Profit or Loss?
Hi guys, I'm very confused here when doing my profit calculation. Please tell me if I'm doing this right or wrong. I'm deducting the expenses from the income and then I deduct the COGS that was £5600. Doing it this way I'm making a loss that does not make sense as I have products that do well that sell for £25+. Can someone help me out here please.
Profit or Loss?
Hi guys, I'm very confused here when doing my profit calculation. Please tell me if I'm doing this right or wrong. I'm deducting the expenses from the income and then I deduct the COGS that was £5600. Doing it this way I'm making a loss that does not make sense as I have products that do well that sell for £25+. Can someone help me out here please.
4 replies
Seller_QuM1AZgzfU9x4
It's not clear whether the £5.6k is the cost of the units you actually sold or the total amount you spent on all goods which would mean you still have units to sell.
Regardless, you have over £3k in ad spend and £1k in adjustments showing. That's on top of having almost £11k in FBA fees for almost £21k in sales. So around half of your sales is going to fees then another fifth in ads / adjustments.
Not sure what your VAT situation is, but presumably you're registered so there's some accounting to do there.
Seller_76AUwmqvSyRIM
I haven't read through your figures but I was struck by this statement. I'm wondering why you believe that selling items for £25+ means that you will make a profit? The selling price is such is irrelevant. You could be selling something for £1 and making a profit (maybe not on Amazon) and you could sell something for £1000+ and make a loss.
Seller_ae51e0CJoHqCX
Yes it appears you are doing it right. It's hard to tell much without know your vat registration situation and the physical margins of each product.
You may have some high selling items with good GP but remember FBA is an expensive business especially when it comes to high volume tight margines products that can pull you into a loss making situation. Remember the old saying turnover is vanity but profit is sanity.
Also the amount that customers are now returning or claiming issues on products is rising so they can have them for nothing. Look at your product sale refunds, you have paid Amazon advertising as well as all the other selling fees and return postage etc if they can be bothered to send back.
It is really easy to oversell and find that you are gtting in over your head. You may have many products that sell well for over £25 but you need to go into your payments dashboard and have a look at transaction view.
You will be able to go down and scroll through some of the transaction whereby Amazon are simply taking up a lot of fee and these will not be worth selling. Also have a go on a few of the filters and look at your refunds, it will break down the returns and these are usually very heavy and Amazon biased. Believe itr or not that Amazon profit out of you if items are returned.
