Rising freight rates, exchange rate fluctuations, price involution… The cross-border e-commerce industry in 2022 seems to have officially entered the era of "normalization of low profits" while the operational difficulty and costs will double.
As a result, the cross-border circle has set off a wave of "cost optimization", personnel optimization, product line optimization, inventory optimization… One operation is as fierce as a tiger, but the final net profit does not increase but declines.
In fact, in the process of optimizing the cost structure, many sellers simply refer to the basic sales data of the product, and do not conduct a deeper profit analysis for the product.
Without the support of profit data, cost optimization is just a scratch. It is not only difficult to grasp the direction of optimization, but also unable to formulate reasonable optimization strategies in a targeted manner.
So how should cross-border e-commerce sellers manage profits, quickly and accurately calculate product profits, so as to find the right direction to optimize profits?
Amazon Cost Composition
We all know that profit = income – expenses, but in fact Amazon's income and expenses accounting is not so simple.
Take the income item as an example , many sellers only count the sales of the store, but ignore another source of income-compensation income, that is , compensation for lost or damaged Amazon FBA warehouses.
In contrast, Amazon has more expenses . From the perspective of major categories, it is divided into procurement costs, first-haul logistics costs, marketing costs, and inventory storage costs.
Under these four categories, many very small details are derived, including expenses incurred for returns, advertising fees, spike fees, monthly rental fees, monthly storage fees, long-term storage fees, carrier fees, and taxes, etc. Wait.
From product procurement to operation, logistics, and promotion, the investment in each link requires the seller to accurately summarize and calculate, and then allocate it to each ASIN to determine whether the product is profitable or not.
Store profit and loss = revenue (total sales) – expenses (goods cost + transportation cost + commission fee + FBA fee + storage fee + advertising cost + other expenses)
How difficult is cross-border e-commerce profit accounting?
When it comes to profit accounting, every cross-border e-commerce seller has various pain points:
The number of ASINs is large and the data is difficult to aggregate, and manual statistics are time-consuming and labor-intensive
Different types of cost allocation have different logics, and reasonable allocation is difficult
Store-level sales profit statistics cannot support analysis and dive
At this time, it is necessary to use a mature ERP system to replace manual profit accounting.
Leadstar ERP's profit report can well solve the multiple needs of Amazon sellers in profit accounting, perfectly replace EXCEL tables, and automatically output the profit of stores and products, helping sellers to quickly judge the store's experience status, for cost optimization and Profit improvement provides more accurate decision-making direction.
0 1 View profit data from multiple dimensions, bid farewell to manual statistics
Leadstar ERP profit report integrates 10+ original Amazon back-end tables, provides 50+ analysis dimensions, and the data accuracy reaches the level of listed company reports. Sellers no longer need to go to the background to download reports, and easily bid farewell to manual statistics.
Financial personnel can also quickly summarize and analyze platform revenue and expenditure items by MSKU, ASIN, parent ASIN, SKU, store, store summary dimension and order dimension, and can automatically obtain the gross profit of each product with one click without manual calculation. , gross profit margin and store ROI.
Store & store aggregated dimension data supports dimension analysis by store owner, easily solving the pain points of multi-store operation financial analysis.
0 2 Reasonable allocation of costs, clear handling of cargo damage
In order to adapt to various business accounting scenarios, Leadstar ERP cost calculation supports global batch accounting and provides statistics of various financial compliance pricing models.
Supports cost calculation based on fixed cost or first-in-first-out method, and allocates each cost reasonably to all ASINs. For advertising fees and other inconveniently apportioned costs, they are also apportioned according to the proportion of sales, and cost accounting is more accurate.
For goods damage such as returns, inventory adjustments, removals, differences, etc., Linkstar ERP also supports difference allocation to solve cost accounting problems in different scenarios.
0 3 Financial data is sealed on a monthly basis, making it more convenient to do account reconciliation
After the profit report is generated, many sellers may modify the shipping fee or import other expenses in the next month, which will lead to the change of the historical monthly profit data, and the problem that the data cannot be checked when the financial account is checked.
In response to this problem, Lingxing ERP supports checkout and reverse checkout operations, and the profit report is sealed on a monthly basis. After the checkout operation is completed, the profit will not change, and financial account reconciliation is more convenient.
As the main indicator to measure the operating efficiency of an enterprise, in addition to quickly judging the final operating results, timely and effective profit analysis is more meaningful to find the direction of profit optimization and make correct business strategy adjustments through profit analysis, thereby driving the development of the business. , bring greater benefits!