Let's get real - Profits selling on Amazon

[4x4ord]

As I am growing an Amazon FBA business, it is becoming more evident everyday all the disillusion out there about profits and growth rates of Amazon based businesses.

I've only been selling on Amazon for 3 months, but I have 6 products, all imported from China, that are being sold through FBA. I'm still currently buying at "sample" quantities of 50-300 pieces, so my number are skewed. My gross profits per sale currently range from 0 to 23%. My product sales prices range from $25 to $105.

I'm working to target an average gross profit margin across all products of 20%. This is taking in to account purging low margin products, and increasing margins on others through bulk purchases. Thinking about it, Amazon takes at least 15%, up to 40% for FBA on oversized items. That a 60% markup over landed costs.

For the Amazon sellers on the forum, what are typical profit margins? I feel like every internet search on the topic produces someone bloating numbers to sell their webinar or book. What are the real numbers?

I think this is incredibly important for people thinking about starting an Amazon FBA business with $500 to their name, to know what the real numbers are.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[StevieB]

I think this is a very good question and would like to hear feedback as well from those that are doing it. From what I've seen the margins vary greatly. From making a couple dollars to 25%.

 

[illmasterj]

Price average: $14.95
Profit average: 27%

Physical private label product. I have watched this profit slowly get eaten away over the last 12 months.

 

[Jake]

60+% but my ACoS on a lot of keywords isn't that great. The product is fairly unique so people aren't looking for it. Word of mouth is strong though so the more product I get out there the less I'll have to worry about ad spend.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[4x4ord]

Price average: $14.95
Profit average: 27%

Physical private label product. I have watched this profit slowly get eaten away over the last 12 months.

Thanks for posting. Is it increased FBA fees and competition that is shrinking your profit?

Sent from my E6782 using Tapatalk

 

[illmasterj]

Thanks for posting. Is it increased FBA fees and competition that is shrinking your profit?

Sales volume has decreased, though rankings are similar and there aren't any obvious competitors taking more of the market. Advertising costs are increasing. As my products are low value, a small increase in advertising cost makes a large difference to the percentage.

 

[Oztrepreneur]

I think this is a very good question and would like to hear feedback as well from those that are doing it. From what I've seen the margins vary greatly. From making a couple dollars to 25%

Agree it is never clear and I guess largely product dependant. There seem to be a lot of guys on TMF though who make a small fortune from Amazon so guessing the margins are good.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.