Business

How One Simple Excel Mistake Cost Me $10,000

My $10,000 Excel MistakeToday, I am going to share with you about a day I still remember.  This is about when I was running my e-commerce business and rocking the money flow.  I was in the midst of the holiday shopping season. It was between Black Friday and Christmas.  For those of you who don’t know, that is when most retailers and shops earn their money.  It is called Black Friday because companies would run in the negative (red) through most of the year, yet on that Friday, they would sell enough to get them into the positive (black).  I knew first hand how important the holiday shopping season was.  For a man running an e-commerce business on his own, those days were extremely high stress.  I barely slept, was on the phone more than I cared to be, and I would answer more emails than most people would in many years.  I was really busy, but it was bringing money in.  One day that stress caught up to me and it ended up costing me around $10,000!

Selling on Amazon is Great!

Many people ask me for one of my secrets to running a successful e-commerce business.  While I could name quite a few things, my main secret is to get your products on Amazon.  Plain and simple. You want to be a seller on Amazon because it will instantly give you a massive pool of potential customers.  When I first started selling online, I would bring in a few hundred dollars a month.  Year after year, it would grow.  By my second year, I had only made about $15,000 total.  It wasn’t much, but I still loved what I was doing and what I was building.

One day, I was approached by another store owner asking me what I thought about selling my products on Amazon. We had one of those relationships where we would help each other out.  Though we were competing with each other, we still spoke on how to best increase our sales.  I told him I had never thought about selling on Amazon. I was afraid of the costs.  Amazon charges merchants to sell on their site.  When you list something and then it sells, Amazon takes a cut.  In consumer electronics, the profit margin is already razor thin.  After a few days of thinking about it, I decided to give it a try.

From a Few Hundred to a Few Thousand

The first month I was on Amazon was slow.  I was learning a lot about the platform and how to get my products on the right pages.  Amazon does make it pretty easy, but I wanted to take my time to learn.  The second month, I started off with a bang and earned a couple thousand dollars.  Yes, I went from a few hundred to a few thousand.  It just kept growing and growing.  At the end of my third year, I had sold over $1 million in just that year alone!  It was awesome and the money was rolling in and the orders wouldn’t stop.  This was especially the case when the holiday season came around.  Everything was running like clockwork

Until…

I screwed it all up!  When you list your products on Amazon, you have to identify your products by one of their unique identifiers, called ASIN.  Amazon creates these numbers for every product on their site. If you want to sell the same product, you just list it under that ASIN.  They even provide you with a template for Excel to add and update your items and quantity.

Since I have mad Excel skills, I would create macros to keep my quantity up to date.  I would then do some formulas and make sure everything was good. Once done, I would send it over to Amazon and they would update their listings with my latest quantity.  Unfortunately, one day I made a massive mistake.  It was bad.

I was running behind on my nightly inventory update.  I was really tired and burning the midnight oils.  I quickly ran my Excel macro and put in the formulas.  I sent it off to Amazon and then went to sleep.

Beep! Beep!  Beep!

I had a Blackberry back then as there weren’t iPhones or Androids.  I was the talk of my social circle with that badass phone.  Oh, have the times changed.  Anyway, my phone would beep at me when I would get emails.  At 2AM, I started getting a crap load of beeps.  Normally I can sleep right through them, but this time they just kept coming.  I had to check my phone to see what was up.  Those beeps were orders rolling in from Amazon.  I had a brief smile on my face until I noticed one glaring issue.

I didn’t sell the product people were ordering!

Oh crap!  How did this happen?  Why are these people ordering this item from me?  I didn’t have them in my inventory and I surely couldn’t get them at the price I had listed it at.  Damn!

I shot out of bed so quick because I needed to do damage control.  I needed to shut off my listing for said product.  Do you want to know what the product was? It was a Nikon digital camera similar to this one.  The camera cost roughly $350 a piece.  My list was selling that camera at $29.99.  Yes, you read that right, I was selling one of the most popular cameras for nearly 85% off.  People were buying everything I had in stock.  The problem was I had none in stock.

In order to reduce the pain, I opened my last Amazon inventory update.  I found the ASIN of the Nikon camera in my Excel sheet and looked through to see where the price and quantity came from.  Quickly, I realized it was me.  I was in such a hurry that I didn’t fill down my formula correctly and both the quantity and price were one row off.  All of my product listings were wrong, but this was the one that everyone was looking at.

By the time I had removed the listing, people had bought nearly 200 cameras.  The quantity I had listed was 3,800, which corresponded with a stupid memory card the row above the camera listing.  For those who don’t want to do the math, here is what it came to be.

$70,000

Yep, in a matter of hours, I sold over $70,000 worth of cameras I didn’t even have in stock at a price that no one could match.  Not even the manufacturer.  I was up shit’s creek without a paddle people.  I immediately had to cancel everyone’s order and email them my sincerest apologies.  Some people understood, but most were very upset and left my with negative feedback on Amazon.  Because of this, I was kicked off of Amazon for not fulfilling my customer’s orders.  The other part was that it was two weeks before Christmas, which was my selling season.

So, how did this mistake cost me $10,000?  Well, since I couldn’t sell on Amazon, I wasn’t getting sales.  I could only rely on my other channels, but nothing can compare to Amazon.  I rushed my butt off to contact people at Amazon to see if I could get reinstated.  After three days and many phone calls and a little pleading, I was back on Amazon.  During those three days, I lost out on $10,000 in sales.  All because I was rushing to get things done and burning the midnight oils. I made one stupid Excel mistake that is really simple to make.  That little error could have cost me much more, but I still lost out on $10,000 in orders.  As a one-man show, that hurt.  It hurt a lot.

The whole point of this long-winded post is to show you that everyone makes mistakes. Some mistakes are worse than others.  Along those lines, it also should show you to never give up when something bad happens.  While I did get kicked off Amazon, I didn’t cry about it. I reached out to my contacts and figured out what I did wrong.  I pleaded my case and got right back on the horse.  The whole fiasco showed me how vulnerable my process was and I was able to clean it up and create an error free process.  Good things can come out of bad situations!

 

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Grayson Bell

Grayson Bell

I'm a business owner, blogger, father, and husband. I used credit cards too much and found myself in over $75,000 in debt ($50,000 in just credit cards). I paid it off, started this blog, and my financial life has changed. I now talk about fighting debt and growing wealth here. I run a WordPress maintenance and support company, along with another blog. It is Empowered Shopper, which helps people get information about products they want to buy. You can also check out Eyes on the Dollar, which is a great blog that I co-own.

42 Comments

  1. July 21, 2014 at 7:22 am — Reply

    Ouch! I suppose we live and learn, but some mistakes can be tough. It seems like you have the right mindset to never give up. Thanks for sharing your story!

    • July 23, 2014 at 9:14 am — Reply

      We do live and learn, but that was particularly hard to swallow for me.

  2. July 21, 2014 at 7:45 am — Reply

    Wow, I can’t even imagine sir. That sounds like something I would do out of tiredness. Kudos to you though for not giving up and pushing to get back on Amazon.

    • July 23, 2014 at 9:15 am — Reply

      I couldn’t give up that easily. I was able to see how much money could be made, but it took a lot of work for sure.

  3. July 21, 2014 at 8:28 am — Reply

    Ouch, but in the grand scheme of things, thankfully it was only 10,000. Learning these tips and tricks about amazon is really interesting!

    • July 23, 2014 at 9:15 am — Reply

      While I would say it was only $10,000, that was a big chunk of money I could have used to put toward my debt.

  4. July 21, 2014 at 8:46 am — Reply

    Oh, man, that stinks! A $10,000 money mistake is no small amount. The closest thing I have to a big money mistake is my student loan debt, which started at $206,000! While it’s down to $160,000, there’s still a long way to go. I would’ve loved to have had only $10,000 in student loans!

    • July 23, 2014 at 9:15 am — Reply

      I think your student loan debt beats mine!

  5. July 21, 2014 at 8:54 am — Reply

    Ugh what a mess. I am impressed by those selling numbers though. I’ve never had much success with online sales- through ebay, amazon, or otherwise.

    • July 23, 2014 at 9:16 am — Reply

      Thanks! It took me two years to reach that success and a lot of mistakes.

  6. July 21, 2014 at 9:02 am — Reply

    That is crazy! Especially for a one-man business, that is a ton of sales to lose out on! I’m sure those three days trying to get on Amazon were hell, but hopefully once you were back on the negative comments didn’t hurt your sales too bad!

    • July 23, 2014 at 9:16 am — Reply

      Thanks and yes, it was hell during those three days. All I could think about was trying to get back on.

  7. July 21, 2014 at 9:14 am — Reply

    I guess a lack of sales isn’t quite as bad as having to pay money out of pocket, but still. That’s a tough lesson but one well learned, it sounds like!

    I run a lot of Excel reports for my company executives and I tend to shy away from macros. Not many of our reports are the same, so everything is done by hand. There are a ton of helpful Excel tools but macros have always caused me pain!

    • July 23, 2014 at 9:17 am — Reply

      While that is true, it is just like I lost $10,000 because that money flowed right into my pocket as a sole proprietor. I needed that money to pay down my debt.

      Most of my work is in macros. That is what I thrive on, but I have learned a lot since then.

  8. July 21, 2014 at 9:16 am — Reply

    That’s crazy. I bet you probably made the front page of Slickdeals or something, which is why it launched all at once. Just hows how careful you have to be. Glad it ended up working out to get back on, otherwise it would have been a lot more than $10,000.

    • July 23, 2014 at 9:18 am — Reply

      I am sure something like that happened. If not, then I got on the front page of Amazon’s technology section.

  9. July 21, 2014 at 11:00 am — Reply

    Yikes! That is awful and I’m so sorry. That business sounds stressful so I’m glad you no longer have to deal with it!

    • July 23, 2014 at 9:18 am — Reply

      That business was extremely stressful, but it taught me so much.

  10. July 21, 2014 at 11:01 am — Reply

    Wow that’s crazy, I can’t imagine the stress you were probably in, but I’m glad you worked it out and it didn’t cost you any more.

  11. July 21, 2014 at 11:34 am — Reply

    Wow! That was definitely a painful lesson to learn. I love excel, but I am sometimes freaked out about adding too many formulas and macros to a spreadsheet, it makes me feel like I have less control. And it sucks that you lost the money, but at least you moved forward and have made up for it since.

    • July 23, 2014 at 9:19 am — Reply

      I love Excel as well. I do add a lot of formulas and macros, but those were in my early days when I wasn’t coding them well enough.

  12. July 21, 2014 at 12:44 pm — Reply

    Wow you had me on the edge of my seat reading, Grayson, when I say you had sold $70K of cameras with no stock. I thought you had to honor those sales! Yikes, I’m glad it only ended up being 10K of lost income as opposed to out of pocket costs. As an excel user, I totally understand how tiredness and excel don’t mix! 😉

    • July 23, 2014 at 9:20 am — Reply

      Haha, lucky, as the merchant I don’t have to honor any of the sales. If you don’t, then Amazon will kick you off and you have to plead to get back on.

  13. July 21, 2014 at 12:54 pm — Reply

    Holy crap I would be pissed about that mistake. Oh well though – it’s done and over now. I bet you’ll never make that error ever again.

    • July 23, 2014 at 9:20 am — Reply

      I was most certainly pissed about that mistake!

  14. July 21, 2014 at 1:02 pm — Reply

    OUCH! First off, I couldn’t imagine doing a million in sales in one year, that friggen rocks. The costly mistake really sucks though. At least you know you’ll never do it again!

    • July 23, 2014 at 9:20 am — Reply

      Thank Josh! I never imagined it until it happened.

  15. July 21, 2014 at 1:13 pm — Reply

    What a horror story, and just exactly the type of mistake I would be likely to make. On the other hand, it shows you the power of Amazon and your first year sales volume should be motivation to all of us.

    • July 23, 2014 at 9:21 am — Reply

      There is a power in Amazon for sure and that is why I recommend small online companies to get on their. You do have to have it all together before you try selling on Amazon though.

  16. July 21, 2014 at 1:14 pm — Reply

    Ouch! Thats a lot of money to lose. Oh well. You live and learn, right?

  17. July 21, 2014 at 1:27 pm — Reply

    Holy $hit man, that’s harsh… Thank goodness you WOKE UP and dealt with it asap! that’s a nightmare right here, my word… makes a helluva great blog post though 😉

    • July 23, 2014 at 9:21 am — Reply

      I was very attached to my phone back then. I would wake up almost every that crackberry beeped!

  18. July 21, 2014 at 3:18 pm — Reply

    Grayson, that last paragraph was my favorite in the whole story. We’ve fallen off the horse lots in the last year and a half, and it’s tough getting back up again. Thanks for giving us the motivation to keep getting back up. 🙂

    • July 23, 2014 at 9:22 am — Reply

      I have fallen off the horse a number of times. I just can’t stay on the ground. I don’t want to get dirty 😉

  19. July 21, 2014 at 4:49 pm — Reply

    Wow!! That is a crazy mistake! It’s a good thing you caught the mistake when you did…imagine what would have happened had you not!

    • July 23, 2014 at 9:22 am — Reply

      I don’t even want to know what would have come of it had I not woken up and turned off the listing. I would assume it would have been about 2,000 sales!

  20. July 22, 2014 at 1:54 pm — Reply

    Ouch! I have had a few Excel screwups, but never quite that bad. Earlier this month, I thought that I would have a big wad of cash to pay towards a student loan, but discovered that I made a formula error and instead we’re just breaking even this month. womp womp.

    • July 23, 2014 at 9:14 am — Reply

      I am typically really good with Excel. It is my main job, but this was a few years ago and it was a tired mistake. It was a costly mistake for sure.

  21. July 22, 2014 at 10:32 pm — Reply

    That number isn’t even something I can comprehend! Great to know you were able to bounce back. I also didn’t have any clue that was why they did Black Friday.

    • July 23, 2014 at 9:13 am — Reply

      Well, it isn’t why they do Black Friday, but that is why they call it Black Friday!

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