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_KdC91pZ3upczK
Even though Amazon's fees are high, it's also the platform that has the most shoppers. I'm also self employed (myself) but I store everything at home which saves on warehouse costs.
Your products; the cost ratio needs to be worth it to make profit. Can you store at your home? Can you have a manufacturer produce it for you at cheaper cost? Increase your price? Do you need to switch to retail and have stores carry your products? etc.
You need to adapt and adjust to survive.
Seller_c7AY5UmbBC07I
You totally need to sell on other platforms. Each platform has their own set of problems BUT when one goes down you have back up. You must have your own website and promote that. That you own.
I can tell you that I have discovered customers have discovered if they like your products they will search out your own website for the reason that Amazon products are more expensive and they can get better deals buying from the source and getting bundle promotions. I know this from this holiday in particular.
Seller_LdMwd22oQJa8E
%100 agree brother, the only people makes money here are coyotes fake Nike, Adidas or cheap arbitrage. Funny
Seller_oDXVaydIpi3Hi
With the policies and issues they are having, I'd say that time is at hand. Just caught them again charging a customer for return shipping AND still charging us. 4th time we've caught it.
Seller_3RoLAuCqvb4QW
I did a research on the actual percentage of positive feedback for several "prestigious" sellers with 99% nominal positive rating who mainly or exclusively use FBA.
My finding: Those sellers with 99% nominal positive feedback rating all have an actual positive feedback rating around 80%. For example, an exclusive FBA seller, 138 positive feedback in the most recent month, 1 negative feedback, and 35 crossed out negative feedback.
This means the return rate or dissatisfaction rate is rather high and is much higher than some FBM sellers.
Seller_HG8BkPsEYDFam
So it looks like you are making ~ $4.50/hr. Have you considered getting a job? That would prob bump u up to ~ $20.00/hr
Seller_Qmo9DtQcVdWOv
Looks like a fee decrease this year for FBM if those numbers are exact.
The fees are still too high for anyone to actually survive and profit above minimum wage / SSI with under 100k in sales a month though.
Seller_vyPmLWs6tuBqj
products that sell at less than 20$ are not profitable.
And with amazon, you need to be ready to move on with other products when one product fail, look for another one.
I have a product that I have a product that I have been selling successfully for 4 years. Just in August I got a message that I need to get my product approved. After calling amazon they told me that I need to create a new listing since the sytem has some problem with SKU number. The current SKU is pointing to another brand owner, maybe the person hacked my listing.
So I have lost all ranking and review for that product.
Now I have started again from scratch
Seller_08TZq9sOIaGvv
Thank you for trying, don't give up! See if you can make some changes that would make your job easier and more efficient while the sales are slower. What can you think of that is taking so much time and supplies. It seems to me that paying Amazon 60% in fees over your gross and 250% of your profit are really bad numbers. For example my fees are about 10-15% of gross. Raise your prices if you can, add features if you can't. Create bundles to get a higher price per shipment/fee etc. Offer a different color and call it premium. Now is the time to be creative!
Seller_CA70ZtA5VBcto
Why are you fees so high? 60% is ridiculous. Let me guess you buy ads.
