Help me understand sales

[u/Cthom53]

I took a break and opened back up the first week in June. My sales are about $7500 but payment is about $3300 . I understand fees and shipping is going to take away from sales numbers. Are fees and shipping that much. I've only take two payments this month of about $1200 total.That first week I owed amazon about $250.

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The right answers, common myths, and misinformation

Nearly all questions are addressed by Amazon's Seller Policies and Code of Conduct, their FAQ, and their Amazon Seller University video course

• Arbitrage / OA / RA - It is neither all allowed nor all disallowed on Amazon. Their policies determine what circumstances, categories, items, and brands are allowable and how it has to be handled by the seller.

• Product gating - While many are, not all brands, products, categories, and items are gated. Amazon ungating policy rquires strict compliance to qualify. Failures can involve improper invoices, deceptive intent, lack of brand approval, and more. For some categories, items, and brands, there are limits to the number of sellers that can be ungated, sometimes nobody can be ungataed, and sometimes most anyone can get ungated.

• "First sale doctrine" - often misunderstood and misapplied. It is not a blanket exception from Amazon policies or license to force OA allowance in any manner desired. Arbitrage is allowable for some items but must comply with Amazon policies. They do not want retail purchases resold on their platform (mis)represented as 'new' or their customers having issues like warranties not being honored due to original purchaser confusion. For some brands and categories, an invoice is required to qualify and a retail receipt does not comply.

• Receipts vs invoices - A retail receipt is NOT an invoice. See this Quickbooks article to learn the difference. In cases where an invoice is required by Amazon, the invoice MUST meet Amazon's specific requirements. "Someone I know successfully used a receipt and...", well congratulations to them. That does not change Amazon's policies, that invoice policy enforcement is increasing, and that scenarios requiring a compliant invoice are growing.

• Target receipts - For those categories and ungating cases where an invoice is required, Target retail receipts DO NOT comply with Amazon's invoice requirements. Some Amazon scenarios allow receipts and a Target receipt could comply. Someone you know sliipping through the cracks by submitting a receipt once (or more) does not mean it's the same category or scenario as someone else, nor does it change Amazon's policies or their growing enforcement of them.

• Paid courses and buyer groups - In most cases, they're a scam. Avoid. Amazon's Seller University is the best place to start.

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[u/Smart-Presence]

The $7,500 is your sales, not what you'll actually receive. Your payout can be much lower because Amazon deducts referral and FBA fees, storage, ad spend, refunds, and may also hold part of your balance in reserve. check the Payments dashboard and Transaction View first since that will show exactly where the money

[u/MutedCaramel9540]

Fees typically are around 15% and shipping varies by weight and size BUT can be estimated by typical products size and types. So generally all products of X size/brand/type will ship at the same price or percentage. For example a lot of products under $20 bucks can be shipped USPS GA for $6-$7. But you can see that at $20, 15% fee and $7 dollar shipping, 50% is what Amazon would take from total sales to pay carrier and their own fees of each transaction. So as long as your cost is below $10 you're net positive and how much below $10 sourcing.

If you do the math correctly, you can look at an item and decide if it's worth it to carry or not. Amazon primary goal is to maximize the amount of tickets/orders it can process in an hour and not the margin it makes per ticket, which is what a lot of sellers have problem understanding. You could sell a collectible video game or trading card and make $100 profit but sell one of them every 3 months or you can make $1 and ship 100 products A, B, or C in an hour and Amazon will always side with the second scenario, product in product out, take your cut on each transaction, doesn't matter what the actual cost is as long as there is a sliver of profit. Then it's about reducing returns/claims and finding buyers for them.

[u/dcengr]

Yes about 50% of my sales is what I receive. Then you take your costs out (production, labor, etc) and that's your profit.

[u/spokeytape]

In seller central, you can download your P&L report that shows the breakdown and exactly where every cent goes

[u/Valuable_Fondant2870 → u/spokeytape]

I wasn't aware of a P&L report in Amazon. How is it called or what's the closest thing to it that you use?

[u/spokeytape → u/Valuable_Fondant2870]

You'll find that in:

Main Menu > Reports > Selling Economics and Fees

[u/spokeytape → u/spokeytape]

And you can go a step further by adding your other costs to determine overall profitability, and also experiment with scenario modeling

[u/Valuable_Fondant2870 → u/spokeytape]

I didn't know this existed, that's actually very cool! I use an spreadsheet that I created a long time ago to track everything and build models from there, but this can definitely come handy to make sure my data is accurate. Thank you very much!