February 8, 2018 by Andrew Minalto - 23 Comments

My January 2018 Amazon FBA Update – £24,119.08 in SALES and £7,373.73 in NET PROFIT!

Welcome Back!

It’s been almost two months since my last blog post. I wish I could be more active on the blog right now, but the reality is that I kicked off 2018 with a really hard push in all my businesses. Right now, I simply don’t have enough hours and energy in a day to give much time to the blog.

The Amazon Sharks program started with a boom and sold out within few hours of opening. I’m still adding and tweaking final material for the course, so that is obviously occupying a lot of my time, not to mention answering questions that my new program members send me every day.

As a side note: if you missed the launch and did not get into the first group, Amazon Sharks will reopen on 22nd March and there are currently 30+ places available! To avoid any disappointment, you can now book your place in advance by signing up and paying a £99 deposit. This GUARANTEES you a place in the program when doors reopen in March.

Due to many requests, I will also be introducing a new payment option on March 22nd that allows joining members the option to pay in full and gain access to ALL program videos from day one, meaning you don’t have to wait for each new module on a weekly basis. The weekly payment plan will still be available, so you have the choice of the payment and pace that suits you.

Today, I want to give you a quick update on how my latest Amazon business is doing. I’m referring to same business I started at the end of last year—the one that made more than £50,000 in sales in its first three months.

My plan is to publish a monthly update on how this business is doing. This will help keep me accountable to my goal of reaching £30k+ per month with this business by the end of 2018. I also think it would be interesting and valuable for others to be able to follow my progress and see how I am doing.

Seeing the January sales numbers, I may need to re-evaluate my plan!

I might actually need to increase that target to keep this race competitive enough:

In January 2018, I did £24,119.08 in sales—which is AMAZING!

I was actually very surprised that this business did so well in January! The beginning of the year (January/February) is usually the slowest time for eCommerce businesses, and my other businesses are proof of that—sales there are quite slow in January.

But this new business has done very well. On January 3rd, I hit my first £1000 day this year and sales really picked up! In total, there were four days in January where this business made more than £1k in sales, which means my overall goal of £30k in sales per month is actually very realistic.

For the sake of comparison, let’s take a look at the month of December, where this business “only” made £18,051.90

However, as you can see from the graphic, this was mostly because I ran out of stock for a very popular variation of the product I’m selling—one that would have easily doubled that sales figure in December!

As I did not expect such a high sales volume in January, I actually have managed to sell out another variation. This high volume of sales has naturally slowed down a bit now, so I can see that I will be lucky to hit £20k in sales in February—but we’ll just have to wait and see when the month ends!

I know what you’re thinking: “Andrew, £24k in sales is great, but how much profit have you actually made?”

Good question, and it’s something I personally keep at the forefront of my mind each month. It’s important to know exactly how profitable my operations are on a monthly basis.

So, let’s start with the advertising costs. As explained in my previous post, I’m still spending quite aggressively on Sponsored Products. I’m still improving my rankings and, to be completely honest, due to lack of time, I haven’t properly optimised my campaigns yet. In fact, I haven’t even created campaigns for some of the variations. This is something I really need to get on top of fast because I’m just leaving tons of money on the table right now.

In terms of ad spend, you can see that, in January 2018, I spent £2,302.27 in sponsored product clicks, which generated sales worth £8,435.70

That’s an incredible ACoS of 27.30%! (for such cheap product that’s very good in my opinion).

Even though I haven’t done much with optimising my campaigns, it’s clear that my high conversion rates are playing for me and my ACoS is going down! My listings are converting so well that Amazon is simply charging me less and less per click. What’s more,
because the holiday season is now over, click prices are generally going down for everyone, which is good news for all sellers.

My break-even point currently sits at 50% ACoS, which means that in January, paid ads actually generated a very healthy profit. I consider this a bonus because I look at my paid campaigns together with my natural search result sales; in my opinion, they both work simultaneously.

Going back to the numbers: I sold 2419 units last month. After VAT, Amazon seller fees, FBA fees and the discounts I provide, I make an average profit of £4 per unit sold.

This means that my profit before advertising costs was: 2419 x £4 = £9,676.

I spent £2,302.27 on paid clicks, so I also subtract that from my total above: £9,676 – £2,302.27 = £7373.73

(that’s a cool number by the way – 73/73/73)!

Now, there are a few returns I have to take off and some other small adjustments, so it rounds out to about £7000 profit for January 2018. Obviously, this still doesn’t take into account my business overheads—such as office rent and other business expenses—but this is a figure we can use for illustrative purposes.

Not sure about you, but I think a £7k profit on a £24k turnover using Amazon FBA is a pretty decent and realistic number!

Yes, I’m emphasising the word REALISTIC!

It is so common for Amazon seller podcasts and YouTubers to hype their sales data without ever disclosing the real numbers—their profit! They’ll often give a blanket statement that they make 50% or 60% net profit, which anyone with experience will tell you is VERY hard to believe. Sorry—I’m not buying it! Taking into account Amazon seller fees, FBA fees and the cost of sponsored products, you really need to be selling something with absolutely no competition and astronomical demand to have any chance of achieving a 60% net margin after ALL the fees are paid. Of course, reality is not what gets these people subscribers and followers, so they’re happy to gloss over the facts.

£7k profit on £24k in sales means my NET margin is around 30%, which is actually very good if you ask me. Anything in the 20-30% range is very good. Heck, even 10% is good if you’re selling in competitive markets or if you have more expensive items that turn over more than £100k per month!

Remember, this is after ALL the Amazon fees, FBA fees, sponsored products fees and VAT taken off.

Overall, January has been a very busy month. I did get approved for Amazon’s Brand Registry, so I have created my Amazon Storefront and also started working on creating my enhanced brand listing content. I will do a separate post on this in the near future.

As for other developments, I’ve switched my Feedback/Review email service provider from Feedback Five to Jump Send, and I’ve already seen an increase in the number of reviews left. I will do a more detailed post on why I switched services very soon.

There’s still so much to do, and I hope 2018 will see me polish this business to the best of my ability and finish the year reaching my target of £30k in sales per month—or possibly more!

Ok, that’s it for today. There were no tips or tricks in this post, but these update posts will mostly just outline how the business progresses in terms of sales. I will resume writing my “how-to” posts in March when I finish working with my first group of Amazon Sharks members.

I will post the next update on the business early in March, which will cover sales for February.

23 Comments
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  1. Hi Andrew
    I am trying to get ungated in one of the amazon categories. Do you know if they accept invoices from auction houses? Thanks.

    1. Andrew Minalto

      Hi Dion,

      I don’t think they do but it’s very individual – a human person will look at these so someone could accept them while others – reject.

      But I would recommend you get in touch first with them and ask about this – if they say YES, then at least you have a written confirmation for this.

      Thanks,
      Andrew

      1. Andrew, thanks for your reply. I was searching for this info on their website but couldn’t find anything where is states that they accept invoices only from wholesale companies etc. I have an invoice from an auctioneer which is pretty much the same as you would get from other companies, i.e detailed item prices, vat, etc. I will have to get in touch with them to clarify this.

  2. Hi Andrew
    Just wondering what you consider to be a good CTR on your Amazon ads

    Peter

    1. Andrew Minalto

      Hi Peter,

      There’s no such a thing as good CTR as it will depend on the campaign type (Exact/Phrase/Broad), size (how broad keyword list I have) and other factors.

      At least – there’s no point at looking at CTR campaign wise.

      Only individual keyword level would matter but again, results would be very different based on how targeted keywords are.

      I have keywords that have 20% CTR and they make me money and I have keywords that have 1.4% CTR and they make me money.

      So CTR is very irrelevant.

      Thanks,
      Andrew

  3. Huge congratulations Andrew.

    Yep. 30% matches my net profit as well but I am a merchant fulfilled seller. 1/3 for my pockets, 1/3 cost of products and 1/3 taxes 🙂

    Unfortunately there isnt an FBA center in the Eastern European country I live in and I dont want to bother with VAT registration in other states to hold my product in their fulfilment center. I am a bit too comfortable in my “under the VAT threshold” status.

    I do feel like I am losing out big though. Personally Andrew, do you think it’s all worth it to expand into VAT status in a bid to make these huge numbers with FBA?

    The problem with VAT is the need to be registered for 2 years at least etc…

    Thanks Rob.

    1. Andrew Minalto

      Hi Rob,

      Thanks! 🙂

      I do think you’re leaving a lot of money on the table by not using FBA, yes.

      I can’t give you any guarantees of course but if you want to grow your business to the next level, you should seriously consider going the FBA route, even if it means VAT registrations in multiple countries. Amazon offers a service for this where they will register you, do VAT returns for 600 EUR per year, per country. So that’s 3000 EUR per year for 5 countries and I think it’s a good deal actually.

      Thanks,
      Andrew

  4. Hi Andy,

    Thanks for sharing your progress, it really shows what is possible with the right knowledge and experience. I’m looking forward to further updates.

    I have just returned to the world of ecommerce after a 10 year break. I remember following your posts on TWF. I first joined there back in 2006! It’s a shame to see nobody really posts on there noawadays.

    I spent the last two months researching and sourcing what I think is a good product line. The margins are good and there are sellers clearly doing very well from
    It.

    I have a small quantity of stock, so I launched my eBay shop 10 days ago. Unfortunately, the initial response has been disappointing. I only made my first sale today. I have tweaked my listings and followed advice from your previous posts to make sure I have all bases covered, but still I am struggling for sales. I think the main problem is traffic. With there being many more established sellers my listings just aren’t being seen.

    I have started using the promoted listing feature to drive some traffic, but I’ve had to pay the max commission to compete with the other sellers also promoting their listings (they seem to be dominating the top positions due to established sales history / higher conversion rates). Now even if I make a sale, it will be at a loss, but I’m ok with that since my aim is to establish myself and build up some sales history, then I can optimise things to make it more profitable.

    But due to the poor response, I’m wondering if it’s worth jumping ship and focusing on Amazon. Amazon has always been part of my long term plan, but as I am starting with quite a small budget I wanted to start with eBay and build some capital so I could launch my products on Amazon properly.

    Do you think it’s worth launching a private label product on Amazon with say only 50-100pcs in stock?

    Or should I give eBay more time, I’m probably being impatient, it all seems very different (harder) to when I did it before.

    Any advice at all would be really appreciated.

    1. Andrew Minalto

      Hi Tom,

      Thanks for your comment.

      That’s one of the disadvantages of doing business on eBay – when you launch a new product, new listing – you have no ways to start driving controlled traffic to it. Promoted listing feature helps to some extent but we have no control over on where and why it shows up.

      On Amazon, I list a new product, start a PPC campaign and from day one I can have my listing in top search results shown for my most targeted keywords. Yes, it does cost money but it instantly helps me build up sales velocity, get reviews and to see if product sells or not.

      I can’t see why 100 pcs is a big problem to start selling the item on Amazon? You can do it!

      or you can be more patient with eBay of course as over time your listings ranking should improve but still – you’ll be out of control of the process whatsoever.

      Andrew

      1. Hi Andrew,

        Thanks for coming back to me, appreciate your feedback and agree with what you are saying completely.

        I think I will give eBay another month or two and see if I can make any progress. I’d love to go straight over to Amazon, but I wanted to do it right and make a proper investment in the retail packaging, product photography, etc. which sadly isn’t an option right now (got a wedding to pay for first!).

        Interestingly, for the first 7 days I had no interest whatsoever, no sales, not even a single watcher. Then on Friday evening I changed all of my descriptions and used one of the free templates from Spicy Auction Templates. Within an hour, I had a watcher and made my first sale the next morning.

        Thanks,

        Tom

        1. Andrew Minalto

          You’re welcome Tom!

          And good to hear SAT helped you get that first sale! 🙂

          Andrew

  5. Alessia Sirena

    Well done Andrew! Amazing results! I have a question about the launch phase…you mentioned Jump Send which is a tool also recommended by the Jungle Scout Team.
    Now, recently you might have noticed few posts in the Amazon Sellers FB Group about alternative tools for launching products. More specifically, some members are saying that Viral Launch is more effective than Jump Send because it helps ranking keywords as well as boosting sales. Jump Send does not help ranking words, Your thoughts?
    Thank you and again well done, great content as usual!
    🙂

    1. Andrew Minalto

      Hi Alessia,

      I don’t use Jump Send for launching products.

      I use it for sending out emails.

      In my opinion launch tools are not effective anymore and they’re only good for getting initial reviews in. The best way to get a product going and to build sales velocity is to use sponsored products campaigns.

      Thanks,
      Andrew

  6. Hi Andrew,
    At the turnover that you are achieving at present, approx how much time (weekly) are you spending on this product line?
    Thank you

    Stuartie

    1. Andrew Minalto

      Hi Stuartie,

      Right now I’m basically spending an hour a week on this business, basically to just monitor ad spend and reviews.

      I do want to put more hours into it though to grow it further!

      Andrew

  7. Hi Andrew
    Great results ! Great Job ! 30% net profit it is fantastic overall !
    One thing that attract my attention is that is you letting more people to buy Amazon Sharks Course. In your promotional Video you said that you no letting anymore people in because you don’t want to create extra competition.

    1. Andrew Minalto

      Hi Gaz,

      Limited number of people at same time, yes. Next group opens on 22nd March.

      I’m not actually worried about competition that much – I have plenty of it in my niches and do just fine! 🙂

      Thanks,
      Andrew

  8. Nice going, Andrew. It looks like you’ve found some really popular niche products there. Make the most of it before others jump on the bandwagon 🙂

    You mention about the email review/feedback service – Have you noticed over the last week or so a lot of emails cannot be delivered because the buyer has chosen to opt out of receiving unsolicited messages from sellers? Only about 30% of mine are getting through. It seems opting out is the default setting.

    1. Andrew Minalto

      Thanks Simon!

      Yes, I have noticed it. Actually right now I’m investigating this directly with Jump Send.

      Still not sure what’s going on there but in my Messages, in seller account, it looks like messages are being delivered.

      Andrew

  9. Congratulations Andrew – Shows it can be done (in the real world) with the right knowledge!

    1. Andrew Minalto

      Many Thanks Darren! 🙂

  10. Congrats Andrew! These are really great results!
    The Amazon Sharks programme is really amazing, and well explained on every details.
    It’s a really gold mine of informations that you are providing, such a same for me have not so big amount of money at the start to invest on products, and ……have one life only 🙂
    I’ve found already lots of potential great products, following your step-by-step course.

    Please yes, keep updated your progress monthly , it’s really helpful learning on a real amazon selling data.
    Thank you

    Tiziano

    1. Andrew Minalto

      Many Thanks Tiziano, I will! 🙂

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