As one of our more recent Report Toaster customers, Janie from Pistols and Pearls has operated a boutique store out of St Checotah Oklahoma since 2013.
Selling everything from clothes and accessories to makeup, jewelry and even drinkware, she says that her love of helping others look good and feel good has always been the key driver to her success.
For more information on their storefront, you can check out their website here.
Knowing Your Profit
Featuring Pistols and Pearls
Over the course of last year, Janie has been working closely with Tia Jones, a Digital Marketing & SEO Strategist over at Mastering P.O.P. (Mastering Profit over Popularity). Tia has been helping Janie with developing her marketing strategy and boosting her business’s growth.
So, what’s Tia’s #1 piece of advice to merchants looking to boost the success of their online stores?
“It’s really important to know your profit. I know there are a lot of store owners out there who have no idea how much they are making, but you need to know your profit in order to scale.”
Tia’s approach is to adopt a ‘profit first’ strategy, where owners pay themselves first, then calculate any business costs/expenses. If the balance doesn’t add up, then she argues that you need to focus on reducing expenses and costs (rather than sacrifice the portion of revenue that goes towards the business owner).
Certainly, for many merchants, this might be a novel approach. For this strategy to work however, the key piece of the puzzle is that you need to have an accurate assessment of your costs. However, while Shopify’s reports provided her with plenty of data on her sales revenue, there was no easy way to combine this with her product and shipping costs to calculate the overall profits for her store.
In fact, Shopify recommends using a third-party app to track profits at a specific point in time. Luckily for Janie, Report Toaster is just such an app!
Breaking Down the Profits
As well as recording sales data, Report Toaster automatically calculates and displays the data for both Gross Profit (Net Sales – Cost) and Net Profit (Gross profit + [shipping price - shipping cost] - transaction fees). By using these figures in custom reports, Janie was able to get a breakdown of her profits by month/by order.
Breaking down a store’s profits like this can help to identify potential areas where product costs or shipping impacts the bottom line. By identifying areas that have dipped in profitability, Janie can then redirect her focus onto whatever generates the best margins for her store.
Here you can see a copy of one of these reports using the data from our test store:
Put Two and Two Together
One of the other key components in calculating profit is to work out how shipping costs impact profit margins on an order. .
The problem is that while Shopify tracks transaction fees for Shopify Payments and shipping costs for orders using Shopify Shipping, Pistols and Pearls utilizes a third-party service (called CommentSold) to fulfill her orders. She therefore needed to be able to pull together these transaction fees, shipping costs and her Shopify data to calculate the true profits on her orders.
Or as Janie put it:
“This app has been so valuable for me in determining at a glance how my business is performing. It covers every aspect of the necessary information to inform me of the ‘health’ of my business.”
Report Toaster was able to deliver this solution using our third-party integration with Mechanic. By pulling her Transaction Fees and Shipping Costs directly out of CommentSold and integrating them directly with her Report Toaster reports, she can quickly and easily assess the Net Profits for her store.
Track those Taxable Sales
As well as creating extensive reports to track her profits, one of the other key considerations for Janie in the upcoming tax season was to create detailed reports to track her monthly taxable sales.
Each month her taxable sales are separated by reports using different filters, with one for taxable sales inside Oklahoma (OK) and one for sales originating outside the state. There’s even a report that breaks down taxes for specific cities and counties, so at any time Janie can see how much to report in taxes for each respective jurisdiction.
All of this has meant that Janie has been able to utilize Report Toaster not just for her sales analytics, but to provide tax reporting capabilities as well. As she puts it:
“Report Toaster has also allowed me to eliminate several other apps which has saved me a lot of money on app subscriptions. I was even able to get sales tax reports which allowed me to eliminate Tax Jar.”
Finally, one of the key capabilities Janie was looking for with these different custom reports was the ability to schedule them for monthly delivery.
By setting these up, Jane can get regular updates on her store’s performance sent directly to her email. These scheduled reports not only provide a useful snapshot of the necessary data, but the convenience of having them already correctly calculated, formatted, and delivered directly is a big time-saver over crunching all the data directly in Excel.
Currently they have the following reports Scheduled but will likely consider more as others needs emerge:
Monthly Checotah/Mcintosh Taxable Sales
Monthly Non-OK Taxable Sales
Monthly OK Taxable Sales
Products with No Cost
Profit by Month
Profit by Order
Toaster Boosted the Bottom Line
Ever since implementing this solution, Pistols and Pearls have been able to save a significant amount of time on calculating their profits every month. Combined with their ability to remove needless other third-party apps (like TaxJar), they’ve been able to enhance their reporting capabilities while boosting their bottom line.
So what are some of our key takeaways we can look for here?
Track your costs: Shopify has decent data on Sales revenue but tracking this alongside your costs is key to assessing your store’s performance.
Work out your profits: Once you have your product costs, shipping costs, and transaction fees, you can calculate your true profits and work out which products may be hurting your bottom line.
Calculate your taxes: Creating separate reports for your monthly taxable and non-taxable sales by individual jurisdiction makes reporting taxes so much easier.
Don’t forget the shipping: Product costs are a great start, but you need to factor this in with your shipping fees, shipping costs, and transaction fees to determine the true profit from your store.
Make it easy on yourself: Report Toaster can track all these data points side-by-side, so you don’t have to go digging through the data or crunch the numbers manually in excel.
Are you looking to set up something similar for your business? We love doing these case studies and any opportunities to do a deeper dive on the data, so if you’d like us to do something like this for your store, please let us know.