True Cost of an Amazon Business
We manufacture our own products, make them in house. We now only have 1 employee (myself), but in our busiest years we've had 2 employees as well as my wife. Now that I'm by myself, I work probably 60+ hours a week, constantly going.....constantly constantly trying and working. As for a recent example, lets do the math for last month.......
10k Sales
6K Amazon Fees
2.5k Supplies
400 warehouse costs (we fortunately own our warehouse but pay an HOA fee)
Final Profit: $1,100
Now lets do a previous month from a previous year when Amazon took less and hadn't changed it's search algorithm which has tanked sales......just my wife and I working here.
26k Sales
15.4k Amazon Fees
5k Supplies
400 warehouse costs
Final Profit: $5200
Amazon TAKES too much. We're on foodstamps now. And I work 60+ hours a week because that is what is needed to make, ship, converse with customers, and deal with Amazon.
Unsustainable.
True Cost of an Amazon Business
We manufacture our own products, make them in house. We now only have 1 employee (myself), but in our busiest years we've had 2 employees as well as my wife. Now that I'm by myself, I work probably 60+ hours a week, constantly going.....constantly constantly trying and working. As for a recent example, lets do the math for last month.......
10k Sales
6K Amazon Fees
2.5k Supplies
400 warehouse costs (we fortunately own our warehouse but pay an HOA fee)
Final Profit: $1,100
Now lets do a previous month from a previous year when Amazon took less and hadn't changed it's search algorithm which has tanked sales......just my wife and I working here.
26k Sales
15.4k Amazon Fees
5k Supplies
400 warehouse costs
Final Profit: $5200
Amazon TAKES too much. We're on foodstamps now. And I work 60+ hours a week because that is what is needed to make, ship, converse with customers, and deal with Amazon.
Unsustainable.
102 replies
Seller_kIukTwdhvntAp
"Unsustainable"
Hopefully you have already been selling on OTHER sites as well as here. If you haven't, why not?
There are dozens/hundreds of sellers in the same boat that you are in and have either left Amazon or have just added other outlets.
I sell on several other sites as well as a couple of my own websites.
Expand you horizons and fly away!
Seller_rI7BZIczK8iAC
It's simple: you sell too cheap! What salary per hour does it give you? Wouldn't you get more working as employee in an Amazon warehouse? With social insurance?
Seller_6fK2KJK28pv1W
So true - the amount of fees Amazon takes is outrageous and putting people out of business. They need to lower to 30percent. This over 40 percent is ridiculous.
Seller_I2VicKYwfCNhg
I don't know if you looked at the math here.... but the only difference percentage wise is the cost of your supplies, not the Amazon fees.
This looks like an internal problem, and not an Amazon one. Both figures indicate a 60% fee paid to Amazon. Your supply cost increased 5%.
Seller_G1dITKzjrjqtm
How many units are you selling a month? What exactly are the "Amazon fees" Is it FBA? How much do you sell your product for?
I assume you have a low-priced product and some that 60% Amazon takes is a packing and shipping cost from the FBA warehouse.
Are you advertising? What are the PPC fees?
Your supply cost has increased 30%, have you raised prices to compensate for that?
Seller_nK9oS5dJpGEjI
yap it's too high fees which shrinks your profit on top of amazon selling himself which absolutely not fare
Seller_cCPoKiCyBMIn7
I bought a product for $6 to sell it for $16 and earn $2 per product. Today I went to Amazon and saw that Amazon has the Buy Box priced at $6.99. It's really disappointing.
Seller_LTNvvFJ2jqJOv
@Seller_BYn3ICHDweKIc THIS!
I have 3 other platforms and working on adding a 4th, never put all your eggs in one basket.
Seller_Si5oYBditoiQo
I feel your pain. I wonder all the time if Amazon is actually paying me what their supposed to. I sell 5 different products on amazon.
Some things to consider:
- Why are sales decreasing? If you picked the right niche you shouldn't be spending more on ads than 10% of revenue and watching all that organic traffic pour into the listing. You aren't winning.
- Margin is too low if you are the manufacturer. We are anywhere between 8%-16% from deodorants to candles to body butter. Our food products are around 25%-33% but our ad spend as % of revenue is 0-5%.
- Amazon fees are high. Find a way to charge between $20-40+ so fees as percent of revenue are less. Or choose a different product in that price range
- Launch more products and scale topline. I wouldn't be happy on 5k profits a month.
