I have been working this week and more money is going out then in… You may ask why is this the case when you are trying to save to finish your degree in Italy?? My main answer is the holidays, although it is not what you think. I am spending to gain more money back has the holidays are our busiest time to sell! I am spending my money as the main investor in our business and taking the : you have to spend money to make money” approach. I have purchased three new products to go into our Amazon store and I recently went to a book sale. I am trying my best to cram as much stock as I possibly can into our Amazon store. I also, figured out how much Amazon makes a year off an FBA seller that is selling the product. It is actually super interesting and since you are reading this you are obviously interested in saving money or you are an entrepreneur like myself. Ok, so I was introduced to this new site: http://www.junglescout.com/estimator/ it is one of my favorite sites. It estimates by the rank how much Amazon sells each month. If you type in the rank in the specific category you are selling in you will be able to find out how many of the specific products sell a month. This is how I figured out how much is making off the product here is my formula cost of FBA for the product x sales of the month= How much Amazon makes for FBA Cost. I will give you an example:
1,048×18=$18,864 how much Amazon makes off of FBA seller for the one product
Then you take your total and times it by 12 to get the annual cost of how much Amazon makes off of the FBA cost for one product.
where I may make $7 off a product and if I am only selling 10 of them that is $70
I would have to sell $13,090 worth of that product which would mean I would have to sell about 385 of that specific product. Out of that Amazon would make $6,930 off of my FBA fees.
If you can’t understand all of my crazy math here is a simple version:
Product Revenue: $34
Other fees including shipping, product cost etc. $11 ( This is usually more depending upon how much the product is).
I sell 385 products
Product: Revenue: $13,090
Amazon’s profit for FBA Charges: $6,930
Now you can understand how this new website is so valuable to me because, I can see if the product is selling well and I can figure out how much Amazon is making off of my sales. It is no wonder that have made for 12 months $38.52 billion. As long as Amazon continues to be used it with benefit from it FBA sellers. My usual profit margin is around 72% for the year to date which is great! Of course we are shooting for somewhere in the 80% profit margin. I am really enjoying being able to come into the business world and grasp what I am doing. I am now making full use of what ScanPower has to offer and the rankings. Rankings and our gross profit are extremely important to be able to keep our profit margin up as well as, our selling performance. I hope you all found that informative because that is what is going on in my business world right now.
Have an enlightening and adventurous day,