Skip to main content Skip to search

News

eCommerce Businesses: Gross Margins Can Make Or Break Your Business

Gross profit margin is a key metric for eCommerce business owners to manage.

Do you know your gross profit margin per product, sales channel and customer?

This can make or break your business.

Unfortunately, I know most of you will not have these key KPI’s integrated into your accounting and financial system.

Gross profit margin is critical because it immediately gives you an overview of how your current revenue is impacting the rest of your business, and whether it is doing so at a profit or a loss.

This has a far-reaching impact on your strategic and tactical options for how to run your business.

Yes, revenue matters but it is not what you make that matters it is what you keep.

Gross margin should not be confused with net margin which includes your overhead costs.

Gross margin tells you whether your e-commerce store is making a profit on each product that you sell.

Now, if you make a gross profit on each product, but you have a negative net profit, that means that the overhead and marketing costs are too high.

That also means that if you scale your revenue and your customer base, your overhead costs would grow less and you would grow into profitability.

What does it matter to have a business doing $1M, $5M or $10M if you have razor thin profit margins?

If you’re ready to take the next step in scaling your eCommerce business, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Consider the below example:

Company A:

Monthly Revenue: $100,000

Gross Profit Margin: 15%

Gross Profit: $15,000

Company B:

Monthly Revenue: $30,000

Gross Profit Margin: 50%

Gross Profit: $15,000

In this example Company A and Company B make the same profit but Company B does so with only 30% of the revenue of Company A.

👇 I recorded a video going over this below

The key is first understanding and monitoring your gross profit per product, sales channel and customers.

Then you can take this data and benchmark it against your industry.

Finally, we can focus on strategies to improve this significantly.

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Products, Customers AND Sales Channels

One consistent trend that I see is that business owners do not focus on their accounting function until it is too late.

It is unbelievable how many serious business owners do not consistently and frequently review their financials.

Even more frequently, eCommerce business owners are not tracking their accounting data properly to make key financial decision.

This is step number 1 in scaling your eCommerce business.

You need to understand your income and expenses per each product, customer, and sales channel that you sell.

Additionally, you need to properly track your variable costs separately including freight, import, manufacturing costs, packaging and shipping.

We improved one of our recent new clients accounting systems to track this level of granular financial detail in their financial statements.  

This allowed us to then benchmark their key financial data and make improvements in their pricing which lead to an increase of 5.2% or $52,000.

👇 I recorded a video going over this below

Are you managing this properly?

Or are you overlooking your finances?

If you fall into this category check your books.

Are they reconciled?

Do they balance?

Is your financial. data detailed, clear, and actionable?

If the answer is no, this is a serious problem.

At Camuso CPA, we partner with your company to not only handle your basic accounting but to provide ACTIONABLE and PROACTIVE financial insights that improve your business and increase your profits.

If you’re ready to take the next step in scaling your eCommerce business, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Increase Profits, Improve Cash Flows, Effectively Manage Inventory

The truth is most accountants are just a cost.

The cost of compliance with taxes.

The cost of getting the books done.

But when you work with me.

It’s not just about compliance.

👇 I recorded a video going over this below

It is about increasing profits, improving cash flows and effectively managing your inventory.

You need an eCommerce CFO on your team to effectively manage these processes on an ongoing basis if you have serious goals to scale your eCommerce business..

Whether it’s improving your gross margin through pricing strategies based on key performance indicators.

Or improving your cash flow and inventory management with effective forecasting.

Or customizing your accounting process to effectively track income, expenses and key performance indicators on a per product, customer or sales channel basis.

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Increase Average Order Value with Top 5 Strategies

An effective method for increasing your profit margins is increasing your average order value.

Average order value is the average dollar amount a customer spends per transaction in your store.

You can calculate average order value by using a simple formula: total revenue / number of orders = average order value.

To increase your average order value, you’ll need to convince customers to add more items, or more expensive items, to their cart.

There are many different strategies that can be used to achieve this.

👇 I recorded a video going over this below

I included an overview of 5 strategies below.

  1. Add product recommendations to product and checkout pages
  2. Upsell or cross sell complementary products
  3. Provide order minimum incentives
  4. Create product bundles or packages
  5. Run deals and specials

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Why Customer Lifetime Value Can Kill Your eCommerce Business (Use This Metric Instead)

Customer lifetime value is an important metric for eCommerce companies to understand and measure.

Customer lifetime value is an average of how much a customer is worth to you over their lifetime.

What do you do if your business has only been operating for a short time period?

6 months?

1 year?

👇 I recorded a video going over this below

Customer lifetime value will be useless.

30, 60, 90-day customer values are a much more important metric for your eCommerce business.

Factors including your SKU set, your average consumption rate, and your cash flow will dictate the specific time periods you should account for.

The key is to choose a time window that you can impact and that you can afford to wait for from a cash flow perspective.

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

eCommerce Growth Equation – Do The Math

As your business grows, it becomes more important to monitor and analyze your data.

This one equation simplifies your eCommerce financials and allows you to cut through uncertainty so that you can prioritize key financial decisions.

Visitors x Conversion Rate x AOV  = Revenue

By focusing on these three variables, you can you assess every way to increase revenue for your eCommerce business.

The key is acting with this information.

👇 I recorded a video going over this below

Identifying and implementing key financial decisions into your business that increase your bottom line.

The first key step is ensuring that we have clear and actionable data to base our decision on and to calculate our formula.

If these metrics are inaccurate you will make terrible financial decisions.

This requires a proper accounting system.

Then we need to implement financial and business strategies combined with effective marketing campaigns that increase your bottom line.

We need to effectively analyze and interpret this data so that we can make the necessary changes when it comes to pricing, inventory management or other aspects of your operations.

This has to be done on an ongoing basis, at least monthly.

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Markup v. Margin Cautionary Financial Lesson for eCommerce Businesses

Mismanaging margin and markup can lead to selling products at prices that are substantially too high or low, resulting in lost sales or lost profits.

Margin is sales price minus the cost of goods sold.

Below is a breakdown of each profit margin formula.

Gross Profit Margin = Gross Profit / Revenue x 100

Operating Profit Margin = Operating Profit / Revenue x 100

Net Profit Margin = Net Income / Revenue x 100arkup is the amount by which the cost of a product is increased to determine a selling price.

👇 I recorded a video going over this below

To determine a selling price, the figure you should use is markup.

When you’re analyzing your financial performance however, it’s typically better to use margins.

Do not confuse markups and margins at the cost of your profits.

We’re here to partner with you to take your company to the next level!

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

>> Click here to apply for your Strategy Session Now <<

Read more

Eliminate Your Biggest eCommerce Expense!

Taxes are usually the biggest or one of the biggest expenses for businesses.

As a result, a properly designed and implemented tax plan can be one of your most profitable investments.

You may often hear myself or other CPA’s speaking about tax planning.

What does that mean?

Tax planning is focused on organizing your business, investments and life to pay the least amount of taxes as legally possible in the FUTURE.

Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order. 


👇I recorded a video going over this. 

Many people believe they are getting tax planning when they are getting is tax preparation.

When you get your tax return prepared your CPA is focused on accurately and timely fling your tax return based on your HISTORICAL information.

Tax Planning is a structured process designed to protect your assets and minimize your taxes which focuses on:

✔️ Legal Entity Structure 
✔️ Accounting Method Optimization 
✔️ Sales Tax and Other Compliance Assessments 
✔️Deductions 
✔️ Retirement 
✔️ Insurance 
✔️ Legal Tax Loopholes 
✔️ Recent regulatory change 
✔️ Niche specific strategies 
✔️ Advanced planning strategies 

Do not leave money on the table.

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order.

Read more

Ecommerce Business Owners: How Often Do You Speak To Your CPA?

One of the most important steps in maintaining a tax strategy is maintaining an active dialogue with your CPA.

Does your CPA have a structured process in place to ensure you are communicating properly throughout the entire year?

It is not only imperative to design and implement a tax plan for your eCommerce business.

You need to speak with your CPA regularly.

Why?

1.     Your business is constantly changing
2.     Your industry is constantly changing
3.     The tax laws are constantly changing.


Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order. 

👇I recorded a video going over this. 

The tax code is your map to wealth creation.

It shows you how to reduce your taxes and amount huge amounts of cash flow.

Leverage your CPA’s knowledge to open a whole new world to what is legally tax deductible. 

Understanding exactly what you need to do to legally claim your deductions means that even if you are audited, you have followed the rules and minimized the likelihood of having any audit adjustments. 

Do not overpay in taxes or expose yourself to unnecessary risks – EVERY TAX YEAR!

We cover the following aspects of your business and more during the tax planning process:

✔️ Legal Entity Structure 
✔️ Accounting Method Optimization 
✔️ Sales Tax and Other Compliance Assessments 
✔️Deductions 
✔️ Retirement 
✔️ Insurance 
✔️ Legal Tax Loopholes 
✔️ Recent regulatory change 
✔️ Niche specific strategies 
✔️ Advanced planning strategies 

Do not leave money on the table.

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order.

Read more

Politicians Think About Taxes Daily! Why eCommerce Businesses Are Losing.

The majority of the tax law is actually intended to reduce your taxes – not increase it.

If you follow the rules, you should enjoy legal tax deductions and be well-prepared for an audit.

These are the rules and legislation that we see our politicians arguing about on a daily basis.

They focus on this daily because this will shape our country’s future.

But also, your business’s future!

The challenge most people have with this is they don’t know the rules.

Most also have no interest in reading the tax law to learn them.

This is why you need a great CPA on your team.

More importantly a CPA that is focused on proactively planning with you for taxes.

You need a plan, do not be reactive when you go to file this March or April.

The tax law is a series of stimulus packages for business owners.

The government wants to provide jobs and housing. 

To encourage others to do this for them, the government provides tremendous tax benefits to those who provide jobs (business owners) and those who provide housing.

Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order. 


👇I recorded a video going over this. 

We cover the following aspects of your business and more during the tax planning process:

✔️ Legal Entity Structure 
✔️ Accounting Method Optimization 
✔️ Sales Tax and Other Compliance Assessments 
✔️Deductions 
✔️ Retirement 
✔️ Insurance 
✔️ Legal Tax Loopholes 
✔️ Recent regulatory change 
✔️ Niche specific strategies 
✔️ Advanced planning strategies 

Do not leave money on the table.

If you’re ready to take the next step, book your 1-on-1 meeting with me TODAY!

Set up a time to speak directly with me here for a free strategy session to get your tax planning process in order.

Read more