Episode 236: Profit First for Ecommerce Sellers with Cyndi Thomason

In today's episode, we're going to talk about Profit first, specifically for E Commerce Sellers with Cindy Thomason. You're about to hear that and so much more on today's episode of the profit first podcast. Did it sound like it was fading away?

At least it was the right song.

Yeah, it was at least the song, right. But it didn't sound like I was fading into the distance.

It sounded just like that. Did you ever see Amazing?

It's like a velociraptor.

You ever see the movie Cliffhanger? One of the most famous popular movies of all time was Sylvester Stallone.

No.

Yeah. No. In the beginning of the movie, he's climbing across a mountain, and the. The opening scene, another climber falls. It's like one of those.

So that was you falling?

Yeah, that was me falling off the.

I totally got that.

You never saw Cliffhanger?

I saw it. It was a long time ago.

One of them.

You're showing your age.

His herald is on the way to one of the most famous movies of all time.

Is it heralded as that?

It is heralded as that. You know what's so funny, Kelsey? Before we start the show, you're like, this is such a fun show. I love it. Like, you're so supportive of me. Like, you know, Mike, there's perfection and the imperfection. Like, you're saying all these wonderful things. Then you come on the show, you're like, really? You take on this whole new Persona.

It means I love you.

I know. I know it does. I know it does. That's what I tell myself. I'm Mike McAllis. I'm the author of a few books that you may have heard of, and I'm on a mission to eradicate entrepreneurial poverty. Have you ever been in that situation where you start a business or maybe you've had your business for a long time and your friends think you're wildly successful? Jbone, you started the hunter's recipe, right? The day you started, I'm sure your friends are like, oh, God, you're probably a millionaire already. You're moving your seasonings to all over the world and stuff. But the reality is it's a freaking struggle, right?

Yeah, it's tough.

The outside world sees the success. The reality of entrepreneurship is it's inevitably a financial struggle. We work our butts off for it, yet we carry on this Persona of success. And that's the thing we're trying to pierce through. We're trying to actually bring about the legitimacy of success. Not putting on this Persona that's who I am. That's what my job is. And I'm joined studio by my dear friend. And seriously, I consider you a dear friend.

You too.

And kind of an antagonist. Kelsey Ayers.

I'm the antagonist in your story?

Yeah, you are.

I'm the protagonist in my story.

Really? So your hero attacks helpless people?

Yeah. I should rewrite that.

You should rewrite that chapter.

I'm gonna be nothing but sweet. Okay, and welcome, everybody. You can find us on itunes, stitcher, TuneIn Radio, profitfirstpodcast.com, spotify, Google Play, or YouTube. We have a new YouTube channel. It's actually not a new channel, but we are now on video on YouTube. So watch us and let us know what you think. Leave some comments.

Yeah, we'd love to see what you think. And that review. We have a special offer. We're doing a little bribery here. If you do a review, post it on itunes or wherever you're listening to. Podcaster. Then do a screenshot and send it to Kelseykemcalowitz.com, include your mailing address. We will send you a book as a thank you. Additionally, we have a free copy of Surge, one of my books, up on mikemotorbike.com. that's the Mike McCallowitz site. That's just the nickname I used to have. So you can get a free book there. You can get a lot of free stuff if you take two simple actions. Kels?

Yeah?

I want to do an icebreaker again. Now, last week you picked number 23, so I crossed it out. So pick one to 100, but don't pick number 23.

Okay. 55.

Oh, I like when. I like numbers when they repeat like that.

Yeah, me too.

I think it's good luck. Oh, my God. So this one is designed for you.

Okay.

It says, what dance move are you secretly awesome at?

Ooh, the robot.

Are you gonna do the robot?

Yeah, I mean, I'm secretly awesome in my own head at it.

Give us a little robot. Can you do it right now? Because we're filming this too. Wow. Wow, that's good.

I know. Thank you.

That's really. You get the shoulders, like, going perfectly.

Yeah.

So mine is the. The water spray where you go, oh.

Yeah, yeah, yeah, yeah.

Like this around the room. Yeah, yeah. Jay Bone, what's your favorite dance move?

The mower Lawnmower.

What's that look like? I'll explain it. He's taking his gear off. He's putting the microphone down. His dance move is he started to mower. He pull mower and then started jogging along behind it. Oh, good.

Yeah.

I felt like grooving down to that.

If I had more room.

I feel like that was really. Well, you see.

Grass line.

Oh, really? Even if. Really. So what's your secret move? Our dear listeners? We want to know. Post that in your review of our site saying, you know, I love the show. And by the way, I also do the lawnmower.

Yeah, exactly.

You just bought a lawnmower.

I did an electric one, and I really love it.

How many times have you mowed your lawn with it?

Twice.

Okay.

Yeah.

That's not bad.

Yeah. I mean, it's slowing down a little bit.

What? Your frequency of mowing.

I mean that, too, but I feel like the grass hasn't grown a lot.

Oh, the grass has slowed down and grow. Yeah. Okay. Yeah, I like it. I want to go electric myself. I just think there's. It's. I want to say it's environmentally responsible, but I also realize the manufacturing of the lawnmower machine and the batteries may actually do more negative. More negative repercussions than benefit. But I kind of want to go electric. I don't. I hate mowing the lawn. You see smoke blowing. It feels so bad.

And I'm also not particularly handy at, like, fixing things like that. So I feel like with gas engines, you always have stuff go wrong and I can't fix it. Whereas the electric is much more straightforward.

Yeah.

So I did some research on the electric versus.

Oh, yeah.

The manufacturing and everything.

Yes.

Over the long term. It does. It's worth it. It pays out.

Environmentally. It pays out.

Yeah. I'm actually gonna buy an electric motorcycle.

What kind of distance or can you get on?

So the newest one, I think you get 110 miles per charge.

Okay. Oh, it's just a good distance.

Yeah.

And. And fast, I bet you.

Yeah. Because there's no transmission, there's no gear shifting, and it's like, constant torque.

Wow.

There's a lot of. There's a lot of benefits to it.

I started an official research into an electric car. It probably won't happen for another year or two, but I've just started now, kind of playing around with it. I actually need another car because my children have taken my car.

Yeah. Right.

So I thought I was the father of the year. I'm like, I will never buy my children a car. They have to learn to be on their own. Our oldest son, Tyler, bought his own first car. We helped subsidize 20%. So it was just a little bit. And I Said, every child, you get 20% subsidy, but you have to buy your own car. They're like, oh, okay, we'll buy our own car. In the meantime, dad, we're going to steal your car. So my daughter went to college, and she basically squatted the rights to my car. I'm like, where is it? I need exams. Like, there's all these heartbreak reasons why.

She needs a car.

Oh, my God. She goes, you know, Dad, I really want to do well in school. I know how much this costs us as a family, right? The guilt factor. I'm like, oh, my son. So we have one other car that we're trying to sell. It's like, the junker. And I'm like, I'm just gonna drive that one. No one wants that one anyway. We're not gonna junk it. We'll just keep it. Now my son has practice. He's a pole vaulter. He's practicing. He's go to New York State, which is like an hour drive. He's like, dad, I need it for that. And. And I need to take it to school, because I go right from school and pole vaulting practice our drive. Like, mom can't do this, and what am I going to do? No friends. And also, there's this one kid that he needs assistance. He's a freshman, and I'm a senior. I'm willing to drive him. I need the car. So I'm like, okay, of course you need the car. I'm carless. I literally have to get a ride to work every day right now.

Luckily, you live close.

I know. I should walk. Do we be in listener male?

Yeah, we do.

What we got.

So this one. Another itunes rating.

Nice, Joe. I know. It's Joe from. Nice job. Thank you.

It's Joe Torrey from EcoPro LLC.

Isn't Joe Tory like a famous baseball.

Coach from the Yankees?

Yeah.

Yeah. We were so devastated when our tax accountant gave us a bill for a profit that had no showing. Distraught but not defeated, we began to search for a better way. I we are so thankful for the profit first system. Since mid third quarter of 2018, we have already seen the rewards. I encourage anyone who wants to enjoy doing business to tap into this podcast and get the book. As a runner, I've listened via audible several times. Simple and effective.

Boom, Joe.

Thanks, Joe.

Nicely done. You know, it's interesting, Joe's experience. The same thing that you. You have no profitability to show in your business, and yet you still get taxed. And you're like, what? And then you have to find the money. So prop first is a behavioral based system where we allocate money to a tax account. The money accumulates there, and when the tax bill comes, the business already has it accounted for. It's a lot of relief in that.

Yeah, it's awesome.

I wonder how fast Joe runs. Like when he's listening to our show. You think he picks up his pace a little bit? I bet you he does.

Probably when you grunt.

Yeah, that's for you.

Joe revs him up.

All right. I want to thank our corporate partners who make the show a reality thank you, receipt bank. And I've been dissing you so much. We did our research, and you know what? They've been sponsoring and supporting us the whole time, and I'm always questioning it. Now they've been the stalwart in the relationship. Me. You know, in any relationship, there's one person that really constitutes a relationship, and the other one's always a little less.

I don't think that's any good relationship. I feel like you have.

So you say you have a bad relationship.

Poor definition of relationships.

So you say you have a bad relationship with receipt bank, Right? Yeah. Because I'm like, I don't know if we're really a thing. Like, we've been dating. Jeremy, I got to tell you this story. So Kelsey, I think, is the most recent boyfriend, this guy Matt. So Kelsey starts dating this guy Matt and so on.

You don't have to tell this story.

I do. I kind of have to. Okay.

Don't you love having all your personal.

Stuff just like, how's the relationship going? She's like, you know, it's pretty good. He's a very nice guy. He. He's a firefighter, but he does these fly in firefighting where they go to forest fires and stuff like that. So she's like, we don't see that each other as often as we hoped. So I said, oh, how often do you see each other? She goes, well, maybe like once every couple months, you know, for a cup of coffee. I said, okay. After doing this for about a year or so and seeing him four times, she's like, it's really. She goes. She goes, really? I don't know if this working. So she went to call it off. She said, matt, you know, I like you. We don't have much time for each other, so I think we should stop dating. And he goes, we're dating. That's. I add that part. I added that.

That's like our own narrative of the relationship. I know it really wasn't that bad.

I know there's nothing like that.

At the end. I was like, I don't even know how to, like, handle it. I don't even feel like it's a real relationship. He did not say that in any way, shape or form.

No, I know he didn't. But we were making so much fun and we're playing stories, so we're acting out this scene. She's like, it's so awkward. I know we're very well connected. I know we think about each other and we carry pictures of each other and stuff, but I think. I think this has to. I think this has to. It's gone its course and they have to end it. And he's like, who are you?

You got it, Chelsea. I agree 100%.

He calls her Chelsea. He's like, chelsea, I understand. This isn't working. Oh, my God. We have fun here at the office. You know, one thing that is so important with the implementation of Profit First, Chelsea, is is that there's different verticals or different spaces or different industries that could use profit first. Right? So Profit first, when I wrote it, it was to serve all businesses, but also with the realization that if you're a firefighter or if you're in E commerce or something and you're in that as a business, there's special needs you have. You know, firefighting businesses need equipment. E commerce companies need to buy up inventory. So there's certain profit first professionals who have become so steeped in the profit first method that they've now taken it to a new level. They develop their own system. Well, I'm bringing on the expert of experts in the E commerce space with Profit first. So much so that Cindy Thompson has written a brand new book. Go on Amazon right now and get this. Profit first for E Commerce sellers. Cindy Thomason is the founder and president of Bookskeep and is a certified. Her firm is a certified profit first professional service provider. Her company consists of a virtual team located throughout the U.S. cindy and her team provide bookkeeping and profit consulting services specifically to E Commerce E commerce clients all over the world. She lives in the Ozark Mountains of Arkansas with her husband and teenage daughter. Cindy loves to hike with her family. She. She loves to garden and hang out with a menagerie of her beloved animals. Welcome to the show. Author of Profit first for E Commerce sellers Cindy Thomason.

Welcome, Cindy.

Hi there. Hi, guys.

How are you?

I'm awesome. How are y' all today?

Oh, we're doing. We're doing super well. Yeah, Sounds like it E commerce providers, how do they struggle with profit?

Oh, E commerce is complicated. The inventory component makes it really challenging. And you know, in a brick and mortar store, a lot of times you've got a back room and you can actually look at the inventory that you have available. Well, all of E commerce providers, for the most part their inventory is stored somewhere else. Either they have it at Amazon or maybe they've got it stored at a prep center or a shipping warehouse. Most of the time they don't have it where they can take a look at it. So it just makes it a lot more complicated to keep up with. There's nothing tangible to look at, so they don't have that going for them. Plus it's all managed by numbers through these platforms like Seller Central with Amazon or different third party logistics software or integrated resource planning software. So you have to be kind of a data nerd to figure out what's going on with inventory.

Which what I'm hearing is we're basically blind to the inventory. If we're an E Commerce seller. There's all this software out there that maybe obviously it's meant to serve good intentions, but it sounds like it's almost blinding to us. It sounds like we're in a data overload situation.

It is. You have to really learn what numbers are important to pay attention to.

So what are the most important numbers to pay attention to if you maintain inventory and want to be profitable?

Well, first of all, you have to understand the cost component of your inventory and what makes that up. I mean, there's obviously the product itself, but the labor that goes into prepping it to ship, the shipping itself, the customs, bonding agents, there's just so much that goes to having a product available to be sold. And one of the things that I think our clients really struggle with is they have these systems where they track inventory in a software system that does a lot of things really well. But that data in the system is relying on your input and there's no check and balance to that. So our clients have this data report that says their cost are whatever and then they compare it to what we report out on their QuickBooks or Xero P and L and they don't always match. And it's because the systems, these inventory systems really aren't like a closed system. They're not reconciled back to true bank activity. So sometimes if you're not real careful about the data that you put in, the data that you get out really is leading you astray.

So maybe there's not really Immediately obvious then. So if I'm tracking inventory and I'm not keeping inputting my own data around the labor and stuff, I may think I'm actually according that system profitable or making more and more money when I'm actually losing money.

Right. It's really always sad because a lot of times clients will invest in these inventory type systems before they have a financial system and then they things just aren't working for whatever reason and they don't always understand why. So we put a financial system together and run our reports and they will have told me, oh, you know, my gross margin is around 69%. I'm like awesome. Then there's money bleeding out somewhere. But then when we actually run the prepare the real books that are reconciled back to financial statements and can show what their true gross margins are, you know, I'm seeing things like 17% and there's just a huge disconnect there between what their thinking and what reality is.

Wouldn't they see that though in their bank accounts right away? I mean even if your inventory is not accurate, you don't have a financial system. Don't you see your money dwindling pretty fast?

They do see that and they, they think that there's something else wrong.

You know, we, we here, we maintain inventory, we actually sell on Amazon, we sell books and we had a meeting this morning, you, me, you, Kelsey, myself and Amy about we actually might be losing money on every transaction. Yeah, because you know, we weren't talking about these, I'll call them invisible costs or hidden costs, labor, packaging, materials. We just said, oh, a book cost us X, we sell it for Y. The difference is a profit. But that's not true. Cindy, help me.

No, well the, the fees from Amazon for example are at a. Yeah, in a minimum 15% but I've seen them upwards almost to 60%. So just depending on what you're selling and how it has to be packaged, whether you're using FBA system or merchant fulfilled, the fees can just really be quite costly.

So if we have all these costs, have you, do you have success stories? Do people actually make money on Amazon or is everyone losing?

No, there are some success stories, but those success stories really start with getting a good handle on the profitability of your products because one bad product that you're selling a lot of can really tie up a lot of your cash and drive your gross margin down to the point where it's costing you money. And it's not uncommon whenever we work with clients that we really dig in there and look at the per product level of what's profitable because I had a client just a few weeks ago who had a product that was selling for about $60, but the margin on that one product, and they introduced it to me as their flagship product. When we looked at the margins on that product, they were 8% and I mean, that's just nothing to be able to then carry forward and run your business on. Whereas they had some other products that they had not been paying as close attention to because this one was their flagship you. And they were making great margins on those products. So when you're looking at investing, they were getting ready to invest another $42,000 to get that product brought in. And I'm like, I don't see why you would do that. I mean, it's not making you any money and it's tying up your cash. And so you really kind of have to get to the point of looking at the product mix. And once you understand the product mix and what's making you money, then you can, you know, pour your attention there and fan those flames a little bit.

So they, they misunderstood what products were profitable and which ones weren't simply because they had the wrong data or they just guessing.

They, they had the wrong data and, and they kind of had blinders on. They really wanted to believe that this product, which they had kind of fallen in love with, was going to be, you know, it had been successful. And over time, competitors came into the market and they had to lower their price. And just over time it turned out to no longer be successful. But you have to look at that kind of dispassionately and say, this isn't working anymore, let's stop here. Rather than remembering the good old days.

Yeah, I find it true too. We build an affinity toward a product or something that we're selling and we kind of backfill it with logic and try to prove that it's successful because we want it to be successful. Do you have any simple techniques for us to become candid about what's making us money and what's not making money?

Well, I think just having an outside person hold it up in front of you and ask those questions. As soon as I started talking with them about this particular product, we did like a 13 week cash flow projection of, okay, when the money was going to be coming in from their sales and when they would be able to have enough money to buy this product again. And I couldn't see how it would work. And you know, they understood that. We had a conversation around it and at that point I thought we were kind of on the right path. But the next time I talked with them they had reworked my numbers and they had, had gone back in and plugged in these percentages, I mean these, this particular product and were trying to tell me that they figured out how to do it. And I just looked at it, I said yeah, but every one of your cash flow numbers at the bottom here is negative. So I don't see how you've really figured out how to do it without it having to borrow money. And they're like oh yeah, you're right. So sometimes it has to sink in and you just have to have somebody there to help you see what you've been blinded to.

There's that joke that circulates around the situation saying you lose money on every transaction but you're making it up on volume.

Yeah, right, exactly. In my industry, Jeremy's, they really think that you can, even though they have lost money or had very little low profitability in the business the entire time, they believe that they just have to get to this certain level and they'll be profitable. And it's just a fallacy because you can't take a product that's 8% and turn that into a business that's going to be sustainable.

Right. I got a question for you about the implementation of Profit First. So you've been very successful in turning around companies. Even more successful if a company gets implemented from the get go, of course. What is the strategy? Have you modified Profit first for Amazon sellers, ebay sellers, anyone selling online?

Well, the inventory component is crucial and so we set up a separate account for inventory. So and let's just take an Amazon seller for example when Amazon, typically they deposit their money into my clients bank accounts every two weeks. So when the money is deposited into their account, Amazon's already taken their fees. And one of the first things that we do is we pull off the inventory component. In other words, whatever they just sold represented some cost to the business to buy that inventory and we just take that off immediately because we assume they're going to have to replenish that inventory. So that's the first thing is we get inventory out of the mix, we put it in a separate account and then the other piece of it is really understanding that inventory from the standpoint of product by product, what's profitable. Because as I mentioned before, you can really have one product that you have an affinity for that that's losing. So we have to be sure we understand the inventory component. Then the Other piece of it is there's a seasonality to most retail businesses. And for our clients that have, like a high season in Q4, we try to help them manage all of that inventory that's coming in that, you know, we help them prepare so that they can purchase that inventory and have it available, but also manage the influx of cash that comes in during this time period. Because, as you know, with Parkinson's Law, when the bank accounts start filling up with all the sales, it's real easy to just think about what you can do with all that money without thinking about the other nine months of the year that you need to be able to sustain your business.

Right. So Parkinson's Law, for anyone that may not be familiar with that, was. He was a theorist in the 1950s studying human behavior. He wrote actually a satirical article about this, but says that as time expands, the more time we have to do something, the longer it takes. So the more money we have available to us, the more we'll consume of it. The greater the resource, the more the consumption. So I hear so far. Cindy, two things. You take the standard profit first system, but you added some cool tweaks. You add an inventory account and you're pulling money out of there. I can't remember if it was last week we talked about this real revenue adjustment with sema. Is this a real revenue adjustment? Meaning are you taking the income, subtracting the cost to replenish the inventory, and then coming to what their real income is, so to speak, or real revenue, or is this different?

Yeah, that's how I would look at it.

Okay, so then you have this real revenue number. Then you're taking it and you're allocating it. That remaining money to what accounts.

Typically the profit account owner, pay taxes and operating expenses. Some of my clients, as they get that figured out and working well, we add additional things like advertising. Advertising is a huge expense for these online businesses. And advertisers are really good at showing how the money that you make is bringing you a return. What we found, though, is that doesn't always translate to increased dollars in your bank account. And so we. We had a client that had invested over about $200,000 in advertising, and his bank account only increased $50,000. But he had great reports from his advertising agency about how he was getting this great return. So it didn't compute. And so when you pull that advertising dollars out into a separate account, you can pretty quickly see if. If the revenue is coming in and a percentage of it is going into advertising, then you ought to be able to sustain that advertising. And instead it was being a drain on his business. So advertising is another account that we use. Product launch is another one. My clients are always asking me, when can I launch another product? When can I, you know, when can I? I've got these ideas and we, we pull them. We just set up an account for it and we typically say 10% of what you're putting into your invent. If you're wanting to grow, put that into a product launch account. Now, you can be more aggressive if you've got the margin to do that, but 10% will allow you over time to see, okay, I've got the money there that I can afford to buy the product, I can afford to get it into this country and I can afford to market it. And once those dollars are there, you can launch without having to worry about the debt you might have to take on if you were trying to borrow money for a launch. Because it's a big gamble when you're launching a new product. We all have hopes and dreams, but that's no guarant that that's going to pay off.

I love the, the fact you have those accounts and you can just see the advertising account really landed with me.

Yeah.

You had 200,000 there. It's now 50,000. Clearly it's not working. There's been some businesses, India, I know we've talked offline about this, that they're just not in a position to recover. They're desperate. They, I think they played the cash flow game, meaning they were collect money as fast they could and they would stretch out how soon they paid their vendors. So for a period of time there was cash with them. But ultimately that, ultimately that catches up with them and they have to go under. How do I. Have you seen businesses, am I sharing the story correctly? Have you seen businesses that just are not, they're insolvable, they can't be fixed anymore. And what do you do then?

Yeah, that's my worst client because I, you know, I take it on. And most of the time they don't have the books in order. And so when we go about getting them in order and we put together all the pieces of this puzzle, sometimes the pictures, you know, not pretty at all. One that we've had recently had 55 credit cards.

Oh my gosh. And one company.

Yeah, yeah. And then they didn't even realize that they just, you know, when we, I'm.

Sorry, Using them all.

No, what happens is they use them, they max them out, then they get another One and so there' sitting there with debt to be repaid. So it's not like the debt goes away, but they're maxed out so they can't continue to use them. And it's a huge problem that people don't really understand. I mean, sometimes. Now, this particular client wasn't paying off his credit cards, but some of my clients will tell me, I pay my credit cards off every month. I don't see where that's a problem. And I explained to them that you're using, you've got this product that you bought with a credit card and you're selling that product, but you're buying future products. You know, you buy products in the future that pays off that debt for that old product. And people have a hard time getting their head around that. But here recently I've had three different clients and they were international clients. They weren't in the US but, but their American Express cards, their balances had been reduced by about half. So when they didn't have the ability to borrow anymore, then they didn't have the ability to pay off what they already owed because they were depending on future sales from those things that they bought in the future to pay off last month's credit. And so it's a bad situation. What I try to advise people to do that E Commerce clients love credit cards because it gets them all kinds of perks for travel and stuff. And most of my clients and me included, really like the ability to travel and credit cards give you a lot of points for things like that. But what I advise people to do is be sure that whatever you've got set aside in your bank account is going to cover you at the time you pay at the time you put that inventory or operating expenses on your credit cards. And I recommend that they have two separate cards or, or divide their cards up because most of them have multiple cards. But you want cards dedicated to inventory so you can quickly look at what your balances are on those cards and look at your inventory bank account and know I've got the money to cover that as long as you manage it. That way you don't get put in that bind of having to sell, having to put something on a card to sell it to pay off a prior debt.

So I'm hearing is the simple solution is you can't buy inventory if you can't afford to buy it from your prior sale. So when I sell stuff, there's got to be extra cushion in that margin to allow me to replenish the inventory. Otherwise you're going to go in this downward spiral. Right?

Right. I mean, most of the time the margins are not enough to pay for both debt and sustain the business and buy the new inventory.

Okay, so you got to avoid that situation. But to get started, you have to take on some debt. I mean, to buy my first batch of inventory, maybe I use my own personal funds that do I do a loan to the business, how do I get started? Or do I start very small and you slowly build up your inventory, how do you do that?

I think either way is fine. You do have to start with something and typically what I recommend to my clients is figure out what it's going to take you to buy that first round of inventory and have that saved up and the second round so that you can order and replenish before you're depending on the cash coming in because you don't really know how fast it's going to come in. And there's so many variables with platforms like Amazon where you can be suspended or inventory can be lost. So if you're thinking that you're going to bring a product in and sell it on Amazon, I would recommend maybe your initial product launch is $20,000. I would say have $40,000 available for inventory when you start. And you know, it may delay you a few months saving that money up to be ready to start. But you're going to start on good footing and not immediately having to go into debt, which will just augur you deeper and deeper in.

Yeah, I like that. Start slow, build slow. This is a game of patience.

Yes, it is.

Tell me about your brand new book. So Profit first for E commerce sellers. I'm pumped up. I'm pumped up because my name's on it too. But tell me a little bit about the book. It just comes out. It came out just now. It's. We're in January. Tell us a little about the book.

Well, it's the culmination of everything that I've learned working with my clients in trying to help them be successful. There's some, you know, heartache stories in there where things didn't turn out so well, but there's. We do chronicle three different clients throughout their journey where we've been working with them for three years or more in bringing them out of the pain points that they had into a successful business. And these three clients were just really gracious to open up and tell their stories about what worked and what didn't work and what didn't work and what kind of issues they've had. And what's working well?

Well, I'll tell you, you know, I think E commerce is actually a golden opportunity. I just think, Cindy, from what I learned from you is people, some people are going into this very recklessly. And if you go into recklessly, of course you won't be successful. That's true with any kind of business. But this is the future. There's a massive opportunity there if you go in with discipline and knowledge. And I am very proud to have co authored this with you, or I shouldn't say co author, I did a little introduction section, but to be part of this, this book, because you are empowering people with both knowledge and the foresight to go in protecting themselves and build this up from the ground up the right way. So thank you.

Yeah, you're welcome. And I think, you know, you were talking a little bit ago about going slow and starting slow. There is this mentality, I think, in a lot of E commerce mastermind groups where you have to grow and be at 2 million in two years so you can sell. It's pretty common in some of the clients that I work with. But what I've found is that those clients that are willing to go slow and get their systems in place and make sure they have good margin and invest based on the profitability, they start slow. But then it's like you pour on the gas later and they really do well later because they're growing without any debt and they can. One of my clients that I talk about in the book, he consistently launches new products that he's paid for before. He doesn't have to go into debt for any of that. He's purchased part ownership in a business that's outside of his business. That's totally different. Just as another thing to have his hand in, should this business not work out over time or something happened to the Internet or whatever, you know, he's got, he's diversified. And so it's really interesting to see how while you may start slow, that doesn't mean that you finish slow, that you can finish really strong and things accelerate the further you get into it.

As Kelsey likes to say, every day, slow and steady wins the race.

It's true.

Cindy, thanks for joining us. Where can people learn more about you and bookskeeping?

Bookskeep.com that's B O O K S K E-E-P.com Nice and simple.

And go on Amazon right now and type in profit first for E commerce sellers. Cindy's spelled with C Y N D I. So Cindy Thomason, it's an extraordinary book. It will be a game changer for you, I assure you. Cindy, thank you for joining us today.

Thanks, Cindy.

Yeah, thank you for having me. Thanks, Kelsey.

So I don't know, Kelsey, you heard the cough heard around the world. Did you hear the echo? Did you hear it? I know Jeremy goes and it goes ba boom and you just hear echoing in the background.

Yeah. This foam isn't doing anything.

I know. Dude, there's not enough foam for a cough that loud. Brian, don't edit that out because I want people to hear that. It just like echoed and reverberated. I couldn't actually have to interview. I couldn't even hear. It was still reverberating.

Felt really bad about that.

No, you shouldn't. I love it because you try holding in. You're like, kelsey, you know we're going to do. We're going to recap what we learned. There's always something interesting, exciting. We are going to share a listener mail that came in and I'll answer it. And we're thank our corporate partners right now.

Oh, just doing it twice.

Does that make it. Does that fix it? Have you talked to Matt since you the breakup, I mean?

Yes, he's texted me a few times.

Oh, is he wanting to get back together?

No, I don't think so.

Wouldn't be funny if he asked you. He's like, hey, you want to go out for a first date? Because we never really dated before. Like, what if actually that. That. That moment now inspires him to realize that he's blind to the fact he's dating someone?

I don't think so. I highly doubt it.

Mike, are you gonna email him the link when the podcast.

No, I know.

Poor guy. Yeah. We only have one listener. It probably is him sitting there listening. Oh, poor Matt. So, Kelsey, let's talk about our corporate partners. I want to thank Nixie. Yes. You know, if you had an X tiva phone system, maybe. Maybe this relationship will still exist.

I do have one and it doesn't exist. So point proves wrong.

Does he have one?

No.

There you go. You both to connect, you need a nextiva to next. Listen, let it be known nextiva connects.

That is a fallacy every day.

It connects with any phone system. But when you have a next tv, the nextiva, you can actually activate a video chat too. Over your next phone.

Yeah, when you have the fancy phone.

I know. Oh, you don't have one of those? No, I only bought that for me. I have to fancy one.

You got two of them for you.

I know.

I know he talks to himself.

So here's the thing. I have the nextiva fancy.

Hey, you.

Hey, you.

I know.

I do that. I have an Extiva fancy phone here at the office and a nextiva fancy phone at my house. It says it's called the fancy phone. And so when I chat, I. I call myself up. I go, hey, you. And then I have to run to the office to receive it. I'm like, I'm here. What are you doing? You're at home. Oh, I'll come over and see it. And I run back home. So because no one else has an XTV fancy phone. Ron has one. So I do it with Ron. I said. I said Ron. Did that sound like Ron? Did not sound like Ron. I heard Ron.

I heard Ron. I didn't hear.

I. You heard Ron.

I heard Ron.

Okay. I. And I didn't hear cough around the world. She made me say it. She made me say it. Guilty. All right, Kelsey. And then receipt bank.

Yes.

You can scan in any receipt and it auto recognizes the the vendor. So if you eat at a local restaurant, that's a common use of receipt. He'll scan and say, oh, my God, Kelsey, are you really eating at Wasabi house again? Or what's the place? Sushi house.

Yeah, they're both sushi places that we go to.

Yeah. Yeah, I love sushi. Do you like sushi, Jay Bone?

Yeah, I love sushi.

Okay. What?

Japanese sushi? Are Chinese sushi.

Oh, Chinese sushi. So that's a Chinese place next door. Just let me know. And it's excellent. And we scan in every receipt from them. Okay, Kelsey.

Okay.

What would you learn today?

So I thought that this is so beautiful, the idea that she is so honed in on what it means to be an e commerce seller.

Yeah.

That she anticipates the pitfalls before her clients even do.

Exactly.

And she can see the things that they're blind to and convince them otherwise. Whereas, you know, a regular bookkeeper probably wouldn't.

I think. Yes. So I learned about the blindness too. I think there's this perception when we introduce technology to any business. I don't care. I hope non e commerce providers were listening to this because this applies to all businesses. Everything she shared. And we buy these sophisticated tools that we think will give us knowledge but actually clouds us.

Yeah.

So we have a sophisticated social media thing you guys are looking at. I'm not. I looked at it once and I'm like, I don't know what's going on. And I got a Misperception. I think of the reality, and I think this is true for any software. So the big thing was I said, how do you fix this? She was just getting outside set of eyes looking at it. That's a good idea for any business. Just get someone from the outside who doesn't have an emotional attachment.

Exactly. And that's the key.

Yeah, because you throw bias in.

Yep, yep. Because you. They want the outcome that they want, so you create the reality around that.

Exactly. When there's an emotional attachment, we put a bias into it. Like that breakup with Matt. There's that emotional. I should have.

I knew it. I knew it's something. I saw it on his face.

I'm just saying I should have. I should have managed that for you because there was no emotional attachment for my side.

You should have.

I'm like, matt, this is awkward.

I should just send you in to do the breakup.

Totally. I'm like, dude, this is totally awkward. Like, I know we don't really know each other, but I know about you a little bit. And we're not working for Kelsey. And he's like, who's Chelsea? Oh, my God.

Yeah.

All right, listeners, what's our. I want to. I want to hear our listener. Oh, that was that. Whoops. Now. Now I want to know. Mail pattern ball. Our listener. Mail.

Okay, so this one comes from Eurona.

Yes.

And she says, I just started reading slash listening to problem first, and my plan is to begin to implement the system immediately. However, there is only one big problem. I don't have enough to pay our basic bills, loans, and payroll. How do I set aside money for profit when I'm already so cash strapped? The FAQ sheet mentions a come to Jesus moment, and I feel like we are past that. The only place that I could cut is payroll, but then I would be left doing all the jobs myself, and I'm already overworked, stressed, and tired. It's clear I need some major help.

Yeah. Great question, Arona. And here's the situation. Your business is telling you something. You have to be very cognizant of this. When you don't have enough money to pay your bills, your business says there's a fundamental problem. There's two issues. One is you can cut costs, which you've already looked at. You can only cut costs so far before you start cutting the muscle of the business, and it's not sustainable. The other thing is increase margin. And this is the biggest opportunity yet. So few entrepreneurs see it. They say, I can't cut more costs. I guess this is the way it is. No increase margin. And any business can do it. You know, Cindy was telling me a little trick that these e commerce providers do is even if they're selling something that anyone else can sell, it's generic. You sell an iPhone, right? Everyone sell an iPhone. Has to be a specific price. How do you make more margin if the price is set? Well, some e commerce providers start packaging in a second thing, like a training video series that gives you the 20 best hacks to get the most out of your iPhone system. That bundle now becomes more valuable and there's higher margin. Increase your margin. Your own. You can do it.

You can do it.

You can do it.

You can do it. You know what else you can do? You can write us any questions that you have to ask mikemichalowitz.com yeah, we'll take it.

And we'll answer them on our YouTube channel or here on the podcast or maybe I'll just shout from a rooftop.

Yeah, good luck finding the answer. But please do leave us ratings and reviews on iTunes, Stitcher, TuneIn, RadioPodcast.com or YouTube.

Yep. And when you do a rating, we have a special offer, right?

Yeah, just take a screenshot and send it to me Kelseykemicalitz.com and we'll send you a book, whatever book you want of Mike Michalowicz's.

Yeah, say that twice. And make sure you include your mailing address. Right. Because we're going to mail you the print book. I also want to inspire you to check out mike mccallowicz.com. that's my website. All the books, everything I'm doing to help eradicate entrepreneurial poverty is up there. Tons of free resources and a free book up there too. So you can get like a two booker. You do a review, you get a book. You go to the mic, you get a book. It's book fest. Two booker. I'm a two booker, all right? And I encourage, encourage everyone to check out profit first professionals. That's our organization. Cindy's one member. We have 350 plus that are eradicating entrepreneurial poverty. So if you have a need to improve your profitability and you're an e commerce provider, reach out to Cindy. Cindy. For God's sake, Cindy. If you're Cindy. Cindy. If you're someone else, if you're in a different type of industry, go to profitfirstprofessionals.com and click on find one will hook you up. All right, let's get out of here.

So, bye.

You got your payback thanks Simbi. Thanks Simbi. Oh my gosh. I had you whole episode. I got you all episode. In the very end. I left one out there for you to slam me. See you guys. Do it.

Do it.