Hey Ladies and Germs!! 🙂 For the past 2 and half months, I have been selling a private label product on Amazon Prime using FBA. I started this business from scratch and all on my own after reading a few success stories about making money selling on Amazon. In a nutshell, I worked with a Chinese manufacturer to mass produce a product that I chose, slapped a logo on it and then had it shipped to the United States so I could send it to the Amazon warehouses. It literally took me 9 whole months just to get to that point. Check out my full timeline of how long it took me to get started with my Amazon business.
Today I am happy to show you my first official Amazon FBA Income report. It’s essentially a breakdown of all my sales, expenses and payments to date for the first few months of officially having my product for sale on Amazon. I will write an Amazon Income report every few months or so as long as I have product(s) selling on Amazon.
For those of you new to Cash Flow Diaries, you will soon learn that I have a passion for reaching early retirement and I am doing everything I can to get there. Yes another early retirement blog! Bah hambug!! 😉 Just kidding! I know you love reading about this type of stuff because deep down inside, we all want to be financially free, sit in our underwear somewhere near a beach and drink some coffee!! Haha okay maybe not the underwear part but you get what I am saying. This amazon selling business is merely an experiment for me to see if I can make some money to help me save for buying more rental properties. My end game to early retirement is passive income and most of my passive income will come from my real estate investments. I now have 6 rental properties and want to continue buying until I am financially free. Feel free to check out my net worth posts for a timeline of how I have been growing my empire. Or feel free to just check out all my Amazon FBA posts since I started if you only care about my amazon biz!
So if you want to keep up with these income reports or just want to see all the methods I will utilize to reach financial freedom, subscribe now so you don’t miss out on any of the action. Just put your email here and subscribe. That’s it! Easy Peasy!
Now lets get to the real numbers. Is selling on Amazon FBA worth it? Let’s find out.
Total Sales to date
I started selling the last week of August. As of today, I have been selling for about 10 weeks. Here is a visual break down of my total sales on a per day basis:
At this rate, I am averaging about 5 units sold per day. Some days I have sold up to 10 units in one day as you can see above on Oct 15. There are also some days where I only get one or two sales. As far as I can tell, there is no rhyme or reason on how the sales work. At this point I am satisfied with my sales however of course I wish I could sell more. Ideally I want to get rid of my inventory as fast as possible so I can realize all my profits. As you will see below, after all my expenses I have paid for to date, I am still in the RED and have not made any profit. I still have a ton of inventory left though so the profit will come. Just need to keep selling!
Total Product Sales = $14,205.26
Total Profit minus FBA Fees: $10,580.59
**Amazon is now charging me $9.77 in fees per product sale. Strange because just a few weeks ago they were charing me a little more than $10. For some reason it went down. My item is currently listed at $38 per unit.
Actual Payments I have received from Amazon: $7,367.46
Amazon has paid me over $7k already which is great. Why haven’t they paid me the $10k in sales? Because they have deducted all the amazon expenses I have had already which include shipping, PPC costs and monthly amazon seller costs. Below I will break down every expense line by line.
Total Expenses to date including Amazon Fees and PPC
Here is a complete breakdown of every single expense I have had from ordering samples 9 months ago all the way to advertising costs from Amazon PPC campaigns.
|Date||Description of Expense||Expense cost|
|2/14/2016||Jungle Scout Ext||-$78.00|
|3/30/2016||30% of first order||-$3,867.00|
|5/10/2016||amazon seller payment||-$39.99|
|6/6/2016||tx sales tax late filing fee||-$104.00|
|6/7/2016||amazon seller payment||-$39.99|
|6/20/2016||3rd party inspection||-$100.00|
|6/27/2016||final payment of product||-$9,005.00|
|7/5/2015||amazon seller payment||-$39.99|
|8/2/2016||amazon seller payment||-$39.99|
|8/11/2016||final invoice for shipping||-$2,004.06|
|8/14/2016||fivver photoshop pics||-$6.00|
|8/15/2016||UPS amazon shipping to warehouse||-$428.41|
|9/2/2016||amazon seller payment||-$39.99|
|10/2/2016||amazon seller payment||-$39.99|
|10/3/2016||tx sales tax filing fee||-$15.60|
|11/2/2016||tx sales tax filing fee||-$46.79|
|11/2/2016||amazon seller payment||-$39.99|
|11/8/2016||Amazon PPC fees to date||-$1,454.30|
As you can see, there is a very expensive experiment. This little side hustle of mine has cost me over $18k so far while having been returned $7367. That still leaves me with just under $11k I need to make back before I break even. Which leads me to my next point.
625 Units left
$23,750 Total Sales Potential Left
$17, 644 Total Profit Potential Left
So I need to make $10,823.86 to make all my money back and I have the potential of making another $17k in profit. If I were to sell all my remaining inventory as is, this would leave me with about a $7k profit. The bad news is that it’s not going to play out like that. I will have probably another few thousand dollars in PPC costs. So at the end of the day, I am probably going to profit about $5k from this maybe less.
Estimated Net Profit and Returns Projected after selling ALL units
Based on what I am seeing here with the amount of products I have left and my occurring expenses, I am probably going to see about a $5k profit which would equate to a 25% return on my investment. If I can get rid of all my inventory in less than a year of when I started, then that would leave a very good return. What other investment out there can you make +20% returns?
The first 9 months getting all this started before I actually was selling anything was the most time-consuming. I spent hours and hours researching, going back and forth with suppliers and trying to figure out how to get this all working. I lost track of the amount of time I did during this time period. However, the amount of time I have spent on this AFTER my item started selling is very little. Maybe 30 minutes a week. Once you get through all the hard stuff of getting your items listed and selling, it pretty much goes on auto pilot and it is very passive.
Is it worth selling on Amazon FBA?
In my opinion, Yes, absolutely it is worth it. Grant it, I will not be making as much money as I initially thought when I first ventured into this project but it looks like I am still going to make a decent return. Even if I only made a 20% return, that is still much better then any other investment out there that is not Real Estate! (If you know what you are doing!)
There you have it folks! Until next time. Let’s go out there and make some more money!