For those interested in ecommerce accounting, let me tell you–it’s an exciting space. The pace is rapid. The exits are gripping. And you meet a lot of neat people.
It’s also an opportunity for you to have an outsized impact on one individual’s life, supporting them through multiple ownership cycles. Ecommerce startup journeys can be fast, and many people who successfully start one business go on to start multiple.
In this article, I’ll share a bit about our 29-person ecommerce accounting practice at Acuity, and why I think it’s such a fun space that’s only growing more exciting. (For context, Catching Clouds, an Acuity company, merged with Acuity.)
Ecommerce sellers and the need for speed
My favorite thing about ecommerce is the entrepreneurs. Whether first-timers or 12th-timers, they’re passionate about something they want to put out into the world. Maybe it was a hobbyist’s love for snowmobiles that turned into a multi-million dollar ecommerce business. Or maybe it was a calculated choice to invest in something to build their family’s wealth. To be good, you have to be original, and you’ll always be learning from and working with originals.
I think it’s fair to say that ecommerce sellers are a little more focused on exiting than most businesses. It’s a wildly complex world, and it can leave you burnt out. The cycles are so fast. I’ll talk to a client who says, “I love this work. I’m going to hand this company to my kids in 10 years.” A week later, we’ll talk and they’ll say, “I sold. Somebody offered me stupid good money.” (If you want to understand these folks better, I recommend reading The EXITpreneuer’s Playbook.)
To be successful, they need the right mix of drive, social expertise, organic appeal, and paid ads. They also tend to need a really good ecommerce accountant.
Ecommerce entrepreneurs really need help outsourcing finance
My sense is that it’s getting significantly harder to start and scale an ecommerce business. There are just more barriers. One is access to capital. Another is a flooded market and the state of the economy. It takes a lot of capital and focus, you have to run social channels well, and you have to offer a unique product to make it sustainable. And for many, it isn’t.
Aggregators mostly came and went. The surprise growth of the early pandemic came and went. This is an industry that’s following every ripple and economic wave and is constantly affected by innovation and global supply chains.
These entrepreneurs consider strategic advice and forecasting from their accountant advisor a huge benefit. To scale fast without over-acquiring inventory, you need a plan. To manage cash flow, you need a plan. And to keep your return on advertising spend (ROAS) high—the lifeblood of many ecommerce businesses—you need a plan.
Just a few months ago, Facebook Ads released an update and every business that wasn’t monitoring its ROAS saw sales plummet. Entrepreneurs who didn’t know to look for that lost out.
And on top of that, there are all the questions. What am I going to buy? How am I going to sell? How will we keep track of back-office paperwork and cloud inventory? I find entrepreneurs are thankful to outsource the financial portion, and they get a lot of value for doing so. For less than they’d pay one controller, they’re getting people to manage their books, recognize revenue, and consult like a CFO. It’s all the combined years of experience of all those people.
With an advisor who knows the cycle, someone can still take that hobby and invest $20,000 of their money into their inventory to start seeing a return and get off the ground. But they really need that advisor more than ever.
The change is accelerating, and it’s only growing more fun
When I look to the future, I get excited about what’s coming. Globalization is getting rocky and we’ve now seen how that can break down. I think the future is near-shoring and onshoring. I think 3D printers and rapid prototyping are going to change absolutely everything. Rather than sending schematics to China, visiting, and waiting six months, you can get a prototype printed in plastic or steel within days. There will soon be factories of 3D printers that’ll manufacture widgets for three hours then switch over to steel bolts and continue overnight.
From a futurist’s perspective, rapid, agile production is a really interesting opportunity. Imagine being able to print the same product in a variety of colors on demand without any retooling, to run ecommerce tests.
Some of our most satisfying relationships have come from helping clients seize opportunities like that, and experiment. I’m still in touch with lots of our clients who’ve exited. Recently, one said that outsourcing their accounting was one of the best decisions they ever made. Another, whose business ranked in the top few hundred companies on the Inc. 5,000 list wrote publicly, “We could not have done this without you.”
Thinking of getting into ecommerce accounting? Give us a shout. We’re hiring.