen Shot 2016-09-08 at 5.12.11 PM

The Product Breakdown page is another place where I really get a lot of value. Trying to split out Seller Central data, by product, in an excel spreadsheet, was nearly impossible. Here I can see exactly how an individual product is performing, and I can compare products against each other to prioritize my time and financial investments.

Screen Shot 2016-09-08 at 5.17.23 PM

Shane: Any parting advice, or best practices for Amazon sellers who want to get better on finances?

Michael: First of all, if I was able to get good at accounting stuff, anyone can. It just takes some effort. I have a few guiding financial principles that I now follow religiously.

1. Strict Fiscal Discipline:

I have learned that successful businesspeople use budgets and realistic sales projections to run their businesses. By the 15th of the month, they know how well their business performed financially in the prior month.  They do not spend money unless it is intentionally allocated, and fits into the balance sheet.

2. Dedicate 25% of Time to the Finances:

As a general rule of thumb, I spend about 25% of my time in the finances. Obviously, I am still focused on growing my business. That means exploring product niches, optimizing my listing, and driving effective marketing campaigns. But, I can not forget how all of those efforts relate to the finances. That is why I set aside time every week to evaluate my Profit and Loss and Balance Sheet.


A big thank you goes out to Michael for participating in this interview and sharing the financial mishaps from his personal experience. I was really inspired by how open Michael is about his past failures and the direction of his business. Hopefully his story is helpful for you, wherever you are in your FBA journey.


Author: Shane Stinemetz

Jiu Jitsu fighter, Sci-Fi lover and Digital Nomad. After becoming an FBA seller, Shane left the tech scene in Silicon Valley to work on Fetcher and travel around the world.

3 Comments on “Seller Profile: “Accounting Saved My Amazon FBA Business””

  1. Looks good. I live in Canada but am happy doing all my calculations in US dollars. When it comes to my tax returns I’ll just convert back. I’m assuming that people just insert the cost of goods plus any costs for labelling, prepping, storage, marketing–and these are probably easy to sort on a per product basis. I am wondering if it would be possible to have other costs assigned on a pro rata basis to products. So if you had costs that were not directly related to a specific product such as website costs or interest on loans or help with your tax return, could the program, based on the cost of goods, simply assign these other costs to a product. For example, if I had spent $1,000 taking courses and $1,000 on accounting and I had two products with total costs of $1,500 and $2,500 could the program assign 37.5% of the $2000 in cost to the product that cost $1,500? I know that it could get complicated as the cost of goods will change over a year–or example, I could order $2,000 of a product in September and then another $1,000 of the same product in December as I restocked. Also wondered how you would deal with costs from year to year. Marketing cost are going to go down after launch so it could look as though a product that was launched in the previous year was really successful but not so much in the launch year. The other thing I wondered about was setting it to your own financial year end. I don’t suppose the program would account for inventory carried over? I know this is probably asking too much.

    1. Great questions, Heather!

      1) I use Fetcher to track all of the expenses with my Amazon products. Fetcher has the ability to track what we call “Other Costs” (labeling and packaging materials etc) and they can be assigned to a specific ASIN or they can be tracked as general business expenses which will get rolled into your total business profitability calculation. Personally, I wouldn’t want to assign expenses like loans, tax professionals, courses etc to my COGS since those expenses have no impact on the actual cost of producing and shipping my products. I would choose to track those costs in my overall profit, but Fetcher gives you the choice. However, labeling and packaging materials should be assigned to a specific ASIN. Fetcher can’t prorate the costs between multiple products at this point, but you can do the easily math and enter the prorated dollar amount manually in Fetcher. Does that make sense?

      2) It’s true that costs and overall profitability shift from month to month, especially with new product launches. But, I don’t think you’ll find new product launches to have a tremendous negative impact on profitability from year to year (as you reference). The way I compare products and performance over time is with the Fetcher P&L page. It’s an easy way to compare months or years. For me, as long as profitability is on track, I’m a happy guy! It’s ok if profitability takes a bit of hit during launch. That’s the price of doing business!

      3) For inventory, it’s true that Fetcher doesn’t account for the value of inventory over time. is the best resource I know for handling inventory issues. One tip though – check out my earlier post on how to use a Balance Sheet and Cash Flow Statement to account for the value of inventory

      Hope this helps, Heather.

      1. Hello ,

        we relaly liek you r solution but we are a UK seller , does fetcher work with the UK (if not) , do you have plans to launch a UK version ?

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