iQualTech takes helping hand of A2X for Amazon
Amazon FBA brand growth data-driven
Launched in 2012, iQualTech is a UK-born consumer electronics brand, developed solely as an online marketplace business - specifically Amazon FBA. It sells to the US and in seven different European countries, with approximately 98% of its sales through Amazon.
As owner Zamir Cajee puts it, “We started with earphones and speakers - and it’s really just grown from there.”
In 2016, the company hit the one-million-pound turnover and grew even further after some successful crowdfunding. With a variety of items on sale, and in multiple marketplaces, Zamir’s accounting quickly became “a nightmare.” By adding A2X into the mix, he dramatically simplified iQualTech’s accounting and was able to access critical business metrics.
For most people, it would take years of meticulous planning to source and launch an electronics brand. For Zamir, all it took was one simple question - where do electronics come from? He immediately jumped on a plane to China, toured the various tradeshows, visited a couple of factories, and got to know his future manufacturers on a personal level.
“For my first order, including my trip out to China and shipping, I had $7000 on my credit card. I wasn’t going to even hit close to my manufacturers' minimum order requirements, but I had a plan. I showed them my brand, how I was going to grow the business, and thankfully they both saw how serious I was about it.
“When we got the goods, I had 56 days to get the products sold so I could get my credit card paid,” Zamir laughs. “I was incredibly naive, and I made so many mistakes. Looking back now, I’d do so many things differently. But I got lucky and I’ve learned along the way.”
Amazon’s black hole of data
Amazon is good at spitting out reports and data. The problem is then turning that data into useable information and understanding it in detail, Zamir explains.
In the beginning, he started by using Amazon’s general summary reports to account for his sales. In 2016 when the brand launched in the Pan EU, it caused a lot of ‘what ifs’ - and Zamir couldn’t find the information he needed in the summary reports.
“We then started looking for more detailed reports. What you end up doing is looking at even more spreadsheets, spending even longer trying to find all the different lines you need to account for.
“I would lock myself away for between 2-5 days to get the VAT quarter closed. That would be my life every quarter - it was a nightmare.”
Zamir knew there had to be an easier way.
The devil is in the detail
When Zamir foundA2X for Amazontwo years ago, he said it was like a hand reaching out to help.
“I’m one for testing - you usually know within a couple of hours if it’s going to make your life easier.”
Immediately Zamir could tell from all the different account codes A2X created that a lot of his accounting hadn’t been correct. Two years on, and A2X has helped Zamir save time and get to know his business at a more granular level.
“The devil is very much in the detail, and because Amazon gives you so much data, it can be insightful - if you know how to read it.”
Zamir explains how with A2X, he has a better understanding of their costs, revenues and Amazon FBA fees.
“Having all that data at a much more granular level provides a huge opportunity for analysis. If you interrogate it, there are areas where you can grab an extra 3-5% margin just by looking through the data. If you can increase that sales margin without having to spend any more money just by looking at the data, then you may as well.”
Days of work done in hours
As a small team, for iQualtech, time is money. The end of a VAT quarter used to take days to complete. It now takes Zamir one hour.
“What easily took two days before - running reports, calculating it all up, creating invoices and bills, contouring them off, reconciling them - now I can do seven European marketplaces worth of invoices for a quarter in an hour.
“No chance I would have done that any other way.”
While time is easy to track and measure, the one thing that has had the most significant impact is harder to quantify.
“It would be hard to put a number on it, but the awareness through data A2X has given us helps significantly with business decisions.
“I don’t have to squirrel myself away for days, I don’t dread the end of a quarter so I don’t put things off to the last minute, making me better organised, and having the confidence to jump into Pan EU and not be terrified by it, that helped.”
First comes relief, then comes growth
To other Amazon FBA sellers struggling to make sense of their numbers, Zamir says he “feels their pain.” But there is a way forward.
He says initially A2X provides relief. Then you wonder why you’ve not done this before. All that time and pain for nothing. Then you get over that and see it for what it is - a way forward.
“Let’s put it this way, I’d put off doing my VAT returns to the last possible second. It’s now the first. You feel like you’ve accomplished so much in such a short period of time.
“Basically, I take all the credit for all the work A2X does!”
Now they’ve hit the million-pound-turnover, and launched a new brand, what’s next?
“We’re not looking to take over the world, so we probably have more modest goals. Amazon is the best logistics company in the world as far as I’m concerned, so we’d like to grow into new marketplaces - Australia, more in the US, and Japan.
“One thing’s for sure, I’ll be asking A2X if they cover a country before I go into it.”