Fix This Next Series: Sales – The Foundation of Ecommerce Business

If you have taken the Fix This Next assessment at you now know where to focus your attention to get out of the survival trap.  If you haven’t done the assessment, start here. When you’re done, come back and stick with us as we go over why sales is the foundation of your business!

Over the next few weeks, we’re going to dive into the 5 levels of the Business Hierarchy of Needs and the actions needed to resolve that vital need in your business. 

The Sales Level

Sales is the foundation level of every business. This makes sense since you must have sales to generate cash. We’ve all heard Cash is King and Cash is the Lifeblood of a business. While this is true, if your business is struggling, is Sales the true solution to your problem? As typical, the answer you get from an accountant is…it depends.


More sales is not always the solution for a stronger company as sales must support profit. Profit is the level that builds stability and order in our business. We’ll talk more about the Profit Level next week. For now, let’s understand how to ensure that strong sales is the foundation you’re building your Profit on. 

The Sales Process

A sale is much more than clicking Buy Now on Amazon or your website. Here are the five core steps in the sales process: 

  • First, you must create a connection with your buyer, perhaps in your keywords or photos in your listing, or ads that you run.   
  • Next, you have an agreement where the buyer provides their payment information and you promise to deliver your product.   
  • Then the deliverable step is where your product is delivered to the buyer.   
  • The collection step is where you are paid, and the funds may be held at Amazon for a couple of weeks or with your merchant processor. 
  • Finally, the conclusion is the step where all agreed-upon terms are delivered and both parties confirm the parameters of the agreement are complete. 

 Lifestyle Congruence

As you might expect, the vital or core needs in the Sales foundation level relate to the sales process described above. Let’s start with Lifestyle Congruence. What is the sales level needed to support personal comfort?  What do you need to take home? This is not the DREAM goal; but what makes you comfortable? If you haven’t determined this level, take a few minutes to understand what you need to support your personal/family budget. Once you know that number, you can use our Owner Pay Calculator to determine the sales level needed to reach this desired level of owner pay. Basically, you will reverse engineer your sales based on what you need to support your lifestyle. 

Awareness and Conversions

 In ecommerce businesses, a direct relationship with customers can be challenging. Developing awareness and conversions are data science fields all their own. Below I have summarized the behavioral aspects of these steps and encourage you to understand them to ensure you can diagnose the vital need in your sales foundation. 

Prospect Attraction: Do you attract enough quality prospects to support the sales needed? Most business owners go through three stages of awareness when finding customers. The first stage is the “anybody” stage where anyone is a potential customer. Then you identify a market to sell to based on what other businesses are doing. Finally, you determine “your” market. Your market will be determined by what your company can do, what your company wants, and what your company needs. Develop a consistent presence in a community of ideal prospects, and with an excellent reputation you will generate awareness so those customers will seek you out when they are ready to buy. 

Customer Conversion: Are you converting enough prospects into customers to support your needed sales? The consistency and quality of your leads will determine the conversions you make. First, you want to ensure you are attracting the right prospects. Once you are, then your goal is to get those prospects to convert.  If you spend too much time on prospects who never buy, then you are attracting low-quality prospects.  Conversion is looking at both sides; what do they want and what do you want? You are looking for alignment. 

Delivering on Commitments: Are you fully delivering on commitments to your customers? Much of this is not in the direct control of ecommerce owners when sales platforms and fulfillment centers such as Amazon shift priorities as we recently saw with the COVID-19 pandemic. Consider how you source your product and how you fulfill it. What options do you have for both sides of this equation? If your traditional supply of product is interrupted, do you have a backup source? If your traditional sales/delivery platform is interrupted, do you have a plan B?  Many of our clients have faced these issues recently and I am blown away by the entrepreneurial spirit. If you haven’t been impacted by the pandemic, then you are lucky.  But don’t be cocky; you need to be sure this core need is addressed. Consider it carefully in your evaluation. 

Collecting on Commitments:  This core need takes on a unique perspective as it is often times managed by ecommerce sales platforms.  While you may not have a direct collection from your customers, you have to be mindful of policies that your sales platform and your bank have to ensure you collect the sales dollars.  For new and rapidly growing Amazon businesses, we see Amazon hold back balances.  I’ve recently seen a bank hold back funds that they deemed a large “suspicious” deposit from a traditional merchant processor.  How your sales platform handles refunds can also impact your collections and their easy return policies have to be factored into your sales and margin calculations. 

image-8One of the main themes of Fix This Next is to look at the data! As you can see, all of the 5 core needs in the Sales  level rely on collecting and analyzing data. If you you’re relying on your gut, then you need to do more research. If you’re not a numbers person, then look to those on your team who are. Sales is the foundation, so be sure it’s strong! 


Interested in Profit First? profit first for ecommerce sellers

If your ecommerce business isn’t where you’d like it to be in terms of profitability, check out my book, Profit First for Ecommerce Sellers. It answers important questions about how to implement Profit First in an ecommerce business. Take control of your money and your business, and put Profit First to work for you! Contact bookskeep today to learn more about amazon and ecommerce bookkeeping.



Post Author Cyndi Thomason


Cyndi Thomason is founder and president of bookskeep, a U.S.-based accounting, bookkeeping, and advisory firm for ecommerce sellers worldwide. She has a passion for data analysis and process development. She uses that passion to educate her clients and help them structure their businesses to maximize profits.

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