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.