April 12, 2018 by Andrew Minalto - 14 Comments

My March 2018 Amazon FBA Update – £17,456.02 in SALES and £4,956.73 in NET PROFIT!

Good news—I’m finally BACK! 🙂

Yes, I have managed to sort out my businesses, the Amazon Sharks program, so that I now have a few extra hours each week. This means I can spend more time on the blog again and that weekly blog posts will resume starting from NOW! When it comes to selling on Amazon, there are so many topics I want to cover, and more importantly, I want to share my own day-to-day operations, ideas I’m testing and mistakes with you too!

So, I will try to publish a new post every Thursday from now on. If you have opted in for my FREE Amazon video, you will receive an email reminder each week when a new post goes live. If you haven’t signed up, you can easily do it from any page of this blog. If you’re on a mobile device, simply sign up from the homepage:

Besides weekly blog posts, starting from next week, I will also post more regularly on my Facebook page. These will be small but important Amazon updates, as well as new tips and tricks I discover on a daily basis. So, if you’re interested in all of that and more, head over to Facebook and Like my page to receive updates on those posts.

Things move fast in the world of Amazon selling. I have noticed that many of the articles regarding product sourcing, importing from China, branding and other topics covered on this blog already need an update, so I will also try to re-write/update the most important archive posts to make sure you’ve got the most relevant and updated information for 2018!

March has been a VERY interesting month for my Amazon business! Sales-wise it basically stayed at the same level as February, but the whole VAT drama has definitely put some more grey hair on my old head. But more on that later! As usual, let’s start with the actual sales figures.

Results

March started very promisingly but, overall, sales did not improve significantly over the February results. As I’m still in my first year with this niche/category and haven’t traded for a full 12 months yet, I don’t know the actual seasonality trends. I can only assume that the winter months for this product are the high season as sales do seem to slow down after January. But I will only know that for sure once I have traded for the full 12 months.

I can usually get a pretty accurate idea of the seasonality of a product from Google Trends, BUT this time I can’t see any major fluctuations, apart from a few dead weeks around Christmas time:

Anyway, when I reach the full 12 months of trading with this new business in Autumn, I will have more data to accurately analyse seasonality effects.

Let’s get back to the actual sales numbers.

In March, I did £17,456.02 in sales on Amazon UK alone (I don’t sell on any other platforms yet), selling 1612 units:

I make a profit of £4 per each unit sold (after Amazon sellers fees, Amazon FBA fees, product cost, shipping to Amazon and VAT), which means that the profit I made before ad spend was:

1662 units sold x £4 = £6,448

As I’m doing better in the organic search, I have “toned down” my advertising campaigns. I have lowered my bids on most major keywords to Amazon’s suggested bid range. Even with that reduction, I did manage to spend almost £1.5k in Sponsored Products ads in March 2018:

Headline ads have improved on the ACoS side of things, but I’m still a little worried that I don’t get enough clicks out of them. Even though I have set VERY broad campaigns for my major keywords, all I was able to spend on Headline ads was £114.43

Though I’m happy about the positive ACoS, I’m not happy about the clicks volume on these Headline ads, so this is something I will definitely need to investigate further to try to improve. I’m not sure how I will do that since I can’t start using irrelevant keywords. ACoS is already very tight on these campaigns, but maybe I should spend more time on the creative part itself by using different product images, for example.

Taking the cost of Sponsored Products ads and Headline ads together, I spent a total of £1491.27 on advertising.

Sponsored Products: £1376.84

Headline Ads: £114.43

TOTAL: £1491.27

Ok, so to determine my actual NET profit, I need to subtract advertising costs from my baseline profit:

£6448 – £1491.27 = £4,956.73

So, that’s almost £5k profit, which I’m very happy about! Of course, this is without taking any overheads into account, but as I run multiple businesses from same premises, those costs are not that significant anyway. For the sake of these blog posts, I just want to keep things simple and use this profit number for each month, so it is easier to do the maths.

Speaking of maths, we are now three full months of trading into 2018, so let’s sum up the numbers so far:

January
Sales – £24,119.08
Profit – £7,373.73

February
Sales – £15,316.28
Profit – £4,340.22

March
Sales – £17,456.02
Profit – £4,956.73

TOTAL
Sales – £56,891.38
Profit – £16,670.68

These are the results for my first three months of 2018, selling through Amazon FBA alone for this one niche I’m working in:

(In Amazon reports the total figure is off by £20 because probably someone did a return).

£16,670.68 profit in just the first three months of the year is not bad at all! Especially considering many people earn that kind of money working 40 hours a week for a full year. I have spent maybe 10 hours in total on this particular business this year (which I’m not actually proud of as I know there are many things I need to work on).

And if we look at the date range starting from first day of trading, which was 8th September last year (2017), this business has made more than £113k in sales so far selling more than 11 000 units!!!

However, my goal was to reach £30k in sales PER MONTH for this business by the end of this year (2018), so by no means am I stopping now! I have an action plan in place to achieve that goal, but more on that in a moment.

Important Happenings

March was a very stressful month. If you’re selling on Amazon already, chances are you’ve noticed the whole VAT number drama on the Amazon seller forums and other places. If not, then to cut a long story short, Amazon is now forcing all sellers—who are required by LAW to be VAT registered—to provide VAT numbers. So far, so good.

I have been VAT registered with this business for many months already, so this new rule shouldn’t affect me, right? Wrong!

The whole “clean-up” process was done by an algorithm (of course) and one of my accounts was picked up! Yes, I got an email basically saying that my VAT number is NOT valid and I need to provide valid number within 30 days or my selling privileges may be removed.

In the beginning, I did not understand what was going on. However, after emailing the VAT appeals team (vat-number-appeals@amazon.com), they informed me that my company details are NOT the same on Amazon and the VIES system (which is where they check VAT numbers).

I couldn’t believe it so I double-checked it myself. The difference was that in the VIES system, my company name was WITHOUT the “Ltd.”, but on Amazon, I had the company name WITH the “Ltd.” part because Amazon specifically requires that we provide the company name WITH any legal extensions, such as Ltd.

Now, I have no control over how and when VIES or even HMRC uses the Ltd. extension. That Ltd. doesn’t even feature on the VAT certificate issued by HMRC.

I explained this to the Amazon VAT team, showing them that it IS the same company! Even though the address is the same and the company name itself is the same, they still asked me to send them proof of ownership in the form of the company registration certificate and my VAT certificate.

After sending the documents through, I got a fairly quick reply that everything is fine, that my VAT number is validated, and that it will be updated in my account within three days. I was relieved at that moment and pretty happy about how quickly the situation was resolved.

Wrong.

Nothing happened after three days. My account page was still showing that my VAT number is rejected.

I gave it another day or two, but when nothing changed, I contacted VAT team again. I informed them that my VAT number was still not fixed after five or so days. Two days later, I got an automated reply stating that they’re super busy and since this is manual work, they are getting through all the sellers as fast as they can. My VAT number status should be updated within next five days. Ok, no probs.

Five more days pass and nothing happens.

And just to rub salt in the wound, I receive another automated email from Amazon informing me that since my VAT number is INVALID (YEAH!), my VAT calculation and invoicing tools have now been disabled. This means that I no longer can automatically send VAT invoices to my customers and my B2B transactions also went down as a result:

Mind you, I knew that this was just an automated system email/action that was happening alongside the VAT team telling me that everything is fine with my VAT number. It just shows how in big companies like Amazon, the left arm often doesn’t know what the right one is doing.

At this moment, I was starting to get very frustrated. My VAT number was not validated yet, I lost my VAT calculation/invoicing tool, and I had received yet another email from Amazon stating that my account selling privileges would be removed in 30 days. If the VAT appeals team didn’t get to my account before this timed, automated system, then my selling privileges would be shut down.

My only course of action was to keep emailing the VAT appeal team every two or three days. Each time, I received nothing more than an automated reply about how busy they are, that this is a manual process, and that my VAT number will be fixed within X days. To my annoyance, the time frame kept increasing over time! In the last email, they said it would take seven days.

In my mind, I was already starting to think about what to do if the worst happens, and how to protect my other accounts, etc. Luckily, last week, on the 4th of April, my VAT number was finally fixed/updated in my account! I can’t tell you how happy I was to see that green VERIFIED text next to my VAT number!

What can we learn from this?

Nothing.

Just how vulnerable we can sometimes be when dealing with these large corporations. There was no way to speak to anyone directly over the phone to explain that my VAT number is legit and that it is the same company name, just without the Ltd. part. Any logical and reasonable human being would understand this minor inconsistency in two minutes and fix it right away.

I used the Live Chat and also called Seller Support as I wanted to get a phone number for the VAT team—something that would let me speak with a real human to sort the issue out quickly and efficiently. I also wanted to share that phone number with you, so people who are in a similar situation could call Amazon directly to get it fixed.

No one gave me a phone number. There’s no phone support for the VAT team. It seems that they work in a top-secret underground location with no phone communication with civilisation.

Amazon is such a large company with so many departments and systems that they almost banned me from selling while saying “you’re all good” at the same time! Funny indeed! 🙂

If you have any VAT number problems, I would recommend you just email the VAT appeals team (vat-number-appeals@amazon.com). Do it regularly to stay on top of the issue and hope for the best. There’s really not much else you can do.

Luckily, there was a happy ending to this VAT saga, but it did remind me that Amazon, eBay, PayPal and similar companies are all relying on algorithms and systems to do a large amount of the work, so you can’t expect any humanity or common sense from them.

Over the last few weeks, I have received an increasing number of support emails from people who are confused about the whole VAT situation. They’re not sure whether they need to register for VAT or not! In response to this, I will be doing a full and detailed post about the whole VAT situation next week on the blog! So, stay tuned for that as I really want to clear the air once and for all.

What’s Next?

The expansion plan for me is pretty clear now. In April, I will fix my listings. I want to sort out my Enhanced Brand content to bring it up to the highest standard (taking into account that there’s a new layout system now available in the Enhanced Brand content settings), visually fix up my Amazon store, and then the next step is to expand to the US—Amazon.com!

I probably won’t be able to get my stock across the pond in April as I still need to fix some issues, get more stock in, arrange shipping, etc., but the plan is to start selling in the States ASAP. Most likely, it will happen in May. You will be first to know when that happens as I will post updates on my Facebook page as well as cover the most important steps on the blog too.

My organic rankings in the UK are already quite good and my PPC campaigns are pretty optimised now, so from what I can see, the UK market for this product right now is about £15k or so per month. This means that I need to make another £15k in sales on Amazon US by the end of this year to reach my goal.

We’ll see how that goes, of course! 🙂 But no matter how good or bad the results turn out to be, I will share them honestly with you—including every lesson and mistake I make along the way.

Amazon Sharks Update

Lastly, I wanted to give a quick update on the Amazon Sharks program! I have finally worked out the best way to do the program in terms of registrations, how many people I take in each round, etc.

From the emails I have received, I realise that taking on a new group every two or three months is not ideal. Many of you want to start selling on Amazon right now and can’t wait two or three months to get started. I know that many of you won’t wait and will simply start on your own, make tons of mistakes that could be avoided—and that I will have to help you fix later on anyway.

So, what I will be doing instead is taking on a new (but smaller) group of just 10-20 people each month! This way, I can still provide a high level of support for everyone, limit the number of people I take in, and CUT the waiting time for people who want to get started ASAP!

I will still keep the deposit system as it is right now. That means you pay £99 when you register your place in the program and then—when we actually start the program—you are on a weekly payment plan of £99 each week for nine weeks until the full balance is paid and all the videos/modules are released to you.

And, of course, you always have the option to pay in full to get IMMEDIATE access to all the videos from day one!

The next opening is planned for the 26th of April, so if you’re interested, check out the Amazon Sharks website! Watch the video there, which explains in detail how it all works, and if you feel that this program is for you, you can sign up. I would love to see you on the other side of the wall!

Ok, that’s it for today. I hope that this post was interesting, motivational, or at least good fun to read! I will be back next week with a detailed post on the whole VAT situation.

14 Comments
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  1. Hello there Andrew,

    I’ve just found you website and is fully impressive. I’ve lot of work to read and help. The first thing is that I have a main doubt for conducting my business. The Fact is:

    I run a business in Spain and a friend of mine opened an Ltd to collaborate along the year. He will start invoincing to my spanish company for marketing and website services. If he doesn’t reach this first year the famous VAT registration threshold of £85,000, he will not be obligated to register for VAT. But if for example he invoices my spanish company from his UK ltd without but, there’s any tax to pay to Hrmc if the total of the year is, for example, £60.000. Were are both not clear about that.

    And the other thing is that is a good scheme to work each other

    1. Andrew Minalto

      Hi Avo,

      You will have to consult an accountant to help you with this stuff as I’m not really qualified to give you advice on this.

      But if you’re not VAT registered, you won’t pay VAT to HMRC – just corporate tax after doing yearly return.

      Thanks,
      Andrew

  2. Hi, congrats for your work! Can you share your amazon page and products?

    1. Andrew Minalto

      Hi Simone,

      Thanks! 🙂

      I do not share this publicly but I do share this information with my Amazon Sharks customers:

      https://www.amazonsharks.com

      Thanks,
      Andrew

      1. Thanks Andrew I am seriously thinking of it.
        Cheers 😉

  3. Hi Andrew, would you say starting on Amazon using the FBA programme is risky or is there a high chance of making a profit if I follow your advice and find a good niche. PS I am the same school kid from the YouTube comment section:)

    1. Andrew Minalto

      Hi Paul,

      Thanks for your comment.

      As with any business, there are risks involved of course BUT in my opinion, they’re very small risks.

      If you use common sense, follow my advice, find a good product (proven seller), brand it properly etc. it should sell.

      Worst thing that can happen is that you sell it at cost price or something and just get your investment back.

      In many other business ventures you could potentially lose all your investment and even go into debt so Amazon FBA business in my mind is a low risk profile business.

      Thanks,
      Andrew

      1. Hi Andrew,
        Thanks again for the excellent, professional advice yet again. I have one more question that I would like to ask, at what stage do you have to register VAT and a PLC and what are the associated costs?

  4. Hi Andrew, great honest to the point post. I have tried and failed with my Amazon business for over a year now. Spent loads of cash and have a pallet of stock at home which is not ideal. I joined a course and paid a decent sum of money only to find the support dwindled. I have been following you for a while now, do you still sell on ebay? I would be keen to learn more about your programme. Cheers
    Warwick

    1. Andrew Minalto

      Hi Warwick,

      Thanks for your comment.

      No, I don’t sell on eBay anymore – for reasons explained in this video:

      https://andrewminalto.com/amazon-video/

      Thanks,
      Andrew

  5. Hi Andrew,

    Such great posts and support as always!!

    I am still going through the Amazon Sharks course, will you be updating the VAT video? I’ve read all Amazon Sellers now must be VAT registered!?

    Many thanks as always,

    Andy.

    1. Andrew Minalto

      Hi Andy,

      No, not ALL sellers on Amazon need to be VAT registered now.

      The VAT information in Amazon Sharks course is already correct and up to date.

      I will have a post about the whole VAT issue next week, on my blog, so stay tuned for that! 🙂

      Thanks,
      Andrew

      1. Great Mentor as ALWAYS!!

        Thanks Andrew!

        1. Andrew Minalto

          You’re welcome Andy! 🙂

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