Doing $10K a month in sales, but quitting Amazon
You may think I’m fortunate in that I’m doing just under $10K per month in sales. But once my stock runs out, I’m quitting Amazon. Unbelievably, I’m making almost no profit. Amazon has fingers in so many pies that there’s just nothing left at the end to make staying worthwhile.
I did all the working out at the beginning. I should be making 45% ROI. But I just didn’t know that I’d be getting enormous FBA storage fees (Got a $600 ‘inventory storage bill’ the other day, then the next day another LSF bill!!) and then LSF fees in addition to those fees, then advertising is necessary in my case, I still haven’t got my head around all the different sales taxes for USA and then on top of that, returns (due to customer not measuring themselves properly), send the item back (at charge to me), incurring yet more charges.
It looks grand, seeing $10K a month rolling in, dozens of sales daily - Gives the appearance I’m doing really well… But the reality is that Amazon is seeing 80% of that and the rest is just what it takes to make the product and land it in Amazon.
Of course you’re going to say I’m doing it all wrong. Then I am, I suppose. It’s just disheartening, feeling like a worker bee and getting little in return. So I’m done with it, for Amazon.com - Other marketplaces are more profitable. I’m going to stick with those. Just my two cents contribution/moan, for what it’s worth!
17 replies
Seller_EPJQ1xQmX18hq
I don’t blame you one bit. Low margin/high volume sellers are successful on Amazon, but Amazon has commoditized many categories and its no longer worthwhile to list products in those categories. You can make money with speciality products, but they generally have low rank and weak volume. Private label products end up in a race to the bottom with Chinese sellers making up their own brand and jumping into the mix. Then you have Amazon itself, picking off private label products with its own “Amazon Brand” label.
If Seller Central had a widget that displayed your sales, margins and profit, the vast majority of sellers would leave the platform.
“Your margin is my opportunity” - Jeff Bezos
Seller_X9AxWaXfNnGAl
That is probably the best decision for you.
However, I think your expectations might a bit high.
The 45% ROI expectation might be out line.
If you separate out your product sales from your fulfillment and ensure that you price adequately for the fulfillment, you might be doing better than you think.
Most mail order business tracks their shipping income/expenses separate from the product sales. They may partially subsidize their shipping costs from their product sales, but that is an informed decision. They won’t usually just take all of their shipping costs out of their margins.
You also need to consider your referral fees as part of your advertising costs. 15% is not unreasonable. A website will often pay more than that for customer acquisition.
Regardless, at the end of the day, you should have profit. Your product cost, fulfillment fees, referral fees, and any other costs you might incur should still result at a reasonable margin, but all things considered 45% is still a bit optimistic.
A typical wholesale purchase is around 50% of your selling price. Take 15% off of that and you are probably looking at less than 35%.
If you are paying 30% of your selling price for fulfillment, that needs to be added back into the purchase - either as a separate fee (for FBM) or by increasing the selling price to include that fee.
So, your base selling price might be 130% of the MSRP when including shipping and after you take off the 15% referral and 30% fulfillment and the 50% COGS, you should still have up to 35% from the MSRP as your profit or that could be reduced for product discounts or other expenses. However, if your fulfillment costs are not added into your pricing, that might leave you with only 5%, which is not going to be adequate.
The LTS fees are a wild card in there, but you need to be responsible to clear out items that will cost you the LTS fees. They are designed to encourage you to take them out of inventory. If they are affecting too many of your products, those are products to discontinue and take off Amazon.
Dave
Seller_PsxScQon0oOt0
I agree… I am successful in my professional life…leaving also!!! A bunch of greedy people…
Seller_mBRPkkhJLYPb9
I agree, there is so little profit.
Should we flip hamburgers to make more money?
Seller_tNSvCjiOBuiLN
Anyone who thinks you are fortunate for doing 10k in sales doesn’t understand business. Your revenue has nothing to do with your profit. Someone can sell $10 a year and make more than someone selling millions. Refocus yourself and rely on profit rather than revenue
Seller_1EskFdm7jscEo
If you live outside of the United States I see where you have more of a challenge.
I live in France selling our olive oil on Amazon.com
What I did was I secured a fulfillment warehouse, mine is cold storage, but for apparal you wouldn’t need that. I found 2 good fulfillment warehouses in Ohio.
If I did not take the cold storage warehouse I would have taken WeFulfillIT in Toledo Ohio. They will resupply your FBA inventory for you and send it to Amazon for you at a very low cost.
If you set up an account with WeFulfillIT you could place a removal order and have it shipped there. It is a big enough business that they know what they are doing but small enough so that if you call you can actually talk to the right person.
I raised my prices on my main selling size, that half a liter by $5 over last year. My sales really picked up after I did a Brand Page and then Enhance Brand Content for the individual products. Prior to that they were not moving as fast as when they were $5 cheaper. I had to price it appropriately, I have a lot of expenses in shipping and storage, I don’t want to break even on Amazon, I need a little coin in my pocket.
Best of luck to you.
Doing $10K a month in sales, but quitting Amazon
You may think I’m fortunate in that I’m doing just under $10K per month in sales. But once my stock runs out, I’m quitting Amazon. Unbelievably, I’m making almost no profit. Amazon has fingers in so many pies that there’s just nothing left at the end to make staying worthwhile.
I did all the working out at the beginning. I should be making 45% ROI. But I just didn’t know that I’d be getting enormous FBA storage fees (Got a $600 ‘inventory storage bill’ the other day, then the next day another LSF bill!!) and then LSF fees in addition to those fees, then advertising is necessary in my case, I still haven’t got my head around all the different sales taxes for USA and then on top of that, returns (due to customer not measuring themselves properly), send the item back (at charge to me), incurring yet more charges.
It looks grand, seeing $10K a month rolling in, dozens of sales daily - Gives the appearance I’m doing really well… But the reality is that Amazon is seeing 80% of that and the rest is just what it takes to make the product and land it in Amazon.
Of course you’re going to say I’m doing it all wrong. Then I am, I suppose. It’s just disheartening, feeling like a worker bee and getting little in return. So I’m done with it, for Amazon.com - Other marketplaces are more profitable. I’m going to stick with those. Just my two cents contribution/moan, for what it’s worth!
Doing $10K a month in sales, but quitting Amazon
You may think I’m fortunate in that I’m doing just under $10K per month in sales. But once my stock runs out, I’m quitting Amazon. Unbelievably, I’m making almost no profit. Amazon has fingers in so many pies that there’s just nothing left at the end to make staying worthwhile.
I did all the working out at the beginning. I should be making 45% ROI. But I just didn’t know that I’d be getting enormous FBA storage fees (Got a $600 ‘inventory storage bill’ the other day, then the next day another LSF bill!!) and then LSF fees in addition to those fees, then advertising is necessary in my case, I still haven’t got my head around all the different sales taxes for USA and then on top of that, returns (due to customer not measuring themselves properly), send the item back (at charge to me), incurring yet more charges.
It looks grand, seeing $10K a month rolling in, dozens of sales daily - Gives the appearance I’m doing really well… But the reality is that Amazon is seeing 80% of that and the rest is just what it takes to make the product and land it in Amazon.
Of course you’re going to say I’m doing it all wrong. Then I am, I suppose. It’s just disheartening, feeling like a worker bee and getting little in return. So I’m done with it, for Amazon.com - Other marketplaces are more profitable. I’m going to stick with those. Just my two cents contribution/moan, for what it’s worth!
17 replies
17 replies
Seller_EPJQ1xQmX18hq
I don’t blame you one bit. Low margin/high volume sellers are successful on Amazon, but Amazon has commoditized many categories and its no longer worthwhile to list products in those categories. You can make money with speciality products, but they generally have low rank and weak volume. Private label products end up in a race to the bottom with Chinese sellers making up their own brand and jumping into the mix. Then you have Amazon itself, picking off private label products with its own “Amazon Brand” label.
If Seller Central had a widget that displayed your sales, margins and profit, the vast majority of sellers would leave the platform.
“Your margin is my opportunity” - Jeff Bezos
Seller_X9AxWaXfNnGAl
That is probably the best decision for you.
However, I think your expectations might a bit high.
The 45% ROI expectation might be out line.
If you separate out your product sales from your fulfillment and ensure that you price adequately for the fulfillment, you might be doing better than you think.
Most mail order business tracks their shipping income/expenses separate from the product sales. They may partially subsidize their shipping costs from their product sales, but that is an informed decision. They won’t usually just take all of their shipping costs out of their margins.
You also need to consider your referral fees as part of your advertising costs. 15% is not unreasonable. A website will often pay more than that for customer acquisition.
Regardless, at the end of the day, you should have profit. Your product cost, fulfillment fees, referral fees, and any other costs you might incur should still result at a reasonable margin, but all things considered 45% is still a bit optimistic.
A typical wholesale purchase is around 50% of your selling price. Take 15% off of that and you are probably looking at less than 35%.
If you are paying 30% of your selling price for fulfillment, that needs to be added back into the purchase - either as a separate fee (for FBM) or by increasing the selling price to include that fee.
So, your base selling price might be 130% of the MSRP when including shipping and after you take off the 15% referral and 30% fulfillment and the 50% COGS, you should still have up to 35% from the MSRP as your profit or that could be reduced for product discounts or other expenses. However, if your fulfillment costs are not added into your pricing, that might leave you with only 5%, which is not going to be adequate.
The LTS fees are a wild card in there, but you need to be responsible to clear out items that will cost you the LTS fees. They are designed to encourage you to take them out of inventory. If they are affecting too many of your products, those are products to discontinue and take off Amazon.
Dave
Seller_PsxScQon0oOt0
I agree… I am successful in my professional life…leaving also!!! A bunch of greedy people…
Seller_mBRPkkhJLYPb9
I agree, there is so little profit.
Should we flip hamburgers to make more money?
Seller_tNSvCjiOBuiLN
Anyone who thinks you are fortunate for doing 10k in sales doesn’t understand business. Your revenue has nothing to do with your profit. Someone can sell $10 a year and make more than someone selling millions. Refocus yourself and rely on profit rather than revenue
Seller_1EskFdm7jscEo
If you live outside of the United States I see where you have more of a challenge.
I live in France selling our olive oil on Amazon.com
What I did was I secured a fulfillment warehouse, mine is cold storage, but for apparal you wouldn’t need that. I found 2 good fulfillment warehouses in Ohio.
If I did not take the cold storage warehouse I would have taken WeFulfillIT in Toledo Ohio. They will resupply your FBA inventory for you and send it to Amazon for you at a very low cost.
If you set up an account with WeFulfillIT you could place a removal order and have it shipped there. It is a big enough business that they know what they are doing but small enough so that if you call you can actually talk to the right person.
I raised my prices on my main selling size, that half a liter by $5 over last year. My sales really picked up after I did a Brand Page and then Enhance Brand Content for the individual products. Prior to that they were not moving as fast as when they were $5 cheaper. I had to price it appropriately, I have a lot of expenses in shipping and storage, I don’t want to break even on Amazon, I need a little coin in my pocket.
Best of luck to you.
Seller_EPJQ1xQmX18hq
I don’t blame you one bit. Low margin/high volume sellers are successful on Amazon, but Amazon has commoditized many categories and its no longer worthwhile to list products in those categories. You can make money with speciality products, but they generally have low rank and weak volume. Private label products end up in a race to the bottom with Chinese sellers making up their own brand and jumping into the mix. Then you have Amazon itself, picking off private label products with its own “Amazon Brand” label.
If Seller Central had a widget that displayed your sales, margins and profit, the vast majority of sellers would leave the platform.
“Your margin is my opportunity” - Jeff Bezos
Seller_EPJQ1xQmX18hq
I don’t blame you one bit. Low margin/high volume sellers are successful on Amazon, but Amazon has commoditized many categories and its no longer worthwhile to list products in those categories. You can make money with speciality products, but they generally have low rank and weak volume. Private label products end up in a race to the bottom with Chinese sellers making up their own brand and jumping into the mix. Then you have Amazon itself, picking off private label products with its own “Amazon Brand” label.
If Seller Central had a widget that displayed your sales, margins and profit, the vast majority of sellers would leave the platform.
“Your margin is my opportunity” - Jeff Bezos
Seller_X9AxWaXfNnGAl
That is probably the best decision for you.
However, I think your expectations might a bit high.
The 45% ROI expectation might be out line.
If you separate out your product sales from your fulfillment and ensure that you price adequately for the fulfillment, you might be doing better than you think.
Most mail order business tracks their shipping income/expenses separate from the product sales. They may partially subsidize their shipping costs from their product sales, but that is an informed decision. They won’t usually just take all of their shipping costs out of their margins.
You also need to consider your referral fees as part of your advertising costs. 15% is not unreasonable. A website will often pay more than that for customer acquisition.
Regardless, at the end of the day, you should have profit. Your product cost, fulfillment fees, referral fees, and any other costs you might incur should still result at a reasonable margin, but all things considered 45% is still a bit optimistic.
A typical wholesale purchase is around 50% of your selling price. Take 15% off of that and you are probably looking at less than 35%.
If you are paying 30% of your selling price for fulfillment, that needs to be added back into the purchase - either as a separate fee (for FBM) or by increasing the selling price to include that fee.
So, your base selling price might be 130% of the MSRP when including shipping and after you take off the 15% referral and 30% fulfillment and the 50% COGS, you should still have up to 35% from the MSRP as your profit or that could be reduced for product discounts or other expenses. However, if your fulfillment costs are not added into your pricing, that might leave you with only 5%, which is not going to be adequate.
The LTS fees are a wild card in there, but you need to be responsible to clear out items that will cost you the LTS fees. They are designed to encourage you to take them out of inventory. If they are affecting too many of your products, those are products to discontinue and take off Amazon.
Dave
Seller_X9AxWaXfNnGAl
That is probably the best decision for you.
However, I think your expectations might a bit high.
The 45% ROI expectation might be out line.
If you separate out your product sales from your fulfillment and ensure that you price adequately for the fulfillment, you might be doing better than you think.
Most mail order business tracks their shipping income/expenses separate from the product sales. They may partially subsidize their shipping costs from their product sales, but that is an informed decision. They won’t usually just take all of their shipping costs out of their margins.
You also need to consider your referral fees as part of your advertising costs. 15% is not unreasonable. A website will often pay more than that for customer acquisition.
Regardless, at the end of the day, you should have profit. Your product cost, fulfillment fees, referral fees, and any other costs you might incur should still result at a reasonable margin, but all things considered 45% is still a bit optimistic.
A typical wholesale purchase is around 50% of your selling price. Take 15% off of that and you are probably looking at less than 35%.
If you are paying 30% of your selling price for fulfillment, that needs to be added back into the purchase - either as a separate fee (for FBM) or by increasing the selling price to include that fee.
So, your base selling price might be 130% of the MSRP when including shipping and after you take off the 15% referral and 30% fulfillment and the 50% COGS, you should still have up to 35% from the MSRP as your profit or that could be reduced for product discounts or other expenses. However, if your fulfillment costs are not added into your pricing, that might leave you with only 5%, which is not going to be adequate.
The LTS fees are a wild card in there, but you need to be responsible to clear out items that will cost you the LTS fees. They are designed to encourage you to take them out of inventory. If they are affecting too many of your products, those are products to discontinue and take off Amazon.
Dave
Seller_PsxScQon0oOt0
I agree… I am successful in my professional life…leaving also!!! A bunch of greedy people…
Seller_PsxScQon0oOt0
I agree… I am successful in my professional life…leaving also!!! A bunch of greedy people…
Seller_mBRPkkhJLYPb9
I agree, there is so little profit.
Should we flip hamburgers to make more money?
Seller_mBRPkkhJLYPb9
I agree, there is so little profit.
Should we flip hamburgers to make more money?
Seller_tNSvCjiOBuiLN
Anyone who thinks you are fortunate for doing 10k in sales doesn’t understand business. Your revenue has nothing to do with your profit. Someone can sell $10 a year and make more than someone selling millions. Refocus yourself and rely on profit rather than revenue
Seller_tNSvCjiOBuiLN
Anyone who thinks you are fortunate for doing 10k in sales doesn’t understand business. Your revenue has nothing to do with your profit. Someone can sell $10 a year and make more than someone selling millions. Refocus yourself and rely on profit rather than revenue
Seller_1EskFdm7jscEo
If you live outside of the United States I see where you have more of a challenge.
I live in France selling our olive oil on Amazon.com
What I did was I secured a fulfillment warehouse, mine is cold storage, but for apparal you wouldn’t need that. I found 2 good fulfillment warehouses in Ohio.
If I did not take the cold storage warehouse I would have taken WeFulfillIT in Toledo Ohio. They will resupply your FBA inventory for you and send it to Amazon for you at a very low cost.
If you set up an account with WeFulfillIT you could place a removal order and have it shipped there. It is a big enough business that they know what they are doing but small enough so that if you call you can actually talk to the right person.
I raised my prices on my main selling size, that half a liter by $5 over last year. My sales really picked up after I did a Brand Page and then Enhance Brand Content for the individual products. Prior to that they were not moving as fast as when they were $5 cheaper. I had to price it appropriately, I have a lot of expenses in shipping and storage, I don’t want to break even on Amazon, I need a little coin in my pocket.
Best of luck to you.
Seller_1EskFdm7jscEo
If you live outside of the United States I see where you have more of a challenge.
I live in France selling our olive oil on Amazon.com
What I did was I secured a fulfillment warehouse, mine is cold storage, but for apparal you wouldn’t need that. I found 2 good fulfillment warehouses in Ohio.
If I did not take the cold storage warehouse I would have taken WeFulfillIT in Toledo Ohio. They will resupply your FBA inventory for you and send it to Amazon for you at a very low cost.
If you set up an account with WeFulfillIT you could place a removal order and have it shipped there. It is a big enough business that they know what they are doing but small enough so that if you call you can actually talk to the right person.
I raised my prices on my main selling size, that half a liter by $5 over last year. My sales really picked up after I did a Brand Page and then Enhance Brand Content for the individual products. Prior to that they were not moving as fast as when they were $5 cheaper. I had to price it appropriately, I have a lot of expenses in shipping and storage, I don’t want to break even on Amazon, I need a little coin in my pocket.
Best of luck to you.
