On today’s episode we want to help you save a ton of money if you’re an Amazon seller. If you’re currently a seller on the platform, that lump sum deposit from Amazon sends you contains all of your revenue, your fees, and doesn’t tell you much else. So how do we make sense of it?
Ashley Schroder of A2X Accounting is here to help us out.
- The right way to pay for Amazon advertising
- Fees that could be costing you more than you think
- Clear explanation of the Washington sales tax debacle
Andrew: Welcome to “The eCommerceFuel Podcast,” the show dedicated to helping high six and seven-figure entrepreneurs build amazing online companies and incredible lives. I’m your host and fellow eCommerce entrepreneur, Andrew Youderian.
Hey guys, Andrew here, and welcome to The eCommerceFuel Podcast. Thanks so much, for tuning in to the show today. On today’s program, we are talking about accounting. Don’t leave, especially if you’re an Amazon seller, because while this may not be the most riveting topic in the world, there’s a good chance that it can save you a lot of money, especially if you, on Amazon, are really kind of ignoring the fact that you get a lump sum deposit from Amazon that contains all of your revenue, net all of your fees, and doesn’t tell you anything apart from the number that you probably post your income statement.
So if that sounds like you, if you know you’re not doing your accounting on Amazon as well as you should, stick around. I’m talking with Ashley Schroder from a2xaccounting.com. He’s the founder of that tool that makes it a lot easier to understand what that number is to break out the deposits, and all the different line items in there, and account for them. We talk about just the implications of not doing Amazon accounting correctly, how to think about doing it better and with more transparency. We get into sales tax on Amazon, which is a whole can of worms.
Anyway, hopefully, it’ll be insightful, and if nothing else, give you the push you need to get your Amazon accounting in order, because I would venture to guess most merchants probably are not doing it justice.
So, before we dive into that though, I wanna quickly thank our two fantastic sponsors. First, Liquid Web, who offers world-class web hosting for your WooCommerce store. Four reasons you should seriously think about these guys, so who I use for, not just my WooCommerce store, but all of my hosting. Incredibly highly elastic platform. If you get hit with a massive traffic spike, you’re gonna stay online, but it also of course, pairs with Woo, which you can customize to your needs. It’s a rare blend.
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All right, thank you, sponsors. And with that being said, let’s go ahead and do a deep dive on geeking out on Amazon accounting, with Ashley.
Ashley Will Be Safe If There’s A Nuclear War
Andrew:So, Ashley, I can’t help but ask right out of the gates, do you realize that New Zealand is the place that all of these Silicon Valley tech billionaires are starting to create their end of the world compounds? Because New Zealand is supposedly, the perfect place if stuff hits the fan on a global scale, to be able to isolate yourself and live comfortably, and away from all the pandemics and nuclear war. Have you heard of all this?
Ashley: Yes. In fact, it’s been a little controversial down here because Peter Thiel is one of those billionaires, and he, under some dubious circumstances, got granted citizenship and has been kind of an investigator for a reporter down here who has been patrolling through the records trying to figure it all out. It’s one of those things where like normally, you know, you have to live in New Zealand for years and years before you can become a citizen, and like Peter Thiel came down here for, I don’t know, a few days or something, and then he managed to become a citizen, and sort of bring a big question mark of how this happened.
Yes, it’s been making headlines on and off for the last probably 12 months, the story of how that all came about.
The eCommerce Scene in NZ
Andrew: Man, well, congrats on being set up. You’re in a prime location, of course. You’re in Auckland. And what about the eCommerce scene in New Zealand? I believe Australia, Amazon just kind of opened up full tilt in Australia this last year or late 2017 or early 2018. What’s the eCommerce scene look like in New Zealand? Is Amazon even in New Zealand? Did that roll over with the Amazon launch? Is there a pretty vibrant eCommerce scene?
Are there a lot of sellers selling locally? Is the market not big enough to make it sell, to make it work, or do you have many niche sellers online? I have no idea.
I’d love to hear what, kind of what stage you guys are at in the eCommerce maturity.
Ashley: So, we don’t have Amazon here. And we are a relatively small market, so I think the recent launch of Amazon in Australia will impact on New Zealand. I’m sure a lot of people will start shopping on amazon.com.au from here. The kind of independent store scene is, again, because the market is small, it’s not huge eCommerce stores.
I was for a long time kind of involved in the Magento meet-up here in Oakland and you see, you know, successful stores, but not by the standards of the U.S. successful ecommerce store.
So, I think, you know, I think just because of our market size, we’re not gonna ever create the, you know, the next, I don’t know, like any of these really large eCommerce businesses, just certainly there’s not a market for it. But there is a, you know, there is a pretty good ecosystem of developers down here. The meet up was always, you know, pretty well attended by developers, agencies, store owners.
So, yeah, I think it’s gonna be interesting over the next couple of years to see how the introduction of Amazon in the region changes things, but at this stage, you know, it’s mostly smaller stores selling locally.
The Black Box of Amazon Accounting
Andrew: Very cool. So, let’s move a little bit to Amazon, Amazon accounting, of course that’s kind of one of your areas of expertise with A2X. You really understand that world. I have to make a disclaimer out of the gates. I’m not an Amazon power seller by any means. I have an Amazon account, I sell on Amazon, but it’s a relatively small amount of product. But with my experience, my kind of Amazon experience, hopefully, I would be a little more sophisticated maybe if I was selling more.
But I think this is maybe something, an experience that even medium, to even some large sellers have, as I see money coming from Amazon and I get a deposit in my bank account, and I have no idea what it’s for. It’s kind of like a black box, you know. Is that the reason you guys started A2X? And if so, like can you give us a sense of maybe by default, without going into customizing things, how Amazon treats deposits and accounting, just at a high level?
Ashley: Yeah. So, pretty much, that is exactly why we exist. So, that black box, that kind of unknown payment, is what a lot of sellers really struggle with. And so we kind of unpack all of the transactions that go into their payment and figure out what they all are and when they happened, and we send that into your accounting system in a way that lets you kinda track all the different, you know, sales, and revenue, expenses, fees, everything that kind of goes in there.
So, pre-A2X, or typically pre having an accountant involved, a lot of sellers do really struggle with that. I mean, you can do the kind of number crunching yourself in a spreadsheet, but it’s pretty painful, kind of horrible. It’s so, you know, pivoting and knocking around in spreadsheets, really. And you have to do it for every time they pay you, which can be every two weeks. So if you’re doing several channels, yeah, it can be a dozen times a month that you’re having to do this, you know, really horrible menial process.
But, you know, to answer your question, I think a lot of sellers are in that exact position where they don’t necessarily know exactly how much Amazon is charging them, or how much their sales are, or their margins, or anything. They’re really just getting a neat pay out, and they’re calling it profit and putting it in the bank.
So, that’s, you know, that’s sort of one of the big things that A2X helps solve, is figuring out how much you’re actually making on Amazon and how much they’re charging you in fees and those various other things, so that you can kind of track it more closely.
The Default Amazon Lump Payment
Andrew: Is there anything that Amazon does not? So, you think about Amazon, there’s so many things, you could have, you know, FBA storage fees, long term storage fees, of course, the commission you pay to the sales commission, FBA shipping costs. You’ve got may be, you know, return credits. Maybe you have, you know, all these different things that you’re advertising that you get charged for, or that you’re running on Amazon.
Is the default for Amazon to just give one deposit per, you know, every two-week period and include everything in that one deposit? Is that their default? And if it is, can you go in, and how much ability do they give you to break that into multiple deposits?
For example, I know that like in my Amazon advertising console, there is the ability to be able to charge my advertising fees to a credit card versus net them out of my revenue, which makes my accounting easier. So that’s just one thing, but is everything by default lumped into one? And how much can you go in and change the configuration to be able, hopefully, give you a little bit more transparency with the deposits and charges that they do?
Ashley: You know, the advertising one is the only one I know of where you get to choose, that, you know, you can choose to not have it go into your settlement and have it on a credit card. So, in general, the default is definitely two weeks, everything lumped into one, including like, I don’t know if you’ve ever used Amazon Capital, like their lending services, but all of that comes in through settlements as well.
So, I mean, that’s another huge source of confusion, is if you draw a loan down on Amazon and your settlement for that period looks amazing because you suddenly get this big lump sum of cash but it’s not a profit obviously, right? It’s a loan. So yeah, it’s another example where it’s really important to kind of understand what the numbers are. But yeah, certainly the default is every two weeks, everything lumped together.
And the option around advertising is relatively new, like being able to include in the settlement. I think sometime last year they introduced that. I was actually, can I ask you, do you do the including settlement or pay on credit card?
Andrew: In terms of the advertising I do on Amazon?
Nuances With Paying for Amazon Ads
Andrew: Yeah, right now I do it on a credit card, just primarily so that I have a clear picture of the expenses and I can put them on the right line items on my P&L, but I mean, also because it’s nice to get some of those miles. But mostly because just transparency on the accounting.
Ashley: Yeah, so I think that’s the right way to do it, because they don’t charge you more for the advertising, so you’re basically just getting free miles. And, you know, sometimes it can be five or six figures, right? Like, you could be getting a lot of cash back rewards or MI rewards, whatever your credit card gives you, but you get longer to pay for it, and you get rewards. It seems like a no-brainer to me to put it through credit card.
So, I’m always a little bit confused why people would have it come out of the settlement instead when they’re having to pay for the two weeks instead of the next month.
Andrew: I didn’t even know it was an option until I happened to stumble across it and said, “Wow, I feel like an idiot. I should have done this months ago.”
Ashley: So you’ve probably encountered someone and like are you sure you wanna be doing this out of your settlement deposit? You could be racking up some serious miles, go to Bahamas or something, once a year.
How Amazon Determines What Goes Into Your Account
Andrew: Yeah. How does Amazon treat the revenue? Obviously, you know, there’s that lump sum, but when they’re thinking through that, if you make a sale on Amazon and you get that revenue generated, is it always a two-week ruling period? Do they take, let’s say your sales, or the net sales after fees that you generate from let’s say, the 1st the 15th through the month, and then pay those out on the 30th? What is the schedule that Amazon…how does that internally work, in terms of how they calculate what they actually put in your bank account?
Ashley: Yeah. It’s almost always two weeks. So, some early sellers on the platform have different cycles, and some European sellers can have their payments on demand, so they can have shorter settlement periods. But the settlement periods are basically always all of the orders and revenue during that period when the settlement’s open, minus all of the fees and expenses, and other charges in that period. That gets you your net total, and that net total is what gets paid to you at the end of that period, and it’s typically, two weeks.
So, paying for things about Amazon as far as accounting goes, is they don’t pay any attention to month ends, so you can end up with that two-week period running, you know, 10 days of January, four days of February, and so then if you booked the payment in February, like February looked really good, right? Very profitable, and it makes January look really bad, but in actual fact, if you break the transactions out and put them in the right amounts when they happened, you end up with a much more even smooth distribution of your revenue and expenses.
The Default for Deductions
Andrew: Yeah. Amazon, how do they do that? Do they have a, so when you make a sale, let’s say I make a sale of a product on Monday, is Amazon going to credit that sale in their reporting form that…I’m guessing they would credit for Monday, for the actual inventory when you’re trying to figure out your cost of goods sold, in that reporting, does it default to when you sell the item when they deduct the inventory, or does it default to when the item actually ships? Because sometimes it’s same day, a lot of times, it’s different days.
And like you mentioned, on different months, that can mess up. So, how do they, especially on the inventory side, when is the default for deducting it?
Ashley: So, it varies a lot. There’s sort of several phases through an order, so they sort of recognize an order early in the process when a customer places it, and then the next steps can be almost instant or quite quickly afterwards, or they can take sometimes, days or I’ve even seen situations where it can take weeks.
So, you know, the order places, some time later that gets confirmed, I guess the payment clears, and then sometime after that, it ships. And so those three things don’t always happen exactly at the same time, and so deciding when to recognize an order can be slightly tricky. I think in general when you talk to accountants, it’s mostly that you choose one and you just stick with it. So, you know, if you’re gonna use order dates, then you just use order dates all the time.
So, on A2X, because everything’s settlement-based, we’re looking at the date when the order posts into the settlement, which is I think pretty much when it gets. So, that period between the order getting placed and paid is normally pretty quick, but there are different examples where it can be days. And I think without knowing for sure what’s going on in that period, I think sometimes it can be things like fraud checks on the credit card.
Sometimes I guess if you place a high risk order, or the credit card gets flagged as high risk, maybe the call center is gonna call you and, you know, get you to send a photocopy of driver’s license or something. You know, those kind of processes start to kick in.
So, yeah, the kind of recognition of an order can vary, depending on which timing you use. I think as long as you choose one and stick with it, it’s gonna be fine. So, understanding that it’s not always gonna be all on the exact same day is really important.
Fees To Watch Out For
Andrew: Yeah. You mentioned stuff like fraud check fees. Some of the things we’re talking about are really obvious, you know, like your cost of goods sold on your inventory side, your FBA fees, etc. What are some of the fees or charges, that if you didn’t take the time to really dive into those the settlement reports and break out, what are some of the fees that you wouldn’t notice as much and you might let slip by for months or years and really add up going unnoticed, that you wouldn’t think about, that aren’t quite as obvious? What kind of fees have you seen in there that people wish for that bill?
Ashley: So, some of the ones that people often will forget about, especially in the kinda pricing models or deciding what to sell for, like return fees. So, you know, you sell the product, you should pay to ship it out, and then if the customer returns it to FBA, you get charged the return handling fee. And so I think during that, understanding what your return rights are for different products, and then knowing that those are gonna have a return handling costs and allowing for that in your pricing and your margins is pretty important.
And I think a lot of people don’t notice that happening, so that’s probably why one.
The long term storage fees are a really big number for a lot of sellers, and so, you know, having those out on a separate line in your profit and loss statement is a pretty good way to make sure you’re keeping an eye on it. I mean, you get the email warnings from Amazon, and it’s no secret that they’re coming, but I think in terms of profitability, being able to see how those fees have impacted your bottom line at the end of the year is really important.
There’s a lot of other fees that seem to be different, based on different categories. Obviously, commissions are different, but certain categories have other fees, like, I don’t know if you’ve ever seen fiscal variable closing fees. I think it mainly applies to books, and music, and DVDs. But basically, just like variable commission rights at the end of, once you make a sale.
So, yeah, there’s a few, depending on the different categories and things, there are a few fees that are worth keeping an eye on. I’m trying to think what other ones would be worth, you know, pulling out separately. Obviously, taxes that come through the settlement. You know, that’s a whole separate discussion, but pulling those out and treating them separately in your accounting is always a pretty good idea as well.
Andrew: Yeah. So, you’re taking about sales tax, right?
The Botched Sales Tax Issue
Ashley: Yeah. So, in the U.S. you’ve got sales tax, in U.K. and Europe you’re got like VAT, and so varying sort of scenarios as far as Amazon and sales tax. It’s actually, it’s an extremely messy area of life for an Amazon seller, and I think it’s probably gonna get a lot messier of an experience as well as all the states are sort of tracking down or getting more aware of what’s going on with FBA and nexus and things.
Andrew: Yeah. There was something else I was gonna ask you, but is the tax situation in places, you know, like Australia, probably Europe, somewhere established because it’s been there much longer, is the tax situation in, you know, outside the U.S. as much of a mess as it is inside the U.S., or are we unique here in the States for having totally botched the sales tax issue on Amazon?
Ashley: No, I have to say your tax system is kinda nuts, but it really is at a knots. So, in New Zealand, we just have one tax rate, and everybody pays. It’s called Goods and Services Tax. So, if you’re a consumer and you go buy, I don’t know, a book for $10, it’s actually gonna be extra 15%, so it’s gonna be $11.50. That $11.50 gets paid by the seller to the government as GST, and that’s pretty much how it works.
The only slight difference to that is if you’re a business and you go and buy like a wheelbarrow because you need it for your business, then at the end of the year when you’re paying your GST, you get to claim back the GST that you paid, you know, from business expenses.
So, that one paragraph is pretty much the tax code. I mean, there’s a few things that are different, but that’s pretty much it. So, the situation in the U.S. is just kind of always boggles my mind. I mean, we…so, we don’t claim at all to be kinda tax advisors, or when it comes to kind of tax questions, we typically say you need to talk to an accountant, or tax advisor, or an expert at sales tax, because it’s so complicated.
But whenever I hear about what kind of things sellers in the U.S. have to deal with, it always just kind of amazes me that, I guess that you’re as entrepreneurial as you are over there. It’s kind of an amazing, it amazes me that despite all of that extra bureaucracy in compliance, you manage to be, you know, so entrepreneurial.
How To Know If You’re Collecting Sales Tax
Andrew: Fortunately, I’d say the Amazon tax situation is probably on the extreme end of the dysfunction with some of our tax code issues and regulation, thankfully. But it’s, yeah, it’s a mess. Thinking through that for an Amazon merchant, obviously, I think, you know, the biggest risk for somebody would be not breaking out the sales tax. Because, Amazon, correct me if I’m wrong, but Amazon will collect the sales tax for you in some cases and then submit it to you as part of that deposit.
So you could potentially, if you’re not paying attention to look at that, see that deposit, not realize you’re collecting sales tax and then at the end of a year period, not have accounted for that, but then realize you have the sales tax payable due that you’ve already had but you just haven’t accounted for it or planned for. Is that a situation that…Am I thinking about that right, the way Amazon deals with that in the states?
Ashley: Yeah, pretty much. So, you can tell Amazon what states you want to collect or charge tax in, and then they will, you know, when a buyer comes along that’s trying to ship to that state, they’ll figure out the right tax rate based on the city or zip code, or whatever, and charge that and then they will pay that to you as part of your settlement.
So, you’re right. If you’re not aware of the amounts, if you’re not kind of tracking them, you can end up with a situation where you might think that payment coming to you each, you know, every two weeks is your money, but actually, it’s, you know, a decent part of it can actually be not, strictly speaking, your money. You know, it’s kind of, it’s money that’s been paid you, but you’ve got to turn around and pay it to, I don’t know, the state of California, or the state of Texas, wherever you’ve collected it for.
I think that catches people out definitely, not accounting for that properly. And then also, you know, the more recent thing of where to register, like which states you have Nexus on, and should actually be charging tax in. I won’t claim to have any sort of expert advice on that, but I know it’s an area that seems to be, you know, I was at a cross fit show last year and I’d seen Michael Fleming from Poster Johnson talking about all the various kind of edge cases around, you know, where FBA creates and doesn’t create a nexus.
It seems to me like a real minefield for sellers.
Things To Be Aware Of As A Seller
Andrew: Any other final thoughts in terms of, you know, we covered a lot of things we should be breaking out the way Amazon does things, some of the problems if you’re not breaking out that lump settlement once or twice a month. Any other things Amazon sellers should really be thinking about on an accounting-wise basis that either can trip them up, or a lot of people don’t do that they should be doing?
Ashley: One thing on the tax thing, and this is new as of January this year, you would have probably seen headlines around how Amazon is now are collecting Washington State sales tax for everybody, whether they’ve registered there or not. Have you seen headlines about that?
Andrew: Yeah, I have, yes.
Ashley: So, I think there’s a sort of almost a misunderstanding, or some misinformation, that I’m hearing from sellers, that because Amazon’s collecting it and paying it on their behalf, they can kind of wash their hands of Washington. They don’t have to worry about it anymore. And so, talking to, I had a call with Poster Johnson last week, and talking to them about, our questions were more about, you know, how should sellers be accounting for these transactions?
And what we got from the call was I think a bit of a shock, because there’s a lot more to it than, you know, Amazon collects and Amazon pays it, I don’t need to do anything. There’s actually a lot. You know, you actually still have to register and file in Washington. You have to then claim credits for the amount that Amazon paid on your behalf.
There’s another tax, which I have never even heard of. I’m not sure if you’ve ever heard of, it’s called B&O, Business and Occupation tax in the state of Washington, which apparently is super to sales tax payable on your revenues in certain situation. And Amazon is not collecting a payment for you, so you actually need to still track your sales in Washington and pay this extra tax, potentially, when you file your return.
The whole thing kind of just seemed actually a lot more complicated. So, I think a lot of sellers are under the impression that it’s actually made life easy for them, because Amazon is collecting and paying it now, and they don’t need to worry. But the impression I got after talking with the tax expert was quite the opposite. It’s actually made it possibly more complicated, and certainly, you need to be paying closer attention to it, not, you know, not forgetting about it or ignoring about it entirely.
So, I would say if there’s one thing that…We’re working on some articles around this at the moment, just because I think it’s a big deal. But I would say, if you’ve got considerable sales volume into Washington, it would absolutely be worth talking to an expert to make sure you’re, you know, complying with all the required tax laws now that Amazon’s doing what they’re doing, and that you’re filing your returns properly.
How A2X Accounting Helps
Andrew: Ashley, I kind of alluded and mention A2X Accounting, which is the software that you’ve created to help with this. I mentioned a couple things that it does, but can you give people who aren’t familiar with it an overview of what it does and how it can help sellers avoid a lot of the mistakes that we’ve, or potential pitfalls we’ve been discussing?
Ashley: Yeah, I sure can. So, kind of our pitch is A2X makes Amazon accounting easy. And so what we do is every day, we automatically check your Amazon account for a new settlement. As soon as a new one comes through, we import all of the transactions, we crunch all the numbers, and figure out what revenue, sales, fees, expenses, you head, and then we seam those sort of to your accounting system so that you can reconcile those amounts to the money when it arrives in your bank account.
So that lets you make sure you got paid the right amount, make sure you account for all of the different types of transactions that you are paid, or paid Amazon. And it lets you make sure that the transactions are being put in the right month, or the right period. That way, you can compare month-on-month, year-on-year, and really try to tell if your business is growing, or, you know, how much more profitable or less profitable you are each month.
That’s what we do, basically.
A Detailed Look At Amazon Costs from A2X
Andrew: You reckon. So, you can sync that with like zero, for example, pull it into that one settlement when we broken out where all the fees, you know, all the different aspects that you wanna configure, you can see them line by line on the P&L to get a much better, much more transparency, but also ties into your accounting.
Ashley: Exactly, yeah. So, that’s pretty much the two benefits that you get out of that. One is you see all of the detail, which you would otherwise miss if you’re just accounting for the lump sum. But you get the benefit of tying all of those individual amounts and reconciling them back to the deposit that actually arrived in your bank account.
So, you’re getting that kind of check point that you know you got paid the right amount, you know you captured all of the right sales, but at the same time, you’re also getting that visibility into what all those different transactions were.
She’s Also a Magento Expert!
Andrew: Yeah. And totally unrelated to Amazon’s sales tax, but you’re also a blogger for it at ashroder.com. I remember back in the day when I was on Magento, I pulled up, I used a lot of your articles when I was kinda learning how to be the world’s worst Magento hack, in terms of getting under the hood and change things.
So, first off, thank you, for those. Those were super helpful. Also, I’d love to get your thoughts, like you’re still very involved, or at least from talking before we hopped on, somewhat involved in the Magento space, what are your thoughts? I just ended up doing a Magento kind of, you know, State of Magento 2008 discussion earlier this year, and would love to hear your thoughts, like where do you see Magento right now? Do you see it kinda static, on the rise, declining?
Is it getting better, or worse? I would be curious just to hear your quick take on it.
Ashley: Yeah, I have to say I’m probably not really qualified these days to give a good kind of pulse of the community. I still have a couple of extensions, and I still kind of, you know, keep an eye on the news, but I’m not really actively involved anymore. I have some good friends that are, and it sounds like the move to Magento towards, you know, the community is moving slowly, not maybe as quick as everybody would have liked. But they are moving.
You know, it seems like Magento, the company is doing really well. They keep signing new, big clients. So, yeah, I don’t know if I would have an opinion on whether it’s going well or not. We still run a few Magento stores, but not anywhere near like we used to. If I was doing a new store for somebody now, I would think pretty hard about doing Magento. I think it’s quite a complicated base for all, but the, you know, biggest and most advanced stores.
Andrew: Love to, before we wrap up here, do a quick lightning round with you Ashley. So, rapid fire questions. I’m gonna just lob, and feel free to just give me quick replies back if you’re up for it.
Ashley: Okay, I’ll try.
The Lightning Round!
Ashley: Awesome. If you had to identify the number one thing you’re trying to optimize your life for right now, what would it be?
Ashley: I’m experimenting at the moment, with getting up early and fitting in a training run before the kids wake up. So, I’m trying to optimize like getting in time for exercise before they wake up, before work starts, that kind of thing.
Andrew: Nice. Who’s someone you strongly disagree with?
Ashley: Oh, my Gosh, I’ve pretty much stopped reading Twitter because I so strongly disagree with most of the U.S. Republican politics that seems to resonate so much there at the moment. So, I would just probably say, U.S. right wing politics is probably, I strongly disagree with most of what I see coming out of there at the moment.
Andrew: How much money is enough? So, what would be the number in your bank account where, obviously, you can work more if you wanted to in the future, but where you could say no, if you didn’t…you would feel like you wouldn’t have to work unless you wanted to? It would be enough money.
Ashley: I’m kind of a Mr. Money Mustache reader, casual reader. So, I would say freehold house, and, you know, like high six or seven figures, and some sort of passive income equities and investments, and just keep your overheads really low. So, I’m gonna say kind of low seven figures is probably my number.
Andrew: Nice, two million? Three million?
Ashley: Yeah, probably in that ballpark. You know, as long as you keep your overheads low, that’s more than enough.
Andrew: Nice, I like it. And I think I know the answer to this, but I’m gonna ask it any way. It’ll be a soft ball lightning round question, given Xero is based in New Zealand, but, Xero or a Quickbooks online for your accounting for your ecommerce business?
Ashley: Yeah, I am a little biased because of the whole and, you know, we’ve been using Xero for a long time, long, long time, so I personally, and for our own business accounting, we use Xero. But now we’ve worked really closely and deeply with both platforms.
There’s a huge amount of overlap with what they can do, so it’s a, you know, people ask us that all the time, actually, straight away, and I typically say, you know, you should probably talk to your accountant and use what they’re comfortable with, because they’re gonna be the one working in there most of the time. It’s better to choose what they’re good at than choosing what you necessarily like to look over something.
So, yeah. It’s a tricky one, but if you’re hunting, gotta go with Xero on that one.
Andrew: Nice, nice. That’s very good. The worst investment you’ve me in the last 10 years.
Ashley: Worst, or stupidest?
Andrew: Your choice. Your choice.
Ashley: So, my wife and I got married in Las Vegas, and then, you could call this an investment or a waste of money, but we brought a Corbett and we did a big road trip around the kind of southwestern part of the U.S. And then we put the car in a container, and we shipped it back to New Zealand. We still have it today, and so every day I look out the window and I’m like, “That was the stupidest thing. Why did we do that?”
We now have kids and it has no back seats, so it’s more like an art piece, really. So that was probably the stupidest thing that we wasted money on when we were kinda young and foolish.
Andrew: That’s a great story. I’ll let you, you know, hopefully, help you redeem yourself here. What’s the best investment outside of your business that you’ve made in the last 10 years?
Ashley: I would probably have to say, so I invested in a few of the kind of New Zealand software companies like Xero and Push Play, and funnily enough, so a few of those. A couple of those have done really well over time. Somewhat ironically, one of them has actually gone under entirely, so that kind of cancels out some of the benefits, but, yeah.
So, some of the New Zealand tech companies have done very well.
Andrew: And then finally, what was the first CD you ever owned?
Ashley: It would be, and I’m kind of a little embarrassed by this, but…
Andrew: Oh, that’s why I asked the question. Most people are pretty embarrassed.
Ashley: I think it was “Celebrity Skin,” by Hole. and I was like a teenager. Yeah, “Celebrity Skin” by Hole, I think was it. Or maybe, if not that, it would have been an album around the same time by Placebo called, I think it was called “Without You I’m Nothing.” It was the one with the “Every You and Every Me” song on it. So, I was kind of into that. I guess it would have been like the mid to late 90s grungy alternative thing in my early teenage years. So, embarrassingly, that’s what I ended up getting, I think.
Andrew: I love it. Ashley, right here. Hey man, I appreciate you coming and talking about this stuff. If you’ve been listening, of course his website and his SAS company that helps streamline the process of Amazon accounting for your eCommerce store, a2xaccounting.com. That’s a2xaccounting.com.
He also runs a, kind of a business to help people in Australia, and New Zealand, and other countries export their goods abroad to larger markets. That’s export-x.com. And if you want to geek out on his Magento articles like I did, and other kind of thoughts on web development, aschroder.com. We’ll link up to all those in the show notes.
Ashley, so good connecting with you, and thanks so much for talking shop with me.
Ashley: Awesome. Thanks for having me on the show, Andrew, it’s been awesome to share.
Andrew: That’s gonna do it for this week’s episode, but if you enjoyed what you heard and are interested in getting plugged into a dynamic community of experienced store owners, check us out at ecommercefuel.com. eCommerceFuel is the private vetted community for eCommerce entrepreneurs. And what makes us different is that we really heavily vet everyone that is a member to make sure that they’re a great fit, that they can add value to a broader community.
Everyone that joins has to be doing at least a quarter a million dollars in sales via their store, and our average member does over seven figures in sales annually.
So, if you’d like to learn more, if that sounds interesting, you can learn more and apply for membership at ecommercefuel.com.
And also have to think our two sponsors that make the show possible, Liquid Web. If you are on WooCommerce, or you’re thinking about getting on to WooCommerce, Liquid Web is who you should have host your store, particularly, with their managed WooCommerce hosting. It’s highly elastic and scalable, it’s got built-in tools to performance test your store so you can be confident it’s gonna work well.
And it’s built from the ground up for WooCommerce. You can learn more about their offering at ecommercefuel.com/liquidweb.
And finally, Klaviyo. For email marketing, they make email segmentation easy and powerful. They integrate with just about every cart out there, and help you build incredibly automated powerful segments that make you money on autopilot. You can check them out and get started for free at klaviyo.com. Thanks so much for listening, and looking forward to seeing you again next Friday.
Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerceFuel private community. It’s our tight-knit, vetted group for store owners with at least a quarter million dollars in annual sales. You can learn more, and apply for membership at ecommercefuel.com.
Thanks so much for listening, and I’m looking forward to seeing you again next time.
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What Was Mentioned
- Andrew Youderian: Blog | Twitter | Facebook | LinkedIn
- Ashley Schroder: Website | LinkedIn
- Magento Review: Has Complexity Killed Its Appeal?