February 1, 2017 by Andrew Minalto - 2 Comments
Net/Gross Profit, Sales, Turnover, Margins, ROI All EXPLAINED!
Hello & Welcome!
It’s 1st February today, congrats – we have moved passed the year’s darkest month and slowest sales period and can start looking forward to spring and summer!
Today I’m starting a weekly, 4 part blog post series covering the most common and important terminology used in the online selling world.
Today we’ll start with General Business terms and in the following weeks we’ll cover:
- Importing & Shipping
- eBay & Amazon
So in total there will be 4 posts that should cover most of the terms you need to know about.
It may be geared towards people who are totally new to selling online but still – even experienced sellers sometimes mix up important stuff so it’s not a bad idea to go over the basics every now and then. And as we all know from Dragons’ Den – there is no bigger problem than not knowing your numbers, right?
So let’s get started with a list of the most common business terms that every entrepreneur should know about!
Sales/Revenue – amount of money you have received for the sale of goods. Example: if you sell an item for £10 and you sell 100 items, your sales would be £1000. Usually, when showing sales, you don’t take off ANY expenses associated with these sales. For example, this means that you wouldn’t take off PayPal fees from this number.
Turnover – basically the same thing as Sales but the term “Turnover” is usually used to show sales in a certain period of time. So if someone asks you what your turnover was for the last 12 months, you would give your total sales number for that period.
Gross profit – this is one of those numbers every Dragon is looking for! Gross profit means your Sales minus Cost of Goods. So for example, if you buy an item for £50 and sell it for £80, your gross profit is £30 (£80 – £50).
However you do not deduct any further expenses associated with sales, like taxes, salaries, rent etc. Only the cost of goods.
Net Profit – this is the REAL profit as we speak – money you make after ALL expenses are paid. This includes cost of goods, salaries, shipping costs, rent, utility bills etc. This essentially means the money you take home, after paying tax (if taxes are applicable). (more…)
August 2, 2016 by Andrew Minalto - 2 Comments
Custom PRODUCT Branding – How to Create A REAL Online Business!
Anyone who has been reading my blog for a long time, or better yet has purchased either my Easy Auction Business or eCommerce Magnates video course, will know just how much emphasis I place on BRANDING.
However, some people still view branding as something frivolous… something that you can do if you have the money and business is strong, but certainly not something that’s necessary.
I disagree with this completely! I view branding as an integral part of my online businesses, and creating my own brand products is my no.1 strategy for building real, profitable, and sustainable businesses.
But for anybody who’s not completely familiar with the term, what is product branding?
Well to put it simply – it’s when you take an unbranded product, i.e. a product that doesn’t have a brand, logo, company etc. shown on it, and YOU brand it – either the product itself, the packaging, or as in most cases both.
This in effect creates a completely NEW product which you own and can sell online, be that on eBay, Amazon, or your own ecommerce store.
But I know that some of you will now be wondering “why?”
After all, branding a product will add to the cost and it really doesn’t add any practical value… so it’s a waste, right?
WRONG! Premium packaging adds to your brand and increases the perceived value of the item you’re selling.
Perceived value is something I actually mention quite often, particularly in my video courses, but it’s still something that most small time eBay sellers complete ignore – despite the fact that it’s honestly one of the most important factors in creating a real brand and business.
Just look at some of the world’s top companies… Apple are in fact a perfect example. Some of their products cost a fraction to produce in comparison to some of their competitor’s offerings, yet the perceived value (among consumers!) for Apple products is unparalleled.
This is all down to their brand and you simply can’t create a brand with an unbranded product!
The other big benefit to branding, which I briefly mentioned above, is that you create a unique product and this helps hugely with comparison shopping, where the buyer simply chooses the cheapest option, as it’s much harder to compare two different products – even if that difference is only the branding. (more…)
April 6, 2016 by Andrew Minalto - 4 Comments
eBay vs Amazon Price War – 50 Products Tested!
It’s competition time again! 🙂
In the past I’ve done several “battle” blog posts, where I put a few options against each other in a side by side test in order to find the winner – such as the fulfilment house battle, which is a very popular post on this blog.
Today I want to test some online wisdom that you hear very often:
“You can get higher prices for your products on Amazon than you can on eBay”.
You see this “fact” quoted so often online, and I myself have actually said this a few times as, based on some random research I’ve done, it does appear to be the case more often than not.
But I decided that it’s time to test this claim properly, and get some proof one way or the other. So today I’m pitting the two giants, eBay and Amazon, against each other in a comprehensive pricing test.
How The Test Works
Even though I would ideally test thousands of products to get the most accurate data possible, that’s just not feasible, so instead I’m going to choose 50.
But to keep the products I choose relevant, I’m going to introduce a few rules:
I don’t want there to be any confusion here – I’m doing this test so we can find out where it’s better to sell our products, not to find out whether you should use eBay or Amazon for this year’s Christmas shopping.
And that means I will be completely ignoring products from major companies like Apple, Samsung, Nike etc. etc. I’ve probably said this a hundred times by now, but much to the dismay of those who are first looking into selling online – you cannot make any money on high end branded electronics/clothing as the margins are just too thin.
So for our experiment I’m only going to look at products from 3 main categories:
- Unbranded products
- OEM branded products
- Small/Asian brands
Basically – the type of products that you can actually source and import from China.
While I will of course try to get a good mix of different product prices, for similar reasons as the no big name brands rule, I will generally focus on products that sell for less than £50 as that’s really the optimum pricing level for small/medium sellers. (more…)