In the early days of starting a business, our cost accounting and revenue forecasts for Amazon stores were not very accurate, but this also allowed us to be mentally prepared. To put it bluntly, “Goals must be set, just in case they are achieved.” For example, in the next 12 months, the monthly cost of the target listing is $12,000, and the revenue target is $30,000-50,000. Then, a feasible operation plan is made based on these. The most important thing is that we need to know how much money we need to invest in the next year and how much money we can make, which is similar to the investment income of the project. As we all know, for FBA sellers, the initial cost budget will be more than that for self-delivery. Among them, the payment for goods is the expenditure that occupies the most funds. After all, there is still a certain amount of financial pressure to prepare goods for FBA first. Of course, in addition to the purchase cost of the product, what other expenses are there? Let’s first look at the calculation formula for order revenue: “Order revenue = sales – procurement cost – Amazon first leg – order commission – FBA logistics costs – promotional discounts + specific sales tax – CPC advertising fees – Listing operating costs (varies from person to person, using rent, labor, property water and electricity, etc. weighted average). “
Although some of the operating costs cannot be accurately estimated, we can use software to achieve initial cost accounting to provide a reference for future Listing operations. Here are 3 small tools to share with you.
1. Official FBA profit calculator
You can find it in the seller’s exclusive navigation. Then select your target market and enter the FBA calculator.
Follow the prompts and fill in the corresponding data. Remember not to fill in the wrong counting unit, including size, capacity, and currency. Note: The profit margin here only excludes the product procurement cost, Amazon platform fees (commission + FBA fees) and logistics first leg costs. Other operating-related costs are not included and need to be calculated separately.
2. SMARTSCOUT Profit Calculator
The second tool is SMARTSCOUT’s FBA profit calculator. Just like the official FBA calculator, fill in the corresponding ASIN, quantity, price and cost in the designated boxes, and the software will automatically calculate the result.
It should be noted that the cost of FBA is divided into tiers.
3. EXCEL homemade FBA profit calculator
The third tool is an EXCEL version of the FBA profit calculator made by the team. It consists of multiple cost modules. It should be noted that after filling the relevant ASIN data into the gray cells, the cost will be automatically calculated in the “SUBTOTAL” column.
The first is FBA cost accounting, including FBA shipping, order commission, and FBA storage fees.
The second is the purchase cost and advertising budget of ASIN. After the basic information is filled in, EXCEL automatically calculates the profit and profit margin. The profit margin of ASIN in this case is 40.23%.
In addition to the above Listing cost-profit accounting, we must also ensure that the money is spent on the right things for the operation-related expenses. Therefore, we must set performance goals according to the different stages of Listing and monitor the corresponding store performance indicators in real time, including but not limited to product gross profit margin (40%, profit/sales x 100%), return on investment (45%, actual profit product cost x 100%), product sales rate STR (30%, 30/60/90 days), target keyword time on the homepage (1~2 weeks), ROAS (6~8, CPC revenue cost ratio), etc.
Through the above data collection and analysis, we have a full understanding of the target data of product selection. Finally, we refine it and present it in the form of an FBA project report table.
At the same time, the product selection data report will be compiled into a book in the form of a PDF file and enter the company’s product selection library.
At this point, the product selection report has come to an end. The overall process is not complicated, but there is a lot of data. As long as everyone takes it seriously, you will definitely gain something.