Don’t ignore the data
It constantly shocks me how few sellers know their conversion rates
or sessions (visits). Don’t join them!
Equally: don’t drown in data either!
Make sure your “necktop computer” can absorb what your laptop is
Detail Page Sales & traffic report (Under “Reports>Business Reports” )
• Sessions: Is your product getting seen? If not, it’s time to drive
• Units ordered: Are you making sales? How many?
• Unit session percentage: = conversion rate. How well (as a
%age) is your listing converting visitors to buyers? If this is low,
it’s time to improve your offer (inc. price)
Profit and Loss
Don’t get buried in the numbers. Measure for a purpose
• The purpose of P & L is to help with decisions:
• Will you reorder this product?
• If so, how many units, what can you afford (cashflow)?
• Use software for Gross Profit!
• e.g. Manage by Stats, Fetcher, HelloProfit
Amazon Ad Spend
• If you’re launching, expect to spend a LOT initially. That’s fine IF
you’re gaining keyword ranking for valuable keywords as a result.
• Overall picture by campaign: Monitor for either really good
(profitable) or really bad (expensive) results.
Measure Keyword by keyword for manual campaigns:
• Look for sales – are you driving sales and ranking?
• Next look for clicks – are you telling the algorithm to rank your
• Check CTR (Click-Through Rate). Over 0.7% is good for ranking.
Get the Overall ad spend by-product:
• Take the ad-spend on a product for a period.
• Check your overall sales (Business reports) for the same period.
• Calculate your ad-to-sales ratio (ATS). If it’s high in launch
period, that’s fine. After launch, aim for about 10% overall.
• Mostly ignore ACoS unless it’s super high (over 100%). It’s a red
Last time on Amazing FBA, we talked about startup businesses. Today, in part two of my discussion with Penny Lowe, owner of Wellington Consulting, we’re focusing on accounting for companies that would qualify for the 10k collective. In a nutshell, today we’re going to be talking about scaling from an accounting perspective.
It’s long overdue that we’ve had an accountant on Amazing FBA. Today I’ll be sitting down for part one of my interview with Penny Lowe, owner of Wellington Consulting. If I had to name one single item as the most significant pain point for most entrepreneurs, it’s accounting. So many people in all walks of business struggle with tax accounting, bookkeeping, and payroll. It’s impossible to cover everything accounting in just an hour’s worth of interviews, but today in part one of this two part series on accounting, we’ll be covering the basics for new sellers on Amazon.
It is important for any business to measure its profit and loss as this helps in determining the direction of the business. It helps in understanding if the business is headed in the right direction or if there are changes that need to be implemented. Continue reading
The final 5th part of this miniseries of 5 episodes, this completes this overview of Profit Maximizing Strategies. Remember the basics: you can only increase profit 2 ways:
We looked last time at decreasing your overheads. Here we address the other profit killer: your Direct Costs.
Otherwise known as COGS=Cost of Goods Sold.
look at your Total Landed Cost (TLC): Here are some ideas for reducing these:
-Manufacturing cost – can you negotiate with your supplier for lower costs? If you order more units, can you get a lower per unit price?
-Freight cost – get multiple freight quotes. Order more in bulk so you can sea freight rather than air freight etc. Choose lighter products!
Also consider your Amazon costs when choosing a product:
-Weight handling costs: Consider product weight & calculate costs very carefully if considering a heavy product. Will it make a profit?
-Oversize product costs: same things to consider as heavy products.
-Amazon Warehousing/storage – generally these are low but again very bulky products may increase these – do your P&L calculations carefully as well.
Other supply chain cost reductions: