Welcome back!
I know that everyone is already in the Christmas mood, but I still wanted to get this update out to you and share my results on how my Amazon FBA business did in November.
Yes, this Christmas will be different, but I can still feel the Christmas spirit in the air, and I will still enjoy this holiday with my family in the best possible way.
And those with kids will know that they expect the “whole thing”, regardless of whether there’s a global pandemic happening or not. In fact, I don’t think kids worry about all this drama at all. They are so quick to adjust and simply look for enjoyment in the simple things. At least, that’s what my kids do.
I did all my Christmas shopping online this year. On Amazon. I spent no more than an hour ordering all of the gifts (well, not all) that my kids put in their letters to Santa. What’s interesting is that some of the items looked very promising from a business perspective, too! 🙂
I hope you understand that I simply can’t look at Amazon listings without checking the Jungle Scout numbers. For example, 5D Diamond Painting Kits.
Yes, the competition shows up as high in Jungle Scout, but the market is flooded with many CHEAP, low-quality items and listings. Many of the designs are also questionable. I don’t want to buy such an item for £8 and get a low-quality product. I’m happy to pay £15 to £20 for a premium product. Not that many such listings are available in this niche.
Another item my daughter wished for was a professional acrylic paints kit. She likes painting with acrylic colours on canvas, so I (Santa) wanted to get her a nice, premium kit.
Again, there were lots of cheap-looking acrylic paint kits on the market, but there are also premium brands, like Castle Arts and others, with fantastic looking designs, branding and packaging. I don’t know about the actual paint quality (yet), but I was perfectly happy to pay the £40 price point for a beautiful, large set of colours. And this brand, Castle Arts, does tens of thousands of pounds in sales per month.
Just a few examples of how great the GIFT market can be! If you sell anything that can be given as a gift, you shouldn’t be afraid of charging a premium price if the quality of the goods, reviews, packaging, branding and everything else reflects that.
The key is to make it look like a £100 item and then sell it for £50. That’s a GREAT deal in most consumers’ eyes and you will have yourself a very profitable Amazon FBA business.
Now, let’s take a look at my own business results in November 2020! This is the third year in a row where I have run out of stock before December even began.
How I made £57,020.50 PROFIT on
Amazon UK in November 2020!
Yes, November was a very good month. An extremely good month to say the least! 🙂
This is all thanks to the four Christmas variations of the product I sell—nothing else. Of course, my regular items continued to sell as well, but the vast majority of the sales are from four Christmas variations. This is just more proof of how powerful Q4 and Christmas sales can be.
Here’s a quick recap of my business model for people who are first-time readers:
I’m selling one simple product in multiple variations (around 20 active variations at the moment) and my selling prices are:
- Amazon UK: £7.99
- Amazon DE: €9.99
- Amazon FR: €9.99
- Amazon IT: €9.99
- Amazon ES: €9.99
- Amazon NL: €9.99
My NET profit per unit sold varies from marketplace to marketplace because Amazon’s FBA fees are different across regions:
- Amazon UK: £2.5
- Amazon DE: £3.3
- Amazon FR: £2
- Amazon IT: £2
- Amazon ES: £2.5
- Amazon NL: £3.3
- Amazon SE: £3.3
To be 100% transparent, I do run a sale from time to time, just to get rid of slow performing SKUs, but in general, it won’t affect the overall results that much (if you want, you can take few hundred pounds off the overall profit numbers).
In total, I was able to sell 23,223 units across all seven of Amazon’s European marketplaces in November. Let’s take a closer look at how the numbers stacked up:
Amazon UK
15,160 units sold, resulting in total sales worth £120,681.96
Net profit = 15,160 x £2.5 = £37,900.00
Amazon DE
1,629 units sold, resulting in total sales worth 16,145.11 EUR
Net profit = 1,629 x £3.3 = £5,375.70
Amazon FR
2,842 units sold, resulting in total sales worth 28,206.52
Net profit = 2,842 x £2 = £5,684.00
Amazon IT
1,904 units sold, resulting in total sales worth 18,633.76 EUR
Net profit = 1,904 x £2 = £3,808.00
Amazon ES
1,646 units sold, resulting in total sales worth 16,230.94 EUR
Net profit = 1,646 x £2.5 = £4,115.00
Amazon NL
36 units sold, resulting in total sales worth 303.83 EUR
Net profit = 36 x £3.3 = £118.80
Amazon SE
6 units sold, resulting in total sales worth 491.13 SKR
Net profit = 6 x 3.3 = £19.80 🙂
TOTALS
Total units sold across all marketplaces: 23,223
Total sales: £120,681.96 + €79,580.16 (£71,888.66) = £192,570.62
TOTAL NET PROFIT: £57,020.50
That’s almost £200k in sales and £57k in NET PROFIT from selling £7.99 and €9.99 items.
In one month. On Amazon.
I don’t know what else you can call it but PHENOMENAL! I didn’t even do anything during the month of November. I answered four customer messages—that’s it!
What’s more interesting (or sad, depending on how you look at it) is that I did run out of stock—again! 🙂 Yes, some SKUs did run out of stock before December began and others before I reached the 10th of December.
As we all know, the period from the 10th to the 20th of December is the BUSIEST time of the year, which means that I left A LOT of money on the table. Again.
Will I INVEST in 50,000 units
for Christmas 2021?!
That’s a good question. For the 2020 holiday season, I had 30,000 units prepared. Seeing these sales numbers, I should probably go with 50,000 units next year, right?
I don’t know. I deliberately used the word “invest” there as it is an investment. It costs me, on average, £1.3 to manufacture and deliver one unit to Amazon.
So, if I want to get 50k units done for next Christmas, this means “freezing” a cool sum of £65,000 for basically 12 months :-). Yes, I will start working on Christmas stock as soon as January/February as I need all of my Christmas stock to be moved to Amazon by September at the latest.
The £65k investment is not a problem, as Amazon is now returning the money I invested earlier this year. What worries me is that the record sales I’ve seen this year could be COVID-19 related. Or to be more precise, a large percentage of these sales and the sales increase could be due to the COVID-19 situation.
Next year, this will be behind us (hopefully), so sales could slow down—they probably will. My thinking is to go with 30k units next year and hopefully I can maintain the same sales level as this year.
Oh, did I mention that I didn’t spend any money on PPC ads? All these sales are from organic Amazon traffic, nothing else. When you rank your listings, this is pure gold—it’s a money-making machine.
And that’s about it. The year has basically finished for me in terms of this business as shoppers are now focused on getting into the Christmas spirit! And I will too.
Even though talks are still in progress, it seems likely that next year, we’ll all wake up outside the common EU market. It will be interesting to see how it will change the Amazon landscape and what new challenges these new logistics will bring.
If you want to learn from my success and get access to my personal support, check out my Amazon Sharks video course. In more than 20 hours of step-by-step video lessons, you will learn exactly how to create a profitable Amazon FBA business from scratch.
This is not just some odd theory. I show my own business as an example throughout the course, PLUS you can rely on my 15+ years of experience in eCommerce by asking any questions you have any time you need help!
Merry Christmas everyone and a happy New Year!
Oh God, please make it a better one.
Hi Andrew
Very impressive, well done! I hope this year goes as well.
I came to this post from your 3 part PPC guide where you advised PPC was essential. What was the reason you didn’t run PPC on this product please? Surely if you had done so you would have had even more sales. Or do you simply run PPC for newly launched product and then once the organic rankings have been established, do you then pause PPC?
Also with regards to your sales overseas, are all these FBA, and do you translate the product labeling/instructions etc and products title, details page, keywords etc into the native language?
Many thanks
Hi Dean,
Many thanks!
The reason for not using PPC was simple – I knew I would sell out purely with organic sales and so there was no point in giving up the extra margin.
Some people do suggest pausing PPC campaigns once you’ve established your product and listing but personally I’ve seen a big drop in sales when doing so as your sales velocity drops and affects your search ranking.
So I will run PPC campaigns indefinitely and just continually optimise them.
And yes, Amazon do have a feature where they auto-translate listings for you but it’s worth the extra cost to get it done professionally in terms of higher conversion rates.
All the best,
Andrew
Hello Andrew,
Is that profit in UK before VAT, right?
Hi Andrew,
No that’s my final net profit after all fees, VAT, etc.
The word that springs to mind is Wow! Very impressive results Andrew with no PPC!
Quick question about restocking. You mentioned that you’ll aim to have all of your Christmas stock moved to Amazon by September the latest. Am I correct in assuming that Amazon don’t impose any restocking restrictions on well established sellers? Because Amazon are still only allowing me to send a maximum of 250 units at a time.
Is it worth me asking Amazon Seller Central if they can increase this figure or will it automatically increase as my monthly sales increase?
Hi Hefin,
Thanks! 🙂 No, they’re – I also have limits in place, but I hope that it will last only this year and next year they will remove them OR at least increase them. I didn’t have any problems with the Christmas stock though – they did take into account last year’s sale and I was allowed to send in thousands upon thousands of units in advance. Way more units that I was planning to send in.
The limits automatically increase/change based on your sales, yes.
Thanks,
Andrew
Hi Andrew,
Thank you for this report. Very inspiring as usual, I don’t comment a lot here but I read every single post, since I have discovered you and took the Amazon shark course.
My question today is related to inventory. As you suggested in your course I always get the goods delivered in a warehouse and I send them to FBA warehouse every time I am running out of stock there. But it costs me also a lot to store the goods in a warehouse…
This is now my third order with the same supplier and I am happy with the quality, we are improving the good’s quality every time few customers make suggestions or complaints. So to tell, my supplier communicate a lot with me and also improve every time at minor additional cost.
Inspection is done in China with Richforth, I learnt the hard way.
I am wondering if this could be cost effective to ship directly to FBA warehouse.
What do you think ?
Thanks
Alban
Hi Alban,
Thanks for your comment.
Yes, you can do that IF you’re confident that the quality of the goods will be good. AND you can manage the quantities effectively – as there is a limit on how many units Amazon will allow you to send in. Also, you need to calculate Amazon storage costs – they could be even higher than what you currently pay.
Thanks,
Andrew