Amazon FBA Income Report May 5, 2014 – July 31, 2014
Update Jan 2016: I’ve been selling on Amazon for nearly two years and I’ve also started private labeling products. All new posts related to Amazon selling and private labeling are on my new site www.PrivateLabelPreneur.com. If you’re interested in following my journey, come on over and get on the email list! I’ve also expanded/updated my Resource list, you can find it here: PrivateLabelPreneur.com/Resources.
It’s time to report on how I’m doing as an Amazon seller using their FBA (fulfilled by Amazon) services. As I mentioned in an earlier post, it takes money to make money and it takes time to figure out how to pick the winners. So, it should be no surprise that after three months, I’m still in the red overall.
So far I’ve spent $967.68 on inventory and $491.39 on tools and supplies ($1,459.07 in out-of-pocket costs). Amazon has paid me $780.78 so that leaves me $678.29 in the hole.
But the good news is that each month that goes by, I’m getting better at offsetting the costs with the income. Notice that in July I finally received more than I spent for that month.
Good Tracking is Critical to Honest Evaluation
Seeing money being deposited into your checking account is nice, but don’t be fooled into thinking that you’re making money. You should keep good records of what you spend so you can get a true picture of your income.
Here is spreadsheet I built to track my costs and income detail. Click here for a PDF copy.
The Cost of Education
The truth is that what I have at this point isn’t a business, it’s a hobby. The costs I’m tracking don’t include any compensation for my time or the costs to drive my car for sourcing trips. In part that’s because I find myself sourcing everywhere I go so it’s hard to carve out the few minutes scanning products at the grocery store when I was going there to shop anyway.
Or, since Michael’s is next door to Trader Joe’s, I stop by because it’s convenient. I haven’t figured out how to account for those trips so right now I’m not tracking those costs.
I consider these first few months of my time the cost of education.
The Jury is Out…
If you were to ask me right now if I felt that being a seller on Amazon is a slam dunk business idea, I’d tell you the jury is still out. After three months of working at this pretty hard, I can tell you this:
- To do well, you cannot “play” at it. You have to work at it. Of course that’s true for everything!
- Having your own products is probably the most profitable. I shed some light on that in this post.
- Bundling and multipacks appear to be the best strategy. I’ll post more on that soon.
I’m going to keep at this because I do see an upside and I never want to give up before exhausting all angles. I’ll continue to be your crash test dummy and keep you posted on my strategy and success (or failure as the case may be!).
I’d love to hear from you. What are your thoughts on being a seller on Amazon? If you’ve tried it, what recommendations or insights can you share?
If you’ve been considering giving it a try, what are you learning from my experience? What else would you like me to post about this test?
- Income Lab 1.3: Amazon FBA Seller Tools & Resources
- Income Lab 1.2: Setting Up Your Amazon FBA Account
- Income Lab 1.0: Selling Through Amazon FBA (Intro)
- About Income Labs
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