How to actually make money
HOW do people generally make money on a product?
I sell an item that costs £3.00. FBA fees are £3.00 and I sell for £9.99.
But somehow after 11 months. I have sold £10,480.62 of orders. Costing £3,317.57 in product cost. Yet amazon have charged £7,554.51. Meaning I have lost -£391.46
HOW, JUST HOW IS THIS POSSIBLE!
I can’t continue with this. HOW am I suppose to make a living selling on amazon FBA with so many charges. I am loosing money.
91 replies
Seller_esvgLzKXw2YAl
It’s simple enough.
You work out what it’s going to cost BEFORE you decide on a selling price!
You price for profit, not for sales.
Seller_7VbclcPFFRTnc
you have to work out your costs and price it correctly
Seller_7VbclcPFFRTnc
£3.60 if you are not VAT registered
are you looking at the fulfilment and referral costs
have you actually looked at your transaction view of a sale to see what the actual fees are on each sale as on your figures, if the item cost was £3 and the FBA fee £3 , taking £7554 means they are double what you expected
how about advertising and FBA shipment costs , have you accounted for those ?
Seller_esvgLzKXw2YAl
This is on one of your products.
Bear in mind, that is worked as if your VAT registered. It doesn’t include any expenses for returns, sending to Amazon etc.
Use the Revenue Calculator to work out your costs before listing.
Seller_77IcbQKVGdZo0
Your actual losses are higher than this as you have to take into account other overheads so you have probably lost significantly more.
Simply understand your costs/fees and raise your prices so you are making a profit.
Also keep an eye on your FBA fees as errors happen with measurements and you can be charged more than you expect.
I wouldn’t also wait 11 months to find out my profit/loss. I currently work this out on a monthly basis.
Also with the accounting package I have now I do a daily estimate which helps me to understand if I am coming across any problems. It is probably a little more work than some would do but it works for me.
Seller_ICqvJVQurZXgc
Ball park figures you have sold app 1000 units over 11 months say 330 days so about 3 sales a day and your pumping 4£ plus vat into the advertising budget so each sale is costing you about £1.50 in advertising.
With FBA at £3 per item is that just postage or your referal cost cause you mght as well be sending them out yourself at 3 items a day.
Basically the product is not right for your pricing point and someone is either getting it a lot cheaper than you or is not spending on the advertising or spending better on the advertising.
Seller_DTufFoxJuMU0M
Yeah I’ll sell things at a 40p loss before I’ll pay for disposal
Going to cost me the same in the long run anyway, so might as well have a happy customer at the end of it
But thats for things that are nearing 365 days (soon to be 270) and are going to attract LTSF’s, at that stage I just want rid because they’re going to literally start costing me money
Seller_AhvvRglv9UwMu
As well as using the revenue calculator, have you checked what fees you’ve actually been charged against a specific order/product? For example, in the past I’ve used the ‘Transaction View’
Click on an order and you will see the details of the fees charged
We are being charged a total fee of £7.86 for a product selling for £26.95. FBA is a no brainer for us, because if we were to sell this via FBM we wouldn’t make as much profit. Our orders are sent using Royal Mail either signed for or tracked service, which starts at £3.71 for us.
