It’s no secret that running an Amazon FBA business isn’t free—to make money, you’ve got to spend some first. Luckily, you don’t have to go into any business decision blind with Egrow on your side. To further elevate our users, we created a Profitability Calculator that covers all the bases when it comes to investing in an FBA business.
So, what exactly does this calculator cover? Let’s take a closer look…
There are plenty of things to consider when it comes to preparing to sell. Our calculator goes through different costs under the umbrella of manufacturing, including advance payments to manufacturers, total cost of goods, samples, thank you notes, user manuals, and overall packaging costs. Having a number in mind before you dive into the process can help you better plan and prepare for best- and worst-case scenarios.
Before you launch your product, it’s important to have everything organized and looking its best. That means taking high-quality product images, writing content for your listings, inspecting your products, and un-gating categories on Amazon if need be. This section also dives a little deeper into Enhanced Brand Content (ECB), barcodes, Amazon subscriptions, and patent checks. Not sure what any of this means? We’ve got a guide that will help you through each part of the process.
When you sell through Amazon, you’re going to have to allocate a portion of your profit to pay an FBA fee, storage fee, and shipping charges at the very least. These figures will be based on the size and capacity of your inventory. When it comes to measurements, most manufacturers and freight forwarders will provide information in either inches or centimeters. That’s why Egrow offers calculations for both.
When shipping through Amazon, there are a handful of things you need to take into consideration including the flat FBA fee, transaction charges, product weight, selling price, and the total inventory landing cost. Additionally, there are split shipping options in which you send part of your inventory over faster than the rest. This is helpful if you want to begin ranking more quickly or to mitigate back orders if you’re close to being out of stock.
Once your product is at the Amazon Fulfillment center, your listing will become active. That means it is now time to launch your product and continue to grow your reach in the market. This section of the calculator goes over your total ad spend based on popular types of advertising—PPC, social media, Google Ads, etc. It will provide a ratio of your ad spend vs. how many units you have sold in a given period.
After everything is factored in, you’ll be presented with a table that includes the lump sum of all expenses, costs, and fees, as well as your overall profit and profit margin. It’s important to remember this will show your expenses in the first few months of launching your FBA business. After that, your total will go down because they won’t include pre-launch costs.
We understand there’s a lot of information to go over when it comes to online selling, which is why we’re here to break it all down. In addition to the calculator itself, we have put together a comprehensive guidebook, so you can go through each and every one of these topics—and even more information we haven’t even covered—in more detail as you use the calculator.
In the end, our goal is to make your job as an Amazon seller simple and stress-free. If you’re ready to take your business to the next level, download our Profitability Calculator and guidebook today. In the meantime, feel free to reach out if you have any questions. Our team is always here for you!