Cross-border e-commerce financial monitoring: a comprehensive strategy from profit to inventory management

In the field of cross-border e-commerce, good internal financial control can not only directly help companies improve their profit levels, but also enable real-time monitoring of the company’s development status, thereby providing a basis for corporate decision-making. Financial monitoring mainly includes three aspects: profit management, inventory management and cash flow management. This article will focus on the specific operating methods of profit management and inventory management.

Profit Management

Price monitoring

Sales price setting is directly related to the profitability of the product. In order to prevent losses due to unreasonable selling prices, products can be divided into three categories: profit-making, break-even and return-even, so that the selling price can be set more reasonably. The specific steps are as follows:

• Get the purchase cost of the product;
• Estimated first-haul freight;
• Calculate FBA delivery costs;
• Determine the final selling price based on expected profits and various costs.

Daily profit monitoring table

The daily profit monitoring table is an important tool for corporate profit management, which can help companies discover and solve problems in a timely manner. Its production process includes:

• Update SKU cost and first-haul freight;
• Download transaction details of the previous day and mark advertising costs;
• Match the exchange rate and the cost and fee of each order, and calculate the order profit;
• Collect order data from each site to obtain sales, gross profit, gross profit rate and other information;
• Screen out abnormal products and analyze the reasons.

Monthly Profit Statement

The monthly profit report is a summary of daily monitoring results. The production steps are as follows:

• Download monthly sales reports for each site and account, and update product cost and expense statements;
• Calculate the monthly sales, gross profit, and gross profit margin of each site;
• Analyze the expense ratio and find out the reasons for the anomalies.

Refund rate analysis

Monitoring chargeback rates is critical to optimizing product quality and improving customer satisfaction. The calculation method is:

• Calculate the SKU refund rate (refund data/sales data) in real time through the daily profit statement;
• The monthly refund rate (refund amount/sales) is derived from the monthly profit report.

Inventory management

Inventory turnover summary

Good inventory management can effectively avoid overstock risks and improve the sales-to-movement ratio. The steps to create an inventory turnover summary are as follows:

• Download the FBA inventory report of each site last month in the sales background and convert it into system SKU;
• Collect SKU inventory data of each warehouse;
• Record sales outbound data and in-stock data through ERP, and calculate the inventory turnover rate and turnover days of each SKU;
• Analyze the inventory situation to determine whether there is any shortage or slow sales.

Inventory turnover detailed list

Inventory turnover details can help sellers accurately grasp the inventory data of different accounts, different sites, and different products. The production steps are:

• Analyze sales and inventory ratio, and calculate the turnover days of each SKU;
• Set a “warning line” based on logistics methods and supplier delivery cycles.

In addition, formulas commonly used in inventory management include:

• Inventory turnover rate = sales outbound cost of the month / average inventory of the month
• Inventory turnover days = number of days in the month / inventory turnover rate

Through the above methods, cross-border e-commerce companies can better control costs, improve efficiency, and achieve sustainable development.