Guide to Profit First for Ecommerce

What is the Profit First Method? 

Profit First, created by Mike Michalowicz and refined for ecommerce by Cyndi Thomason, is a money management method that flips the typical financial equation from Sales-Expenses=Profit to Sales-Profit=Expenses, making profit a priority in your ecommerce business. By using multiple bank accounts to cover your most important areas, you not only increase your understanding of cash flow, but start becoming more profitable as well!

With bank accounts for inventory and taxes, Profit First also helps you with inventory management and tax prep as well. The best part is you can start Profit First in any stage of your ecommerce journey and it will grow right alongside your business!

Getting Started with Profit First

Starting with Profit First is easier than you think. With just a quick assessment and a few bank accounts, you’re ready to start taking your Profit First! This method will change the way you think about money and your business, and get you on the path to profit in no time. These blogs can help you get started:

Assessing the Health of Your Ecommerce Business 

4 Profit First Accounts to Strengthen Your Business 

5 Steps to Building a Cash Strategy That Works for Your Ecommerce Business 

Does Your Ecommerce Business Have a Squirrel Fund? 

What’s Different About Inventory?

Inventory can be more confusing for an ecommerce business because cash flow is handled differently than in other areas. However, there are ways to make accounting for inventory a lot easier! You can find everything you need and download our free Inventory eBook Guide here:  

How Well Do You Know Your Inventory Numbers? 

 Inventory Costs – What’s COGS, What’s Not? 

Understanding the Ecommerce Inventory Process 

Accounting for Inventory: Your Questions Answered! 

How to Keep Track of Cash Flow for Inventory 

Inventory Basics 2

No Fee Online Banking Options for Profit First

It can sometimes be a little frustrating to find software that will support your Profit First set-up. There are a ton of options, but it’s hard to know which ones flow best with the method. Luckily, there are several tools out there that make running a business with Profit First a lot easier, and we’ve tested them out so you don’t have to! Here are some of our favorites:  

Relay Bank: Debunking 4 Harmful Misconceptions About Business Banking—Offering A Single Source for All Ecommerce Banking Services—An Online Solution for Ecommerce Banking Stacks 

Using Profit First to Increase Profits

Everyone is looking to make more money, but there’s not always a clear way to make that happen. While “selling more” may seem like the obvious answer, driving up profit involves a bit more thought. There are several things you can do to increase profitability in your business, from product design to crunching the numbers.

How to Create a Profitable Product 

How To Increase Your Amazon Profits 

5 Key Levers to Drive Profits—Identifying 1 and 2 

5 Key Levers to Drive Profits—Levers 3, 4 and 5 

3 Things to Help Ecommerce Sellers Identify Real Profit 

Could You Use More Profits in Your Ecommerce Business  

How to Pay Yourself and Build your Team

Supporting yourself is probably one of the biggest reasons you started your ecommerce business, so how do you know when to start paying yourself and how much you should be making? You’re also an employee who works hard for your business so you should be reaping the rewards of your efforts. 

You’re Ready to Quit Your Day Job–But is Your Business Ready? 

How to Pay Yourself as an Ecommerce Business Owner 

When Can I Hire My Next Resource? 

Does Your Ecommerce Business Support the Lifestyle You Envisioned?

Owner Pay Calculator

Profit First Challenges for Ecommerce Businesses

Ecommerce businesses have their own unique challenges when it comes to Profit First, but that doesn’t mean you can’t still make it work! By keeping an eye on the numbers and making sure you know what’s important, you can keep the cash flowing and still take your Profit First!

Gross Profit Margins and Financial Health 

Why Gross Margin is the Bottom Line for Ecommerce Sellers 

How to Eliminate Cash Flow Headaches for Ecommerce Sellers 

Managing Debt in a Profit First Business

Debt is oftentimes a scary word, especially when it comes to your business. Debt does have its place in a growing business however, you just have to know where that place is and how to use it. By increasing your understanding of it, you’ll not only know how it can help your business, but how to pay it off as well.  

Wait! What? Debt Can Be a Good Thing for Your Ecommerce Business? 

Debt and Growth in Your Business and the Role Each One Plays

Paying Down Debt With Profit First 

Credit Cards and Better Business Ownership Go Hand-in-Hand 

Start making data-driven decisions and become more profitable today.

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