I hope everyone has survived the weather change and has gotten back on track!
In today’s post, I want to share my latest update on how my Amazon FBA business has done in February 2018! If you haven’t seen my January 2018 Profit Update post, make sure to start with that. In that post, you’ll find an introduction and some background information about this business operation.
In February, my sales slowed down. I made £15,316.28, selling a total of 1535 units:
My profit from that was: 1535 x £4 = £6,140
This is my profit after paying Amazon seller fees, FBA fees and VAT.
But, of course, I continued doing Sponsored Product ads at a cost of £1,560.08:
I also started doing Headline Search ads as they have become available to “normal” Amazon sellers, so I spent an additional £239.70 there:
So, after subtracting my ad costs, my NET profit on Amazon for February was:
£6,140 – £1,560.08 – £239.70 = £4340.22
So, I’ve landed just above the £4k mark, which is £3k less than I made in January when my NET profit was £7,373.73.
After doing more than £24k in sales in January, I was slightly disappointed with the February sales, but if I look at things realistically, I know that my February sales are actually very good, because:
- February is the shortest month—this year there are only 28 days, which eliminates 2 to 3 days’ worth of sales for the month.
- The weather situation didn’t help either!
- January’s sales of more than £24k was actually a big surprise to me. My sales shouldn’t have been that high in the first place. As it often happens, when you make more in one day, week or month, you often make less in the next one. So, if we take January + February sales together and divide by two, it’s averaging out to £20k per month in sales and almost £6000 NET profit per month—which is great!
Plus, there was one week in February where my sales drastically slowed down, which also impacts the total sales generated:
Lastly, the most accurate indicator is actually the ad spend. In January, I spent £2,302.27 in Sponsored Products clicks and that generated £8,435.70 in sales. However, in February I “only” managed to spend £1,560.08 and it generated £5,008.22 in sales.
And I did not touch my ad campaigns!
This simply means that demand for my product was lower in February compared to January, and there’s not much we can do about that.
I’m not looking for excuses, of course! I’m sure that I could have made more in sales IF I had spent more time on the business. The reality is that I was so busy with the Amazon Sharks program that I didn’t even touch my Amazon business in February. In total, I maybe spent an hour during the whole month, and that was just to check in on daily sales and answer emails or invoice requests.
So, those are the business results for my latest Amazon FBA venture for February 2018. Now, let’s take a look at some of the most important things that happened during the month.
The biggest news was that Amazon finally made Headline Search ads available to “regular’ sellers. Previously, these ads were only available to Amazon Marketing Services customers. Now anyone who takes part in Amazon’s Brand registry can use this ad type to get massive exposure for their listings in various places on Amazon:
Now, I have only started with this, but my initial results show that the click-through rate (CTR) is much lower compared to Sponsored Products ads and the ACoS is also not as good. Which makes sense, of course, as these are ADS and they look like ads. For Sponsored Products ads, our listing is shown in the main search results, where many people probably don’t even realise that they’re sponsored listings because they blend in so well:
But I see this new development as a great sign that Amazon is working towards new tools for sellers and with proper optimisation, I’m sure that these Headline Search ads can be profitable and bring in extra traffic while also building brand awareness! I also hope that Amazon will implement other placements in the ad system, like one below the item’s Buy Box, which should yield very good results.
When it comes to challenges and problems, the biggest one I faced in February was the sudden problem with Jump Send email deliverability. Basically, one day, all of a sudden, most of the emails sent out bounced back. The reason stated was that an Amazon customer has opted out of receiving emails, which shouldn’t be the case really because people are opted in by default:
And the problem still continues. Most days, up to 80% of emails get bounced back, which is obviously not good! I have contacted Jump Send directly from day one and they’re looking into this issue. As soon as I have some news, I will make sure to update you either on this blog or via my Facebook page (be sure to Like my page to receive updates, if you haven’t already).
These emails are obviously very important to my overall Amazon business strategy. While I am still getting product reviews at a rate of 1 to 3 per day, it has slowed down because of this email deliverability issue, so I would like to resolve it ASAP.
Lastly, Amazon introduced a new GRAPHICAL report tool built into the Sponsored Products page. We can now visually see at a glance how well our campaigns are performing over set periods of time. This will be quite helpful when evaluating click costs and ACoS over longer periods of time. For example, if we want to see how things are changing over a period of six or twelve months:
So, these are the biggest changes that happened in February. I’m sure I will come back to the new Headline Search ads in a separate blog post in the near future, but for now, let’s take a look what happens in March and beyond!
There is good news and bad news.
The bad news is that I’m still super busy with the Amazon Sharks program and haven’t had enough time to work on new blog posts so far this year.
The good news, however, is that I’m putting the final touches on the course this week. That means it will be fully finished and ready for the next group launch, which is happening on the 22nd March—next week! This time, there will be an option to sign-up and get full access to the course from day one, but the weekly subscription model will also be available.
It has only been two months since we started working with the first group of Amazon Sharks, but I have already received two testimonials from people who are KILLING it—before they have even made it to the end of the whole program! It just shows how quickly you can gain results on Amazon if you simply take action and go for it:
Anyways, this means that I will be able to spend more time on the blog too!
Starting from early April, I will resume weekly postings, and I can’t wait to share my journey and the progress of my business in 2018 with you. I will also share all my tips and tricks along the way!
Very soon, I will be expanding to Amazon USA. I’m just waiting for my trademark application to go through. Plus, there’s so much to do on improving listings, adding videos, optimising ad campaigns, etc. I will cover ALL of that with you throughout the year.
So, if you haven’t done it already, sign-up for the FREE AMAZON video at the top of this page to receive my weekly updates on my progress and learn along the way!
Until next time!
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Big fan of your blog here, thank you for putting in the time and effort to provide us such useful information on starting up your own eCommerce business in the UK.
Inspired by your story of taking life in your own hands I have now decided to take the plunge and start selling on Amazon. Since my main job is freelancing and I already use my personal account for that, I need to have a separate business account for Amazon to avoid confusion and tax issues. However, my bank told me that since I am importing from China and this is a high risk country according to their policy, I will need to provide a purchase invoice in order to set up a business account with them, and even then they are not 100% sure that they will approve me. I was wondering if you’ve had similar issues when setting up your business account? Thanks in advance!
Thanks for your comment! 🙂
Are you a sole trader? If so, you don’t need a business bank account – you can use personal bank account.
Plus many suppliers in China also take PayPal, so you don’t even have to do bank transfers to China.
I see Amazon Sharks is out again now, but when will be the next release date (roughly), and the one after? Will it be every 10 weeks?
Thanks for stopping by!
I haven’t decide yet on whatever I will close down the program or just keep it open – as it is….
Reason being – over last 2 months I received deposit payments (for the new round) from +/- 50 people. Which is the number I’m comfortable taking in each round.
So basically for me, there’s no point in keeping the deposit system alive as it complicates things for everyone – I need to manage deposits, then emailing on launch days, people not getting those emails etc. etc. So for me it would be just simpler to keep the program open so that people can sign-up straight away at any time.
So that’s the plan now but I haven’t made the final decision yet.
Re your email, that is an amazon thing, nothing to do with your provider. Buyers are now opted out by default in line with an amazon new policy update.
This is what I thought too but how do you know that?
I mean – did you get confirmation from Amazon about this?
As I am an Amazon customer too and I haven’t received any information/emails about any such changes.