Joe Cox, Founder and Managing Partner of Ecommerce Accountants, started his career as a full-time accountant and Amazon seller on the side. When he couldn’t find a good accountant, he stepped up to the plate himself.
Though Joe was hesitant to re-enter the accounting space, he now enjoys serving e-commerce clients more than selling physical products himself.
Brexit and the pandemic have drastically changed e-commerce in the UK. Although online sales have reached record highs, dropshipping businesses have taken a hit because of tax changes.
Ever had a side hustle that morphed into a full-time gig? What about a situation where the side hustle and the day job fully integrate?
That’s what happened for Joe Cox, Founder and Managing Partner of London’s Ecommerce Accountants. He earned his certification as an accountant while working as an Amazon seller on the side. After finishing his accounting credits, Joe made accounting his backup plan and put Amazon in the forefront.
But when it came time to do the books for his e-commerce business, Joe found that there was a major hole in the market.
“We just couldn't find an accountancy in the UK that we could give the books to. I had a bookkeeper that was working for me. We had a team in the UK, an office, and a lot of products that we were making and selling. I'd quit accounting because I didn't really enjoy it, and started this online thing, which I really enjoyed, but then ended up basically being an internal finance function,” Joe says of the inception of Ecommerce Accountants.
On episode 46 of the Accounting Leaders Podcast, Joe chats with host and Karbon CEO, Stuart McLeod, sharing the growth trajectory of Ecommerce Accountants, his team’s tech stack, and the difference between providing services and products. Plus, Joe and Stuart discuss some of the trends affecting trade in the UK.
Ecommerce Accountants provides bookkeeping services for a particular vertical without an abundance of competition. Because of that, Joe says they’ve had to be more selective about what clients they take.
Being involved with e-commerce for so long, Joe knows there are two types of businesses: those that have longevity; and those looking to make a quick buck, which often flame out within six to nine months. Joe’s found that the more fulfilling work comes from the clients with lasting power.
Over the past several months, Ecommerce Accountants has inadvertently adopted a ‘one in, one out’ policy for clients—meaning it doesn’t take on a new client unless one is leaving.
They’ve also increased their pricing, which discourages one-and-done clients. Having higher fees allows Joe’s team to spend the time they need to fully service their clients and deliver high-quality outcomes.
“We're getting quite complex problems, like people that haven’t been able to figure out how to deal with the data on various sales channels. We were able to do it for them. It's way more fulfilling. They're not cost-sensitive because they see the value in the work that we're doing,” Joe tells Stuart on the podcast.
Joe initially started Ecommerce Accountants with some reluctance, as he preferred the thrill of selling online to the grind of accounting. But in recent years, he’s found it to be the opposite.
“In some ways, the accounting side is way more fulfilling. When you're working with people and you have good outcomes, and especially when you're able to train someone well and help them develop, I find it’s been surprisingly satisfying.”
“Selling products online was very much just like ‘money, money, money,’ because all you're doing is making stuff and selling it.”
Joe shares one of his favorite client success stories with Stuart. One of his clients started as an Amazon seller, ended up becoming an Amazon employee, and now owns his own Amazon consultancy.
By complete coincidence, both Joe and the client started in the same rundown office building before upgrading to their current location around the same time. Now, Joe and the client often see overlap in their respective businesses—Joe does accounting for some of the same customers that his client provides consulting services for.
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Being in Britain, Joe’s seen many changes in the last two years. During the pandemic, he watched his clients’ sales soar due to more people shopping online than in-person.
“When we work with our clients, we usually get secondary user access to a lot of their accounts. Amazon and Shopify are quite visual. In May and June 2020, people's sales charts were spiking higher than they do in Christmas, Black Friday, and Cyber Monday—and those days are insane,” Joe shares of his clients’ success.
On the accounting firm side, Joe saw an influx of new online businesses from people eager to ride the wave of e-commerce. Add that to pandemic relief measures that accountants had to manage, and his hands were full.
More recently, Brexit has thrown new curveballs into Ecommerce Accountants’ work. For starters, tax changes brought on by Brexit now disincentivize Brits from dropshipping, the practice of fulfilling retail orders without keeping stock on hand.
Now, thanks to Joe’s focus on Ecommerce Accountants’ client portfolio and cautious growth, he has a hybrid team of 25. Though he’s not eager to add a host of new clients any time soon, he’s looking to increase advisory services. That doesn’t necessarily come easy with e-commerce, though.
“E-commerce businesses have inventory, which is the main thing on their balance sheet, and that affects their profit and loss. Unless the client has that sorted, it’s very difficult to offer advisory,” Joe explains.
While he’s not ready to tackle e-commerce accounting outside of the UK just yet, Joe does look forward to continuing his mastery of the UK’s e-commerce market.
“There's still a lot of work for us to do here. Once we've mastered the advisory stuff here, and got a big enough team—whether that's 100 or 250 people—then I think we can start looking at Australia, New Zealand, America, Canada, those sorts of places.”