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
This is the 4th of 5 episodes in the mini series with One aim: Increase Your Profit!
Today we address the less sexy side of increasing profits: decreasing costs! All of us are to some degree aware of costs when ordering inventory because a sudden spend of several $1000 in one go generally gets your attention!
But there is a hidden profit killer that I’ve fallen victim to too many times: OVERHEADS!
Your overheads creep up over time, it seems, like weeds! Add the latest software product once a month, use a VA for research, add a bank account… and it can add up over the months to several hundred pounds a month. If you are running a huge business, that’s fine – but is it in proportion?
Here’s what works for me: every 3-6 months latest (don’t leave it for over a year like I used to!), I download a CSV of a bank statement. I go through all my expenses and ruthlessly cull half or even 2/3 – anything the business doesn’t really need yet and isn’t necessary for expanding in the next 3-4 months.
Check the best deal for a business address, phone numbers.
Do you really need complex accounting software? I’ve used Xero and A2Xaccounting for 2 years. I still can’t make my bank accounts reconcile with the system – the result is that the Xero accounts are wildly out with reality.
I’m giving up and saving myself £50 a month.
For sales and profits tracking, I find cashcowpro really really helpful at just $29 a month or so.
Bootstrap to start with, get the cash coming in and THEN spend a proportionate amount of money on overheads. You should in any case do things manually to start with so you understand your business numbers and processes.
Face it, we mostly check our sales stats more than once a day! It’s so easy to overlook overheads but the danger is that all your hard-won gross profits get swallowed in your overhead. I’m embarrassed to admit how long I let that happen. Don’t copy my mistake!