Profit: How Much Should You Be Gaining When Selling On Amazon
No matter what level you are at in terms of Amazon FBA, you might wonder how much profit you will make from your products. Instead of looking at the profit margin, you should be looking at ROI. Project Nine University
founder Kale Abrahamson and co-founder Taylor Hiott offer a presentation
telling you just how much Amazon profit you should be making on your products.
What is ROI?
ROI stands for Return on Investment. ROI is a way of telling what your profit will be on a sale. “We want to know if we sell one product, what is our profit going to be on that one product,” Taylor explains. The formula for ROI is Revenue-Expenses divided by Expenses. The goal is to reach 200% ROI. At Project Nine University, we prefer ROI for one reason: cash flow.
“There’s a guy in China. I’m paying him money and getting one product. I take that one product and I sell it to one person on Amazon. They give me a certain amount of money. What we’re trying to get with the ROI is to make that amount of money I’m getting back to be enough to purchase two more units and pay for the one we just sold. That’s what 200% ROI really means,” Kale explains. Essentially, with ROI, you are making room to grow.
How to Calculate ROI and Amazon Profit With an Amazon FBA Calculator
One of our favorite extensions to use has been Jungle Scout. We have used Jungle Scout to find every single one of our products. There are a couple of parameters to hit when doing product research. “We want 7 out of the top 10 to have more than $5,000 in revenue. The other parameters to consider are that the product is that 7 out of the top 10 have less than 75 reviews,” Taylor tells us. You can run Jungle Scout on any product as an Amazon FBA calculator to see if it is within the parameters mentioned.
Typically, we do research by typing in different letters to see what results pop up. Another way to research Amazon profit is to look at Amazon’s bestsellers. From there, you can examine different departments to locate different products. From there, you would use Jungle Scout as your Amazon profit calculator. Amazon Scout FBA Calculator is a great Amazon profit calculator that we like to use as well. When you put the product price in this Amazon profit calculator, you will be able to look at its ROI.
Essentially, in order to understand how much profit you should be gaining on Amazon, you will need an Amazon FBA calculator. Even Amazon Seller Central offers a fulfillment by Amazon revenue calculator. This calculator provides your fulfillment costs and allows you to see real-time cost comparisons between your fulfillment and Amazon Seller Centrals offer for customer orders.
How to Sell on Amazon as a Beginner With Project Nine University
When Kale Abrahamson started out with Amazon FBA, he considered it to be a side hustle. He worked out of his 500 sq ft apartment selling cornhole lights. Now, Project Nine University
has over 150 employees on its payroll. This isn’t a consulting resource run by a “guru” who is always on vacation and leaving you to speak to virtual assistants. Each of our employees is ready and eager to take each step of your Amazon FBA journey with you.
Whether you are a beginner or have been using Amazon FBA for years, Nine University has something for you to learn
. Sign up today for 20 minutes of FREE Amazon training.