Unlock The Secret Reasons Your Amazon FBA Products Aren't Profitable
Isaac Kuhlman explores strategies to determine the profitability of your Amazon FBA products. Learn how to assess whether your investments are worthwhile or if it's time to cut ties with underperforming items. Isaac shares insights on understanding product costs, freight fees, FBA charges, and ad spend using his profit laser spreadsheet. Gain clarity on your business's profitability and discover ways to adjust pricing and costs for better results. Access the free spreadsheet tool to optimize your Amazon FBA strategy and ensure your product's success.
Episode Summary:
investments and learn strategies for identifying and rectifying the issues that might be holding your business back. With years of experience and a track record of success, Isaac provides invaluable wisdom to help sellers avoid common pitfalls.
Isaac Kuhlman delves into the intricacies of Amazon FBA, starting with the importance of understanding product profitability. His method involves using a custom spreadsheet that assesses key financial metrics, such as cost of goods, freight cost, and advertising spend.
By utilizing this tool, sellers can accurately determine whether their products yield the desired profit margins or if they need to reconsider their sales strategy. Isaac emphasizes the need for strategic decision-making and highlights how informed product choices can lead to greater business freedom and success in the competitive Amazon marketplace.
Isaac also discusses practical steps for adjusting variables, including product pricing and advertising spend, to mitigate losses and improve profitability. His advice centers around making data-driven decisions to ensure that time and resources are invested wisely.
Through detailed examples, Isaac illustrates how minor adjustments can significantly impact the bottom line, encouraging sellers to continually refine their approaches. Those interested in stepping up their Amazon FBA game will find this episode to be a rich resource of actionable insights and strategic guidance.
Resources:
Amazon FBA Strategies Playlist - • Amazon FBA Strategies to Maximize Your Pro...
Learn more about working together here - https://originalamazoncoach.com/work-...
Key Takeaways:
How to determine if your current Amazon FBA products are worth investing in.
Strategies to analyze the profitability of products using key financial metrics.
The importance of understanding your products’ cost structures, including manufacturing and freight costs, to make informed decisions.
How minor changes in pricing and cost can significantly impact overall profitability and sales success.
Tools and strategies for making data-driven decisions to maximize Amazon FBA returns and business growth.
Notable Quotes:
1. "Life is short and even if you have a lot of money in the bank to run this business, you still can't buy back the wasted time."
2. "The mistakes allow me to know how to keep moving the business forward in a better way."
3. "Once you make that decision to cut ties with a broken product, you become so much more free."
4. "If you're ready to jump in and learn what's going on with your business, let's get started."
5. "Take smart actions and keep growing your business.
Timeline:
0:00 Avoiding Costly Mistakes in Amazon FBA Product Investments
1:09 Deciding When to Cut Ties With Unsuccessful Products
1:45 Fixing Amazon FBA Profitability Mistakes
2:34 Calculating Product Costs and Freight for Profitability
3:33 Calculating Amazon Sales and Commissions for Last 30 Days
3:56 Understanding FBA Fees for Maximizing Profit Margins
4:46 Calculating Revenue and Ad Spend for Accurate Profit Analysis
6:00 Strategies for Improving Profitability Through Ad Spend Optimization
8:00 Maximize Amazon FBA Profits with a Free Profit Spreadsheet
Related Searches:
#amazonfba #amazonfbaforbeginners #amazonfbastepbystep #amazonfbatips #fba #amazon #amazonbusiness
Amazon FBA, profitability, product analysis, ad spend, business growth, Amazon FBA tips, product profitability analysis, reduce ad spend, increase sales price, FBA pick and pack fee, how to determine product profitability, ways to reduce Amazon ad spend, calculate Amazon FBA fees accurately, improve Amazon FBA profit margins, steps to analyze FBA product success
0:00:00 - (Isaac Kuhlman): Are you struggling to make money with your Amazon FBA brand? And have you spent months, lots of effort and probably thousands of dollars trying to get this business to work? What if I showed you a way to determine if your current products are even worth your investment? Because life is short and even if you have a lot of money in the bank to run this business, you still can't buy back the wasted time you spent on a product that may have been doomed to fail from the start.
0:00:21 - (Isaac Kuhlman): I have worked with thousands of sellers to get them to understand how to look at products the right way. And and while not all of them were successful for various reasons, they were able to learn from their mistakes and see what went wrong once we assessed the products and the business. And yeah, it does suck to have to learn from mistakes. Sometimes it is necessary and it is absolutely the reason why I've been profitable on Amazon after all these years I've been selling. The mistakes allow me to know how to keep moving the business forward in a better way. And that's why I create videos just like this one.
0:00:48 - (Isaac Kuhlman): My hope is that you won't make the same mistakes that I and others have so you can be more profitable and more successful. I also I want you to know when to cut ties with products that aren't going to work no matter what you do instead of doubling down and compounding the mistakes. As a bonus for watching this whole video, I'm going to give you direct access to the spreadsheet that I'll be demoing that will allow you to determine whether or not you should even work with the products that you currently have or not.
0:01:09 - (Isaac Kuhlman): This means you'll have a lot more clarity on whether or not you should even be spending more time, money and effort into selling the current products that you have, or whether you should cut ties and just get rid of them. And this will benefit you overall because then you won't spend any more time, money or effort long term in into a product that was never going to work. And once you make that decision to cut ties with a broken product, you become so much more free. You're going to feel a lot better about your business and you'll be able to move forward without having that burden on you. Of course I can't guarantee that you'll make money with a new product or any product, but I can get you to understand what may have gone wrong and how to fix it going forward. So if you're ready to jump in and learn what's going on with your business and see if you can Fix those mistakes.
0:01:45 - (Isaac Kuhlman): Let's get started. Also, be sure to follow this channel with a subscribe like the video and comment any questions you have. If you're interested in learning more about tips and strategies for for Amazon fba. All right, so here I am on the profit laser spreadsheet and I have two examples here. I'm going to walk through them step by step to kind of show you exactly what we're dealing with and how this can help you understand your product's profitability and whether or not your current product is making profit and maybe what you can do to change that. So I'm going to give you a couple different scenarios here.
0:02:13 - (Isaac Kuhlman): The first thing is we want to understand that the price you're selling at is the price you're selling at. You can obviously change that if you want, and that will change your profitability. But, but let's just assume that for now we're going to have the product price at 1597. Now then you would enter your actual cost of goods. This is what it would cost for the product to be manufactured before shipping.
0:02:34 - (Isaac Kuhlman): So we have the freight cost here in this column D. So you don't put the freight cost in here, you just put in your cost of goods. So if it's $3.20, so be it. Put that into the column C cost of goods column. Then you put in your freight cost. Now this would include two tariffs and duties as well. If you can actually figure that out, if your freight forwarder gives you that information. Otherwise if they just give you a flat bill and then you divide that by the number of units you shipped in.
0:02:59 - (Isaac Kuhlman): So say it's like $3,000 and you shipped in a thousand thousand units. That'd be $3 per unit. You just have to figure that out. So in this scenario, it's about 40 cents. And then you want to put in your last 30 days units sold. So you'd go to your Amazon business reports and then you click on the on the report that says something like sales detail by age Asin, a child asin or whatever it is. And then you find that child asin, and then it's going to be automatically set to the last 30 days. So then you find the last 30 days units sold. But make sure that those, you know, all 30 days actually have sales because if you do it too early in the day, yesterday's sales won't be reported.
0:03:33 - (Isaac Kuhlman): So maybe you want to do it a day before yesterday and then do 30 days before that. Just put that number in, whatever that number is. Put that actual number in there. So on this one it's a thousand units for the last 30 days. This column is actually going to be pre sorted for you. It fills it out based on a formula. It's basically just your sales price times 15%. So that's the Amazon 15% commission for basically just selling on their platform.
0:03:56 - (Isaac Kuhlman): Then you would need to find the FBA pick and pack fee. And that for this example would be 440. And this is actually a real product. I'm just using this to show you exactly what it is. If you go to your payments and click on a transaction for that product, you, you'll be able to find the, the, you know, not an estimate but the actual pick and pack fee that was charged on that transaction. So the best way to do it that I always say, if you want to know what for sure you're being charged for your FBA pick and pack fee, go to your payments.
0:04:23 - (Isaac Kuhlman): Then click on Transaction View and click on a specific transaction for that same product. And in that line item there will be a, it says FBA pick and pack fee. You'll see the exact FBA fee for that. So we put that number in there and then automatically these other columns are going to be filled out. So it's going to tell you how much profit per unit. So $5. 57. That's probably pretty good profit margin. Almost exactly 35%. That's not bad.
0:04:46 - (Isaac Kuhlman): It's going to show you your last 30 days revenue based on the unit number sold and then obviously your price, so 15,970. And then it's also going to give you a profit before ads per month. So that's 5574.5 dollars in this scenario. And then what you want to do is you want to get your last 30 days ad spend. Make sure you go to your campaign manager and set the date range to, to last 30 days of actual sales. So like you have to match it up to column ease date range. So if you put in, you know, say last 30 days but yesterday's sales weren't actually, you know, in there yet, well put in you, not yesterday's, but the day before yesterday and then do 30 days back from there and do the same thing. Make sure that column L and column E's date range match up exactly.
0:05:29 - (Isaac Kuhlman): Otherwise you're going to get varying kind of information. Once you do that, it's automatically going to tell you what your tacos is. This is your ad spend and divided by your revenue. So column L divided by column J. If it's somewhere between 8 to 20% usually. That means you're going to be profitable. So that's good, right? So then it's saying you profit per month after ads in this scenario, in example 1 is $2,575 roughly. Are you making profit after ads? The answer is yes.
0:06:00 - (Isaac Kuhlman): If you then said, okay, well, let's look at the ad spend and maybe it was $6,000 to get to, you know, $16,000. Maybe it's a launch or something like that or whatever different, you know, it's a brand new product and you're trying to get more visibility. Well then your tacos is 37.57% and you've lost $425 over the course of that month. Did you make profit after ads? No, you did not. So this will help you make some very quick decisions about, you know, ad spend. For example, or maybe your pick and pack fee was too high, you need to get remeasured.
0:06:30 - (Isaac Kuhlman): Or maybe, you know, your freight cost is too high or your cost of goods is too high, you can start changing all these things. Or maybe you're just selling too low because maybe you need to sell it in 1999. And then obviously you can see there, just by changing that one metric, by, by raising your product $4, if you stayed the same in sales, you would actually be profitable. You'd actually be roughly the same profit as somebody who would spend $3,000 on ads at selling $4 less. But again, you can start messing around with these things, kind of trying to figure out how to become more profitable.
0:07:01 - (Isaac Kuhlman): You know, if this was 250, would you become more profitable? Yeah, you would actually make money at that. If you just reduce the cost of your goods by 70 cents, you'd actually make money. Now obviously the first thing you want to do is probably figure out why you spent so much money on ads and then, you know, solve that issue. Because even if this was 4,000, you would have made money, right? But at 6,000, it's going to lose money. So you need to start figuring these things out. And why did you spend that much money? Why was it so unprofitable on your ads? You need to solve this and then get your tacos under control.
0:07:30 - (Isaac Kuhlman): And, and this sheet will help you figure that out for your products as long as you put in the accurate information. Obviously, I can't go over every granular detail in one video, so if you have any other questions, please make sure to post them in the comments below. And remember that free bonus I told you about at the beginning of the video? Well, I want you to grab this profit spreadsheet for yourself. Just click the link below this video so you can get your free copy so you can start understanding if your current products are profitable or not. With this tool, you should be able to figure out whether or not you're doing things right in your business and how to be able to move forward with, with or without your current products.
0:08:00 - (Isaac Kuhlman): Also, make sure to check out the rest of the videos on this channel to learn more about the ins and outs on Amazon fba. Until next time, watch your metrics, take smart actions and keep growing your business.
