It’s time for a quick recap of July!
Man, this ecommerce thing is such a roller-coaster…
Working for almost 10 years in affiliate marketing got me somewhat prepared for any time things go wrong and for the massive swings that can (and will) happen in business, but this is taking it to a whole new level for me.
I’m not going to wait any longer to break the good news: it’s been my best month so far in ecommerce.
But it came along with a lot of headaches that I wouldn’t have missed if they had not happened.
Here’s what happened in July
As I was saying last month, I had to fire my assistant because she skipped work for almost an entire week without much of an explanation.
So July started with searching for someone to fill her position, and I found someone great to do so.
I was a bit wary because I hired a friend who needed a job, and most people know that it can be risky to hire family and friends.
But all my doubts are gone as she’s going above and beyond to do her job and she never complains when I unexpectedly add more tasks to her already heavy workload.
What I’ve been focusing on
Now that I have someone new to place orders for my ecommerce project, I focused on improving the ROI (return on investment) of that project.
Everything was going somewhat smoothly until I woke up on a Saturday morning to find my PayPal account on lockdown.
They were still accepting incoming payments, but were preventing me from withdrawing any money or use my PayPal account to pay for anything (including Facebook ads).
As a result, I had to stop all my ads because the payments were going to get denied anyway.
It turned out it was their way of preparing my account to activate a reserve on it. By putting a lock on a Saturday morning, they were hoping that nobody would notice until Monday morning when they would have stacked a good amount of money and then claim it all to be the “minimum reserve” for the account.
Effectively keeping our money for themselves to do as they please for the life of the PayPal account.
On top of it, they added a rolling reserve for 45 days to all my transactions. That means for every incoming payment, they put a percentage away in case some customers ask for a refund, and they release the funds after 45 days.
I discussed extensively with some account reps over the phone to lower the percentage and try to decrease the duration. It was a complete waste of time.
All this feels unfair since I have less than 0.5% refund rate on my entire ecommerce project, but if you want to work with PayPal, you have to play by their rules. They know it, and don’t hesitate to make you understand that they will be completely fine without you.
Taking a look at the numbers
Despite these issues with PayPal, I was still able to maintain the overal growth of the site. The number of order increased by 1,468, which is not too far from the 1,685 increase during June.
If you’re wondering why the number of sales increased so much but the total amount didn’t grow at the same pace, there is a simple explanation: I started selling cheaper products with a better margin.
This change of pace turned out to make it a decent (and finally profitable) month.
I know that 3% ROI is nothing to boast about, but I’m excited about it because it’s actually a profit!
I’ve been working relentlessly since January on this project, and it’s nice to finally have a positive month, albeit rather small.
What about the money?
Here is a breakdown of the money flow for my various projects.
To make this report easier to understand, I’m using a simple color code: green numbers are positive, red numbers are negative.
Please keep in mind that these figures may not be 100% accurate due to various factors such as refund requests and network adjustments. The terms for each payment may also vary. As a result these numbers may differ from the actual payments issued and received.
|Facebook Ads||-$114,219.93||▲ $2,906.15|
|Cost of Goods||-$24,323.24||▲ $2,529.59|
|PayPal Fees||-$4,569.43||▼ $413.05|
|Stripe Fees||-$3,131.75||▼ $395.23|
|Shopify Apps||-$175.88||▼ $87.95|
|Niche Sites||$1,599.12||▲ $167.71|
The small increase in profit with my niche sites, and the sponsored article I published on Dukeo were nice additions to an already profitable month.
I think there was a silver lining to my issues with PayPal in July: it forced me to be more conservative with my ad spend and it resulted in an increase of over $12,000 to my bottom line compared to June.
What’s happening next?
For August, I am planning to keep my conservative approach with my ad spend to make sure I don’t burn through my budget too fast.
If I don’t cut the losing advertising campaigns fast enough, I will get most of my money stranded in PayPal and I won’t be able to keep the traffic flowing.
I am also contemplating the idea of launching a second store, although much smaller, and dedicated to a particular niche.
These niche stores are much harder to take off the ground, but easier to keep afloat if you manage to build a real brand that people love.
See you next month for another update!