April 18, 2024
CARLSBAD, CA – Tax day is done, but the battle to remain profitable and competitive never stops. Matt Remuzzi, founder/owner of CapForge Inc., Carlsbad, Calif. has been helping online sellers wage (and win) this battle for about eight years now.
CapForge began in 2000 with a focus on bookkeeping, but it wasn’t until 2016 that an online seller asked for help with his accounting. He hadn’t been able to find anyone who could ‘figure it out’ so Remuzzi and his team started studying.
Those humble beginnings blossomed into more than a thousand e-commerce clients, representing the firm’s largest specialty. Remuzzi (shown here [blue shirt] at Prosper Show 2024 with client Ardo Huul) took a break from the rigors of tax week to chat with the Prosper Show newsletter about how he helps online sellers navigate often confusing financial waters.
Prosper Show: What were the common questions at Prosper last month?
Remuzzi: A lot of people ask about how to stay competitive and how to stay profitable. In the old days it was, ‘How do I even sell?’ The mechanics of selling was new for a lot of people, and if you could get a product on the virtual shelves of Amazon, you had a fighting chance of having a decent business. Today, that process is pretty well-trodden ground, but now there’s so much competition, and a lot of people who are professionally doing it. It’s less of a side hustle and more of a full-time occupation. The business has become more competitive and the margins have been squeezed a bit.
Prosper Show: What other concerns did you hear about?
Remuzzi: The concern today is, ‘How do I continue to grow my business in the face of more competition, more Amazon fees, and more products from customers to choose from?’ Sellers are asking if they should expand to different platforms, or try to build a brand off Amazon. What are the options? That comes up a lot from people who have been doing it for a while.
Prosper Show: Why do sellers need outside help?
Remuzzi: When people get into the business, they’re good at picking a brand and developing listings, but they’re not so good at knowing how they’re doing financially. They want to know; Can I afford to order more inventory? Should I take out a loan? Can I bring on an employee? Should I use a virtual assistant? How much can I afford to spend on ads?
Prosper Show: Why do some sellers not know the answers to these questions?
Remuzzi: A lot of them don’t even have the data to look at, so it’s difficult to even try to make a decision.
Prosper Show: How does CapForge help?
Remuzzi: Step one is the bookkeeping piece of getting the data gathered, so sellers can see where they’re at. Step two is helping them understand and optimize. They may have some products they’re selling that are unprofitable. Let’s figure out how to turn that around or get rid of those. Some sellers are spending 25% of revenue on ads, but really this needs to be down to 10% or 15% at most to stay profitable.
Prosper Show: What about taxes?
Remuzzi: When it comes to tax time, e-commerce tax really is a different animal from a main street business, restaurant, or boutique clothing store. People come to us and say, ‘This tax bill doesn’t make any sense.’ That’s because their CPA might not be very familiar with how e-commerce works. We can save them a substantial amount on the tax side as well. We try to help sellers optimize the business and maximize tax savings, and between the two, free up enough cash to either make a reasonable living, or be able to reinvest in the business—or both.
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