Breaking into the Breakout Accounting Niche of Ecommerce
The New Era of Ecommerce Accounting
The Cloud of COVID is an era we won't soon forget, and for Arizona-based CPA, Doug Binkley, he predicts the pandemic-driven shift to mass online shopping will make an indelible imprint on his accounting practice. According to Shopify Plus, at the height of the pandemic, 10 years of ecommerce growth happened in just 90 days.
Like his vintage 1996 fossil fuel-powered Yamaha Virago motorcycle, traditional accounting segments are quickly facing extinction, making way for evolutionary new niches such as Ecommerce Cloud Accounting. Lucky for Doug, he happened to be precisely in the right place at exactly the right moment.
It all started back in 2014, when a client migrated his wholesale toy business to the internet, setting up shop as an Amazon reseller. An analytical accountant by nature, Doug instinctively uncovered some major tar pits in his client’s bookkeeping, and quickly realized the need for an Amazon accounting system from A to Z.
Since a Fulfilled by Amazon (FBA) reseller ships to an Amazon warehouse, there is a lag between the time the goods leave the reseller’s inventory and when they actually sell to the end consumer, and the reseller is paid. This “virtual” sales gap threw a real wrench into his client’s books.
Digging for Data
Without hesitation, Doug delved into his client’s Amazon account, digging for data he ultimately used to create a completely custom Amazon accounting system. Not only was he able to solve the “inventory recording” saga, he went on to mastermind algorithms to help his client forecast inventory needs based on seasonality and trends in the Amazon marketplace, thereby preventing lost sales and inventory overstocks - talk about carving out your own accounting niche!
Knowing what products to order and when to send inventory helps his client win the coveted Amazon “Buy Box”, where over 80% of Amazon sales are made for a particular product. “We use every shred of artificial intelligence available in optimizing our client’s success,” says Binkley. Even Doug’s biweekly client meetings align with Amazon’s two-week payment schedule.
Doug’s flare for management accounting further fueled the development of a proprietary “shipping” tool used in optimizing the space within a shipping container when ordering from overseas vendors. The tool uses product metadata (dimensions and weights) to calculate when a shipping container is full. “Over time, this type of intelligence and insight saves money and makes a positive impact on my client’s sales,” says Binkley.
Value-Add Leads to Higher Profits
Unlike Amazon’s “one size fits all resellers” mentality, Doug makes a point of customizing his client recommendations, considering most Amazon resellers are small family-owned businesses. Doug points out, “Amazon comes up with general recommendations across the board for all 2 million Amazon sellers." He summarizes, “we have a value-add, not by the hour, philosophy here at Micro Accounting Partners." Besides Amazon, Doug works with clients who sell on other ecommerce platforms, such as eBay and Shopify.
Doug’s shiny new Micro Accounting Partners website screams ecommerce with its clean design, simple layout, and progressive color pallet. When asked if his color choices were strategic, he confessed his Yamaha Virago motorcycle served as inspiration for the website’s trendy teal color, and it just so happened that “Amazon Orange” paired nicely.
Foretelling the Future
What’s on the horizon for ecommerce? A recent report by Statista forecasts United States retail ecommerce sales will total an estimated $469 billion in 2021. Analysts aren't anticipating a slowdown anytime soon, predicting retail ecommerce sales in the U.S. to reach $563 billion by 2025. The rapid growth has ignited an urgent need for bookkeeping, forecasting, and cash flow management systems designed specifically for the nuances of running an ecommerce businesses.
Doug concurs that the ecommerce accounting space will continue to grow, but for now he's micro-focused on getting the word out. “A lot of the smaller guys don’t even know ecommerce accounting exists. It’s like the age-old adage, they don’t know what they don’t know. That’s where Micro Accounting Partners comes in.”
Doug Binkley retired from a 28-year career in corporate accounting in 2017. He currently runs his accounting practice from his home in Arizona alongside his wife, Beverly, and daughter-in-law, Nikki.