How to ensure profitability on Amazon

Everyone wants to make money on Amazon, rather than give away free products to buyers at a deep discount or collect long term storage fees. Here is my detailed advice addressing basic profitability tips.

𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁’𝘀 𝗳𝗲𝗲𝘀:

Go to amazon FBA revenue calculator and put the ASIN of your product to calculate all applicable fees.

𝗕𝘂𝘆𝗯𝗼𝘅:

Make sure your product is priced within 2% of the Buy Box.

The Buy Box is the widget located at the right side of the Amazon product page, which lists pricing and has the gold button that reads “Add to Cart.”

Whatever the current price is in the Buy Box, you should be aiming to be within 2% of that price. If your price is higher, your offer for the product may never display in the Buy Box.

𝗗𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲 𝘆𝗼𝘂𝗿 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆:

Profit percentage in wholesale averages between 15-30%. Subtract Amazon’s fees and the cost of your product from the sales price. If you’re in the positive, then yes: you’re profitable!

If you know how many products you expect to sell (if you have the stock or can estimate it — see next step), you can calculate profitability from those sales and fees, too.

𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲 𝘆𝗼𝘂𝗿 𝗺𝗼𝗻𝘁𝗵𝗹𝘆 𝘀𝗮𝗹𝗲𝘀:

Determine the product’s monthly sales estimate using the Jungle Scout Extension or free Sales Estimator, such as Keepa. Divide that number by the number of sellers on the listing plus one (which will be you). This is the average number of sales, which are shared on the listing.

For example, if a product has 2,000 sales per month and there are currently 4 sellers selling the product, the math looks like this:

2,000 / (4 + 1) = 400 sales per month.

Monitor 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱 𝘀𝘁𝗼𝗿𝗮𝗴𝗲 𝗳𝗲𝗲

To avoid costly storage fees on Amazon, try to keep only 2-3 months of sales in stock. For example, for the example product above, you would need 400-600 units in stock in order to cover sales between orders.

I hope you found this article helpful. Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Regarding Amazon Seller Performance, you can always participate in our Amazon Seller Performance – Friendly Advice – Worldwide group, where you will be very welcome.

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