Finance

What I Learned From Our New York State Sales Tax Audit

A few months ago I overheard a voicemail being left on our office answering machine from The New York State Department of Taxation and Finance. My first thought was “crap, this can’t be good”. They generally don’t call people to say “good job paying your taxes, keep it up!” I called Mike, who handles our accounting, and he returned the call. Later that day we learned what I had suspected: we were being audited. Supposedly we were “randomly selected”, although I have a hunch that… Continue reading

8/15/11

We Scored Ourselves a Nice Line of Credit (Finally) + Other Accounting Advancements

Remember that inventory cash flow post I always link to? You know, the one where I basically concluded: Is there any solution to this problem? Yes, there is, and we personally know several e-commerce companies that no longer have this problem. Their solution: they have a shit load of cash. This year we’ve seen good progress towards accumulating that “shit load” of cash. As we keep going further and further above our estimated monthly break-even point, the fixed expenses become more and more negligible and… Continue reading

7/8/11

How We Use Pre-Sales to Improve Cash Flow

I’ve written before about how the cash flow cycle of inventory can be the death of e-commerce companies of all sizes. One of the things we’ve done this year with surprising success is pre-selling items before we get them in stock. As soon as we place an order with a distributor, the product goes up on our site. Most of the time the description just says “coming soon” and the picture is just something like this: This isn’t all that intuitive of a practice. I… Continue reading

6/28/11

Chargeback Fraud – Customer Caught Red Handed (Finally!)

Without a doubt the most popular post I’ve written was last years post about chargebacks. Like most retailers, we feel pretty helpless when it comes to chargebacks, and I think that resonates with people.  Since the system at it’s core is very broken, retailers don’t have a whole lot of options.  Any system you put in place to reduce chargeback fraud invariably creates issues for legit customers. Creating new problems for all customers when a very small few are causing the issues, without guaranteeing any… Continue reading

7/13/10

Inventory – the Death of e-Commerce Companies, Large and Small

A New Company Let’s take, for example, a brand new company that’s getting into the blue widget business.  For fun, let’s call the owner Carlos. Widgets cost $50, and retail for $100.  For simplicity, we’ll assume that Carlos has to pay in cash up front (which is somewhat common when you just start out), that he orders once per month, and that he receives his inventory immediately (clearly, not very common). Carlos has saved up and he has $5k to start out with, so he… Continue reading

6/30/10

The Bootstrapped Office

My favorite Lifehacker posts are their “featured workspaces.” If you haven’t seen it, people submit their unique work areas and they pick the best of the best to display on the blog. The ones they pick are usually some combination of simplicity, elegance, creativity, and affordability. If you have a few minutes, take a look at all of the recently featured workspaces. Being that we’re a bootstrapped company, our work areas are more focused on simplicity and affordability and not so much elegance and creativity…. Continue reading

7/18/09

Funding Your First Business

Hypothetically, let’s go back in time and say I’m about to graduate from college.  I know that in my heart I want to be an entrepreneur, but I’m concerned about how to fund a new company and have enough money to live. What do I do? It’s a common position for potential business owners to be in.  I think a lot of very talented people that would start successful businesses get scared away by the financial uncertainty of starting their own business. My advice –… Continue reading

7/4/09

Chargebacks: how we were taken for $6k and how we’re fighting back

This post has been a long time coming, but it’s one that I finally made sure I sat down and wrote because I’m sure it can save someone from getting scammed the way that we did. What is a chargeback? According to our good friend Wikipedia: A chargeback is the return of funds to a consumer, forcibly initiated by the consumer’s issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer’s bank account or line of credit. The… Continue reading

5/19/09

Pure Adapt Featured on the AMEX Plum Site

About a year ago I wrote a post about how cool the American Express Plum Card is for small businesses.  I also posted a picture of how the Pure Adapt card was shown among many others on their website at the time: After my subsequent post about how we saved $1k in FedEx charges with the Plum, AMEX contacted us and asked if they could feature the content of the post in their new online marketing campaign.  We didn’t know exactly what to expect, but… Continue reading

4/14/09

Does Location Matter? Why Albany is Perfect for Us

A few weeks back Penelope Trunk wrote a really interesting article about deciding where to locate your start-up, entitled Starting a company in Silicon Valley is stupid.  Clearly from the title of the post, she isn’t one of those people that preaches that you have to be in the Valley or in NYC to run a successful start-up.  She herself moved from NYC to Madison, Wisconsin to start her new company, simply because the cost of living was low and the quality of life was… Continue reading

4/1/09