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Watertight Amazon accounting for Catalyst

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Watertight Amazon accounting for Catalyst

In a market flooded with low-quality products, avid rock climbers Josh Wright and June Lai saw a need for high quality Apple accessories that would let them take their technology out on adventures. That was the beginning of Catalyst. Their first product was a totally waterproof iPhone case launched in 2010. Since then, they have continued to refine their product, release new ones and grow their customer base internationally. That success has come with extra complexity - especially when it comes to managing their Amazon sales, which felt almost impossible until a partner recommended A2X.

Wide reach, complicated accounts

With a growing market, Catalyst now has four Shopify stores globally, a WeChat store in China and eight Amazon marketplaces worldwide. Using Fulfillment by Amazon (FBA) for its marketplaces made it easy to ship product, but hard to manage the financial side of the transaction. Amazon has a notoriously impenetrable billing system that provides figures lumped together so you have no way of knowing what charges relate to which sale, country, tax type or service fee. The fortnightly reports also made it difficult to track sales and profit month by month.

June explains:

"We were taking Amazon's weekly payments and we were booking them manually. We use FBA for almost everywhere in the world except China, and we weren't getting the granularity in terms of the fees that we wanted to see."

As June says, this made it incredibly difficult for Catalyst to make good business decisions. While the overall profit or expenses related to the sales are easy to calculate, the company needed breakdowns of the figures to understand which geographical areas were making money, and also if FBA was the most profitable way to sell its products.

"It's really hard to drill down and really understand your channel-level profitability. You need that kind of data to be able to manage your Amazon business," says June.

No easy solutions

To get the information they needed, Catalyst tried a few methods. Initially, they were downloading reports from Amazon weekly and analysing them in Excel. Then they entered the data in Xero, creating journal entries manually. However this did not provide the data they needed, and the process was time consuming and prone to human error.

"With eight marketplaces, trying to get all this data from all these transactions and figure out what kind of fee breakdowns we had - it was a lot of work," June says.

As the business grew, this method become ever more unsustainable. June and Josh explore using Visual Basic to build macros, to convert exported CSV Amazon files into something Xero could work with. But in spite of this complex process, they still weren't getting the data they so desperately needed.

"We're growing and because we have so many channels, we have a lot of different things that we're running concurrently," says June. "We want to make sure that we're focusing our time appropriately and we're getting a good return on things that we're doing."

Complexity simplified, bug free, better decisions

Catalyst decided to try A2X. The first thing they noticed was the ease of the whole process. The setup was easy, with one API integration in the back end pulling all the data through to Xero. A2X quickly automated the entire process and provided the granularity of the data they needed. It was so simple and easy to understand that staff didn't need any training, says June.

Even better, A2X didn't have those niggly bugs that SaaS solutions often come with.

"It did what we expected it to do, and I can't say that is true of all SAAS companies - with a lot of them you're spending a lot of time and resources trying to find workarounds. We've never had any issues with A2X. It's reliable, which is actually really important."

Using the app, the time savings were immediate and most importantly, the system delivered the data direct into Xero. This gave Catalyst the control it needed over sales decisions, allowing it to refine or change processes to ensure maximum profitability.

"A2X really helps save a lot of time. We're very bottom-line focused in a lot of things that we do. So A2X gives you that control to be able to make sure that you're profitable," explains June.

Allowing for future growth

As Catalyst continues to expand, A2X is the tool it needs to access full data to optimise profitability - especially as it expands to new markets.

As June explains, you don't want to have to invest more people, tools, resources and time with each new market. What you need is to be able to easily find the lowest cost structure, test it, make it work and then focus on growing it.

In that respect, A2X "just makes sense," she says.

"It allows us to manage all those Amazon marketplaces from one account as opposed to having to login for every single one - that's just crazy. A2X creates a lot of synergies in terms of workflow and costs and time management."

And June's final word?

"I think A2X is really the only solution in the market. It does the job for what we need. The automation makes it easy to book an account for our Amazon sales. It saves us tons of time."